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Mr. Darling: Will the right hon. and learned Gentleman give way?
Mr. Clarke: I shall do so for the last time because I do not want to detract from the main point.
Mr. Darling: I am grateful. I allowed the right hon. and learned Gentleman to intervene in my speech on several occasions. Is not his problem the fact that Railtrack knew that it was insolvent? It unquestionably could not pay its debts. It had been telling the Government for six months before October 2001 that it was in deep financial trouble. It might have wanted to approach the regulator, but not to get a second opinion about whether it was insolvent. The only reason for going to the regulator was to get barrel-loads of public money to stop it being insolvent. For that reason, the right hon. and learned Gentleman's argument falls down. We are not considering a company that was solvent in October 2001. By its own admission, it could not pay the debts and it wanted "millions of pounds by Monday morning". It could not get that.
Mr. Clarke: It was for the regulator to decide whether the company was insolvent. Railtrack knew that as well as the then Ministers. Railtrack despaired of following that route. Regardless of what it requested, it was up to the regulator to decide whether to give it anything. The regulator was independent and had rightly been severe about Railtrack's past performance. However, the route of approaching the regulator was cut off.
The former Secretary of State has no answer to the question of why he got, in a meeting, the Prime Minister's personal authority to legislate, unless he feared that the regulator would produce a financial arrangement that would block the insolvency. There was no need to ask the Prime Minister for legislation if the regulator intended to do nothing. There was no need to contemplate emergency powers if Railtrack had accepted that it would not approach the regulator. The only reason for the device was to force an insolvency that the regulator might have stopped.
The former Secretary of State told the regulator of his intentions only on the Friday before the Sunday when he made the application for the insolvency. I shall read the judge's account of the evidence that was given about the meeting with the regulator when the then Secretary of State told him of his intentions. Tom Winsor said
"that Mr. Robinson's reaction would be likely to be an immediate application for an early interim review. Mr. Byers said that that had been thought of and that if such an application were made he had the authority (as he had) of the Prime Minister and Chancellor immediately to introduce emergency legislation to entitle the Secretary of State to give instructions to the Regulator. Mr. Winsor pointed out what adverse effects such legislation would have not just on railway financing but on regulated industries generally. He spoke, too, of implications under the Human Rights Act. He made no headway; Mr. Byers said an application to put the company into Railway Administration would be made on Sunday."
The regulator was told that if he acted he would be sacked and that, even more important, his powers would be taken away. That makes it clear that there was only one motive: to ensure that he could not undertake a financial review and the company could not be rescued.
Railtrack rolled over on the Sunday. It did not oppose the administration. By that time, it was disheartened, but the regulator had tried to stiffen its resolve. By Saturday, Mr. Winsor was talking to the chief executive of Railtrack. The judgment states:
"Mr. Winsor, on the subject of the threatened legislation, pointed out that it would take time to be passed and was a difficult card for the government to play. It would be likely to be resisted by reason of its effect on other regulators and other regulated industries. It would be hard fought and might not be passed at all, but, despite that, Railtrack showed no interest. He suggested that they might call the government's bluff but Mr. Robinson just repeated that the government would do it."
The unfortunate Mr. Robinson had lost heart and despaired. He considered a financial review and was told that the Government would legislate to remove the regulator's power and that there would be no review. The independent regulator invited him to call the Government's bluff because it would not have been easy to get the measure through the House. However, it was lucky for the right hon. Member for North Tyneside and the Government that Railtrack had finally had the stuffing beaten out of it. It was presented with a pistol but it did not fire it. It agreed to administration and the victims were the shareholders—the people who never discovered what the value of their company might have been. The scheme of putting the company into administration had been successful because the people in charge of Railtrack would not ask for a financial review. When told that the Government would legislate, they despaired.
It is a sorry and disreputable story. It shows the process of government being subverted and misused. It shows motives that would never have come to light without the litigation. Only when the shareholders came to court did anybody know anything about the stage-by-stage discussion, planning and plotting that had gone on between a few people to produce such an appalling result. That is why we have tabled the motion and why the debate is important.
