David Walker – the corridors of power …

Railtrack is now the make or break issue for transport secretary Stephen Byers. He is going to need exceptional political skills to weather the coming storms.

The fate of ‘spin doctor’ Jo Moore is the least of his worries. Her thoughts on using 11 September as a cover for bad news are not the problem; they are precisely what special advisers are paid to think.

No, Mr Byers is playing for higher stakes. What does he do with the stricken monster Railtrack? He doesn’t know. Seminars at the Institute for Public Policy Research have failed to produced a detailed plan. Meanwhile the boss of the Strategic Rail Authority, Sir Alistair Morton, is openly mutinous and rail regulator Tom Winsor is not best pleased at being sidetracked.

Railtrack’s collapse is heavy ammunition for opponents of the public private partnership for the London tube. City finance people are blustering about never trusting government again, stopping loans to anything that relies on an unclear commitment by the state to intervene if things go bad. And of course the fate of Railtrack raises ticklish issues in corporate governance.

But it is the personal politics of the Blair cabinet that will determine Mr Byers’ fate. That is to say his capacity to re-build confidence in Railtrack Mark II depends on Gordon Brown.

He will both have to let the Treasury make guarantee-like noises about private investment for public purpose and to stump up the money for railway lines when governance arrangements post Railtrack are so uncertain.

It’s chicken and egg: without the money, who is going to get involved with a not-for-profit Railtrack; without an investment vehicle what chancellor would throw money in Stephen Byers’ direction? Will Brown be minded to assist? Mr Byers is one of Tony’s cronies. Failure on the railways would hurt Michael Barber, delivery supremo at Number 10, and the prime minister before it rebounded on the chancellor.

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