Latest news with #VirginTrains
Telegraph
06-07-2025
- Business
- Telegraph
Incompetent Labour is fighting one of Britain's best entrepreneurs
It is meant to be pushing for 'growth, growth, growth'. In the wake of the rebellion over welfare cuts, and with Chancellor Rachel Reeves reduced to tears last week in the House of Commons as she contemplated the bleak prospects for the British economy, the Government is more desperate than ever to stimulate some kind of expansion. So why is one of the UK's best entrepreneurs being prevented from setting up a new business? Sir Richard Branson has this week been stopped from reviving Virgin Trains. In reality, it is only smart entrepreneurs that actually grow the economy – and if the Government doesn't understand this, then there is little chance of getting the country moving again. Virgin Trains may well stir mixed memories for many readers. From rail privatisation in 1997 up until 2019, it ran the trains on the main West Coast routes, from London to Birmingham, Manchester, Liverpool, and up to Edinburgh and Glasgow. It brought some much-needed design skills to the carriages, and spruced up the marketing. While the trains were not always on time, it would be hard to argue they were any worse than any of their rivals, and possibly better. Sir Richard now wants to bring the operation back, with services from London Euston to Liverpool, Birmingham and Preston, adding an extra 5m seats to the routes. Here's the problem, however. The Office of Rail and Road, the regulator that controls the network, has this week blocked the application. That decision came after ministers and senior Whitehall officials lobbied against the bid, on the grounds that the service would deprive Labour's new nationalised rail service of crucial ticket revenue. It was not just Virgin. Other potential operators were blocked as well. The routes will be left with Avanti, which, as it happens, was Britain's worst rail operator in the first quarter of the year, with 60pc of its trains running late, and 6pc cancelled completely. Seriously? Sure, Sir Richard is a maverick. Not everything he tries works. But he has a great record of building businesses, from the original Virgin record label, to the Virgin Atlantic airline, to the dozens of other businesses he has spun off the main brand over the last 40 years. Indeed, Virgin increased annual passenger numbers on the West Coast franchise from 8m a year to 42m during its 22 years of operating the route. But no. It turns out that neither the Government nor the regulator like the sound of extra competition, or more choice for passengers. 'Anyone who remembers British Rail would rather forget it,' said Virgin after the decision was announced. 'Competition improves services, increases rail ridership, and drives better results for everyone, including the taxpayer.' That is very true. We can probably forget about Virgin's bid to compete with Eurostar in running trains through the Channel Tunnel, and on to destinations across the rest of the Continent. Even though ludicrously high prices surely demonstrate that service could desperately use some competition, it is now clear the Government does not approve of that sort of thing. Tragically, it probably won't happen, driving people onto cheaper planes instead. Indeed, we already have a glimpse of what the railway system will look like under Labour. Now that we have Great British Railways, complete with rail replacement buses on its opening day of service, the Government will be less interested in choice and in customer service. It will mainly be worried about protecting the state-owned incumbent, and if that means higher fares, and fewer trains, with fewer services on board, then the passengers can lump it. So long as they are not offered any alternatives – and it doesn't look as if they will be – then their interests don't count. It will be harder and harder for rivals, until eventually we end up with a single state-owned train company, and one dominated by the trade unions. We will be right back in the 1970s. There is a bigger point at stake here than just one rail operator. We see very little sign of the company backing the UK's best entrepreneurs. Sir Jim Ratcliffe's Ineos was hit with a huge levy even after it upgraded its plant in Hull to run on hydrogen gas. Likewise, we have seen very little sign of backing for entrepreneurs such as Sir James Dyson, who recently argued that Labour's 'war on aspiration' was driving talent out of the country, or Sir Tim Martin, the founder of JD Wetherspoon, who is now looking at setting up pubs abroad. Meanwhile, it is no better among the younger emerging tech start-ups. Guillaume Pousaz, the founder of Checkout, has left for Monaco after losing his non-dom tax status, and Wise, a giant in online finance and payments, has decided to move its listing from London to New York. The list goes on. There is absolutely no sign that the Government is willing to make any concessions to people who start a business and make a success of it. What happens to the trains to Preston, and whether there is some extra competition on the route, is not the most crucial issue facing the county. It is what it reveals about the mindset of ministers and regulators that is genuinely worrying. After all, Branson is one of the great entrepreneurs of the last few decades, a man who has brought his restless energy to sector after sector, built a hugely valuable brand, and proved time and time again that he can make business work for customers. If we are not willing to welcome him back into the rail system, then it is hard to see how it can ever improve. The blunt truth is this. It is entrepreneurs who create growth, not the Government. Until Labour works that out, the economy will remain trapped permanently in stagnation.
