Afternoon:
10°c
Gordon Brown takes over East Coast mainline
Ben Bailey1 Jul 2009
The Government moved to nationalise one of Britain's main rail services today and threatened to seize control of two more.
Gordon Brown's Transport Secretary Lord Adonis stepped in after National Express said it would walk away from its loss-making East Coast franchise by the end of the year. He said he had set up a publicly-owned company to run it.
Lord Adonis added that the Government may have grounds to terminate National Express's other rail franchises. Department for Transport lawyers are examining whether to take over East Anglia, which runs all trains from Liverpool Street including the Stansted Express, and C2C which operates all services out of Fenchurch Street to Essex.
The move came as National Express announced that its chief executive Richard Bowker, a former boss of the nowdefunct Strategic Rail Authority, was leaving to take up a railway job in the Middle East.
The company is expected to unveil losses of more than £20 million for the first half of the year. National Express ran into trouble after bidding £1.4 billion over 10 years for the contract to run the East Coast services from London to York and Scotland.
The Transport Secretary also signalled that National Express was highly unlikely to win another rail franchise.
“It is simply unacceptable to reap the benefits of contracts when times are good, only to walk away from them when times become more challenging,” he said.
Lord Adonis admitted that there would be a cost to the taxpayer from the intervention. “We will have to pay whatever it takes to ensure services continue.”
But Lord Adonis denied that a subsidy would be paid to National Express. He also insisted there was not a wider crisis in financing Britain's rail system.
Fifteen out of the 16 franchises were working fine, he added. Lord Adonis admitted, however, that the Department for Transport was in dispute with Stagecoach over South West Trains, which runs services into Waterloo.
On the turmoil at National Express, Lord Adonis said: “I would like to give an absolute assurance to the travelling public that there will be no disruption to services.”
Staff would transfer to the new public body running the East Coast services, he added as part of an “orderly” hand-over.
Bob Crow, general secretary of the RMT union said: “We welcome this renationalisation of the East Coast route but this shouldn't be a short-term, crisis measure. It should be a longterm
solution to the chaos that privatisation has brought.”
Reader views (30)
Catherine asked below what penalty do National Exit Stage Left incur? As I understand it thanks to Dept for Transport and the millions they and the private sector pay legal and other goon advisors to line advisors pockets whilst misrepresenting taxpayers interests, the ratio is:
NE £32 million penalty : You and me mug taxpayer £1.2 billion. - this is a disgrace.
Of course the very lawyers who we unknowningly all paid for to set up this "deal" will fight hard on this scurrying company's behalf to ensure it is not precluded from getting some of the fat rail franchise pie again if the economy recovers and we who are paying all the bills (left by rat-like CEOs running away from the problems knowing they will never be held truly accountable despite all the bs about good corporate governance (Goodwin, Hornby, Bowker...)) can actually afford to travel again.
- Jim, London, 01/07/2009 14:48
Report abuse
Given Lord Mandelson's latest attack on George Osborne, I think he will be furious with the Standard over the headline to this story. Gordon Brown has not nationalised this rail line service. Lord Adonis has done so and Gordon Brown knew nothing about it. Gordon himself will be furious in case he is now dubbed the Fat Controller.
- James Elliott, Eastbourne UK, 01/07/2009 14:34
Report abuse
I have family in Leeds and travel on this route regularly. It has been a disgrace for many years. Nearly all of the trains are BR locomotives from the 1970s and 80s that have been repainted. Inside they are tatty and dirty. Unless you book your ticket well in advance it is almost no cheaper than getting a flight and takes twice as long. Privatisation has basically wrecked Britain's railways.
- Matt, London, 01/07/2009 14:30
Report abuse
Mickinlondon is right
Look at a map of the railway network at its peak, in the period after the 1923 Grouping (which created the Big Four of LNER, LMS, SR and GWR) in say 1930, and weep. Pre Beeching, the network can be seen at:-
http://www.joyce.whitchurch.btinternet.co.uk/maps/BR1961c.jpg
Our Victorian ancestors, without computer technology or cheap oil, built a magnificent transport network which you could use to get pretty well anywhere without a driving licence or a car. Our political "leaders" of the post WW1 and WWII period have decimated and destroyed that legacy, and the wonderful achievements of the architects, engineers and workers who, with the 19th and early 20th century railway companies built Britain's rail network. The botched Tory 1993 privatasation following the European Union Railways Directive:-
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31991L0440:EN:HTML
was another blow to our railway system. We deserve better, and its difficult to believe any of the main political parties can or will deliver on this issue
- Max, london, 01/07/2009 14:23
Report abuse
Isn't this the second time that the government has cancelled the ECML franchise because the franchisee was unable to pay the fees?
I think that Lord Adonis is cheeky when he accuses the rail companies of trying to benefit from the good times and then abandon their obligations in the bad times. What about the government, who insist on raking in fixed fees through bad times as well as good? Perhaps they should re-think their business model, and take an agreed percentage of profit instead.
