APPENDIX 4: MEMORANDUM FROM CHRIS GRAYLING
MP [BYERS.8]
Letter to the Chairman from Chris Grayling MP
Thank you for your letter concerning the evidence
given by the Rt Hon Stephen Byers to the Transport Sub-Committee
on 14 November 2001.
To give a context to the circumstances for this written
statement to the Committee, can I remind you of the background
to my line of questioning to Mr Byers that day.
In November 2001 it was six weeks after Railtrack
went into administration, and we were in the midst of an enquiry
into the future of the railways and the circumstances that had
led up to the administration.
The story that the Government had told us was that
they begun the process to force Railtrack into administration
only after a meeting that had taken place some three months
earlier on July 25, between the Chairman of Railtrack John Robinson
and the Rt Hon Gentleman. Mr Robinson, we were told, had warned
at that meeting that Railtrack would need extra Government support
if it were to survive. Without that support, its future was in
doubt.
The Government, we were told, had taken urgent steps
to ascertain the nature of the problem, had concluded that nothing
could be done, and then forced the company into administration.
My colleague and I, Honourable Member for Vale of
York, were the two opposition representatives on the Committee.
We had long discussions about what we had heard—and we concluded
that this story simply didn't add up. We suspected that the Government
had been planning to force a restructuring of Railtrack well before
that meeting on July 25.
It was those suspicions that prompted my question
to the Rt Honourable Gentleman on 14th November.
I asked him:
"Was there any discussion, theoretical or
otherwise, in your Department before 25th July about
the possibility of a future change in status for Railtrack, whether
nationalisation, the move into a company limited by guarantee
or whatever?"
The Rt Hon Gentleman replied
"Not that I am aware of."
The Committee will be aware of the detail of the
exchanges that took place over this matter in the High Court,
and I have enclosed a transcript of this with my letter.[125]
You will be aware that in those exchanges, the then Secretary
of State admitted that the response he gave to my question during
that meeting of the Transport Sub-Committee was untrue. Since
then, he has made his personal statement to the House and has
written to me personally. I have enclosed a copy of his letter
to me.[126]
For me, the essence of the question is whether his
explanation of his action is credible. You will see that in his
letter to me he described his action as an "inadvertent error".
This was also the explanation he gave the House. The relevant
section of Hansard gives the following explanation.
"Having reviewed the documents that were
put before the court, it would have been because I considered
the meeting of 25 July to be the moment at which discussions began
and that the commissioning of work to be carried out on the future
options for Railtrack did not represent discussions in the true
meaning of the word."
I have reviewed both the Court papers and also a
copy of a minutes of a meeting held at No. 10 Downing Street on
July 5 2001, involving the then Secretary of State and the Prime
Minister, plus representatives of the DTLR, the Treasury and the
No. 10 Delivery Unit. It is this latter document that was handed
to me recently by the Member for Rutland and Melton. The minute
specifically refers to a discussion of structural issues within
the Rail industry and the future structure of Railtrack.
The Court papers also make extensive reference to
meetings and discussions about the future structure of the rail
industry prior to July 25. I would particularly draw the Committee's
attention to the memorandum written by Mr Byers to the Prime Minister
prior to a meeting on July 3, in which he says "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".[127]
It is my view that taken together, all of these elements
make the claim that the then Secretary of State could have considered
what was taking place as being something other than "discussions"
is straining credibility.
It was for that reason that I did not accept either
his statement to the House or his personal apology to me. Indeed
it is my view that his personal statement to the House also verged
on the misleading.
I would be happy to meet your Committee to discuss
these issues should you wish to do so.
31 October 2005
125 Not printed (see list of unpublished memoranda). Back
126
Not printed (see list of unpublished memoranda). Back
127
Not printed (see list of unpublished memoranda). Back
| 
