Taxpayers subsidise Stagecoach

Stagecoach today said it will receive a taxpayer hand-out worth up to £45 million between November and May, to help its loss-making East Midlands rail franchise back into the black.

Chief executive Sir Brian Souter said the Government would pay Stagecoach a revenue subsidy after the franchise - which runs into St Pancras - had "lost in excess of £30 million in the first half".

He added: "We understand when you sign contracts you have to take the rough with the smooth.

"The group overall including the West Coast [route from Euston] paid £100 million more in premium payments to the Government [during the six months to November] than during the same time last year."

Stagecoach's half-year, pre-tax profit fell 29% to £90 million during the six months.

The transport operator added that its London bus business - it bought the East London Bus Group, which operates the Selkent, Thameside and East London brands, out of administration for
£52.8 million last year - was going well.

"We inherited a business that was in decline, now our turnaround plan is on track," Sir Brian said.

Stagecoach also set out plans to invest
£44 million in a fleet of 100 new double-deckers with 81 seats, a toilet, power sockets, wi-fi and CCTV, for its budget coach business, Megabus, in the US and UK.