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Mr. Andrew Rowe (Faversham and Mid-Kent): Does the Deputy Prime Minister accept that nothing in the history of Eurostar or the former British Rail's estimation of traffic flows gives me any confidence whatever that the generation of traffic will enable the company to raise the additional equity that it is expected to raise? What happens to the project if it does not raise that equity?

Secondly, will the right hon. Gentleman define freight? Hitherto the only freight that has been considered for that line was the kind that could travel in passenger-type trains. Does he mean that the kind of freight that will now be carried will be much more diverse?

Mr. Prescott: There has always been great difficulty about the projection of those figures. I can remember the hon. Gentleman being critical of statements by British Rail or by the private company that took over. I think that we have made a more realistic assessment, and there is a memorandum in the Library for those who wish to make judgments. A proper assessment is critical, and there is much agreement between us and the consortium, even on our independent assessment, on the judgment of how many people will travel and at what time. I refer the hon. Gentleman to the memorandum from which he can judge that.

The hon. Gentleman asked about raising equity. That was one of the essential points in the previous Government's deal. We are involved not in raising equity but in a guarantee in the way that I have explained. Of course we have asked the original shareholders to pay more. They were committed to only about £60 million, and we are asking them to pay more towards the LCR equity. It is right for us to do that.

The hon. Gentleman also asked about freight. English, Welsh and Scottish Railways and Freightliner are already taking considerable traffic growth through the tunnel.

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We want to encourage that, and our White Paper is about how we might encourage more rail freight. One of my first discoveries on coming to office was that the transfer of the three rail companies to EWS was not a sale. It was given £250 million to take them off our hands. That was another example of a sale of public assets at the direct expense of the taxpayer.

Mr. Paul Clark (Gillingham): I congratulate my right hon. Friend on saving an essential national asset, and on drawing something from the jaws of disaster. I should like to ask about north Kent. Obviously, I have not had an opportunity to read the memorandum, and the answer may be there.

My right hon. Friend made it clear that work on the second part would start in 2001, and that it would be completed by 2007 or 2008. What I am particularly concerned about--it was alluded to earlier--is the in-between period and the effect on commuters and on traffic trying to get into London; we should try to minimise that as far as possible. Will the Deputy Prime Minister say whether 2007-08 is the latest or the earliest date that that second phase will be completed?

Mr. Prescott: They are the dates that we have come to an agreement about, and, as soon as we have gone through all the details, I shall give a further statement to the House and place it in the Library at the appropriate time, so that the final details and contracts can be seen; but I believe that date to be a realistic one.

As my hon. Friend will notice, that phase will start before the completion of the one that goes through Ebbsfleet, so I believe that it is a realistic date. We have an agreement completed. The line is going through to St. Pancras. There will be problems, particularly with available services. One can see that those problems were obviously going to arise. I shall give my attention to those now that we know that we do have a proper financial arrangement to provide us with the channel tunnel rail link.

Mr. Damian Green (Ashford): I thank the Deputy Prime Minister on behalf all of those businesses and households in Ashford that have suffered the uncertainty caused by blight, which will be relieved to know that at least that end of the line will be going ahead relatively quickly, but may I ask him for two assurances?

First, the right hon. Gentleman said that the environmental protection measures would be exactly the same as those agreed in the original Bill. Given that the Government will now take a direct financial and managerial interest in this project, will he accept from now on responsibility for ensuring that those environmental conditions are met? Many of my constituents are concerned that Rail Link Engineering and London and Continental Railways have been trying to bend the rules, if you like, to try to avoid some of the environmental considerations.

Secondly, my biggest regret about the statement was that it was made as though there were simply one station on the line this side of the channel tunnel--at Waterloo. Part of the problem of London and Continental's management is that it has consistently undervalued Ashford station's potential. I hope that, with the new management in place, London and Continental will

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recognise the importance of Ashford station not just for my constituency, but for environmental reasons. Having people travelling into central London via a relatively under-used station, rather than travelling on the M25 and M20, would be extremely helpful for the whole of south-east England.

Mr. Prescott: I understand the importance of Ashford station. Indeed, in order to emphasise that it is an important stopping point, I invited Environment Ministers at the recent G8 summit, who had their conference at Leeds castle, to get off the train at Ashford.

We have to sell more of Eurostar's services. The restructured management is an important step in that direction. Having new people on the board who have had other transport experience will play an important part in increasing the amount of traffic and exploiting the full potential of Eurostar services.

I made the point that the obligations that we entered into with the previous contracts still remain. Government will have a responsibility with regard to environmental matters, but we do that as Government rather than as a 5 per cent. shareholder on some board. The proper way is for Government to address Government responsibilities, and private companies to address their responsibilities.

Ms Margaret Hodge (Barking): I congratulate the Deputy Prime Minister on what appears to be an imaginative deal, and congratulate him in particular on his success in ensuring that the guarantee will not be counted against public spending for future years, which is particularly welcome.

My constituents have been the innocent victims of the previous Government's botched plans. They now require real certainty. In part of his statement, the Deputy Prime Minister said that Railtrack would have an option to build the remainder of the track. He later said that the second phase would start in 2001. My constituents need certainty. Will that phase start in 2001, or could Railtrack talk itself out of that option?

Mr. Prescott: No.

Mr. Matthew Taylor: Yes.

Mr. Prescott: Well, the hon. Gentleman was on the programme, without having seen this, giving us all the judgments, and then congratulates me on delivering something different.

With regard to the Railtrack application, it is attractive for Railtrack to go into that second phase. Railtrack's income is based on access charges, which are being reviewed by the regulator. Two reviews may be involved, and it is very difficult to take a long-term view--that is one of the difficulties of the private sector. That is why Governments get involved in such long-term infrastructure programmes. If the company chooses not to complete the work--although it certainly wants to do so--it would be easy to find another contractor to complete it. LCR has a contractual obligation to complete the link, and I intend to see that it does.

Mr. John Wilkinson (Ruislip-Northwood): I welcome the commitment of the Government to seek an extension to St. Pancras, which I am sure my constituents in

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north-west London and people in the north of England welcome. Regarding Heathrow, the high-speed rail link is especially imaginative--for all the reasons the Deputy Prime Minister described--but will its commercial viability be contingent upon the construction of the fifth terminal at the airport?

Mr. Prescott: No, it is in no way contingent on that at all.

Mr. John Heppell (Nottingham, East): I congratulate the Deputy Prime Minister on rescuing the project. I spent a year of my life on the Channel Tunnel Select Committee, and I would hate to have wasted all that time with nothing at the end of it.

One of the things we realised in the Committee was that for real benefits to go to the regions--especially my region of the east midlands and my city of Nottingham--it was essential that we had the full link right through to St. Pancras station. Can my right hon. Friend guarantee that that will happen? I want to go back to the city and tell people not to worry, and that we have promised that the link will be built as far as St. Pancras station.

Mr. Prescott: Yes, the contractual arrangements are to complete the link to St. Pancras. As to whether the link will run any further to other cities in the north, I have that under review, and I hope to have a report by December. Following an experiment which found that only 10 people were travelling on the regional services, the services were discontinued. Whether that was an excuse because the company did not want to continue the regional services, I do not know. Given this House's interest in regional services and the completion to King's Cross and St. Pancras, I am sure that the matter will be constantly debated. I will be constantly accountable to the House--that is the commitment I give, and that is the contract I have with LCR.


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