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May 16, 2018updated 17 May 2018 11:21am

Virgin Trains East Coast will be taken back under state control

By Rachel Dobbs

Rail services on Britain’s East Coast Main Line are returning to state ownership.

Chris Grayling, the transport secretary, told parliament today that the rail line will be nationalised and relaunched as the London and North Eastern Railway.

Grayling said the measure is temporary, and will ensure “the smoothest possible transition to the creation of the new East Coast Partnership” and will be in “the long-term interests of passengers”.

The line, which between London and Edinburgh, has been run as a joint venture between Stagecoach and Virgin, under the name Virgin Trains East Coast, since 2015.

The venture ran into financial trouble last year, and Grayling told parliament that the franchise had lost almost £200 million. Despite this, he argued that the East Coast Line is not a failing rail service.

To prevent further losses, the government will terminate Virgin Trains East Coast’s contract on 24 June 2018. It will then be under the control of the Department of Transport.

Grayling said this period of state control will be used to establish a new public-private partnership from 2020.

Grayling said:

When it is fully formed the new LNER operation will be a partnership the public and private sectors. In all circumstances ownership of the infrastructure will remain in the public sector, but the railway is at its strongest when it is a genuine partnership between public and private.

Grayling was also careful to state that the move would not result in any change for passengers or railway staff.

The UK’s opposition Labour Party has delighted in the announcement. Labour has long been critical of privatised rail services. John McDonnell, the shadow chancellor, tweeted to congratulate Grayling for the move, saying that it was a step towards meeting Labour’s manifesto promise to renationalise the UK’s railways.

Following Grayling’s statement in the Commons, Labour’s Jenny Chapman challenged him to stand up and say: “My name’s Chris Grayling and I’ve just renationalised a railway”.

However, Grayling was adamant that renationalisation was not a “long-term” solution.

The full text of Grayling’s statement can be read here.