Examination of Witnesses (Questions 1
- 19)
THURSDAY 24 NOVEMBER 2005
CHRIS GRAYLING
MP
Q1 Chairman: Good morning, Mr Grayling.
The Committee is making progress on the matter which was referred
to it by the House last month. I gather you want to make an opening
statement.
Chris Grayling: Really, Sir George,
if it would be helpful to the Committee, I would be very happy
to take just a couple of minutes to talk the Committee through
one or two aspects of the rather large pile of documents I sent.
Q2 Chairman: Okay.
Chris Grayling: Obviously the
Committee is aware of the background to this. There has been no
dispute from Mr Byers that he did commission work on the future
of the rail industry. The question is whether that work constituted
what was described subsequently in the evidence session to the
Transport Committee as "discussions".[1]
There were just a few things I wanted to point Members to in the
documentation. I know that you have page numbers, so I will try
to match up the page numbers. Firstly, on page 4, which is a minute
from the Private Secretary to the rail team, item 2 says, "The
Secretary of State said it would be essential to get the Treasury
to buy into any further work on Railtrack structures. He asked
you to look at ways of taking forward some joint work. You agreed
to speak to Shriti Vadera".[2]
That was on 20 June in the year concerned. Indeed on the following
page it specifically refers to options for reforming Railtrack.
Then there is an email from Shriti Vadera: "Following my
meeting with Byers, he has asked his officials to do some joint
work with HMT on options for Railtrack involving alternative owners
and management".[3]
On page 7, you have some of the remit of that work, the details
of the setting up of that working party,[4]
and two pages later on, what you have as page 9, Sir George, we
have confirmation that Mr Byers was very directly involved in
that: "Steve is doing a note for the weekend box, ahead of
their bilateral next Tuesday", and then it mentions the fact
that he "is leaning towards options which deliver stability
in the short term . . . with incremental change in the longer
term".[5]
There is a copy of that note, Sir George, three pages later on,
what you have in your bundle as page 13.[6]
That is a copy of the note done by the then Secretary of State,
Mr Byers himself, to the Prime Minister where he makes—
Q3 Mr Dismore: Is this the one headed
"Restricted Policy"?
Chris Grayling: That is the one,
yes. In the third paragraph from the bottom on that page, it says
specifically, "My Department, the Treasury and the Policy
Directorate are accordingly starting joint work to identify all
the possible options for Railtrack. We will probably need to engage
(in strict confidence) investment banking advisers". There
are just a couple of other references. The pack contains a full
detailed document produced by Mr John Nevitt of the Railway Sponsorship
Division, which is on your page 17, which contains really a very
detailed analysis of the future of Railtrack and the options that
were under consideration, a not-for-profit company, Railtrack
administration and so forth.[7]
The page immediately after that document, page 33 of your bundle,
says very specifically, "I passed on to the Secretary of
State the timetable for taking forward joint work on options for
Railtrack. He is keen to make quick progress on this. He thinks
Cullen II may provide an opportunity for quick action".[8]
Then, finally on the detail, Sir George, you will see that there
are a couple of examples on the following two pages where David
Rowlands in the DTLR was talking about the time-frame for the
options paper to the Secretary of State and indeed makes a reference
on your page 37, "The Secretary of State wants to have decided
the way forward by the first week in September".[9]
Now, all of those discussions, which emerged in documents that
were submitted to the court, all of that took place before the
key meeting in question. As far as we were concerned on the Select
Committee, we questioned the Secretary of State about the whole
process and he was very adamant in what he told us, that really
the starting point for the process was the meeting he held with
the Chairman of Railtrack on 25 July 2001. All of the items I
have just described to you are documented evidence of the participation
of the Secretary of State prior to that date.
Q4 Chairman: Thank you very much.
Of course the Committee will be interviewing Mr Byers and we will
want to raise with him the issues that you have summarised in
your opening statement. Perhaps I can just ask you a few questions
firstly about a date. In your speech on October 19, column 849,
you referred to the minutes of the meeting held in Downing Street
on 6 July 2001.[10]
Was that an inadvertent error?
Chris Grayling: Yes, I think that
was an inadvertent error. The meeting concerned is the one on
the 5th. There is a minute of that meeting, both the handwritten
minute and the detailed Downing Street note in the latter part
of the bundle and that is the meeting to which I was referring.
Q5 Chairman: Yes, I just wanted to
clarify that.
Chris Grayling: That document
was sent to me on the afternoon of Mr Byers' personal statement
to the House.
Q6 Chairman: I just wanted to make
it clear that there was not a meeting on July 6.
