Gordon Brown recommended that he be given a peerage, so as to be able to get him into Parliament and appoint him to a government post.
Labour didn't do it either when NXEC finished. And the reason is that there are legal factors which should not be overridden by the emotions of some members of this forum. But the idea of withdrawing the passport to bid for future franchises is an interesting one. On the other hand, if Stagecoach and Virgin were unable to bid, would the people who were glad to see the back of them complain that too many foreign companies were getting hold of British rail franchises?
Correct. All franchises are held in what are known as 'Special Purpose Vehicles,' specifically to limit the liability of the parent company (or companies if it's a joint venture) in the event of something going wrong.
That makes it legally almost impossible to cross-penalise.
As far as I'm aware, the full details of the National Express East Coast deal are still not public; Robert Peston (then) of the BBC is quoted as having been told that an offer was made by National Express of around £100m to terminate the franchise, but that this was turned down in favour of the £72m bond default. The suggestion from the then Minister for Transport was that anything other than invoking the default terms of the original franchise agreement would set a precedent for other franchises to renegotiate their terms, on the basis that that's effectively what National Express were trying to do.
Without knowing what the terms relating to the reported additional £28m were, and I don't think that they're in the public domain, it's difficult to assess whether decisions taken were the right ones, or even just the right ones at the time.
I suspect that what any additional payment would have done is shifted the balance of control back to National Express, and the DfT may have thought that there was a greater than £28m risk in that happening and potentially finding the business in an even worse state if Directly Operated Railways was considered an inevitable ultimate outcome.
Again though, this is a detail of the franchise model, and has significant commonalities with issues that have already arisen with the likes of Carillion and other private contractors delivering closely-held government contracts.
Supposedly, it's the bigger picture that the Public Accounts Committee and Transport Select Committee are considering, using specific evidence to come to their conclusions. In particular, the latter won't be reporting on whether the Virgin Trains East Coast website is good or bad, but they'll be looking at it to assess whether it's inevitable that the franchise model results or is more than likely to result in outputs driven purely by silo'd cost control or ill-conceived ideas borne of limited long term understanding of the business in question.
Not unnaturally, supporters of the franchise model will likely quickly point to poor decision-making by, in this case, the DfT and The Treasury, and that's often quite a successful political strategy to deflect attention.