Sooner or later, the style of government must be improved. When the current Chancellor becomes Prime Minister, my red hot tip for his successor is the current Secretary of State for Transport, who led for the Government in the debate. I hope that he raises the standard of government by an inch or two. To be fair to him, he did not defend all the processes that had been used; he tried to defend only the decision.
To show that the matter is not simply a bee in the bonnet of Conservative politicians, I shall quote the comments that Simon Jenkins made in The Sunday Times on 17 July, when the judgment came out. [Interruption.] He is an independent commentator. He has said rude things about me in the past month or two, and about many other hon. Members. It is no good groaning about independent critics. He is also careful what he says:
"The case is of massive significance to the integrity of British politics. It is the common man against Leviathan, the evidence portraying squirming ministers, bullying officials, money beyond dreams of avarice, chicanery and lies. Laid bare have been the
- inner workings of Tony Blair's courtier style of government. The Scott inquiry into arms-for-Iraq was small beer in comparison. The case tells us more about Whitehall's view of the world than ever did Hutton. It deserves a Spielberg movie to itself."
I cannot say that that is overstated. I do not think that it is understated, either. We have had an opportunity, because of the court case, to see the veil ripped away and to see what actually happens in the new Labour Government when they handle a controversial decision. It is not a pretty sight. The Government should not escape censure for that, nor should the then Secretary of State for Transport, Local Government and the Regions. But the person who should be held responsible above all for this dreadful mess is the Chancellor of the Exchequer.
6.50 pm
The Minister of State, Department for Transport (Dr. Stephen Ladyman): Finally, with the right hon. and learned Member for Rushcliffe (Mr. Clarke), we have at the Dispatch Box one of the real authors of the Railtrack misfortune. The party that says that it wants to look forward has given us a perfect opportunity to examine its past and rolled out one of its crustiest dinosaurs for us to have a look at. But the fact that the dinosaurs could roar did not mean that they were not finished.
There was not a word of apology from the right hon. and learned Gentleman. We did not hear a word about his role in the creation of Railtrack.—[Interruption.] We did not hear a mutter of regret from any of the sad remnants of the Major Government who are sitting on the Front Bench today; I can see at least three of them. There was not a breath of apology, not a murmur of regret, so let me start by putting the record straight.—[Interruption.]
Madam Deputy Speaker (Sylvia Heal): Order. The House must come to order.
Dr. Ladyman: The disaster that was Railtrack had its origins in the botched privatisation of the railway system, for which the Government whom the right hon. and learned Gentleman served were totally responsible. It was a disaster born of a feckless, economically illiterate and weak Government who were determined to force railway privatisation on the nation, whatever the price. As the price mounted, did the right hon. and learned Gentleman, who after all became Chancellor of the Exchequer before the privatisation was complete, once count the price? When he became Chancellor and the sale was being forced through before the general election, did he put his foot down and block the bargain basement disposal of national assets? Not at all. On the reorganisation of Railtrack, he was silent. When railwaymen and engineers were being elbowed from the board and replaced with retailers and property men, he did not utter a word to stop it—not a murmur.
In an intervention, the right hon. and learned Gentleman said that, when he was in office, things would not have been done as they were done by this Government. He said that the Conservatives would have convened a Cabinet Committee and exchanged ideas in memos. Did those memos and those Cabinet Committees stop the disaster that was Railtrack?
24 Oct 2005 : Column 79
Instead, that Government and that Chancellor pushed ahead. If anyone has lost money on Railtrack, if railway travellers wonder why rebuilding the railways has taken so long, and if taxpayers want to know why so much money went into the pockets of Railtrack for so little return, they need look no further than that Conservative Government and the right hon. and learned Gentleman. If they want to know what the Conservative party would have done in the same circumstances, they need look no further than the comments of Tory Front Benchers—[Interruption.]
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