National Express, Britain’s second largest transport company, took over from GNER in running the East coast mainline in December 2007. A year on, some people are nostalgic: “Everybody is wishing for GNER back again - the staff and the customers”.
This feeling is hardly surprising. National Express has ruthlessly cut jobs. By March 2008, it had announced that 115 of its 500 clerical staff in its York HQ would be axed. In December it announced 750 cost-saving job cuts across the country. It offered voluntary redundancy to about 50 train catering staff in the north east. Jobs and conditions were at first secured by TUPE, but this does not help other National Express workers feel secure, especially with the onset of recession.
National Express (NEx) is making life harder for RMT than it was under GNER and reps have found themselves stuck in long talks going nowhere. NEx thinks it is in a strong position, having got away with everything it wanted on the East Anglia franchise, taking advantage of weak union organisation there. One RMT activist said NEx will have a tougher time if it tries to do the same on the East coast. If the RMT is not exactly strong there, it is holding on.
And for passengers, National Express has said it will put fares up by 2.1% above inflation for the next seven years!
GNER’s contract was ended early because it was failing to meet its £1.3bn contractual payments to the government. It bid too competitively in eagerness to secure the contract and also struggled because parent company SeaContainers was not making money. GNER would have made 300 job cuts to hold onto the contract. In this system of TOCs competing for contracts, and striving for profits, there are no good guys.
The system of franchises just stinks. It is a corrupt club. Richard Bowker, the NEx chief executive who put the bid together, knows how to milk the system. He used to be chair of the Strategic Rail Authority, the ‘independent’ body that awarded franchises before it became part of the Department for Transport! This club hands out contracts, which TOCs see as licences to print money. Bob Mackenzie, SeaContainers chief executive, complained that payments to the Treasury and prescriptions about the service had made it difficult for franchise owners to make money. “It was too easy to make money but now it has become too hard. We have to find a balance.”
When GNER struggled with payments, it wanted the government to renegotiate its contract to duck out of its obligations. The government opposed this, not wanting to ‘set a precedent that we are willing to bail out operators at extra cost to the taxpayer’. But what about renationalisation? The problem is the railway being given to these charlatans in the first place, then given to them again and again, even when it’s proved that profit-making and running a railway don’t mix, and will result in job cuts and fares hikes. NEx may be a ruthless company, but it is as bad as the system it tries to survive in.