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Mr. Duncan: The right hon. Gentleman is right: he would have been entitled to come to the House to try to change the law, but he was working within existing statute law. Why did he not tell the judge who granted the administration order about the powers of the regulator, who, if he had chosen to exercise them, could have staved off the insolvency that was granted in that order?

Mr. Byers: All the relevant details were provided to the court, as far as I am aware. I refer once again to the point made by Mr. Justice Lindsay. In referring to the making of the order, he says:

Mr. Justice Lightman—

who was the chairman of Railtrack,

So Railtrack gave up, effectively, because its directors knew the state that their company was in.

A major public policy decision was taken to say that no additional funding should be given to Railtrack, and we met all our legal obligations.—[Interruption.] The
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hon. Member for Rutland and Melton says from a sedentary position, "You didn't tell us," but the right hon. and learned Member for Rushcliffe was agreeing with me when I went through the nature of a major company coming to the Government in confidence with commercial information. I appreciate that the hon. Gentleman has never held Government office—he is unlikely ever to do so—but if he consulted the right hon. and learned Gentleman, he could have explained to him what the nature of government is all about. He would find that useful. It would not have any practical application—he will never have the chance—but it might be good for his wider knowledge of the way in which government works.

Railtrack was a flawed privatisation. Railtrack was obliged to meet the needs of its shareholders. With Network Rail, we now have a far better system that can put the travelling public first and we are beginning to see improvements in the railway system as a result. When the chairman of Railtrack met the Prime Minister in July 2001, he described his view of Railtrack. I shall quote because the language may not be quite parliamentary. He said that Railtrack was "a crap company". He was absolutely right in that analysis of Railtrack.

Despite all the criticism that I have had over the years from Railtrack shareholders, aided and abetted by Conservative Members, as they have been again this afternoon, I am confident that, when I took the decision in the autumn of 2001 to say, "No more extra money for Railtrack" and to put the interests of the travelling public first, I did so after proper debate and deliberation in government. I did it with the powers that I then had as Secretary of State for Transport, and I am absolutely confident that it was the right decision to take in the public interest and for those people who travel every day on our railway network. So I make no apology for that decision and for unwinding the Tory privatisation that was Railtrack. It was failing the industry and the travelling public, and we did things rightly and properly in the public interest. That is why I will support the Government amendment this evening.

6.7 pm

Damian Green (Ashford) (Con): It has been instructive to listen to both the current and the former Secretaries of State for Transport, who have been anxious to tell us what they did, but very reluctant to deal with why they did it, which is central to the point made by my right hon. and hon. Friends in the motion. I want to concentrate for a few minutes—I am conscious that other colleagues wish to speak—on the second half of the motion, which criticises the conduct of the Chancellor of the Exchequer's special adviser and then considers the impropriety in the formation of Government policy. That lies at the heart of the debate. As well as the hugely important issue of running an efficient railway, it is possibly even more important that we run a fair and decent Government, and the whole episode reveals that the current group of Ministers—especially the Chancellor of the Exchequer and his advisers—are not capable of doing so.

I shall concentrate on the use and behaviour of special advisers. As a former special adviser, I want to challenge the implication that the way in which special advisers'
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now routinely behave, which damages the reputation of the whole civil service, is in any way comparable with how they used to behave under previous Governments.

The events surrounding Railtrack illustrate that the Government no longer hold to one of their articles of faith. They have always believed that the public care only about what they do and not at all about how they do it. That theory was exploded by the Iraq war, when even some of those who supported the Government's policy were deeply disturbed by the Government's lack of candour about their reasons for taking action and, equally, by the slapdash way in which decisions are taken, which allows the lack of candour to flourish because it bypasses the proper systems of government.

What is transparent from both the files and today's debate is that the Government wanted to renationalise Railtrack. That policy could have been properly debated in the House. Indeed, that happened in other venues. That is an entirely proper policy debate. What is not proper, and what the Chancellor's special adviser in particular seems to have driven, are the efforts to renationalise by stealth and on the cheap. In particular, as we have heard throughout the debate, the Chancellor's special adviser was the driving force behind the contempt shown to Railtrack shareholders.

The audit trail is clear. On 26 July 2001, Ms Shriti Vadera wrote:

At the end of July she was asking in e-mails:

She went on to state at the end of August that

before her now notorious e-mail describing the shareholders as "grannies".

What the e-mails illustrate is not just Ms Vadera's contempt for small shareholders—that is a matter between her and her political masters, especially, perhaps, those Treasury Ministers who purport to support an enterprise economy—but how much real power lies in the hands of special advisers who seem to have no regard for any proper process of government. Permanent officials would not write e-mails like that about a sensitive matter of public policy, because they have proper regard for the way in which advice to Ministers should be devised and presented. Under previous Governments, special advisers would not have written like that, either. It is not a matter of pedantry or trying to wrap up advice in Sir Humphrey-style obfuscation; it is a decent regard for propriety, without which even democratic government loses its legitimacy. Governments have huge power. That means that individual officials have huge power and should exercise it responsibly.

Many people would say that it is wrong to talk about officials, because Ministers take responsibility for decisions. I wish that were still the case. Under this Government, Ministers too often duck and dive and try to evade responsibility. Just occasionally, the light
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shines on what is going on behind Whitehall's closed doors and we discover who is pulling the strings. The Government who brought us Jo Moore and still bring us Shriti Vadera have no right to hide behind constitutional or parliamentary proprieties. The people who tore up the old rule book cannot hide behind the old rules. In this case in particular, they cannot hide behind the old rules because Ms Vadera was clearly uninterested in maintaining the structure of the rail industry, which had been left in place to ensure that a proper balance was maintained.

We have just had an interesting debate about the role of the rail regulator and Mr. Tom Winsor's interpretation of it. It was entirely in the Government's power in four years to instigate a discussion and introduce legislation. They chose not to do so. When it came to the point where they wanted to renationalise Railtrack on the cheap, they realised that he might be an obstacle, so they started threatening him. The history of that episode shows that instead of having a proper policy debate, they choose to do things behind closed doors.

It is worth analysing who lies behind this manifestation of the increase in special advisers' powers and the misuse of that power. The plans for the destruction of Railtrack on the cheap were clearly hatched in the Treasury, and the spider at the centre of the web was the Chancellor of the Exchequer. It is a little ironic, but I feel sorry for the Prime Minister, who has had to suffer public rebuke following the Butler report for his informal style of sofa government. The Chancellor is in many ways more culpable of subverting the proper processes of government, because he is characteristically more thorough, more rigorous and more focused than the Prime Minister when he sets about subverting the processes of proper government.

The Chancellor's special adviser in this case was assiduous in pulling together and forcing through the policy that led to the collapse of Railtrack. To return to my first point, such behaviour on the part of a special adviser was unthinkable under any previous Government of any party. Special advisers are in a privileged position and should recognise that that brings responsibilities. That has clearly not happened in this case. Even more importantly, senior Ministers who appoint and employ special advisers should make it clear to them that they are expected to meet the highest standards of propriety—the standards that all of us expect from permanent officials. It is plain that the Chancellor does not expect or encourage his special advisers to meet those high standards.

All that is a most serious charge to lay at the Chancellor's door. He aspires to be Prime Minister. In that role he would be responsible for the conduct of all his Ministers. Why should Ministers or special advisers respect the rules when the Chancellor of the Exchequer holds the rules in contempt? The Government's conduct over Railtrack stinks, because those at the very top of the Government do not care about using their power in a proper, decent and fair way. For that they should be ashamed.

6.15 pm

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