On the Wrong Line by Christian Wolmar

Author:Christian Wolmar [Christian Wolmar]
Language: eng
Format: epub

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CHAPTER NINE

Railtrack: suicide or lynching?

When Tony Blair returned in triumph to No. 10 to begin his second term in June 2001, Railtrack had few friends in or out of Whitehall. The company had become an object of hatred and ridicule to passengers. It had caused grave financial damage to its customers, the train operating companies, and had lost any credibility in the City. The regulator, Tom Winsor, who was responsible for determining how much money the company received from government and through access charges from the train operating companies, had made it clear that his patience was exhausted. Responsibility for new large projects had effectively been taken away from Railtrack; even those on which work was proceeding had an uncertain future. The new Secretary of State at the Department of Transport, Local Government and the Regions (DTLR), Stephen Byers, had been warned by his officials, and their colleagues in the Treasury, that Railtrack seemed to have an insatiable appetite for cash and a more or less foolproof method for extracting it from the public purse. For the brutal truth was that no government could afford to stand by and see the railway system grind to a halt. So if Railtrack could persuade the regulator, whose remit obliged him to provide the company with sufficient funds to carry out its functions, that it needed more money, there was very little the government could do except cough up. Certainly, the regulator was supposed to make sure that the company had been operating competently and efficiently, but this was a near-impossible task given the complexity of the structure of the privatised railway. Privatisation, it had now become evident, far from freeing government from the financial burden imposed by the railways, had, instead, removed much of its ability to control and limit that burden.

It was therefore somewhat unlikely that when John Robinson, who had recently taken over as chairman of Railtrack from Sir Philip Beck, walked into the headquarters of the Department of Transport on 25 July 2001, he expected to get a particularly warm welcome from Stephen Byers. And even less likely that he would emerge with promises of lots of extra lucre. Nonetheless, his company’s plight was dire and he wanted the new minister’s help. Having been so recently told by the regulator not to put out the begging bowl, he tried to bypass Winsor by appealing to ministers directly. He asked for what Byers would later describe as a ‘soft letter of comfort’ addressed to Railtrack’s banks and a three- to four-year suspension of the regulatory regime. That was a demand to which ministers could never have acceded, even though the government would also have got a new type of share in the company in return for the risk it was taking on. It would have meant, in effect, that Railtrack would have permanent and unlimited access to the Treasury’s back pocket: the company would have been able to threaten to close lines if insufficient money was forthcoming from

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