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Mrs. Theresa May (Maidenhead): And so the entertainment continuesas Fred Karno's army parade one by one this afternoon. Today's two statements have one thing in common: from the Post Office to Railtrack, the originator of the problems is the Secretary of State for Transport, Local Government and the Regions.
How many times since Railtrack was put into administration on 7 October last year has the Secretary of State come to the House clinging to his political life only to be saved by the support of the Members on the Benches behind himsupport given because of statements such as the one he made last October when he told the House that
If the £300 million that will be used to fund the purchase of Railtrack is not new money, what work to improve the railways will be abandoned to pay for it? It is passengers who will pay the price for the Secretary of State's incompetence.
The Secretary of State repeated the point about an early exit: he said, "There is a value to the Government, the taxpayer and rail users in an earlier exit from administration." I wonder whether his indecent haste in trying to conclude the deal has anything to do with his desire to avoid legal action by Railtrack's shareholders. Of course, such action would have required him to explain, under oath, why he sought a court order to wind up Railtrack, given that funds from the rail regulator were available to keep it afloat. Some £300 million of taxpayers' money is being spent to save the Secretary of State's facebecause we now know that a deal was on the table that would have compensated shareholders, sorted out Railtrack's finances and brought it out of administration early, and which would not have required money from the taxpayer.
I have this question for the Secretary of State: given his repeated assurancesin and outside this Houseto Members, to journalists, to the public and to his own party that this Government would not use taxpayers' money to compensate shareholders; given the Prime Minister's assurance that taxpayers' money would not go to shareholders, but would be spent instead on improving the railways; and given that a deal was on the table to compensate shareholders without using taxpayers' money,
Mr. Byers: I will answer in my own way. There was one element of the hon. Lady's question that I agree withthat there is a link between the two issues of the Post Office and Railtrack. On looking back, people will see that it is this Government who are tackling the Conservatives' failure in respect of the Post Office[Interruption.]
Mr. Byers: The reality is that Railtrack was a Tory creation that was failing the travelling public, and I make no apology for taking action on it; it was part of the problem with our railway system, not part of the solution. The Conservatives would have thrown millions more into it, but it would not have delivered an improvement in our railway system.
The hon. Lady raises a number of important questions. [Hon. Members: "One."] No, there were a number of questions, as I think the record will show. She said that the £300 million will be taken away from other transport projects, but as a result of changes being made that sum will be self-financing through savings elsewhere. The simple explanation is that Network Rail will be able to raise money more cheaply than Railtrack was ever able to do.
On the hon. Lady's specific question, if there was a precise deal on the table that involved spending no taxpayers' money, the Government would consider it. Indeed, as I pointed out in my statement, the administrator has made it clear that, if further proposals are put forward, he will consider them. It is right and proper that he should do so. That is the answer to the hon. Lady's question. If there is a deal on the table, it will be for the administrator to deal with it.
Mr. Byers: I am making the statement because I felt that it was appropriate that the House should be informed. The £300 million is money that the Government are prepared to make available because of the savings that we will make as a result of an early exit.
The hon. Lady raises the question of the winding up of Railtrack. No application was made to the regulator by Railtrack. It could have applied for an interim review, but it failed to do so. Railtrack attended the court, but it did not object to the administration order being made. That is the truth of the situation.
The hon. Lady asked about the statement that not a single penny would go to shareholders as opposed to the railway, but every single penny of the £300 million that we are committing will be used to improve the railway network. That is what will happen as a result of the deal that has been announced today. The difficulty the Conservatives have is that they cannot come to terms with the fact that their creation, Railtrack, is now being laid to rest and the alternative will put the travelling public first.
Mr. Byers: I know that I have a disagreement with my hon. Friend on the role that the private sector can play. Private finance has a legitimate role to play in some of our major public sector contracts. However, it has to be on clear terms of value for money and it has to be for a reason. The reason must be that it will drive up the standard of provision.
In relation to the 10-year transport plan, we have £180 billion that will make a significant difference to the quality of the transport infrastructure. In relation to the £300 million grant that might be made available if there is an early exit from administration, none of that sum will be cut from existing projects because it is money that will be saved because of the efficiencies that will come from a company limited by guarantee.
I shall remind the House of the situation. Railtrack plc came to the Government to ask for additional resourcesfor £1.5 billion to be brought forward into control period 2. At the same time it was paying £709 million in dividends to its shareholders. There is a clear contrast between the two. The company limited by guarantee will have the interests of the travelling public first, and savings will be made as a result. Indeed, savings will come from the fact that the company limited by guarantee will be able to obtain money more cheaply than was possible for Railtrack. I agree with my hon. Friend that we must be clear about the benefits when we involve the private sector in such arrangements. The greater clarity we have will also be so much to the good.