Chris Grayling: No.
Q7 Chairman: Can I then put to you
a rather general question. The House is, by and large, a fairly
forgiving place. If somebody makes a mistake and comes along and
apologises, it is the instinct of the House to draw a line and
move on. In this case, Mr Byers wrote to you,[11]
apologising, he came to the House and actually made a personal
statement in which he deeply regretted what had happened, offered
his apologies to the Speaker and to the whole House.[12]
What was it, when he made that statement, that impelled you to
feel that you had to press the matter in the way that you did?
Chris Grayling: I think it was
the way in which Mr Byers made that statement, combined with the
importance of the point during the initial investigation by the
Select Committee. This really was the central part of the questioning
to Mr Byers about what had taken place. There was some considerable
debate about, for example, the timing of the preparation of the
draft Bill that would have been used to remove powers from the
Rail Regulator had he objected and sought to intervene in the
process of putting Railtrack into administration. There was considerable
doubt about whether this process, the process of pushing Railtrack
into administration, had really been generated because the company
came to see the Government and said, "Help! We're falling
apart". The very strong suspicion was that this had been
part of a premeditated process that went back well before the
discussions with Mr Robinson, so this was a central point in the
investigation. The question was raised with Mr Byers that he gave
information to the Committee that was absolutely not correct.
If you then lay alongside that the explanation he gave to the
House which he described as an "inadvertent error",
I am afraid I just do not buy the idea that you can have detailed
discussions with the Prime Minister, you can have papers with
the Prime Minister, you can attend meetings at 10 Downing Street
about the future of the rail industry and then describe it to
the House as an inadvertent error when you say that the discussions—
Q8 Chairman: Well, perhaps I could
put my question in a different way. What could he have said which
would have enabled you to accept the apology?
Chris Grayling: I think if he
had put his hands up and said, "Yep, it's a fair cop. I was
wrong. I should have been more up-front with the Committee. I
accept that, because of political pressures at the time, I was
circumspect with the evidence I gave. It was wrong to do so, I
accept that, and I apologise", I think I would have accepted
that. The fact is that he has not actually accepted that he, in
my view, lied to the Committee. He said, "Yes, I'm guilty
as charged", but actually he has tried to weasel his way
out of it and I do not accept that.
Q9 Chairman: Basically what you are
saying is that he has apologised for a lesser offence than the
one that you think he committed?
Chris Grayling: Yes, and a fairly
half-hearted apology in terms of his excuse. It was a fairly half-hearted
excuse certainly.
Q10 Chairman: Can we just go on to
the exchange in the Select Committee which generated this. Were
you surprised at the answer you got?
Chris Grayling: Yes, I was.
Q11 Chairman: Why did you not pursue
it?
Chris Grayling: It is quite difficult
when you are a new MP and, as I rapidly learned, asking questions
of Ministers does not always generate the answers that you think
you should get or you think you are likely to get. It is quite
difficult actually when you think you are right and the Minister
says something very different to you. Do you take a step back
and say, "Well, I don't believe you"? Would you, as
an MP of four or five months, say to a Cabinet Minister, "I
don't believe you. I think you're lying to me. I don't think you
are telling the truth"? I did not really believe him at the
time, to be honest, but I guess I thought it was inappropriate
to challenge him and say, "I do not think that's right".
I did not have the evidence to hand. If I had had even a hint
of the documentation we have got now through the court case, I
would certainly have challenged him over that, but it is quite
difficult. It is a fundamental principle of this place, that you
should be able to ask a Minister a straight question and get a
straight answer. It is quite difficult to turn around when you
think the answer you are getting is not straight and accuse him
of not being up-front with you.
Q12 Chairman: If he had given you
a different answer than the one which you might think was correct
and said, "Well, of course, as a responsible Secretary of
State, my Department and I are looking at all the options in case
this company collapses", would that have changed the course
of history?
Chris Grayling: It would not have
changed the course of history. What it would have done though
is enabled MPs who were scrutinising what was happening. You have
got to bear in mind that the Government, as has now been demonstrated
in the courts, and I accept that the Government did not lose the
court case, but it is quite clear that the Government took a view
that it needed either to prepare or indeed push proactively towards
making alternative arrangements for a listed company. That is
quite a significant intervention in the business arena by the
Government. I think the House has a right to know and to understand
and question the motivation for doing that. The shareholders argued
then, and continue to argue, that their assets were renationalised
by stealth. Now, whether or not they are right to do so, and they
went to court and they did not win the court case, nonetheless
surely it must be right that Parliament can ask full and proper
questions about what the Government has done, and in this case
the answer given by the Secretary of State meant that the Committee
was unable to pursue what otherwise would have been a legitimate
line of questioning to understand what the Government had done,
when and why.
