Simon Kelner: Branson's 'failure' was that he wouldn't raise his bet

Kelner's view

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I am now sorry that I didn't enter the bidding for the rail franchise from London to the North-West and Scotland. I would have offered to pay the Government £20bn, and promised a free massage for every customer, on-board catering by Jamie Oliver himself, daily direct non-stop services to Ramsbottom and a limousine service to Euston for anyone who's able to pay the new fare of £2,800 for a first class single to Manchester.

In this world of consumer promiscuity, when we change our energy supplier, our insurance broker, and even our mortgage company at regular intervals, brand loyalty is increasingly hard to come by. So maybe I'm not with the programme, but I like Virgin Trains, I think they have wrought great improvements in the line I use – London to Manchester – and I feel a sense of loyalty towards Richard Branson and his company as a result.

Consequently, it was with some dismay – although not quite up to the level that Branson expressed from his Necker Island redoubt – that I greeted the news that Virgin Trains was to lose the franchise to First Group, primarily because they bid considerably more than Virgin for the privilege. Branson called the Department of Transport's decision "insanity", some analysts felt the growth assumptions in the successful bid to be wildly optimistic, the share price of First Group fell as a result, and even the rail unions joined in an unlikely alliance with Branson.

In a first for this column, I will quote Bob Crow, the RMT general secretary, as an exemplar of good sense and articulate reasoning. "The First West Coast deal is an exercise in casino franchising that lays bare the whole sordid enterprise which is rail privatisation," he said. "Companies promise the earth, jack up fares and slash jobs and services in a drive for profits and if the numbers don't stack up they throw back the keys and expect the public sector to pick up the pieces."

This seems to be the end of the line for Virgin as a rail operator, particularly as Branson has said that he'll never bid for another franchise "unless David Cameron personally apologises to me". (That's not going to happen, I'm afraid, Richard.) And it would be well to remember that, in the 14 years that Virgin has operated the line, it has transformed the service (it used to take three hours to Manchester; it now takes two) and doubled passenger numbers. (We were once even treated to a live musical performance in the buffet car on the way back from Stoke. This was nothing to do with Virgin, but the staff played along with it, and we were all sure that Sir Richard would have approved.)

Of course, if First Group maintain standards – live music being optional – we will soon forget about Sir Richard and his Pendolino. But the history of the British rail network post-privatisation is not a happy one, with the Dutch auction system of awarding franchises based on promises rather than history at the heart of the problem. One thing's for sure: private or not, the public will end up paying. What a way to run a railroad!

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