- A. Bennett, London, UK., 01/07/2009 14:18
Report abuse
John Buckeridge, London
Are you having a laugh? The current regime have got in to bed with private capital like there is no tomorrow. A cynic might observe that they are looking after themselves when they are out of a cushy Parliamentary job. Two Jags failed miserably with transport policy early on, promising lots but delivering a big fat zero.
To be fair however, after PMQs today, Gordon would see a zero as an improvement. "0% growth" from the person who is running this country. Words fail, as much as Gordon fails whenever he opens his mouth.
- Man In The Street, London, UK, 01/07/2009 14:16
Report abuse
Might as well ask 'A Crow' than 'B Crow'. The walking joke is the reason this can not be a state-owned service run economically for the benefit of travellers in the UK. Why use the train when a car does the trip door to door at less than half the price.
- Jerry, Chiswick, 01/07/2009 14:04
Report abuse
Bob Crow neglects to mention that the railway closures of the 1950's was a direct consequence of nationalisation in 1948. What's more, closures accelerated under the Labour Wilson Government vs the previous Tory Government. He may also be shy about advertising that the tube was built with private American captial. It is the only railway in Britain where the americanism 'car' is used instead of 'carriage'. Listen to the announcement, 'Move down inside the car please!'
- Ant, London, 01/07/2009 13:58
Report abuse
Quite amazing the criticism of a FUTURE Tory Government on this site when in fact we have endured a crass and incompetent Labour Government since 1997 who must take responsibility for the chaos. Blame those who have caused the country to be in the current economic mess, yes blame the Labour Government along with doom & bust Brown!
- Joe, Thornton Heath, UK, 01/07/2009 13:41
Report abuse
What if..... National Express were given the same Govt subsidy, fare allowance as that enjoyed by Virgin and GWR. Would that make a difference, or is Adonis not keen to level the playing field?
- Alan, carlisle uk, 01/07/2009 13:34
Report abuse
Bravo. The whole network should be put back in national ownership. Shame then that the rail-hating Tories will soon be back in power to favourise roads over rail, and private companies over taxpayers.
- John Buckeridge, London, 01/07/2009 13:24
Report abuse
Mick , beutifully written and spot on, well said !!
- Brin, wiltshire, 01/07/2009 13:18
Report abuse
The Victorians had great vision; they built and built the nations infrastructure till it was the best in the world, they knew no nation industrial could prosper without railways, and the need to mobilize people and goods to be transported nation wide.
By the time they had finished, hardly a village in the UK never had their own railway station with a connection to go nation-wide.
The Transport Act 1947 can be read on the internet and the Tory responses in later years; so I need write no more about that.
Then we got Dr Richard Beeching; you will all remember him I am sure; he was the one that pulled up all the rail tracks to every village and small town in the UK, and sold off the land to stop it being used again for railways, or railway use etc.
Tom, London, UK: mentions the Adam Smith Institute, and their inspired idiots; he is very correct in that assumption; The Adam Smith Institute is a favourite of the Tory Party; Thatcher just idolized them and did as she was told to do by them.
Today we have a nation lead by idiots, crooks, greed and corruption, all they know is sell cheap, don’t build, and get rid of our industries and buy foreign goods etc.
Without the Great Victorian Politicians and men of great vision; we would still be living in slums and throwing out wastes into the street gutters that lead nowhere.
But today that is being corrected by both the Labour and Tory Party’s; we are returning to no industries, and no new infrastructure, and no hope
- Mickinlondon, london., 01/07/2009 12:47
Report abuse
The railways should be nationalised with immediate effect. Privatisation has been a total disaster. The investment needed to improve infrastructure is too great for private companies, who will only increase prices to pay for investment.
I travel 100 miles a day to get into work. Driving is 55% cheaper than rail. That cannot be right for so many reasons.
- Darren, london, 01/07/2009 12:34
Report abuse
Nationalised or not the railways will still be at the dumb mercy of Bob Crow.
- Steve, London, 01/07/2009 12:23
Report abuse
How NOT to run national transport.
1. Let Gordan Brown be in Charge
2. Let Gordan Brown speak
3. Let Gordan Brown make a decission
4. Let Gordan Brown have a train set
- Fiery, Ealing, 01/07/2009 12:21
Report abuse
Richard Bowker when head of the SRA awarded the East Coast franchise to National (disgrace) Express. He quits the SRA, mooches about for a while then reappears as guess what, CEO of National Express (of course no thoughts of jobs for the boys, feathering own nests or conflicts of interest necessary, it was all above board ?!?!?!). Now he quits National Express to head to the Middle East. I wonder how long and where he will pop up next to ruin.
- Steve, London, 01/07/2009 12:18
Report abuse
Thats fine,we pick up the tab,when when East Coast Main Line start making profits,return it to the shareholders,what fools we are.
