West Coast Main Line shambles: mess with Branson at your peril
Government's decision to reopen bidding for franchise is boost to ‘Brand Branson’ and will open debate on renationalisation
THE DECISION to reopen the bidding process for the right to operate the lucrative West Coast Main Line will have made at least two people extremely happy this morning: Ed Miliband and Richard Branson.
The news was announced at 12.30am last night, the Transport Secretary Patrick McLoughlin's conceding that the initial decision to hand FirstGroup the franchise at the expense of Virgin Trains had been based on "significant technical flaws". A High Court appeal by Virgin against the franchise competition was due to begin tomorrow.
Ed Miliband, basking in the unknown territory of near-universal good reviews for his Labour conference speech yesterday, will be overjoyed that his attacks on the government's competence - "Have you ever seen a more incompetent, hopeless, out of touch, U-turning, pledge breaking, make-it-up-as-you-go-along, back-of-the-envelope, miserable shower?" he asked - were immediately vindicated.
The Daily Mail calls the U-turn "arguably the biggest and most embarrassing shambles on Britain’s railways since the collapse of Railtrack more than a decade ago". Other commentators see it as a personal victory for Richard Branson, the embodiment of the Virgin brand.
From the moment the Government made the decision to strip Virgin Trains of the London to Glasgow railway, preferring FirstGroup's £5.5bn bid to Virgin's offer - which was £700m less - Branson embarked on a PR war to win over the hearts and minds of the British people.
An online petition protesting the government's choice was launched which garnered in excess of 100,000 signatures, and Branson lined up an impressive roster of supporters for his bid including Sir Alan Sugar, Eddie Izzard, Jamie Oliver and Olympic hero - and Virgin brand ambassador - Mo Farah.
Branson also understood the political ramifications of the process, and got the Labour party onboard. Shadow transport secretary Maria Eagle urged the government to delay its decision, made during the parliamentary recess, saying that the Commons should have the chance to scrutinise the bidding process.
The Virgin boss even offered to run the rail link on a not-for-profit basis for as long as it took for parliament to make a decision.
Finally, Virgin Rail moved for a judicial review in late August, a process that was ultimately vindicated in the early hours of this morning when the DfT announced that "serious flaws in the procurement process" had been uncovered, and that FirstGroup's bid was fundamentally unsound. Virgin had described it as a "recipe for bankruptcy".
In the short term, the government will pass on the running of the service after 9 December to the state-owned company Directly Operated Railways, and it has cancelled all other franchise competitions - for the Great Western, Essex Thameside and Thameslink operations - pending two independent reviews that McLoughlin has set up.
Last night, Branson said he hoped the government would let him continue to run the line: "I am pleased to say that the DfT has looked at all of the facts and found significant flaws in the way its officials handled the process. They have basically acknowledged that what we had been saying is correct."
ITV News’s Chris Choi says the affair has been a huge boost to “Brand Branson” and notes that the whole idea of privatized railways will be up for debate. “There are 15 franchises to be offered by the time of the next general election. Now there will be searching questions about whether the entire franchise system is valid. In turn, this will lead to a resurgence of calls to re-nationalise rail,” he writes.
Observer columnist Nick Cohen recognises Branson’s triumph, but believes it says more about the Coalition, tweeting: “It takes a government of unique incompetence to turn Richard Branson from a parasitical state capitalist into a hero of the resistance.”
But as the BBC's Evan Davies pointed out on the Today programme this morning, the Coalition probably should have seen this coming. "There’s an old rule isn’t there?" he said. "You don’t mess with Richard Branson if you’re in politics and maybe that is one the government will be thinking about."