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22 March 2010

Stephen Byers is a fantasist

Former minister barely influenced policy in government, let alone out of it. This is a cock-up, not

By James Macintyre

Unsurprisingly and pretty understandably, the Tories are fighting hard to squeeze as much juice as they can out of the deeply embarrassing and rather obscene attempts allegedly made by Stephen Byers, the former transport secretary, to make money by claiming to have influence over current ministers.

As Byers has referred himself to the parliamentary watchdog, the opposition will probably not succeed in gaining a seperate inquiry into what it is portraying as a “cover-up at the heart of government”. Yet there is no doubt the claims are damaging to Labour.

Given the lessons of the MPs’ expenses scandal — that the perception of swift action is everything in our “24-hour media” — Gordon Brown would do well to be as plainly critical of Byers in public as his aides are being in private today. And certainly Harriet Harman faces a difficult task addressing the matter in the Commons this afternoon.

But this story does not compare to the effect of the expenses scandal across parliament, nor — as some broadcast commentators are claiming today — the widespread “cash for access” affair under the Tories. Because essentially, Byers is not just a loner who made little impact as a minister, but also a fantasist.

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As Christian Wolmar explains today on Comment is Free:

The claim that the intervention by Byers saved several hundred million for [National Express] does not . . . stand up. The liability for franchisees is limited, since no private company will sign a deal with unlimited potential liabilities, and in this case the amount of the contingency and the bond placed with the department was around £75m, the amount which National Express duly lost.

The one concession Adonis made was to allow National Express to keep its other two franchises rather than be forced to relinquish them, which the government can, under its “cross-default” rules that are supposed to stop owners of several franchises retaining profitable contracts if they abandon loss-making ones. Adonis initially threatened to foreclose on C2C and East Anglia, but then announced he would not do so as it was not in the interests of passengers, pointing out that they only had a couple of years left anyway. In fact, he was fearful of a legal challenge by National Express as the rules had been badly framed.

In truth, the department has always been ready to do deals with franchisees. First Great Western was bailed out a couple of years ago when it was in trouble, and allowed to keep its franchises in return for promises of extra investment. Therefore the notion that it was Byers which made the difference is fanciful.