Rail privatisation was once more exposed as a scam this week. Billionaire Richard Branson quit the East Coast rail franchise—and left us to pick up the bill.
Yet the Tories still want to give failing firms more chances to wreck railways.
Tory transport secretary Chris Grayling announced on Monday that Virgin East Coast—part-run by convicted fraudster Branson—was on the verge of collapse.
Grayling said the government will take control of the franchise, which had been set to run out in 2023.
That means it could lose out on some £2 billion in lost payments—simply because the private company said it wasn’t making enough money to carry on. Virgin, along with transport firm Stagecoach, was given the contract to run the line in 2015.
They walked away after realising that they weren’t going to make as much profit as they wanted to out of the franchise.
Now the state will come to the rescue.
Yet when Virgin or another company decides it’s profitable enough to make enough money from it again, the government will hand it back.
It’s not the first time this has happened. The government had to step in to run the same line after National Express abandoned it in 2009. The state made the line profitable—then sold it on to Virgin and Stagecoach.
On the same day that Grayling declared Virgin’s East Coast collapse, he gave the company permission to keep running the West Coast line. And Stagecoach is in the running to win the East Midlands contract.
Franchises must be taken off private companies.
Labour leader Jeremy Corbyn says his government would take rail lines back into public ownership when the contracts run out. That’s good—but it could take years.
The entire industry has to be renationalised now.