The Independent
04-07-2025
- Business
- The Independent
Virgin's bid for west coast mainline rail route rejected by regulator
The UK rail regulator has rejected a bid from Richard Branson's Virgin Trains franchise for rail services on the west coast mainline (WCML). The Office of Rail and Road (ORR) rebuffed the application citing concerns over delays and cancelled journeys. The regulator also rejected bids from First Group's East Coast Trains, known as Lumo, and Wrexham, Shropshire & Midlands Railway (WSMR) The majority of existing services on Britain's busiest rail line, which runs between London, Birmingham, Manchester and Glasgow, are operated by Avanti West Coast. In a statement, Stephanie Tobyn, ORR's director of strategy, policy and reform, said: 'After thorough assessment of each application, it was clear that there was insufficient capacity to approve any of the services without a serious negative impact on the level of train performance that passengers experience on the west coast mainline. 'Additional services within the current timetable structure and planned capacity use would further weaken punctuality and reliability, not just at the south end of the WCML but elsewhere as well.' A Virgin Trains spokesperson told The Independent that the decision marked 'a blow for consumer choice and competition'. 'Virgin's proposed services on the west coast mainline would have delivered excellent value for customers and taxpayers alike by adding five million additional seats every year from a trusted brand with a track-record for delivering award-winning, reliable train services for its customers.' The government plans to renationalise passenger services on the route by October 2027 – a move Virgin is critical of. The spokesperson continued: 'Anyone who remembers British Rail would rather forget it. Competition improves services, increases rail ridership, and drives better results for everyone, including the taxpayer.' They went on to highlight their desire to launch passenger train services through the Channel Tunnel. 'For now, Virgin is focused on bringing much-needed competition to the cross-Channel route by igniting a new era in international rail services for travellers on both sides of the Channel.' The company announced there were 'no more hurdles' after a key regulatory decision by the ORR in March.
Times
03-07-2025
- Business
- Times
Virgin Trains' attempt to get back on to the railways blocked
Virgin Trains' attempt to get back on to the railways has been blocked by the rail regulator. The Office of Rail and Road (ORR) has turned down all three existing applications to run private company train services out of London Euston along the west coast mainline. The regulator says there is insufficient capacity on the line and it would affect existing passenger train and freight users. The ruling comes after pressure from Heidi Alexander, the transport secretary, for the regulator to clamp down on 'open access' train services because they might take income away from the government's renationalised Great British Railway (GBR). Virgin had planned to run services along the line to Glasgow as well as separate services to Manchester and Liverpool. The other rejected applications were from First Group, which wanted to run a new cut-price Lumo service to Manchester, and the French company Alstom, which had wanted to run a service to north Wales. Virgin, which ran the west coast mainline franchise for two decades after privatisation, immediately vented its frustration. 'The decision is a blow for consumer choice and competition,' a Virgin Group spokesperson said. 'We believe that given the opportunity, Virgin's open access routes could play a valuable role in delivering the high-quality train services the British public deserve and GBR wants to encourage. 'Anyone who remembers British Rail would rather forget it. Competition improves services, increases rail ridership and drives better results for everyone, including the taxpayer.' In a statement, the regulator said: 'ORR has concluded there is insufficient capacity on the west coast main line southern section for the introduction of any of the proposed services. 'To introduce any of these proposals would be detrimental to performance on the line and therefore all passengers and freight customers.' Open access rail services, which popped up during the years of privatisation, are operations run by a private company filling gaps in the timetable or the network and are run outside the ambit of the Department for Transport (DfT) without subsidy and retaining all their own profit. Earlier this year Alexander had warned the ORR that such open access operations risked taking revenues from GBR and the taxpayer and creating congestion on the network. The ORR said revenue abstraction was not the issue in its ruling: 'In the case of these three applications, lack of capacity and the anticipated impact on performance alone meant we could not approve them. As such, our duty to have regard to the funds available to the secretary of state was not relevant to this decision.' FirstGroup has been a leading open access operator, running Lumo, a London-Edinburgh service and Hull Trains. The services at times or on routes ignored by the DfT have proved to be