- Colin, Bristol, 01/07/2009 12:18
Report abuse
Totally agree with Frank below. European countries are not driven by lawyers looking for deals and would not be stupid enough to privatise. Time to nationalise.
- Jim, London, 01/07/2009 12:11
Report abuse
Perhaps Fat Controller Gordon can now buy himself a one-way ticket back home?
- Nobby Clark, Perth, the Scottish one, 01/07/2009 11:42
Report abuse
Some businesses are better privatised but rail is not one of them. Nationalise the railways and subsidise it with tax money. Make it affordable for all and reinstate the destinations cut due to being unprofitable for the franchised firms. Rail should be the backbone of every country's transport system.
- Frank, Copenhagen, Denmark, 01/07/2009 11:33
Report abuse
We do not have a balanced transport policy. Expenditure on roads is seen as investment whereas on railways it is seen as subsidy. Consequently the Department for Transport which has historically been biased towards roads sees the franchising process as a way to run railways on the cheap only considering bidders who offer the best (short term) financial deal. As a result the quality of service often deteriorates such as the withdrawal of catering facilities and more seats being squeezed into carriages.
Furthermore, the fare structures are unrealistic. At one end, walk on fares are too high whilst advanced fares are so cheap that they are often uneconomic. More and more passengers have discovered the latter through the internet.
We need a long term strategy. It is to be hoped that Lord Adonis, the first transport minister to believe in the railways, has a chance to make an impression.
- Mike Constable, Islington, London, 01/07/2009 11:00
Report abuse
The last thing the private sector likes is risk, so they'll have made sure to minimise their exposure, which means maximising our exposure. Curiously enough, this in-built quality of all private sector organisations is completely forgotten by the Adam Smith Institute inspired idiots who spent the 80s ranting on about how the dead hand of the state needed to be replaced by dynamic risk taking entrepreneurs. Very dynamic - bid too high, bail out when your miscalculation becomes obvious and hand it back to the, er, dead hand of the state.
- Tom, London, UK, 01/07/2009 10:46
Report abuse
Maybe now the other train companies will get their act together, mainly London Midland who continously run the trains late.
- Triffidqueen, Desk in London, 01/07/2009 10:45
Report abuse
Can the Government do something about properly censuring (not pretending to with words of outrage on the news) those who are responsible and accountable for this type of massive failure which yet again we taxpayers pick up the billion pound tab for!
I was disgusted to see that after HBOS bank nearly brought down the economy, that the chief executive Andy Hornby is permitted to work again in a similar role and not struck off like a Doctor, Lawyer or any other professional would be for gross negligence.
The same here, I do not want to see Richard Bowker who has just cost the taxpayer a billion or so, then resigned, being permitted to pop up elsewhere when the furore dies down and potentially expose us taxpayers to more extensive losses.
If leaders who cause such damage are not properly censured by Govt and regulators, then this country is morally bankrupt and is simply encouraging more arrogant recklessness among company board members and chief executives.
- Jim, London, 01/07/2009 10:44
Report abuse
They should have left the franchise with the previous holder GNER. keep switching franchise is a farce anyway.
- J. L. Gammage, hereford, England, 01/07/2009 10:39
Report abuse
The mainlines to London from Kent ran like clockwork in the year running up to privitisation when the Conservative Government was trying to attract buyers: it proved that it could be run effectively as a nationalised service if everyone was willing. It was one of the dumbest privatisations attempted, has been scandalously propped-up by taxpayers ever since at the enrichment of private firms and individuals and it is a great pity that it is only when Nu/Old Labour is clutching at straws at the end of one of the longest periods of any party in office that it has suddenly thought of renationalising it.
98% of business travel in France uses the rail network: all these politicians who kept banging on about so-called 'green' taxes and policies only a year ago ought to think carefully about their own hypocrisy when forcing mere folks on the street to fork out more in tax for petrol, congestion charges, etc.
- Roz, France, 01/07/2009 10:25
Report abuse
I commute out of Liverpool Street and most trains are late and they are so expensive. Maybe by nationalising the line they can make an example of how public transport should be run, i.e. on time and cheaply, encouraging people out of their cars...some hope!
- Cat, Essex, 01/07/2009 09:37
Report abuse
So much for privatisation, part privatisation, franchise or whatever phrase they call it.
Another failed project. Private business loves it when times are good but raise the white flag and crawl away like cowards when times get tough. How very principled of them.
- Man In The Street, London, UK, 01/07/2009 09:23
Report abuse
I would be interested to learn whether or not National Express will suffer a financial penalty for walking away from this contract.As I recollect, National Express has been making huge profits as a company over many years.If they now decide they overbid for a particular contract surely that is their bad luck and the taxpayer should not lose out. Otherwise National Express and other rail franchises are in a "win win" situation.Perhaps someone could enlighten me and other taxpayers as to what the true position is in this instance.
- Catherine Scott, London England, 01/07/2009 08:49
Report abuse
