BusinessBusiness RecoveryTories attack chancellor over Railtrack collapse

Tories attack chancellor over Railtrack collapse

Gordon Brown accused by Tories of deliberately intervening to ensure collapse of Railtrack

Chancellor Gordon Brown was personally accused in the Commons of intervening
to ensure the collapse of Railtrack in order to guarantee its successor’s
accounts were kept off the balance sheet.

The charge was levelled by former chancellor and failed Tory leadership
challenger Ken Clarke in a crunch debate on Railtrack’s collapse. This follows
the High Court case that cleared former transport secretary Stephen Byers of
acting maliciously in putting Railtrack into administration.

Clarke claimed Brown and special adviser Shriti Vadera ‘were not driven by a
sense of concern for the travelling public or by a sense of outrage at the evil
of privatisation or the rail accidents that had occurred.

‘They were interested in two things. The first… is the chancellor’s
overriding concern that the new body that was to be set up should be off balance
sheet.’

Clarke said this was the only way Brown was able to claim to be following his
own prudent borrowing rule, by showing Network Rail’s £20bn liabilities in the
private sector.

He said the second motive was to obtain the assets of Network Rail either
free of charge or at minimum cost at the expense of shareholders, making the
issue a particularly bad example of the abuse of power.

Former transport secretary Stephen Byers, himself the subject of a Commons
investigation, said: ‘The public now realises that what we did in putting the
travelling public first, not the interests of Railtrack, was absolutely right.’

Transport secretary Alistair Darling denied any abuse and told MPs: ‘It would
be quite extraordinary if the chancellor, whoever it happened to be and whatever
political party was in government, did not take an active interest in railway
finance.’

He said the court judgement showed Railtrack was ‘frankly a mess’, with
severe financial and management problems, and the government was entitled to
take the necessary action to look after the public interest.

Darling alleged Railtrack directors knew their shares, while trading at £8
were worth a mere 60p, but thought that no matter what, all they had to do was
come cap in hand to the taxpayer and demand to be bailed out. Even if the Rail
Regulator had launched a financial review it would not have saved the company.

He made it clear: ‘I simply do not accept the proposition that, right from
the start, the Government aimed to bring about Railtrack’s insolvency.’

Tory shadow transport secretary Alan Duncan said: ‘All the evidence shows a
catalogue of impropriety – a deceitful plan to manoeuvre to present Railrack as
insolvent, and so force a railway administration order on the company as a means
of getting it back for free.’

But transport minister Stephen Ladyman said: ‘The disaster that was Railtrack
had its origins in the botched privatisation of the railway system for which the
government whom Clarke served was totally responsible’.

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