highly profitable. It has already gained licences to provide new open access services between London Paddington and Carmarthen in Wales and London Euston and Stirling in Scotland. It is the operator of Avanti Trains' intercity services under DfT contract on the west coast mainline. Of the decision to block a new Lumo service from Euston to Rochdale north of Manchester, First said: 'We are disappointed. Open access services are good for the communities they serve, offering new travel options and reaching under-served stations, and giving great value fares for passengers. These operators bring significant private investment to both the rail sector and UK [train] manufacturing.' Alstom said it had spent two years preparing the Wrexham, Shropshire & Midlands Railway and had received encouragement and support from the DfT for the open access operation. 'We are extremely disappointed,' a spokesman said. 'We have received overwhelming support from local people, businesses, councillors and MPs, who all recognise the urgent need for this connectivity. We will now urgently seek to re-engage with the ORR and determine our next steps regarding the future of this vital passenger service.' 'A setback for passengers seeking greater choice' Open access train operations are a legacy of the gaps in the network or the timetable created during the privatised era, when private companies launched new services, taking all the risk without state subsidy, and reaped all the profit if they made it work. All current open access operations are on the east coast main line into and out of London Kings Cross competing with — or complementing — services run by state-owned LNER: FirstGroup's Hull Trains direct services to Humberside; FirstGroup's Lumo service to and from Edinburgh; and Grand Central, owned by Arriva, serving northern towns and cities. Tony Lodge, a research fellow of the Centre for Policy Studies and a long-term campaigner for open access, criticised the decision by the Office for Rail and Road (ORR) to block all three extant applications to run services on the west coast main line into and out London Euston. He said: 'It is a significant setback for passengers seeking greater choice, reduced fares, and expanded route options. Open access competition on the east coast main line has successfully delivered all of these, driving increased passenger numbers and revenue growth. The recent pressure from Whitehall to reject these open access proposals is particularly concerning.' Heidi Alexander, the transport secretary, had instructed the ORR to think very carefully about revenue abstraction and network congestion before green-lighting any new open access applications. Notwithstanding the unedifying precedent of ministerial interference in an independent regulator, Alexander will have been influenced by a look at the books of FirstGroup. As a Department for Transport contractor running the giant regional networks of Avanti, GWR and South West Railway, FirstGroup last year made a profit of £107 million on annual revenues of about £3.5 billion, a profit margin of up to 3 per cent. In the same period Hull Trains and Lumo made £34 million on annual revenues of just £106 million for a profit margin of 32 per cent, returns unprecedented on Britain's railways. Open access operations are minuscule compared with the network as a whole. As a battlefield for the argument of private versus public ownership, the issue could become a noisy cuckoo in the nest.
Telegraph
03-07-2025
- Business
- Telegraph
Branson's Virgin Trains revival blocked after government opposition
Sir Richard Branson's attempt to resurrect Virgin Trains on Britain's railways has been blocked after opposition from the Government. The Office of Rail and Road (ORR) confirmed on Thursday it had rejected Virgin's proposal to relaunch services between London and a range of major cities. As well as turning down Virgin's application, the regulator also snubbed proposals from FirstGroup and Wrexham, Shropshire & Midlands Railway (WSMR) over fears that the West Coast mainline north of the capital was already too busy. Virgin, which had planned to offer an alternative to state-run trains on the inter-city route, said the decision was 'a blow for consumer choice and competition'. It comes after the Government and senior Whitehall officials lobbied against the so-called open access applications, arguing that new services would have robbed Labour's new nationalised railway of vital ticket revenue. In a letter to the ORR dated June 20, Richard Goodman, director general for rail reform and strategy at the Department for Transport, said that new rail applications must 'deliver benefits without undue cost to taxpayers or existing passengers'. That followed comments from Heidi Alexander, the Transport Secretary, who told the ORR in January that it should adopt a more rigorous stance on private bids. The industry group Rail Partners said at the time that the Government appeared to be intent on 'creating the conditions for existing operators to wither on the vine'. FirstGroup, which was blocked from running trains from Rochdale to Euston via Manchester, said the ORR must be able to 'work without interference,' while stopping short of accusing the DfT of twisting the regulator's arm. A spokesman said the decision will come at a cost to jobs, private sector investment and growth. Virgin, which increased annual passenger numbers on the West Coast franchise from 8m to 42m during its 22 years in charge of the route following privatisation in the 1990s, had planned to provide services from London Euston to Liverpool, Birmingham and Preston, adding 5m additional seats. It would have competed with Avanti, Britain's worst-performing rail operator in the first quarter, with almost 60pc of trains delayed and 6pc cancelled. A Virgin spokesman said: 'We still believe that, given the opportunity, Virgin's open access routes could play a valuable role in delivering the high-quality train services the British public deserve and GBR wants to encourage. 