Stephen Byers, the Secretary of State for Transport, shrugged off calls for his resignation yesterday, insisting he had not misled shareholders over the collapse of Railtrack.
He dismissed Conservative calls for a public inquiry into the affair, saying he put "delivery to passengers before dividends to Railtrack shareholders".
Mr Byers was forced to make an emergency statement to MPs after Tories said that the order putting the firm into administration had been drawn up by the Government more than a week before shareholders were told of the collapse.
Mr Byers said the company's own advisers had raised the possibility of insolvency if ministers did not release additional funds – and he drew up the order as a contingency plan.
Theresa May, the shadow Transport Secretary, accused Mr Byers of conducting "a drawn out act of wilful destruction". She said. "Sadly, while the Secretary of State had decided to wind up Railtrack, thousands of employees were investing more of their hard-earned savings in the company. For the Government to allow people to invest annual dividends in shares of the company while they were signing the railway's future away is, at the very least, morally questionable."
She told Mr Byers: "It is clear you have been bent on destroying Railtrack from the start. As a result, schemes will be delayed, investment postponed and the industry placed in a protracted period of stagnation. There is a huge obstacle in the way of future investment in the railways. That obstacle is you. You must go."
Mr Byers insisted the final decision to wind up the company had only been taken on 5 October, the day before the Government petitioned the High Court to put the company into administration.
He told MPs: "Railtrack was a creation of the Conservative Party. They clearly cannot come to terms with the fact that this failed Tory privatisation has been brought to an end by this Government. Railtrack represents much that was wrong with the Tories' privatisation of the railways – with the travelling public seen as an inconvenience, getting in the way of the interests of shareholders."
Railtrack called for a public inquiry to establish the full facts leading up to Mr Byers' decision. The company chairman, John Robinson, said: "Contingency plans are one thing, but what we have here is the suggestion that final documents had been circulated among officials that would shortly wipe out Railtrack shareholders' equity. No public company's investors should be treated like this."
Steve Marshall, chief executive, said: "Railtrack was not insolvent until government chose to make it so.
"The directors will continue to fight on behalf of shareholders who were wrongfully deprived of their equity."Reuse content