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Mr. Byers: The hon. Member for Maidenhead (Mrs. May) raised several specific questions and I am more than pleased to answer them, because it is right that the House should be made aware of the facts and not allegations that have no substance. The first relates to the railway administration order. That document is 71 pages long and could hardly be drawn up overnight.

As I said to the House on 15 October, in order to protect passengers' interests, it was clearly right to explore the need for railway administration on a contingency basis. That was part of sensible contingency planning. That is the reality and it is as simple as that. There is no way that a railway administration order running to 71 pages could have been produced after I had had the conversation with Mr. Robinson on the afternoon of 5 October. It was therefore prepared on a contingency basis—as I said to the House on 15 October, before that issue was raised—in case railway administration was necessary.

The second issue relates to the chairman of Railtrack being invited to a meeting in my office on the afternoon of 5 October, after the markets had closed. The hon. Lady should be aware from my statement on 15 October that the Government were considering two clear issues. One was whether to go for railway administration and the other was whether to agree to the request from Railtrack for further Government funding. I said to the House on 15 October that I took the decision—just after midday, I think it was—on 5 October that we could not afford any further Government money to bail out Railtrack. Had I made the other decision—to provide additional Government funding for Railtrack—my advice was that it would also have been market-sensitive information. Whatever decision I took had to be communicated to Railtrack when the markets had closed, whichever the option was. The meeting was set up for 4.45 pm on the Friday, because whatever decision I took—and we did not know when it was arranged—would have been market-sensitive and had to be communicated.

In relation to the involvement of the Treasury and the Prime Minister, the decision was taken in the normal way. It was a Government decision which I took on behalf of the Government. [Hon. Members: "When?"] It was taken on Friday 5 October. That is the 20th time I have told the House that and it is the truth of the situation.

In relation to the value of stations, those issues were considered by the High Court judge when he decided whether to agree to the petition. He agreed, because he realised the difficult situation faced by Railtrack. In terms of threats, there was no threat. In terms of the use of the

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regulator or denying the regulator his position, I was clear that the first people to raise the issue of suspending the regime of regulation were the advisers to Railtrack in August, when they produced the information. Of course, in my conversations with the chairman of Railtrack on 5 October, we covered the issue of how the regulator would deal with those matters, but the position was made clear at that time.

In terms of the responsibilities, surely the question that shareholders should be asking concerns the responsibility of the directors of Railtrack. They knew the financial situation of Railtrack—that without additional Government funding, they would be unable to make a going concern statement on 8 November—so why did not the directors, who have a legal responsibility to their shareholders, tell them about the financial situation? The directors failed to do so.

On the point that the hon. Lady raises about the demand now interestingly being made from the Conservative Benches for compensation to Railtrack shareholders, let us be clear what that would mean.

Mrs. May: I did not mention it.

Mr. Byers: If the hon. Lady is not arguing for compensation for Railtrack shareholders, she should say that clearly. It was not clear in her question. The argument was clear—that £3.60, the claim that they are making, is reasonable. It would mean over £1 billion of extra taxpayers' money going to the interests of the shareholders.

On the issue of the stations, the value of the stations was a matter for the High Court judge when he considered the petition on the Sunday afternoon.

That is the sequence of events. The Opposition may not like it. When the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) was in government, he was a sponsor of Railtrack. We have destroyed one of his better ideas, which says a lot about the right hon. and learned Gentleman. Railtrack had its time under the Conservatives. This Government have rightly brought it to an end.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich): Is my right hon. Friend aware that, if anyone has set out in this sad sorry saga of incompetence to destroy Railtrack, it is the directors and the managing directors, who have made it clear to the market, which has responded by making a clear judgment on the worth of the shares, that they were not capable of continuing to meet their obligation? Is he aware that it was Railtrack's figures that put it in the difficulty where it was not able to meet the costs of the modernisation of the west coast main line? Will he give an undertaking that, whatever comes into being as a result of this appalling incompetence, the new organisation will not only be transparent and responsible to the passenger and taxpayer, but very different in kind from Railtrack?

Mr. Byers: My hon. Friend makes an important point from her experience as the Chairman of the Transport Committee. I think that we now have an opportunity to look at how to restructure the railway industry to put the interests of the travelling public first. What most

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commentators recognise is that the way in which Railtrack was constructed originally denied it the opportunity to put the interests of the travelling public first. We have overcome that. It was because of Railtrack being unable to meet its debts that the High Court allowed the petition for railway administration. Now we can move forward and put in place a structure whereby, because it will be a not-for-profit organisation, any operating surpluses can be used for the interests of the railway network. At last we can make progress towards providing a railway network that is fit for the fourth largest economy in the world, which simply is not the case at the moment.

Mr. Don Foster (Bath): Although the way in which the Secretary of State has handled the Railtrack issue has led to some confusion, not least in relation to the ownership of various assets, I believe that he has broadly followed the right way. Does he not agree that it was absolutely sensible to work up in detail the various proposals before making a final decision, and that today's effort by the Conservative party is basically nothing more than whingeing on behalf of the shareholders, who since May 1996 have received £700 million in dividends and who, incidentally, obtained Railtrack plc in the first instance for a knock-down price, undervalued by £6 billion?

Does the Secretary of State not agree that what the vast majority of the travelling public are interested in is ensuring that we have a safe, reliable and affordable railway system? To that end, on the question of decision taking, having specifically promised an end to the self-defeating system of penalties and compensation, can my right hon. Friend tell us what action he has taken and what decisions he intends to make? Having promised greater co-operation and collaboration between rail and track, can he tell us what decisions he has taken on that issue?

Finally, may I ask the Secretary of State this: having promised a not-for-profit public interest company, limited by guarantee, can he once again give the House an absolute assurance that the new body that he will allow to come into being will categorically not see the recreation of that obscene conflict, in a monopoly, between shareholder profit and passenger safety?

Mr. Byers: The hon. Gentleman's figures are right: since 1996, the shareholders of Railtrack have received about £700 million in dividends. His figures are also right in relation to the knock-down price for which the Railtrack shares were sold. In fact, the current chairman of the Conservative party, when he was Chairman of the Public Accounts Committee, conducted a most useful investigation into the circumstances of the privatisation of Railtrack. As Chairman of the Select Committee, he concluded that the shares sold by the Conservative Government at that time were undervalued by about £6 billion. That was taxpayers' money that could have been put to useful purposes. It is helpful that the current chairman of the Conservative party was able to provide that information for the benefit of the House.

Some of the confusion has been caused by the fact that there are two companies: Railtrack plc, which holds the licence to operate the network and which is in administration; and Railtrack Group, which is not in administration and is still run by the directors of Railtrack.

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Any value in Railtrack Group can be made available to shareholders. That will be a decision for the directors of Railtrack Group—rightly so.

We are looking at penalties and compensation—as I think I noted in my statement on 15 October. We shall set out proposals and ideas to the House later on.

In relation to moving forward, I believe that the appointment of Richard Bowker as the new chairman of the Strategic Rail Authority has been widely welcomed. He will bring renewed vigour to the work of the authority and will give a real sense of direction and purpose.

Finally, yes, I can confirm to the hon. Gentleman that whatever structure is put in place—as is made clear in the guidelines that I announced last week—we do not want to repeat the structural mistakes that were made in relation to Railtrack and privatisation.

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