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Mr. Quentin Davies: Will the Secretary of State give way?

Mr. Darling: No. I have given way to the hon. Gentleman enough.

The idea that we should have simply bailed out a failing company is absolute nonsense.

Mr. Duncan: Will the right hon. Gentleman give way?

Mr. Darling: Not now—I might do so before I finish.

The hon. Member for Rutland and Melton made much of the order for administration. Mr. Justice Lightman said:

"This is clearly a case where the making of a railway administration order is not only appropriate, but absolutely essential".

The hon. Gentleman says that the judge should not have made that decision, suggesting that incomplete information was laid before him. I repeat the point that Railtrack could have objected to the administration order. It could have said, "If you only allow the regulator to come in and bail us out, everything will be fine." Indeed, Mr Justice Lindsay, in his judgment on 14 October, said:

"Mr Byers is accused of engineering a situation in which he could present evidence that Railtrack was or was unlikely to be able to pay its debts. But that needed no engineering."

That is what the judge found. My right hon. Friend the Member for North Tyneside did not engineer the situation. The judge makes the point that Railtrack was unable to pay its debts and that that did not need engineering. Unfortunately, Railtrack had demonstrated in spades that it was unable to pay its debts.

It seems that the foundation upon which the Conservatives seek to build their case falls apart. Railtrack was heading towards insolvency throughout 2001. It had grossly underestimated its costs, it had lost control of its finances and it was in deep financial trouble. Its own advisers said that there was management paralysis. The difference between us seems to be that the Tories would have said, "Never mind, have some more taxpayers' money." Our position is quite different. Our position was that in the light of these difficulties the Government were not prepared simply to bail out the company. It was appropriate, when the company eventually went into administration, to put in place an organisation that could run the railways properly.

It is worth bearing it in mind that under Network Rail unit costs are coming down. It now knows its unit costs. It has taken maintenance back in-house, which has saved millions of pounds. The company is being run
 
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properly as a railway rather than an adjunct of a property company. It is clear to me, coming relatively fresh to the situation, having read the court judgment and having considered all the evidence, that the Government and our Ministers acted entirely properly. That is why I believe that the House should agree to the amendment and throw out the nonsensical motion that has been tabled by the Conservative party—a party that is discredited for the way in which it brought about rail privatisation and allowed Railtrack to be created.

5.12 pm

Tom Brake (Carshalton and Wallington) (LD): What chutzpah! The Conservatives, the Frankenstein creators of the monster that led to the privatisation of the railways, are now admonishing and advising the Government on their handling of the railways. Whatever next—De Lorean advising on start-up businesses, Naomi Campbell providing anger management training or perhaps Jeremy Clarkson promoting fuel-efficient vehicles.

Sometimes, the Conservatives are justified in rebutting attacks that are based on what they did when they were in Government eight years ago, but, in relation to the privatisation of the railways and Railtrack, unfortunately the damage has been so longstanding that they cannot simply bat it away. Perhaps the Conservatives were looking for hope value in the debate—hope that their record would be forgotten. I think that people should be reminded of their record on this issue.

I shall give a few examples of Railtrack's performance. At the time of administration, it was preparing to pay a fine of at least £10 million for failing to reduce train delays. There was Lord Cullen's public inquiry into the deaths at Ladbroke Grove, which found Railtrack to be an incompetent and inadequate company. Railtrack's poor performance was also the subject of a report by consultants Booz Allen Hamilton, which was very critical of the lack of investment by Railtrack. It found that track renewals had averaged only 1.3 per cent. per annum during the control period, which was 1995–2001, which was a low rate of renewal compared with European railways, which typically replace 2 to 3 per cent. per annum. Railtrack's 1995 business plan referred to 2.2 per cent. renewals per annum, not 1.3 per cent., which it delivered. Clearly it was far short of delivering on its targets.

The National Audit Office report, published on 14 May 2004, entitled "Network Rail—Making a Fresh Start", quoted a number of factors that contributed to Railtrack's failure, including a lack of attention to its core business, leading to underinvestment in the infrastructure, loss of engineering skills and poor asset knowledge.

Given the background of the Hatfield crash, the record for track failure rose by 42 per cent. All that occurred after Railtrack took over responsibility for track safety from British Rail. No wonder the hon. Member for Rutland and Melton (Mr. Duncan) did not want to talk about Railtrack.

Mr. Hunt : Does the hon. Gentleman accept that if we talk about whether the privatisation of Railtrack was right or wrong or whether the financial health of Railtrack was in a good or bad state, we risk ignoring
 
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the central Conservative contention that the treatment of private investors was shabby and that the Government should not have behaved as they did?

Tom Brake: The issue of the private investors and their investment was addressed by the court case. The wider public want to hear about the debacle that was Railtrack and the privatisation of the railways. They want to see some humility from the Conservative party, which has not been displayed today.

The Tory obsession with a man—the right hon. Member for North Tyneside (Mr. Byers)—and the desire to dwell on past events is extraordinary. The right hon. Gentleman's behaviour has been referred to the Standards and Privileges Committee, and it is the right body to decide his fate. We should be using this valuable parliamentary time to look not at what went wrong but at how we can improve the railways. The decision to turn Railtrack into a not-for-profit company was originally a Liberal Democrat idea. It was the right decision given that the Tories botched the privatisation of our railways.

As we are in the middle of a leadership race for the Conservative party, I thought it might be instrumental to look at what the candidates have to say about the railways, and railway privatisation and, specifically, how the railways should progress. When the right hon. Member for Haltemprice and Howden (David Davis), the shadow Home Secretary, was Chairman of the Public Accounts Committee, which considered rail privatisation in 1998, he stated:

"If something is done badly, it is done badly."

He came clean and accepted that privatisation was done badly.

Let me remind hon. Members of some of the facts revealed in that report. It gave a damning verdict on rail privatisation, which saw a handful of former British Rail managers become multimillionaires within a matter of months. The best example of that was Sandy Anderson, who made £33 million in six months.

Jim Sheridan : Taxpayers' money.

Tom Brake: Exactly.

The MPs on the Committee said:

"Such large profits risk discrediting privatisation as a whole",

which is something of an understatement. They went on to say:

"The public are understandably concerned when they see a small number of individuals making personal fortunes at a time when complaints about the industry are rising."

The right hon. Member for Haltemprice and Howden said:

"I am not embarrassed. You have to be iron-hard in impartiality"

as Chairman of the Select Committee. He went on to say:

"If something is done badly, it is done badly."

Mr. Duncan: Perhaps I can help the hon. Gentleman. We are happy to accept that in some respects at least Railtrack was a basket case. He does not need to
 
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dwell on that. What matters is the conduct of the Government. His party's amendment

"condemns the way in which the Government handled the process and the operation of the Department for Transport, Local Government and the Regions at the time".

That is the kernel of the debate. Perhaps we could join forces and hear him concentrate on that.

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