New sleaze allegations dismissed

John Major yesterday slapped down a Labour backbencher who raised fresh charges of sleaze after Railtrack announced that it had appointed NM Rothschild as merchant bankers for its planned privatisation, writes Nicholas Timmins.

The announcement came a week after Lord Wakeham, a former Cabinet minister, joined its board. That appointment caused controversy because Rothschild advised the regional electricity companies on privatisation when Lord Wakeham was Secretary of State for Energy.

Malcolm Chisholm, Labour MP for Edinburgh Leith, asked Mr Major at Prime Minister's questions yesterday whether he would be advising Lord Wakeham "to keep his seat warm for the present Secretary of State for Transport as a pay-off for this disastrous anddeeply unpopular privatisation".

The Prime Minister, after praising the success of past privatisations, said the question did "not merit a reply".

Railtrack yesterday said it first appointed Rothschild in April 1993 and the new announcement was a reappointment based on first-year performance.

Rothschild, which has advised the Government on the privatisation of gas and electricity and has advised the water companies and British Telecom on privatisation, stated that before Railtrack was created it had advised British Rail on how operators should gain access to Railtrack's infrastructure. "We are not sure what all the fuss is about," a spokesman said.