Byers gets grilling on collapse of Railtrack

Transport

Stephen Byers has promised to release the minutes of the infamous meeting at the heart of the controversy over his handling of the winding up of Railtrack.

The embattled Secretary of State for Transport told MPs yesterday that official notes of his meeting with the Railtrack chairman John Robinson on 25 July backed his claims that he was warned the company would cease to be a going concern if it did not receive fresh Government support.

Mr Byers also strongly denied threatening Tom Winsor, the independent rail regulator, with legislation to limit his powers if he intervened to save Railtrack.

But during a grilling by members of the powerful Commons Select Committee on Transport, Mr Byers admitted that officials had drawn up a draft emergency Bill to bypass the regulators' powers as part of "contingency plans" to deal with the company's collapse.

Mr Byers, who easily survived a Commons vote of no confidence on Tuesday, faced sustained and detailed questioning about his role in the collapse of Railtrack from the committee yesterday.

Asked about the disputed meeting with Mr Robinson, Mr Byers repeated his insistence that Mr Robinson had outlined the company's poor financial state and asked for a "soft letter of comfort" to secure its banking facilities.

Mr Byers insisted Mr Robinson had warned him that the company could not give the City a vital assurance that it was a going concern if the letter of support or other extra Government aid was not forthcoming.

Chris Grayling, Conservative MP for Epsom and Ewell, repeatedly asked Mr Byers if Mr Robinson had asked for additional Government cash.

Mr Byers replied that Railtrack had asked "for a soft letter of comfort in order to access existing banking facilities" and that there was never a specific request for money.

Mr Byers said he had not seen a note of the meeting made by Mr Robinson and passed to the Financial Services Authority. But under pressure from MPs he said he would send the Government's official note of the meeting to the committee. The document is expected to be made available over the next few days.

Mr Byers repeatedly denied threatening the rail regulator after taking the decision to apply for Railtrack to go into administration on 5 October.

Anne McIntosh, the Conservative MP for the Vale of York, said Mr Byers had put the regulator in "an impossible position" because any attempt to intervene would have been met with emergency legislation.

Mr Byers told MPs that commercial confidentiality had prevented him raising Railtrack's problems with the regulator until the day he announced he was applying for the firm to be put into administration.

He said he had simply been "open and honest" with the regulator and Mr Winsor went on to offer to carry out an interim review of the company's position to help sort out Railtrack's financial problems.

Mr Byers said: "It wasn't me volunteering that there was the potential for the introduction of emergency legislation. The regulator himself said almost 'What if?'. Had I not disclosed the decision Government had taken, then people could have alleged I had misled the regulator. "I was simply very open and very honest with the regulator in response to an issue he had raised."

He brushed aside suggestions that he had blocked payment of a £162m grant to establish a new company to channel investment into the railway system. He said the payment was "a red herring" and insisted that the grant would have done little to offset the company's debts.

Mr Byers also denied repeated Opposition claims that he had undermined Railtrack by withdrawing Government support, insisting the company had faced "financial meltdown".

He told MPs: "I firmly believe that Railtrack had become, not part of the solution for our railways, but a major problem. We now need to concentrate on the measures that have to be introduced and the steps that need to be taken if we are to create a railway system fit for the 21st century."