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Mr. Byers: I do not know who advised the hon. Lady to put that quote in the public arena, but the truth is this: had Railtrack applied for a review on the Saturday evening, which is what the regulator indicated that he would be prepared to accept, then—this is the crucial point—on the Saturday evening, the regulator would have made public the fact that the review had begun. On the Sunday afternoon, the High Court judge, knowing that a review had commenced, would probably not have granted the petition. That is the situation.

However, on that Sunday afternoon, Railtrack attended the High Court with counsel, and I presented my petition. Railtrack did not oppose the petition. Had Railtrack refused—

Mr. Bernard Jenkin (North Essex): You refused it.

Mr. Byers: For the benefit of Opposition Members, I cannot refuse an interim review. On the evening of Saturday 6 October, the Rail Regulator indicated to Railtrack that he would be prepared to conduct a review, or consider it, if an application were made. No such application was made by Railtrack.

Andrew Bennett: Does my right hon. Friend accept that it seems incredible that Railtrack, knowing immediately after the Hatfield disaster that it might have financial difficulties, did not consider going to the Rail Regulator and asking for a review, but preferred to try to negotiate with the Government? If Railtrack was really

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concerned to protect its shareholders, should it not at least have approached the regulator before that date, almost 24 hours before the order was made?

Mr. Byers: Those are issues for Railtrack rather than for me, as Secretary of State. People will no doubt want to raise questions about the conduct of Railtrack.

Geraint Davies: Will my right hon. Friend give way?

Mr. Byers: No, because I want to put on the record exactly what happened, in answer to the serious allegations that have been made by the hon. Member for Maidenhead.

The final point that the hon. Lady made was that, somehow, I had kept my approach, and the possibility of legislation, secret from the House. That is a serious allegation. I have made no secret of our position. It was disclosed in a letter from our financial advisers, which formed part of our evidence to the High Court on 7 October. That same letter was one of a number of papers placed in the Library of the House on 23 October—so much for keeping it secret. It was placed in the Library on 23 October—a big secret. More important, on 2 November, the shadow Minister for Transport, the hon. Member for Brentwood and Ongar (Mr. Pickles), received a parliamentary reply from my right hon. Friend the Minister for Transport drawing his attention to the fact that the papers had been placed in the House of Commons Library. [Interruption.] No, it was not after the event. Clearly, there was a breakdown of communication between the beauty and the beast—[Hon. Members: "Who is the beauty?"] It is a close-run thing.

There was clearly a breakdown of communication because last Wednesday 7 November, the hon. Member for Maidenhead said about the possibility of introducing legislation that it was a stark new piece of evidence. It had been in the House of Commons Library for over a fortnight. That is the reality. Therefore, the position in relation to the regulator is this: open and honest, no misleading of the regulator and the House kept fully informed of the Government's position.

Mrs. Eleanor Laing (Epping Forest): Is the Secretary of State in effect saying that he values the independence of the Rail Regulator, and that he will protect in perpetuity that independence? It is not what the Rail Regulator appears to have understood the Secretary of State to say when he said:

That is a threat to independence. Is the Secretary of State now saying that he will protect the independence of the Rail Regulator?

Mr. Byers: The independence of the Rail Regulator is a matter for the House. It is as simple as that. Conservative Members will be aware of that. That is the situation.

Mr. Donohoe: Will my right hon. Friend give way?

Mr. Byers: What happened is that, in conversation, it was raised by the regulator—

Mr. Donohoe: Please.

Mr. Byers: I had better give way.

Mr. Donohoe: I make just two points. First, did the regulator not say last week to the Select Committee that

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Railtrack at no time had ever approached him, and indeed, he felt that he was being cut out of the loop? Secondly, Railtrack thought that the Government were a soft touch and hoped to get the money out of the Government because it knew full well that it was never going to get it out of the regulator.

Mr. Byers: As a member of the Select Committee, my hon. Friend will be aware of the evidence that was given last week. I think that he has accurately stated the regulator's position.

One other major allegation was made by the hon. Member for Maidenhead—

Mrs. May: Will the Secretary of State give way?

Mr. Byers: No. I have given way several times to the hon. Lady. I want to go on to that particular point. I want to put on the record the response to her very important allegation that the £162 million that was legally due to be paid on 1 October was held back by the Government. I want to be clear about that, too.

As part of the April deal, £337 million was due to be paid on 1 October, which the Government were legally obliged to pay. That was paid in full, every penny, on 1 October, but in addition, in April, all parties accepted that they would use their best endeavours to establish a special purpose vehicle called Renewco. It was recognised that it could be only on the basis of best endeavours because the arrangement could go ahead only if Renewco were not classified as being in the public sector. By 1 October, that condition had not been met, so the payment could not be made.

However, the payment of the £162 million is a real diversion from the issues facing Railtrack. In discussions on restructuring, Railtrack made it clear that, even with the Renewco arrangement in place, Railtrack would still need additional Government support, and as my unchallenged petition to the High Court said, Railtrack would have a deficit of some £700 million by 8 December this year, and £1.7 billion by the end of March next year. Those were the figures. Railtrack's own view was that Renewco would not make a difference to those figures.

Geraint Davies: Is my right hon. Friend aware that, as the Select Committee minutes show, on 7 October Tom Winsor said:

which is the Friday before that Saturday—

In other words, Railtrack was misleading the regulator. That is why, as we have heard, Railtrack presented the new petition to the regulator.

Mr. Byers: I think that when all hon. Members have the opportunity to go through the evidence and the regulator's statements, they will see that Railtrack did not avail itself of the possibility of an interim review although it was invited to do so by the regulator on the evening of

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Saturday 6 October. The petition that I presented to the High Court was unchallenged although Railtrack and its counsel appeared in court.

Chris Grayling: Will the right hon. Gentleman give way?

Mr. Byers: No. I have been very generous in giving way, and I want to conclude my remarks because many other hon. Members wish to speak.

The serious allegations have been addressed.

Mrs. May rose

Hon. Members: Give way.

Mr. Byers: The record will show that I have previously given way to the hon. Member for Maidenhead. [Interruption.]

Mr. Speaker: Order. The Secretary of State has stated that he is not giving way, and that includes to Front Benchers.

Mr. Byers: Hon. Members know that I am generous in giving way. I have already given way in this debate three or four times to the hon. Member for Maidenhead. I should now like to address the issue at hand, and specifically to examine Railtrack's stewardship of the railway network.

My decision on 5 October to refuse further funding to Railtrack was not an easy one. However, I firmly believe that Railtrack was not part of the solution for our railways but a major problem. Let us consider Railtrack's stewardship. No asset condition register for the rail network is yet in place. Railtrack consistently opted not to invest in and maintain the network to a sufficiently high standard. Six months after Hatfield, more than 1,000 temporary speed restrictions were still in place. Costs on the crucial west coast main line project had leapt from about £2 billion to £6.3 billion under Railtrack's leadership, which is an increase of more than £4 billion.

We had to say, "Enough is enough. Let us get to the root cause. Let us look at the structure and put it right, so that for the extra money that the Government are committing to railways, we will get a real return for the travelling public."

The Transport, Local Government and the Regions Committee has made its concerns very clear. It said:

The Committee continued:

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The Rail Regulator—the man who is responsible for regulation and for maintaining the railway network's independence—made the following points when asked whether he would have provided extra funding for Railtrack.

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