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Mr. Duncan rose—

Mr. Byers: Here we go!

Mr. Duncan: As the judge said of the comment made by Sriti Vadera, it was a term of endearment.

Mr. Byers: And I took it as such, as always. I was disappointed by the hon. Gentleman's contribution,
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however, because I was looking for some substance and detail, and something new. I am afraid that it was a rehash of the arguments that were put on behalf of the claimants in the court case, which they comprehensively lost when Mr. Justice Lindsay had the opportunity of examining their claims in detail. It really was tabloid advocacy—all headlines and no substance.

Given that the Conservatives have chosen to have a half-day debate on this issue, it is interesting to see that their priority is to re-fight the battles of four years ago, when public opinion was not in favour of Railtrack. The public now realise that what we did in putting the travelling public first, not the interests of Railtrack shareholders, was absolutely right. That was the crux of my decision. The Conservatives have never apologised for the privatisation of Railtrack. Constantly, they put the interests of 250,000 Railtrack shareholders above those of the 2.5 million who travel on our railway system every day. The Conservative party is still the same—it will always be for the few and not the many, and will always be on the margins of politics in this country as a result.

Serious allegations have been made about the conduct of the Government leading up to the decision about administration. Because of the amendment moved by my right hon. Friend the Secretary of State, however, we can also consider the nature of the privatisation of Railtrack in the first place. I am delighted that the former Chancellor of the Exchequer, the right hon. and learned Member for Rushcliffe (Mr. Clarke), will be replying to this debate. I hope that he will explain to the House what value there was for taxpayers in his writing off £1.4 billion owed to the taxpayer so that Railtrack would not inherit the debt, thereby making it more juicy for potential shareholders. That was a bung of huge proportions from the former Chancellor—to make the privatisation fly in the markets, he made a £1.4 billion gift.

It is worth reminding the House that under the Conservative Government's Railways Act 1993, which saw the privatisation of large sections of the railway system, Railtrack, responsible for the infrastructure, was kept in the public sector. That was for a good reason: everybody realised that the infrastructure operators and licence holder had to be accountable to the travelling public, not to private shareholders. However, John Major, the former Prime Minister, desperate to unite a party that was bitterly divided over issues such as Europe—if I can say that to the right hon. and learned Member for Rushcliffe—wanted a bone of dogma to give his braying Back Benchers. That dogmatic bone was the privatisation of Railtrack, pushed through in 1996.

Every independent commentator said that it simply did not make sense to have the licence holder in the private sector, accountable to shareholders and with a legal duty to put their interests first, not those of the travelling public. The right hon. and learned Member for Rushcliffe, however, when Chancellor of the Exchequer, wrote off £1.4 billion of taxpayer's money to make that privatisation float. In addition, a £69 million surplus had been made by Railtrack while in the public sector. What did he do with it? He did not use it for schools or to employ more nurses. He held it back and then showered it over the new shareholders in Railtrack like confetti—£69 million of confetti. That money was
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made while Railtrack was in the public sector, when those recipients were not even shareholders. That was how generous the right hon. and learned Gentleman was when he was Chancellor.

On the fundamental point of the motion, and as the hon. Member for Rutland and Melton has made clear, had the Conservatives faced the problems that we had in 2001, he would have been even more generous. He would have said to the regulator "Get on! If you want to give them billions, that is fine by us." Billions to Railtrack, a company that was clearly failing.

Adam Afriyie : May I ask a question to which I did not receive an answer from the Secretary of State? I have been listening carefully to the right hon. Gentleman. Does he accept any responsibility whatsoever for the plight of shareholders, especially the elderly, whose pensions will suffer?

Mr. Byers: When I was Secretary of State, I obviously had to have regard to the interests of shareholders, which is right and proper. But, as Secretary of State for Transport, I also had an overriding consideration: the travelling public. People chose to invest in Railtrack shares, and they received the value that was in the company. That is the nature of shareholding. There was value in the company—what was it? £2.50 or £2.60 per shareholder—and it was right for the shareholders to receive that amount. That was what the company was worth.

It is for investors to think carefully about where they are putting their money. Shares can go down as well as up, and Railtrack was a bad investment for many people. There are questions that the former shareholders should be asking the directors of Railtrack.

The privatisation of Railtrack was really a last throw of the die by the John Major Government. It was introduced because he was desperate to bring his party together. It is fascinating to look back at the terms on which Railtrack was promoted to the financial sector. At the weekend, I came across the comments of one financial adviser. He said

He went on

Because of the way in which Railtrack ran the system, the passengers were in the stations for even longer waiting for the delayed trains. That financial adviser was absolutely right: these were the captive customers for those who were trying to promote the sale.

Railtrack was sold for £1.9 billion. It was clear that it had been undervalued. When the right hon. Member for Haltemprice and Howden (David Davis) chaired the Public Accounts Committee, the Committee issued a stinging criticism of the privatisation. Commenting on why it was rushed through before the 1997 general election, the right hon. Gentleman said

The Department acknowledged that Railtrack

That was the background to the botched privatisation of Railtrack. What sort of company was it in the private sector from 1996 onwards? In his report on the
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Paddington crash at Ladbroke Grove, Lord Cullen said that the company suffered from "institutional paralysis". In a recent court case dealing with the Hatfield derailment, it was revealed in the evidence before the court that Railtrack, the company that the Conservatives would have kept in business, had failed to act for over a year after being told that rails near Hatfield were badly cracked and in need of replacement. That is the company so cherished by the Conservatives; but that was the finding of the judge in the recent Hatfield court case.

The judge, Mr. Justice Mackay, went on to say that the Hatfield derailment and the neglect that was there constituted

That is Railtrack. That is the performance of Railtrack. The Conservatives have alleged that somehow I personally engineered the collapse of Railtrack, but the evidence makes clear that I did not need to, because of the nature of Railtrack.

Mr. Kenneth Clarke : Just so that I know what the right hon. Gentleman's case is when I reply to the debate, may I seek clarification? I am astonished. I thought he was a Blairite, but he seems to be saying that his conduct was based on a hatred of the privatisation—although I do not recall his talking about a need to renationalise—and that his actions constituted a punishment of the company for its past misfeasance in respect of some of its duty. Reading the papers, I rather thought that his main motives at the time were to get hold of its assets at minimum cost and at the shareholders' expense, and to ensure that the successor company kept its debts off the public balance sheet. There is no mention of this concern for the travelling public, this desire to avenge the wrongs of nationalisation or the dreadful instance of the Hatfield crash. Is the right hon. Gentleman saying that all that chicanery was aimed at protecting the travelling public and provoked by his dreadful memories of how awful the whole policy had been in 1996?

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