Train services on the mainline between London and Edinburgh are once again being operated by a private firm after more than five years under state control, reigniting the row over ownership of the railway.

East Coast trains have been rebranded as Virgin Trains East Coast. Under the management of a joint venture between Stagecoach and Sir Richard Branson’s Virgin, an eight-year franchise began with the 7.55 am service leaving Newcastle for London King’s Cross on Sunday.



More services and a new fleet have been promised for the line over the next few years, bringing a 50% increase in capacity and faster journeys to the capital.

Stagecoach has pledged to invest about £140m to deliver what it calls “an improved service and a more personalised travel experience for customers”, and is scheduled to pay £3.3bn in premiums to the government.



The previous two private operators failed to meet their financial commitments. A small government-owned company, Directly Operated Railways, stepped in to run trains on the mainline in late 2009 after the last franchisee, National Express, walked away when revenues fell during the financial crisis.

An act of industrial vandalism Mick Cash, RMT general secretary

In its five years as East Coast, the state-run firm returned a little more than £1bn in premiums, as well as several million in profits, to the Treasury. Detailed financial analysis from the Office of Rail Regulation shows it was one of two firms to make a net contribution to government coffers over the last two years, paying in more than it received in subsidy or indirect grants, along with Southwest Trains (run by Stagecoach).



The success of East Coast led to calls from unions and Labour to keep the line in state hands, especially after the 2012 West Coast franchising fiasco meant many scheduled bidding competitions were postponed. However, the coalition ensured its return to the private sector ahead of the election.



The TUC general secretary, Frances O’Grady, said it would be a “costly mistake”. She said: “By taking the East Coast out of public ownership the government is passing the profits to Stagecoach and Virgin shareholders, instead of using the cash to reduce rail fares and improve services for passengers.”

The RMT union staged protests on Saturday at stations along the route to mark its final day in public ownership. Mick Cash, the general secretary, said the public sector had not only “rescued this vital rail link from total meltdown but turn[ed] around its performance”. He said the re-privatisation was “an act of industrial vandalism that will smash apart Britain’s most successful rail company for just one reason – it is publicly owned.”

The shadow transport secretary, Michael Dugher, said the ending of the state-run East Coast company was “a hammer blow for passengers, taxpayers and employees alike”.

He added: “David Cameron’s ideological selloff has ended a public sector service which has delivered over £1bn to the Treasury, kept fares down, had record passenger satisfaction and engaged the workforce with unparalleled success.

“It is clear that when it comes to transport, people have a straight choice – the status quo or Labour’s better plan. Labour will start the process of legislating in the first 100 days of a new parliament to allow a public sector operator to be able to take on lines and challenge the private sector on a genuinely level playing field.”

Dugher added: “Labour will also hold a speedy review of rail franchising to replace it with a system fit for purpose and create a strong passenger voice within a new strategic body for running the railways.”











