Readers will know that OnTheWight always seeks to bring you the maximum amount of information, to help you form a full view of what is happening on the Isle of Wight and important issues that will affect it in the future.
To that end, we’ll be publishing in full the email exchanges between Nick Finney, Isle of Wight Conservative MP Andrew Turner’s transport advisor, and David Pugh, who is connected with the Keep Island Line in Franchise (KILF) group.
It’s a complex subject, so we feel that it’s only right that the exchanges are published unedited, so details are not missed out.
There’s been a few back and forths, so we’ve got a bit of catching up to do.
First in the exchange: Following a live on debate on Isle of Wight Radio on Friday 21st August (listen here, David Pugh wrote to Nick Finney.
Dear Nick
During Friday’s debate, I explained that “under the franchise arrangements not a penny of government money goes into supporting Island Line because it’s all underwritten by a profitable franchise that pays a premium into government”.
You interrupted me to say:
“Have you heard of revenue support? Have you heard of revenue support? Do you understand revenue support? Well if you do you’ll know that SWT receive some hundreds of millions of pounds a year in public subsidy for running part of their services. You will know that. So this idea that somehow South West Trains, out of their largess, out of their plans contribute all of their profits towards the losses on the Island Line is simply not true.”
Please find attached a briefing paper published by the House of Commons Library last week on the subject of railway passenger franchises. It is well worth a read.
As the paper notes:
“A franchise is the right to run specified services within a specified area for a specified period of time, in return for the right to charge fares and, where appropriate, to receive financial support from the franchising authority.”
The paper then goes on to provide a factual overview of the current franchise arrangements, including those for Stagecoach South West Trains (SSWT). It is clear that a number of routes – Cross Country, East Midlands, Northern, South Eastern, TransPennine Express, Wales & Borders, West Midlands – receive subsidies ranging from 0.2 pppkm (pence per passenger km) to 13.1 pppkm, to the tune of millions of pounds.
Yet – as is clear on page 27 – Stagecoach paid a premium (to the DfT) of £312m in 2013/14 to run South West Trains, equating to a subsidy of -5.2 pppkm (i.e. not a subsidy, as it is a minus figure). It goes on to say that in 2006 the total premia paid to the Government over the duration of the franchise was estimated be £1.191 billion. These figures come from the Office of Rail & Road (ORR) Data Portal and a 2006 DfT press release respectively.
So when you repeatedly asked me if I had heard of revenue support, and whether I understand it, it is clear that I do. The question is: do you? What is the basis of your claim that SWT receive “some hundreds of millions of pounds a year in public subsidy for running part of their services”? Do you understand revenue support?
I am copying this to our fellow guests on IW Radio, and also to Lucy Morgan – in case she wishes to share this with her listeners who heard your unsubstantiated claim that SWT (and by implication Island Line) receives some hundreds of millions of pounds a year in public subsidy. Unless you can provide me with evidence to confirm your assertion in this regard, I will instead rely on the evidence set out in the paper from the House of Commons Library.
I am also copying this to Andrew Turner, given that you are his adviser spokesman.
Best wishes
David
