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19 November 2001

Save Red Steve, the people’s friend

Jackie Ashley defends the Transport Secretary, an improbable hero who has shown that even a dedicate

By Jackie Ashley

Ah, the thrill of the chase. Since the forced resignations of Ron Davies (the former Welsh Secretary who walked on the wild side) and Peter Mandelson (twice), the pickings have been a little lean for the hungry Westminster press pack. Now, though, they scent blood – the blood of Stephen Byers. The mild-mannered minister is variously described as “on the ropes”, “up against the wall”, “hitting the buffers” and other such journalistic cliches, as the calls for his political death increase daily. So, will they get him?

I doubt it. And, perhaps more important, should they get him? I believe most definitely not.

It is dodgy, not to say daft, for a weekly journalist to predict that someone will not resign. The potential for egg on the face between the paper’s deadline and its publication is all too obvious and I accept I may find myself yolk-spattered, as indeed the New Statesman has done in the recent past (tattie bye, Henry McLeish). All I will say in defence is that the signals coming from both the Department of Transport and No 10 have never been clearer.

Predicting Byers won’t go may be risky; believing he should not may seem odder still. He is this month’s whipping boy, the man the press love to hate. Certainly, his unclubbable style and his flat, unmodulated voice have done little for his popularity or his public image. They belie a warmer, more engaging character. Byers’s social skills, in any case, are not at issue; his competence as a minister and his integrity are. Whether or not he should resign depends on a number of questions – in putting Railtrack into administration, was his policy right? Is he generally a competent minister? And did he lie to parliament?

Let’s take the policy first. The decision to stop bailing out Railtrack was a momentous one – much more so than has been appreciated. For the first time, this new Labour government cocked a snook at private enterprise and decided to roll back one of the biggest privatisations of the Margaret Thatcher/John Major years. The judgement was Byers’s alone. No 10 made clear it would back him, but did not try to influence the decision. An odd move, you may think, from a man who, when he arrived in the cabinet, was seen as a rather grey, anonymous Blairite, a classic of the kind. Despite his radical youth, he had become the image of a business-friendly, unideological smoothie, a safe pair of hands for a world in which left-right politics had become almost redundant. Now he finds himself under angry attack from the very forces he was meant to be placating – the right-wing press and the world of business – and being defended by the same Labour back benches he was supposed to be loathed by.

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Funny old world.

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Although MPs may grin and joke about “Red Steve, the people’s friend” there is genuine surprise at Byers’s apparent determination to reject, so unequivocally, the bleating by the shareholders and to put the interests of the rail system and the public sector first. But he is absolutely right. As he rammed home in the Commons opposition-led debate on his future, Railtrack has been a disaster of a company, run by fat-cat failures. To keep pumping our money into it, or to buy it back at a cost of roughly £6bn in compensation – now that would have been a scandal.

As for the shareholders, well, it is not surprising that many of them feel aggrieved; if Byers was not absolutely sure he was going to pull the plug until the moment he did so, he had at least a pretty good idea well in advance, when ordinary people were still choosing worthless shares over cash. And yet it does not take a huge degree of economic competence to know that buying shares with a view to making a quick – or even a slow – buck always carries some element of risk. The directors of Railtrack are suddenly much in evidence – stomping from studio to studio and complaining bitterly about their treatment. Yet where were they in the grim months following the Hatfield rail crash, when even the shortest of train journeys seemed more difficult than a polar expedition?

The howls that followed the demise of Railtrack were entirely predictable. There is an element of class war in all of this, and Stephen Byers, unexpectedly, has placed himself on the right side. The most telling parliamentary moments have been when Byers, and indeed Tony Blair, has challenged the Tories to say whether they would fully compensate shareholders with £1bn or more of taxpayers’ money, and asked whether they thought Railtrack was doing a good job. Glum, embarrassed silence was the response.

Yet even if the Railtrack decision was right, there remain more general questions about Byers’s competence. On this, everyone can agree that his hands are not as safe as they once seemed. The trouble goes back to the BMW-Rover closure announcement, when he attacked the German management with a ferocity that had become deeply unfashionable in the new Labour world, and was bitterly attacked in turn by German and British managers. Then came the closure of the Corus steelworks and another bitter argument with the private sector managers over consultation with both government and the workforce.

If a pattern was being set, it was that Byers was neither as admiring nor as comfortable with business as everyone had assumed. Maybe he was still a bit of an old leftie after all. But it is slightly more complicated than that. First, it is much too easy to think that politicians who wear smart suits, shave off their facial hair and look the part therefore become almost like business people themselves. They do not. New Labourites may wish to be business-friendly. But that does not mean they ever can or will really understand business.

Second, as Secretary for Trade and Industry, he was inevitably dealing with closures, and therefore with failure. It is in that sense a wretched, thankless job: the Chancellor takes the credit for economic and industrial success, and you pick up the pieces when things go wrong. When private companies want to close down and move on, they do it fast and brutally, particularly so in Britain, where they do not have to worry about the complex legal employee and community obligations they would face in Germany or France. In the case of Railtrack, and Byers’s new post, it was the other way around: the managers needed huge injections of government money but did not want to be hobbled by “interfering ministers” – a bit of a cheek, to say the least.

Byers’s problems with business might not have been noticed by many voters had it not been for the Jo Moore affair. It is certainly the thing that has damaged him most in the public mind and he may never fully recover from it. (There is an interesting parallel in Scotland, where the newspapers ascribed the fall of Henry McLeish as First Minister partly to the unpopularity of his spin-doctor, Peter MacMahon. Spin-doctors really are now causing more political damage than they cure.)

Here, as with Railtrack, there is a counter-intuitive effect. The public think one thing, the people who count for Byers’s future think another. Hanging on to Moore after her terrible 11 September e-mail about burying bad news enraged almost everyone. But it will have pleased the Prime Minister, who sets huge store by loyalty to the Labour in-crowd, particularly in difficult times. Indeed, I am told he actually urged Byers not to fire her. The more the minister is attacked by outsiders – angry commentators, shareholders’ action groups, Tory MPs, business leaders – the more Labour feels, at last, that he is “one of us”.

There remains one big caveat to the minister’s future. The horribly complex web of who-said-what-when surrounding the collapse of Railtrack may yet ensnare him. There are select committee inquiries and perhaps court cases to come, as well as an investigation by the Financial Services Authority. A great deal was done in a hurry, even something of a panic. The department behaved at least as secretly and ruthlessly as BMW and Corus. While we may never decide definitely whether Byers’s words to the railway regulator were friendly help or a crude threat, it is clear that he was exercising his political power with some aggression. What he cannot survive is clear proof that he lied to parliament. So far, the evidence does not seem to stack up.

These issues have been chased efficiently and properly by the Tories; they certainly make Byers seem a harder and perhaps a more devious politician than before. But in the end, the real question is whether he was right or wrong on the central issue of Railtrack. He may have damaged the government’s reputation by clinging on to Jo Moore. He may have made enemies in business. But those are not hanging offences. If he was right on the big question, he deserves to stay and fight on. Fox-hunting may not be the only blood sport whose future is bleak.