Virgin Trains ‘could be gone by November’

VIRGIN Trains could be ‘gone from the UK in November’, its founder Sir Richard Branson has said, following a bitter row with the Government over pensions for rail workers.

The train operating firm and its partners Stagecoach and France’s SCNF have been disqualified from continuing to run the West Coast Main Line when it comes up for renewal next March, the Department for Transport announced yesterday.

It said Stagecoach, which owns 49 per cent of Virgin Trains, was not prepared to take on enough responsibility for the pensions liabilities of rail workers in bids for three franchises: the West Coast Main Line, which runs from London Euston up to Glasgow and Edinburgh, East Midlands and South Eastern.

Sir Richard said he was ‘devastated’ by the decision on the West Coast bid, adding: ‘We’re baffled why the DfT did not tell us that we would be disqualified or even discuss the issue – they have known about this qualification in our bid on pensions for months.’ The Government could end Virgin’s tenure as soon as November.

The Pensions Regulator has indicated that an extra £5-£6billion could be needed to plug the shortfall in train company pension schemes if private firms, rather than the Government, are forced to take on the liabilities. Virgin and Stagecoach believe this means operators are in effect being asked to write a blank cheque. In a blog post, Sir Richard wrote: ‘We can’t accept a risk we can’t manage.’

The East Midlands franchise, which Stagecoach has run since 2011, has been awarded to Dutch rail operator Abellio.