“Sir Richard Branson’s Virgin and Sir Brian Souter’s Stagecoach shared a payout of over £52m just months before the companies pulled out of the East Coast line, forcing a £2bn government bail out, it has emerged.
Virgin and Stagecoach received the pay out for the West Coast mainline which runs the route connecting London, Birmingham, Liverpool, Manchester, and Glasgow.
Virgin Rail owns 51 per cent of the West Coast mainline, with the remainder held by Stagecoach.
Shadow Transport Secretary Andy McDonald said Virgin Rail’s dividend increases came as “no surprise”.
“This is yet more evidence of a failing rail system which is costing taxpayers a fortune, lining the pockets of billionaires and making passengers feel like they’ve been mugged whenever they buy a ticket,” Mr McDonald told the Sunday Times.
“These vast payouts show exactly why we need to bring our railways back into public ownership.”
Virgin-Stagecoach bail out
The figures have come to light just four months after Virgin, run by Richard Branson and Stagecoach, run by Brian Souter, walked away from the East Coast main line franchise in June, three years into an eight-year deal.
The firms had agreed to pay the Government £3.3bn for the right to run the line, with the sum to be paid in instalments up until 2023.
Stagecoach had controlled 90 per cent of the franchise, compared to Virgin’s 10 per cent. Pulling out of the franchise early will allow Stagecoach and Virgin to avoid making Government payments of up to £2bn.
‘Virgin on the ridiculous’
One online critic described the situation as an “absolute laugh”, while another said: “They don’t even pretend not to be screwing over the taxpayers and the commuters anymore.
“Branson and chums make extortionate profits again while delivering nothing to rail users. It’s all Virgin on the ridiculous.”
Virgin Rail insisted its “industry-leading levels of customer satisfaction” warranted the dividends, with a spokeswoman pointing to company “innovations” such as automatic refunds for delays, free films and TV on board trains and mtickets (tickets you can buy and keep on your mobile phone).
“This drove a strong business performance which helped deliver a record payment to taxpayers,” the spokeswoman said.”