TAXPAYERS have been “short-changed” by up to £2 billion through the government decision to let Richard Branson’s failing East Coast rail franchise off the hook early, Labour warned yesterday.

Last November, Chris Grayling announced that Virgin Trains East Coast’s contract would be terminated three years ahead of schedule, sparing the privateer the embarrassment of being forced to hand the keys back to the government.

The Transport Secretary said a new East Coast Partnership would take on responsibility for trains and track operations on the route in 2020.