Q13 Chairman: I have one final question
which relates to your letter dated October 31 to the Committee
and it is the penultimate paragraph. It is one thing to mislead
a select committee when you are engaged in a spontaneous exchange
and you may not have information at hand, but it is another thing
to mislead the House with a personal statement where you have
access to all the information you could possibly want and you
have the time to prepare it. In your penultimate paragraph where
you say, "Indeed it is my view that his personal statement
to the House also verged on the misleading"[13],
that is potentially quite a serious allegation. Is there anything
you want to say about that?
Chris Grayling: Well, in the personal
statement, and indeed in his letter to me, you basically see that
what Mr Byers has done is to position his original comments to
me and the Select Committee as an inadvertent error and he said
to the House that what had happened had not been discussions in
his understanding of the word "discussions". I am sorry,
I just do not buy that. I think that is an utterly lame excuse.
I do not think it is an accurate excuse. If anybody looks through
these papers, the minutes prepared for the Prime Minister, the
discussions that took place in Downing Street, the scale of the
work being done by his Department, and this is a Cabinet Minister,
it is somebody who has a duty of stewardship over a government
department, whose job it is to know what is going on and, quite
clearly from these papers, knew perfectly well what was going
on, I think it is utterly unsustainable to say, "These were
not discussions in my understanding of the word `discussions'".
I simply do not accept the excuse he has given.
Chairman: That is obviously an issue
to which this Committee will have to address itself in due course.
Q14 Mr Dismore: Mr Grayling, first
of all, when you asked question 857, was that a scripted question
from the pre-prepared list of questions?
Chris Grayling: No, not as far
as I can remember.
Q15 Mr Dismore: It was a freelance
question that you came up with?
Chris Grayling: Yes, absolutely.
Q16 Mr Dismore: The reason I asked
that is that it is quite a complex question and there are lots
of different parts to it, so is there any possibility that Mr
Byers, when he answered, could have been answering part of the
question rather than the whole question in the way it was put?
Chris Grayling: Well, I do not
think so. The question: "Was there any discussion, theoretical
or otherwise, in your Department before 25 July about the possibility
of a future change in status for Railtrack, whether nationalisation,
the move into a company limited by guarantee, or whatever?",
or, in a nutshell, "Were you discussing—
Q17 Mr Dismore: How you just put
it into words, was that how you put it to him?
Chris Grayling: That is the wording
that appears in the transcript.
Q18 Mr Dismore: That is how you put
it to him?
Chris Grayling: That is how I
put it to him.
Q19 Mr Dismore: The way you just
put it to us?
Chris Grayling: Yes. Now, Mr Byers
replied, "Not that I am aware of". It was a very simple
answer to a question that was intentionally a question designed
to be broad-brush enough that it would cover the kind of discussions
that were taking place because I did not know exactly what had
happened, but I thought there was a fair chance that they had
had pre-planning of what they subsequently did in terms of pushing
Railtrack towards administration. The papers that were there,
the evidence that has come out since says different from his answer.
1 Transport, Local Government and the Regions Committee,
First Report of Session 2001-02, HC 239-II, Ev 96-112. Back
2
Attachment 1 [not printed] to Memorandum received from Chris
Grayling MP [Appendix 4]. Back
3
Attachment 3 [not printed] to Memorandum received from Chris
Grayling MP [Appendix 4]. Back
4
Attachment 4 [not printed] to Memorandum received from Chris
Grayling MP [Appendix 4]. Back
5
Attachment 5 [not printed] to Memorandum received from Chris
Grayling MP [Appendix 4]. Back
6
Annex A, Attachment 6 [not printed] to Memorandum received from
Chris Grayling MP [Appendix 4]. Back
7
Attachment 7 [not printed] to Memorandum received from Chris
Grayling MP [Appendix 4]. Back
8
Attachment 8 [not printed] to Memorandum received from Chris
Grayling MP [Appendix 4]. Back
9
Attachment 10 [not printed] to Memorandum received from Chris
Grayling MP [Appendix 4]. Back
10
HC Deb, 19 October 2005, cols 848-50. Back
11
Attachment 15 [not printed] to Memorandum received from Chris
Grayling MP [Appendix 4]. Back
12
HC Deb, 17 October 2005, cols 639-40. Back
13
Memorandum received from Chris Grayling MP [Appendix 4]. Back
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