National Express won the bidding in 2007 for the franchise to run the East Coast rail line. Last year, they realised that they had overbid, and wanted to buy themselves out of the contract. Stephen Byers claimed that he had secretly brokered a deal with the Transport Secretary, Lord Adonis, under which the company would be severely criticised in public, but on the quiet it would be let off lightly.
To some people's surprise, it emerged that Mr Byers' claim that he had lobbied Lord Adonis was true. This is odd because Mr Byers followed his original boast with a statement in which he effectively called himself a liar and said he had "never" lobbied ministers on behalf of commercial interests. It was Lord Adonis who volunteered the information that Mr Byers had lobbied him in the Commons in June, but insisted that it was "pure fantasy" that this conversation led to National Express eventually being let off the hook. He said he had told Mr Byers that he had "no intention" of treating the company differently.
The facts suggest Lord Adonis was as good as his word. The company's chairman, John Devaney, was prepared to pay between £100m and £150m to escape the East Coast franchise, because he was anxious to hold on to the franchises on the profitable East Anglia and CC lines. Lord Adonis made the company pay slightly less to break the contract – £72m – but it will lose both other franchises in 2011, a harsher penalty all round.
Tesco's corporate affairs director, Lucy Neville-Rolfe, approached Mr Byers, concerned about a change to food labelling being proposed by the Environment Secretary, Hilary Benn. Rather than approach Mr Benn directly, Mr Byers went to his own close friend, the Business Secretary, Peter Mandelson, and told him of Mr Benn's plan which would be a "huge nightmare in every supermarket". As a result, Lord Mandelson intervened and the plan was delayed and then emended.
All three main players – including now Mr Byers – deny any lobbying took place. Tesco said it had never employed Mr Byers and described his account as "completely fictitious". Having at first said he had no "recollection" of a conversation, Lord Mandelson later stated that he definitely did not speak to Mr Byers, who also changed his mind and said he had fabricated his account.
The Department of the Environment, Food and Rural Affairs said yesterday: "We do not consider our policies to have been affected by lobbying by MPs." What about government ministers? "You can't expect me to go into detail about what goes on at Cabinet level and Lord Mandelson has made a statement about this subject," said a spokeswoman. Mr Benn had not proposed any food labelling legislation since he took charge at Defra, she claimed. However last January he told The Independent he would lobby in Europe to introduce compulsory labelling of the origin of meat in processed products such as pies.
In January, Defra announced a deal with grocers to label the origin of pork in products. In the meantime, last July Britain secretly opposed a French bid to force EU manufacturers to state the country of origin of milk, cheese, meat and other non-processed foods. Defra said yesterday that shoppers did not want or expect compulsory country of origin labelling on cheese and meat, which it said would be a burden on business. Did the Business Secretary intervene in this decision?