'Anyone who remembers British Rail would rather forget it. Competition improves services, increases rail ridership, and drives better results for everyone, including the taxpayer.' The ORR said it reached its decision to block all three applications after concluding that the southern section of the West Coast route had insufficient capacity and that adding further trains would be 'detrimental to performance.' Stephanie Tobyn, its strategy director, said: 'It was clear that there was insufficient capacity to approve any of the services without a serious negative impact on the level of train performance that passengers experience on the West Coast Main Line.' Virgin said it would now focus on its bid to compete with Eurostar on the Channel Tunnel route to Paris and Brussels.
The Guardian
03-07-2025
- Business
- The Guardian
UK rail regulator rejects Virgin's bid for west coast mainline route
Sir Richard Branson's hopes of returning Virgin trains to the west coast mainline have been dashed after the UK rail regulator rejected its application amid concerns over delays and cancelled journeys. The Office of Rail and Road (ORR) has rebuffed three applications for the route, which connects London to Glasgow and serves major cities including Birmingham. Branson's Virgin, East Coast Trains (known as Lumo) and Shropshire & Midlands Railway Company Ltd, all lost their bids. The regulator said new services could not be introduced due to insufficient space on the west coast mainline (WCML), which would 'likely detriment … train performance'. The line is operated by Avanti West Coast – a joint venture between FirstGroup and Trenitalia – but is due to be one of the final major routes renationalised by the Labour government by October 2027 at the latest. The government has also been attempting to increase competition on the railways by opening up access to rival operators. Stephanie Tobyn, ORR's director of strategy, policy and reform, said: 'After thorough assessment of each application, it was clear that there was insufficient capacity to approve any of the services without a serious negative impact on the level of train performance that passengers experience on the west coast mainline. While the ORR recognised there was an advantage to adding competition on the route, Tobyn said the southern end of the route needed space in the timetable to ensure proper running of trains. 'Additional services within the current timetable structure and planned capacity use would further weaken punctuality and reliability, not just at the south end of the WCML but elsewhere as well,' he said. Virgin has been vying for a return to Britain's rails since being taken off the tracks by the Conservative government, which blocked the renewal of its west coast franchise in 2019. Virgin had previously operated services on the line since 1997. Virgin had applied for three new services from London Euston, with contracts lasting 10 years until December 2035. They would include services to Greater Manchester and the north-west, Liverpool Lime Street and Birmingham New Street. In May, Network Rail refused to support the three companies' applications to access the line, and Virgin appealed to the ORR. On Thursday, the ORR said it considered Virgin's application in its own right but arrived at the same conclusion for each application. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Documents released alongside the notice showed the Department for Transport said the line already operated at 'close to capacity', particularly in and out of London Euston and was concerned about conflicts with the HS2 and Avanti West Coast services. The DfT added that Virgin's application would have an 'unacceptable level of impact on taxpayers, given the greatly constrained overall position of rail finances, and that the loss of revenue on such a significant scale would materially impact the funds available' to the government to invest in the railway. Virgin criticised ORR's decision, saying it was a 'blow for consumer choice and competition' and that the proposed service would have resulted in '5m additional seats every year from a trusted brand with a track-record for delivering award-winning, reliable train services for its customers.' It also hit out at Labour's nationalisation plans. 'Anyone who remembers British Rail would rather forget it. Competition improves services, increases rail ridership, and drives better results for everyone, including the taxpayer,' it said.
