Major torpedoed rail peace deal

JOHN MAJOR and three of his Cabinet ministers vetoed a peace formula that would have prevented today's 24-hour national strike by signals operators, according to senior industry sources.

The Prime Minister is understood to have telephoned the chief executive of Railtrack, John Edmonds, last Saturday to discuss the withdrawal of a plan to offer a 5.7 per cent pay increase to 4,600 signals staff to compensate for a decade in which their pay 'differentials' have been eroded.

Discussions followed with the Railtrack chairman, Bob Horton, and involved three Cabinet ministers. Michael Portillo, representing the Treasury, David Hunt, the Department of Employment, and John MacGregor, the Department of Transport, were the senior figures attempting to untie a potential deal they believed would drive a coach and horses through the public sector pay policy.

Today's stoppage, causing a virtual shutdown of the British Rail network, may be followed by further action next Wednesday and repeated in coming weeks. Commuters who are able to work from home were advised to do so, or risk long traffic jams around towns and cities.

The behind-the-scenes moves by Mr Major and his ministers were not mentioned when he addressed the Commons yesterday. Mr Major said the stoppage was 'unnecessary' and he 'very much regretted that it was taking place'. He accused Labour of being 'on the side of the strikers whatever the circumstances may be'.

Last night, Labour's transport spokesman, Brian Wilson, said: 'It's amazing that John Major should have attacked the unions in the Commons for taking industrial action, presumably in the full knowledge that his own ministers had wrecked the prospect of a settlement. If this is a political dispute then all the politics are coming from the Tory side, as part of their rail privatisation agenda.'

At the end of last week a delegation of negotiators from Railtrack, the new state company which owns the industry's infrastructure, went to the Department of Transport to tell ministers of their proposals. One high-level source said last night that the department was immediately furious. Downing Street was informed, beginning what one industry insider called the process of the 'invisible hand of government'.

The 5.7 per cent award was mentioned in talks early last week as a possible way out of the impasse, but it was never put in writing and directors of Railtrack instead endorsed an offer of 2.5 per cent and the promise of further talks on a productivity package to be completed by September.

Despite Mr MacGregor's knowledge of the behind-the-scenes pressure, the Department of Transport said yesterday that the negotiations were a matter for Railtrack. A spokesman for Railtrack, which is being prepared for privatisation, said that no offer had been made to the RMT rail union until Monday and that any 'numbers' mentioned in last week's talks did not constitute an offer. No offer could have been made without the approval of the Railtrack board. He was 'not aware' of any meeting between Railtrack and the Department of Transport or any government interference.

However, an internal Railtrack South memo from the production manager, Colin Hall, that was leaked to the RMT appears to confirm that the offer was 5.7 per cent 'with strings'. Union negotiators went into the meeting on Monday prepared to negotiate on that basis, but left after seven minutes when it became clear that any such proposals had been withdrawn. Railtrack said that the memo was a 'misconception'.

The company predicted that talks on productivity savings this summer could yield an increase for signals staff of 11 per cent or more, but that it would have to be 'self-financing'.