THE government’s decision to block Stagecoach from bidding for three separate rail franchises due to a row over pensions was lawful, the High Court ruled today.

The rail operator sued the Department for Transport (DfT) for disqualifying it from bidding for the East Midlands, West Coast and South Eastern franchises for refusing to accept the risk of pensions liabilities proposed by the government.

Arriva also brought legal action against the government for disqualifying it from bidding for the East Midlands franchise, but reached a confidential settlement just before the start of a trial in January.

Stagecoach — which bid for the West Coast franchise in partnership with Virgin and French national railway SNCF — claimed that the government acted unlawfully in the way it conducted the franchise competition process.

But in a judgement delivered remotely today, Mr Justice Stuart-Smith dismissed the claims.

He said there was “no indication and no reason to believe” that the terms proposed by the government “were anything other than final or that they invited counter-proposals.”

RMT general secretary Mick Cash said: “The fact that Stagecoach Group Plc wanted all the lashings and profits of the railway without any of the risk of the Railways Pension Scheme is one more nail in the coffin of the privatised system.”

Manuel Cortes, general secretary of the Transport Salaried Staffs' Association, said: “Thankfully the privateers’ gravy train has finally hit the buffers.

He slammed the “ludicrous” situation, whereby since the start of the coronavirus crisis taxpayers “have supported our railways with £3.5 billion while the privateers have been allowed to make a 2 per cent profit.

“This whole episode in the courts shows us again that it is long past time to draw a line in the sand and end the Tories’ failed Frankenstein privatisation experiment.”