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Rail franchising row sparks ‘breach of Ministerial Code’ claim

Lord Adonis has written to Chris Grayling asking for an apology and retraction over a statement the Transport Secretary made to MPs.

The Transport Secretary has been accused of breaching the Ministerial Code during a statement to MPs about rail franchises.

Chris Grayling told the Commons on Monday that Stagecoach had breached a key financial covenant on its East Coast Main Line service, leading to the prospect of the franchise being directly operated by the Transport Department.

He also announced that Virgin is being given an extension to the West Coast line, and that Stagecoach is among a shortlist of firms for a new contract to run the East Midlands franchise.

He said the Government had no “adequate legal grounds” to restrict Stagecoach from bidding.

Lord Adonis has written to Mr Grayling, pointing out that he was given advice by the Transport Department’s lawyers in 2009 that it would be reasonable not to invite a company to bid for future franchises where it had recently failed to deliver on a previous franchise.

His letter said: “You could have ascertained this from the officials who advised me in 2009, so I assume your untrue statement in the Commons was wilful in order to attempt to deflect criticism from your extraordinary decisions to give a new contract to Virgin for the West Coast Main Line, to allow Stagecoach to bid for the next three rail franchises and even to consider allowing Stagecoach to continue operating the East Coast on a new contract.

“You are in breach of the Ministerial Code. I would be grateful for a parliamentary statement today correcting the record.”

Mr Grayling said there would be no impact on services or staff on the East Coast, adding that the rail franchising system had delivered “great benefits” to passengers.

Shadow transport secretary Andy McDonald said:  “This Government is propping up a crumbling system of failing rail franchising.

“The Secretary of State for Transport should have and could have banned Stagecoach from the rail industry for defaulting on its contract.

“His claim that there is ‘no record’ of any previous ban is wrong.

“Labour banned National Express in 2009 and he should have done the same.

“Chris Grayling should apologise to Parliament and retract his statement.

“By cancelling the franchise even earlier than planned the Government have added another £380 million to the East Coast bailout.

“Chris Grayling won’t ban Stagecoach because banning the operator would have meant no direct award on West Coast and taken the company out of the bidding process for East Midlands and Southeastern.

“It could have triggered the end of franchising and he won’t do it for that reason.”

Asked in the Commons on Monday evening by Conservative MP Sir Desmond Swayne: “How good is Lord Adonis’s memory?”, Mr Grayling replied: “I am not a doctor, but I know that there is no record whatever of any ban on National Express continuing to bid for franchises after 2009. I am sure that the legal advice then was the legal advice I have now.

“Whatever one may say in public, the reality is that no legal constraint was placed on National Express from further bidding for franchises.”

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