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Mr. James Gray (North Wiltshire): Will the right hon. Gentleman give way?

Mr. Byers: No. I want to address the thrust of the hon. Lady's charges this afternoon, because they are important and significant. I want to address these allegations, because that is the basis on which this debate is being held.

The hon. Lady has not addressed the important policy issues concerning my decisions. Instead, she fell back on innuendo, smear and allegations. So, today, let us cut through all that and look at the facts. I want to get on to the substance of the allegations that have been made.

Mrs. May: Is the right hon. Gentleman saying to the House that the evidence given by the Rail Regulator to the Select Committee on the Treasury was innuendo, smear and allegation? That is what he has just implied.

Mr. Byers: I shall come to the Rail Regulator. It was the hon. Lady's comments to which I was referring. I shall address the position of the Rail Regulator specifically. Before I do so, I want to address the issue raised by the hon. Lady about the meeting that I had on 25 July.

Mr. Donohoe: Will my right hon. Friend give way?

Mr. Byers: I shall not give way, for the simple reason that I want to put on the record the facts in relation to the allegations made by the hon. Lady. I hope that the House will indulge me if I do not take any interventions while I put on record the truth of the situation.

The first allegation is in relation to the meeting between me and the chairman of Railtrack held on 25 July. I am aware that there has been some disagreement about what was said at that meeting. In my earlier statements to the House, I sought briefly to describe those discussions. Let me now set out the events in a little more detail.

Mr. Mark Francois (Rayleigh): Will the Secretary of State give way?

Mr. Speaker: Order. The Secretary of State is not giving way, and when I rise, I expect hon. Members to be

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seated. Could we have some order in the House? The Secretary of State is entitled—[Interruption.] The rabble is not just over there. The Secretary of State is entitled to a hearing.

Mr. Byers: On 25 July, Mr. Robinson discussed with me a range of issues about Railtrack, including its management and the difficulties that it was being presented with by the present regime of regulation. He outlined to me in general terms the seriousness of Railtrack's financial situation, making it clear that the position was far worse than he had first thought. He spoke to me about needing a soft letter of comfort from the Government by the autumn, before being able to access existing banking facilities. If Railtrack was unable to access those facilities or receive extra financial assistance from the Government, it was clear that, on 8 November, when Railtrack was due to give its interim results, it would be unable to make the critical statement that it was a going concern.

At the same time, Mr. Robinson suggested that my officials have further discussions with Railtrack's advisers, Credit Suisse First Boston, to consider in more detail the state of the company's finances and management, and a series of proposals for restructuring the company and the regime of regulations. Initial discussions took place between my officials and Railtrack's advisers on 27 July, and the message was stark. It was clear that the viability of the company was at issue. That is the sequence of events, and I hope that that clarifies the position for the benefit of the House.

Mrs. May: Will the Secretary of State give way?

Mr. Byers: I want to put on the record the specific points in relation to the series of allegations that have been made.

The second allegation relates to the so-called threats to the Rail Regulator, Tom Winsor. The hon. Lady alleges that I made threats to the Rail Regulator; she did so again today. Now that the Select Committee has helpfully made the transcript available, Members will see clearly that the Rail Regulator at no stage said that he had been threatened. I ask Members to read the transcript, which is here. That was put to him and that was the position.

I want to get on the record the truth of the situation. The hon. Lady made the allegation. I made it clear to the House on Monday 5 November that there were no threats. The first people to raise the issue of suspending the regulator were Railtrack's own advisers. I also made it clear to the House that, in my meeting with the chairman of Railtrack, we covered how the regulator would deal with those matters. Having taken the decision that we could not pour unlimited amounts of taxpayers' money into Railtrack additional to that which had already been agreed, it followed that, if necessary, we would introduce legislation to ensure that that objective was achieved. That was communicated to the regulator in response to a point that he raised with me.

I made a factually accurate statement that I had the necessary authority to introduce legislation if need be. It would, of course, have been for both Houses of Parliament to consider the merits of such legislation. There were no threats. Just imagine the outcry there would have been—[Interruption.] No threats. Imagine the outcry there would have been had I refused to be open with the

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regulator or had I misled him about the Government's intentions. There would have been cause for complaint and cause for the Opposition to raise the matter in the House, but that was not the case. It was raised in discussion by the regulator, and I gave him a factual reply.

Several hon. Members rose

Mr. Byers: I am not giving way, because I want to get points to do with the allegations on the record.

Most importantly, the regulator himself, in his evidence before the Select Committee, clearly did not feel threatened in any way. As he told the Select Committee, for him it was business as usual. It was clear that he did not feel that his independence had been undermined and clear that he retained his independence unless and until it was removed by Parliament.

Several hon. Members rose

Mr. Speaker: Order. The Secretary of State has said that he is not giving way.

Mr. Byers: The regulator told the Select Committee that he informed the chairman of Railtrack on the evening of Saturday 6 October that if an application was made to him for an interim review, it would be considered and it would be possible for the regulator immediately and publicly to announce that he had begun such a review. That all took place on the evening of Saturday 6 October, the evening before the High Court considered my—

Miss Anne McIntosh (Vale of York): On a point of order, Mr. Speaker. I have a transcript here, which I understand is—

Andrew Bennett (Denton and Reddish): A shareholder.

Miss McIntosh: Yes, I am a shareholder in Railtrack, Eurotunnel and First Group.

I have in my possession a transcript, which I understand was not made available to the public. I am not sure of its status, but it is not the evidence taken by the Committee.

Mr. Speaker: Order. Those are matters for debate. Hon. Members can rebut what the Secretary of State has said.

Mr. Byers: If the hon. Lady is challenging the accuracy of the transcript, that is a matter for the Select Committee.

Miss McIntosh: Will the Secretary of State give way?

Mr. Byers: If it is on a point of clarification, then of course.

Miss McIntosh: I am most grateful to the right hon. Gentleman. I shall not enter into the semantics of whether it was a threat or a promise to act. The evidence that we took from the Rail Regulator was that his ability to intervene and apply for an interim review was completely

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neutralised. Why did the Secretary of State take away the independence of the only person able to protect the investment in Railtrack?

Mr. Byers: Two issues are important here. First, only this House and another place could take away the independence of the regulator.

Secondly, it is alleged that I somehow took away the regulator's independence so that he could not act. The evidence given by the Rail Regulator is precise on this point. On Saturday evening, 6 October, the regulator is phoned by the chairman and the chief executive of Railtrack. They ask him, "Can you conduct an interim review?" He says, "Yes, I can." That is what the Rail Regulator said last week in evidence before the Select Committee. The Rail Regulator told the Select Committee that, if an application were made to him for an interim review, he would consider it and

that he had begun that review.

The following day, my petition was heard in the High Court. No move was made to oppose my petition for railway administration.

Mrs. May: As ever, the Secretary of State has been careful in choosing his words and in quoting the Rail Regulator. Will he confirm that the Rail Regulator went on to say to the Select Committee:

That is what he had told the chairman of Railtrack.

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