Midland Mainline rail deal almost derailed by Treasury

Midland Mainline train Image copyright PA/National Express Group
Image caption The improvements to the Midland Mainline will be the biggest since the Victorians built the railway

The smiles were unmistakeable. Some of the leading local politicians from the East Midlands were celebrating.

After years of intense lobbying, the government had finally agreed to a multi-million pound scheme to electrify the Midland Mainline.

Job done.

They were gathering for the annual meeting of East Midlands' Councils, the influential group that lobbies for the region.

It had thought the electrification case was in the bag.

Last minute scares

But I've learned that the biggest investment in the Midland Mainline since the Victorians built it was almost scuppered.

Also threatened was the promise of cutting journey times from the East Midlands to London St Pancras.

This was because of last minute objections from the Treasury - officials were unhappy at the price tag.

It took last gasp political lobbying of the Chancellor of the Exchequer to secure the entire project.

I understand that just a few days before last week's announcement by the Cabinet, Treasury officials were reluctant to give the scheme their full backing.

Electrification between the East Midlands and London St Pancras was estimated at £500 million.

But an additional £300 million was needed to improve journey times by smoothing out three so-called 'pinch points' on the line near Derby, Leicester and Melton Mowbray.

It was those improvements that Treasury officials wanted to chop.

Keeping on track

Whispers of Treasury objections spurred the Loughborough Conservative MP Nicky Morgan into last ditch one-to-one lobbying of Chancellor George Osborne.

"We had to make the case very forcibly with the Treasury," she told me.

"I said if you are going to do the electrification, you also must have the upgrade at the same time, otherwise it costs more money in the long term.

"That case was understood by the Secretary of State for Transport, Justine Greening, and Business Secretary, Vince Cable, but ultimately it was the Chancellor I had to convince."

After a Cabinet meeting in Smethwick, Vince Cable arrived at Leicester Station to announce the go-ahead.

But only a few political insiders knew of the dramatic last minute talks to keep the entire project on track.

"The government clearly realises the need for investment in infrastructure, but every £100 or £200 million is another chunk of money to be found," added Nicky Morgan.

"That's why they were right to push us."

Electrification is now a done-deal, but we are learning that it was a close run thing.

Nicky Morgan says the economic case persuaded the Chancellor.

But with so many Conservative marginal seats clustered around the Midland Mainline, politics could also have been a factor.