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8 April 2002

Byers market

Transport crisis - Save the present Transport Secretary. He may be the best hope for the fu

By Christian Wolmar

The misfortune of Stephen Byers is that his surname alliterates with both beleaguered and bozo. Yet despite the long list of his mistakes and misdemeanours – some of which, such as the Jo Moore/ Martin Sixsmith business, would have amounted to a few paragraphs on the political pages in a less prominent ministry – the case for saving Byers is a strong one.

At three recent private occasions involving senior railway executives, I heard nothing but praise for Byers. “He listens to us and tries to help,” said one executive. “He didn’t get involved in silly posturing over the industrial action,” said another. “He is a class act,” said a third.

Nigel Harris, editor of Rail magazine, says: “Byers inherited the most contaminated of poison chalices. His three biggest problems – Railtrack, the Tube and Nats [air traffic control] – were all passed on to him by John Prescott. He’s the first recent Transport Secretary to face up to the problems and try to make a difference.”

Harris points out that, unlike Prescott who used to thunder on about the iniquities of the rail companies but did nothing to help passengers, Byers does not interfere daily in the minutiae of a complex industry.

On other aspects of his brief, such as local government, Byers is also reckoned to be doing a good job. His white paper on local government, while eschewing the type of local empowerment that is needed, relaxed some restrictions on the way councils borrow money, abolished council tax capping and allowed more freedom for better authorities to innovate. All of which sounds like exactly the sort of decentralisation that most Labour MPs, and every think-tank wonk in town, have demanded for ages.

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True, Byers’s handling of the Railtrack collapse was riven with mistakes. He was right to intervene in the industry, but wrong in the way that he did it. Railtrack was a basket case, and a stupid one as well. While absorbing taxpayers’ cash by the bucket load, it paid its shareholders £140m dividend on the same day in May 2001 that its chairman announced losses of £534m.

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But at the time of Byers’s move in October last year, Railtrack, though well on its way to insolvency, hadn’t quite got there. The minister should have negotiated secretly to take over the company at the prevailing share price (well below the £3.90 per share that the government got in 1996) and threatened the directors that, if they did not agree, the taxpayers’ tap would be turned off.

Instead, he played to the backbenchers’ gallery, stressing repeatedly that the shareholders would not get any taxpayers’ money. He might reasonably have expected to get away with it, were the judicial system not run by the sort of people who hold shares. Nor did “renationalisation without compensation” look such a political triumph when it emerged that most of Railtrack’s 11,000 employees – half of them humble signallers – owned stock.

Yet it was brave of Byers to lance the Railtrack sore, and it is difficult to imagine the other impeccably Blairite ministers who were talked about for the transport job during the 2001 election campaign (such as Jack Straw) daring to move in on the company. They would have followed the civil servants’ advice: throw more cash at the company and hope it will muddle through.

Even the U-turn – the decision last month to cough up £300m to placate the shareholders, which was admittedly dreamt up in the Treasury – showed political courage. It allowed the government to go ahead with its preferred solution – a not-for-profit company – while avoiding the prolonged period of administration for Railtrack, which would have been deeply damaging to passengers. It also avoided the whole wasteful paraphernalia of allowing bidders – none of whom was ultimately serious – to compete to take over the company. Indeed, Byers was entirely truthful when he said the £300m was justified by the savings it would make.

The real criticism of Byers is that he has not shown enough imagination on transport. He has not tried to shift people out of cars and on to more sustainable forms of transport. He inherited a policy of “more transport for all” from Prescott, and has failed to challenge that inchoate agenda. But nobody should be under any illusions: any replacement for Byers would be constrained by Blair’s fear of alienating the motorists’ lobby, a fear that has coloured transport policy since 1997.

The argument against retaining Byers is that he is a busted political flush. But if the railways really do improve – and his selection of performance indicators on safety, performance and the age of rolling stock will help – the fuss of the past few weeks, which is not widely understood by the public, will quietly fade into history just as the Westland affair did.

And Byers has shown, however unwittingly, that there is a third way. Railtrack has, in all but name, been renationalised, and running it through an arm’s-length trust with plenty of government cash may show the way for other public services. The Network Rail structure may well prove to be durable. Byers should put himself forward as the Pied Piper for a new approach to providing public services. Indeed, he could prove his credentials by trying to find a new solution for the Tube, the future of which, according to Treasury insiders, still hangs in the balance. But if he holds on to his boring Blairite mantle, he might as well be consigned to the political junk heap.

Christian Wolmar’s Broken Rails: how privatisation wrecked Britain’s railways is published by Aurum