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Euston, we have a problem

2012 August 19
by Paul Vallely

I wrote to a local MP last week, which is not something I do very often.  Graham Brady is chairman of the Tory 1922 Committee, as well as the member for Altrincham and Sale, so I thought he might actually be able to do something about what was alarming me.  He didn’t reply, perhaps because he knew it was already too late.

The reason for my impulsive engagement with the political process was a rumour that I’d heard circulating in the part of south Manchester where I live. It was that the Government was about to remove the West Coast train line, which joins us to the capital, from Virgin Trains – who run it rather well – and give it to a company with a much worse reputation for service. This mattered for two reasons, only one of which was immediately obvious.

When I left Londonwell over a decade ago and came to live in the North, returning to the metropolis for the occasional daytrip seemed to require the kind of effort associated with launching an expeditionary force. The trains were run-down, infrequent and unpunctual and the staff grumpy and demoralised. By the time you got back home you were exhausted.

But after some initial bumps in the track, Virgin Rail has transformed the railway into a clean, quiet and comfortable service. Trains run to London every 20 minutes, so if you miss one by the time you’ve had a coffee the next has arrived. The fastest do the journey in under two hours. The staff are efficient and friendly. Most important the trains almost always now leave and arrive on time. Small wonder that Virgin has doubled the number of travellers. Their smoked salmon and scrambled egg breakfast is almost worth getting out of bed for – and if you get the early morning red-eye to Euston you can be at a nine o’clock meeting before some of the Londoners arrive.

What makes all this a matter of concern to a wider readership than my fellow Mancunians is what the decision to drop Virgin reveals about the continuing priorities of this Government with its short-termism, its myopic focus on the bottom line and its disregard for those who bear the consequences. In that lies the explanation for a decision which is incomprehensible to those who regularly use the route.

There was no tie-less Richard Branson, and certainly none of his airline stewardess dolly birds, in evidence at Stockport station at 7am on Thursday, the morning after the government announced its decision to award the West Coast franchise to the transport giant FirstGroup, which carries more than 2.5 billion passengers a year in the UK and North America – and which, from many accounts, does so with scant regard for the best interests of the travelling public.

But there were plenty of Graham Brady’s constituents on the platform, some of them reading in their Daily Telegraphs the revelation that the Department for Transport had rated Virgin’s bid as more “deliverable” than FirstGroup’s. The latter had offered more trains, more seats and lower fares – but had done so on projections of growth in passenger numbers which seem very unrealistic. But ministers had ignored that and dumped Virgin.

The mood at the station was glum. The staff feared FirstGroup’s hidden agenda was job cuts. The passengers were reading accounts of First’s existing services in the West Country, Scotland and London. The tales were of dirty and overcrowded trains, poor punctuality, last-minute cancellations and journey times toLondonin some cases slower than in Victorian times. “The contempt the company feels for its passengers is palpable,” one passenger moaned.

Even allowing for standard British levels of whingeing, the anxiety was that First’s promises – of more trains, more seats and lower fares – rang somewhat hollow. It felt like what railway workers call a SPAD, a signal passed at danger.

There are only two ways to make more money from the railways – to increase revenues or to cut costs. FirstGroup has predicted 7 per cent more passengers every year for the next 14 years, which seems wildly optimistic off the back of a double-dip recession. So that means fare increases, or staff losing their jobs. Or both. And, if the passengers and revenue forecasts in Virgin’s bid prove correct, First will make losses which could top £1.5bn by the end of the franchise.

Something similar has happened twice on the East Coast line. There both GNER and National Express, consecutively, outbid Virgin – and then each found they couldn’t make a profit. They handed the keys back to the Government and the outdated and under-funded line is now nationalised. Those who fear that First will do something similar point out that it, quite legally, recently pulled the plug on its contract to run Great Western when £800m in payments due to the Exchequer fell due. Mr Brady’s constituents could be forgiven for thinking that this is all an accident waiting to happen.

There is something more alarming. The Government has demanded a bond from First which will be forfeit if it walks away. But this is only £245m, and if Virgin’s figures are right, faced with a £1.5bn loss First executives might feel that is a pricing worth paying.

So if things turn out well the private sector takes the profits; if things go wrong the taxpayer will pick up most of the bill. Sounds like the massive bank bail-out, or the G4S Olympic debacle, all over again. To rework a phrase from an Apollo 13 moon flight astronaut, Euston we have a problem. And if the train service deteriorates, and the Liberal Democrat vote collapses at the next election as expected, so might Graham Brady.

Sign the Downing St petition asking the Government to reconsider here

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