Tom Richmond: Questions mounting up for Grayling over rail franchise

QUESTIONS: Transport Secretary Chris Grayling.
QUESTIONS: Transport Secretary Chris Grayling.
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TRANSPORT Secretary Chris Grayling is – typically – once again being economical with the truth when he tries to defend the indefensible: his department’s mishandling of the East Coast Main Line rail franchise.

“Stagecoach got its numbers wrong. It overbid and it is now paying the price,” he told MPs in an emergency statement about the express line that links Yorkshire with London and Scotland.

The troubled operator – which holds a majority stake in the franchise that carries the name of Sir Richard Branson’s Virgin Trains empire – is not the only one. So, too, did the Department for Transport while passengers put up with higher fares.

After all, it was Mr Grayling’s predecessor, Sir Patrick McLoughlin, who returned the line to private control after the financial collapse of the GNER and National Express-held franchises – didn’t senior civil servants at the DfT undertake due diligence or do they lack the necessary skills and acumen?

And it was Mr Grayling – widely regarded as one of the country’s least trusted and least liked politicians (and there are plenty of contenders) – who announced in December a shake-up in the East Coast line’s future management that would take effect in 2020. Now, two months later, he says the situation is “much more urgent” after a “key financial covenant was breached”.

“It is now clear that the franchise will be able to continue in its current form for only a very small number of months and no more,” he said without providing further specifics. Did he mislead MPs in December with a disingenuous statement that triggered, in part, the resignation of Andrew Adonis as head of the National Infrastructure Commission? It looks that way.

This matters. Stagecoach and Virgin were due to pay the Exchequer in excess of £3bn if the franchise ran its course until 2023. About £2bn was due to be paid after 2020 – money that will be denied to the Treasury for much-needed improvements in other areas of the rail network.

And, while Mr Grayling did say that the taxpayer was not out of pocket because Stagecoach had spent £200m of its own reserves to meet its existing financial obligations, thus far, it is the private operator – and not the beleaguered Transport Secretary – which appears 
to be in the driving seat because it will be able to continue running rail services without paying its original dues.

This is because it was also confirmed that Virgin’s operation of the West Coast Main Line will be extended while Stagecoach remains in contention to keep running the East Midlands route from London to Sheffield.

Mr Grayling says there are “no adequate legal grounds” to restrict the firms as “financial obligations” are still being met.

Really? After all, Labour banned National Express from tendering for future contracts when its franchise went so far off the rails that the East Coast line was renationalised in 2009.

Yet, before Mr Grayling decides whether Stagecoach and Virgin should continue running the line on a non-profit basis or return the East Coast route to DfT control that would effectively endorse Jeremy Corbyn’s nationalisation programme, he must answer the following questions to the public:

To what extent will the public purse be out of pocket as a result of the effective demise of a route which he maintains is profitable and well-regarded?

What meetings have Mr Grayling and his officials held with Stagecoach and Virgin on this issue, and will he publish the minutes to ensure total transparency?

Will he now reverse the DfT’s recent decision to refuse rival operator Grand Central’s bid to run extra services between Yorkshire and London?

What assurances can he give the public that officials at his Ministry have the necessary expertise when assessing such complex contracts?

Would it be better – in the long term – to scrap HS2 and divert funds to upgrading this line so its potential can be maximised?

I’m not the only one after answers. The National Audit Office is planning an inquiry. And, of course, Parliament’s Transport Select Committee is already seeking more details about the rationale behind his decision to scrap the electrification of two major railway lines in this region and the withholding of documents.

As I’ve said previously, Mr Grayling was fortunate to keep his job in last month’s Cabinet reshuffle – many more able politicians have, in the past, been sacked for far less.

Despite some extra funding, promises to get rid of the Pacer trains from a bygone age and an inquiry into the possible reopening of the Skipton to Colne line, his track record is such that he had lost the confidence and respect of commuters long before the East Coast deal hit the buffers.

No friend of Yorkshire because of his repeated snubs, the only remaining question is this – just how many scandalous failures will it take before the Macavity-like Chris Grayling is fired, or is the Government so weak that Theresa May no longer has the authority to rid the country of a colleague who brings her premiership into contempt with every passing day?

tom.richmond@ypn.co.uk

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