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East Coast train line to be put into public control | East Coast train line to be put into public control |
(35 minutes later) | |
Rail services on the East Coast Main Line are being brought back under government control. | Rail services on the East Coast Main Line are being brought back under government control. |
Transport Secretary Chris Grayling told Parliament that temporary state ownership would provide the smoothest transition to a new operator. | Transport Secretary Chris Grayling told Parliament that temporary state ownership would provide the smoothest transition to a new operator. |
The service is being renamed London and North Eastern Railway (LNER) a brand last used in the 1940s. | The service is being renamed London and North Eastern Railway (LNER) a brand last used in the 1940s. |
It is the third time in a just over a decade that the government has called a halt to the East Coast franchise. | It is the third time in a just over a decade that the government has called a halt to the East Coast franchise. |
Mr Grayling told Parliament that after two months of analysis he had concluded that bringing the service back under the control of the Department of Transport was the best option. | Mr Grayling told Parliament that after two months of analysis he had concluded that bringing the service back under the control of the Department of Transport was the best option. |
The aim was to use a period of state control to establish a new public-private partnership from 2020, he said. | |
Mr Grayling said the new arrangements will not affect staff or passenger services. | |
The London to Edinburgh line has been run by a joint venture between Stagecoach and Virgin, since 2015. | The London to Edinburgh line has been run by a joint venture between Stagecoach and Virgin, since 2015. |
The companies paid £3.3bn to run the franchise until 2023, but at the end of last year it become clear it was running into trouble. | |
In February it was announced that the franchise would end early, leading to accusations the government was bailing out the current operators. | |
Mr Grayling said the companies had "got their bid wrong", overestimating passenger numbers and revenues. | |
He told Parliament that Stagecoach and Virgin have lost almost £200m, but there had not been a loss to taxpayers "at this time". | |
The rail companies have blamed their problems on Network Rail, saying it had failed to upgrade the line which would have allowed them to run more frequent services. | |
Shadow Chancellor, John McDonnell tweeted that he welcomed the move, which he said was implementing Labour's Manifesto promise to renationalise the railways. | Shadow Chancellor, John McDonnell tweeted that he welcomed the move, which he said was implementing Labour's Manifesto promise to renationalise the railways. |
Green Party MP Caroline Lucas tweeted that public ownership should be extended the rest of the rail network. | Green Party MP Caroline Lucas tweeted that public ownership should be extended the rest of the rail network. |
Despite their failure on the East Coast Main Line, Virgin and Stagecoach will be allowed to bid for future rail franchises. | |
After looking into problems on the service, Mr Grayling said he was advised "that there is no suggestion of either malpractice or malicious intent in what has happened". | After looking into problems on the service, Mr Grayling said he was advised "that there is no suggestion of either malpractice or malicious intent in what has happened". |
He added that the firms have paid a "high financial and reputational price" in relation to the East Coast route. | He added that the firms have paid a "high financial and reputational price" in relation to the East Coast route. |
Stagecoach said it had attempted to negotiate a new contract with the Department for Transport, without success. |