Government goes on the defence as Virgin takes over east coast rail line

Virgin Trains East Coast started running the franchise on Sunday, despite some feeling the nationalised railway was better off in state hands.

The line, from London to Scotland via Yorkshire, brought in some £225m in pre-tax profits at its peak following a Government takeover in 2009.

Answering questions from the public at an event in Brighton, Labour leader Mr Miliband branded the Government’s privatisation approach “nonsense” and insisted East Coast had been “better off” in public hands.

“This government has been doing rail re-nationalisation by the back door, but the re-nationalisation has been for companies from Europe,” he said.

“So if you are a European public company you can actually bid for the British franchise, but if you are British public company you can’t bid for the franchise. This is just absolute nonsense.”

He added: “I believe East Coast was better off in public hands, I think it would be better in public hands.”

Rail minister Claire Perry defended the move when speaking at King’s Cross station this morning in London where Virgin showed off a train in new East Coast livery.

She said: “The economics of the franchise did not allow for the sorts of investment that we are seeing. What we see today is the best of the private sector. Let’s stop talking about the ideology.”

Passenger Focus has expressed concern at the decision of Virgin to phase out the Rewards scheme and replace it with a Nectar points rewards instead. The group said this move would “greatly reduce” the benefits on offer.

But at King’s Cross today Virgin Trains East Coast managing director David Horne said research among passengers had shown a lot of people were unaware of the Rewards scheme and said they wanted a scheme that they were already in, such as Nectar.

The East Coast line connects Leeds, Doncaster and York with London and Edinburgh.