Railtrack profits like confetti, says Byers

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Stephen Byers, Secretary of State for Transport, yesterday mounted an impassioned defence of his decision to wind up Railtrack, and flatly refused to pay compensation to its shareholders.

Speaking to the Labour Spring Conference in Cardiff, Mr Byers – who has been under fire since he put the company into administration,with much of the attack personally targeted at the Cabinet Minister and his special adviser Jo Moore – said he had no regrets.

"Despite all the sound and fury and the personal criticism I have had to face I have no doubt that the decision I took in October was the right thing to do," Mr Byers said. He had had to deal with a company that had "failed".

The minister blamed Railtrack's failure to maintain the track for the Hatfield rail crash and the firm for unacceptable delays to passengers.

He also blamed the Tories for undervaluing by £6bn Railtrack's shares when the company was first privatised. They were sold for £2bn, only to be revalued at £8bn two-and-a-half years later. And he criticised the decision to write off £1.4bn of debt owed to the taxpayer while Railtrack shareholders took a dividend from the £69m of profits earned by Railtrack in public ownership.

"Taxpayers' money [was] being recycled as profit for Railtrack, sprinkled like confetti amongst shareholders – yet not one of them was a shareholder at the time the money was made," he said. "And now the Tories have joined the call for compensation to be paid to Railtrack shareholders, a billion pounds of taxpayers' money.

"My position is absolutely clear and resolute on this. There will be no more taxpayers' money made available. For our government it is essential public services that come first and not the interests of Railtrack shareholders."

Mr Byers said that future links between public services and the private sector would not be conducted on the Railtrack model.