Chris Grayling has been accused of misleading parliament over disqualifying Stagecoach from bidding for train franchises.
Statements made by the transport secretary in the Commons appear to be at odds with his own department’s documentation.
The transport secretary has been called on to return to the House by Labour’s shadow rail minister to clarify a deepening controversy in which train operating companies are being told to accept open-ended pension liabilities.
Further questions have also been raised over the sharp fall in Stagecoach’s share price in the nine days between Mr Grayling making his decision to disqualify the company and the announcement of the news.
The row is heaping pressure on the transport secretary after £83 million was wasted on cross-Channel ferry capacity in no-deal Brexit planning.
Last month Stagecoach was thrown off the bidding to run three franchises: East Midlands Trains, South Eastern and the West Coast Partnership, which combines services on the west coast mainline and HS2 between London and Birmingham. Stagecoach operates buses and trains and has £3.2 billion of annual revenues. It employs more than 30,000 staff and is the joint operator of Virgin Trains with Sir Richard Branson.
The decision prompted a furious row between the company and the Department for Transport, which accused the train operator of disqualifying itself. Stagecoach has threatened to take the transport secretary to judicial review.
The East Midlands franchise was awarded to Abellio, the British arm of the Dutch state railway, as it emerged that a third bidder, Arriva, had also disqualified itself by declining to take on pension liabilities.
Documentation, seen by The Times, from a senior DfT official signed with the authority of Mr Grayling states: “All bids contained some non-compliances.”
That appears to contradict Mr Grayling’s statements in an exchange with Rachael Maskell, the shadow rail minister, in the House. Ms Maskell asked why Mr Grayling had appointed Abellio to the East Midlands contract when it, like Stagecoach and Arriva, had been non-compliant to the franchise terms.
“It is not the case that all three bidders were non-compliant,” Mr Grayling replied. When pressed, he asserted: “The honourable lady’s question is based on a totally false premise. She is incorrectly making assertions about non-compliant bids which are simply inaccurate.”
Ms Maskell said last night: “Chris Grayling has once again not been straight with parliament. Legal disclosures from his own department issued under his authority show that, in fact, all bids contained non-compliances. This cavalier approach to the procurement process is wasting millions of pounds of public money. The transport secretary must urgently come to the House of Commons and correct the parliamentary record.”
Ms Maskell believes that Mr Grayling may also be guilty of withholding market sensitive information from the stock exchange. Mr Grayling made his decision to disqualify Stagecoach on April 1. News of that disqualification did not come out until April 10. In the week before the news was announced, Stagecoach shares fell 16 per cent. The stock plunged further afterwards, with a total fall of nearly 30 per cent from 160p to 115p over three weeks.