Chris Grayling’s East Coast bailout echoes the errors of New Labour | Andrew Adonis
Virgin and Stagecoach have been rewarded for leaving taxpayers in the lurch. It’s time government stopped pandering to the super-rich
Chris Grayling’s bailout of Sir Richard Branson and Sir Brian Souter is so crass you might think him plain stupid. But that would be to mistake the ideology behind his shameless rewarding of the billionaires for walking away from the outstanding £2bn they were contracted to pay for operating the East Coast rail franchise until 2023.
On the same day Virgin Trains East Coast, a joint venture 90% owned by Souter’s transport group, Stagecoach, and 10% by Branson’s Virgin, deserted the London-to-Edinburgh line, Grayling awarded Virgin, without competition, a lucrative contract to operate the west coast mainline between London and Glasgow. He also allowed Stagecoach to bid for the next three rail franchises, and even held out the prospect that Souter could be re-awarded the east coast service he had just abandoned, but without the £2bn albatross.
Source: Guardian Transport
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