HC Deb 06 February 1964 vol 688 cc1351-4
The Minister of Transport (Mr. Ernest Marples)

With your permission, Mr. Speaker, and that of the House, I should like to make a statement.

As a result of studies undertaken jointly, Her Majesty's Government and the French Government consider that the construction of a rail Channel tunnel is technically possible and that in economic terms it would represent a sound investment of the two countries' resources.

The two Governments have, therefore, decided to go ahead with this project. The next step will be to discuss further, in particular, the legal and financial problems involved.

Bearing in mind the very heavy burden of the two countries' existing commitments and the many other competing claims on their national resources, it remains to be decided when and how best the expense involved can be sustained.

At the present stage of the discussions, the two Governments have not yet decided whether there is a rôle—and, if so, in what form—for the participation of private equity capital in the enterprise. It is clearly understood that, whatever happens, the Governments will have to have full control of any future operating company.

This, together with the fact that private finance would require Government guarantees, must inevitably affect the final decision.

Mr. Strauss

The Minister's statement is, no doubt, a welcome step forward after many years of postponement and delay, but I should like to ask him three questions. First, has the statement been made today because of the impending General Election? Secondly, will legislation be required to put the Government's decision into effect? Thirdly, in view of the fact that no decision has been taken about the legal and financial consequences, and no consideration has yet been given to how or when the necessary money is to be raised, can the Minister say how long it will be before this project is started?

Mr. Marples

First the statement has been made now in agreement with the French. We have been carrying on the negotiations for several months directly with the French Government, as the right hon. Member knows. This timing is convenient to the French and ourselves.

Secondly, as I have said, we have to look at the legal consequences with the French and to consider what sort of corporation should operate the tunnel. Until that is decided it will not be possible to say what legislation will be required.

Finally, the study group said that it would take about six years to build a tunnel. If we decided to go ahead straight away after we had had the geological survey which is necessary technically, the maximum expenditure would not arise for some considerable time. But we should have to discuss this with the French. My difficulty is that this is an agreed statement with the French. It is very difficult at this stage to add much more than I have said in my statement.

Mr. N. Pannell

Since this is a highly controversial question, cutting across party lines, will my right hon. Friend give an assurance that the matter will be fully debated in the House, which has never happened up to now, before any commitment is entered into by the Government?

Mr. Marples

It will be some considerable time before a firm commitment can be made, because the technical difficulties are enormous. We have not decided, for instance, whether the tunnel should be bored, or whether it should be an immersed tube. I will convey my hon. Friend's suggestion to my right hon. Friend the Leader of the House.

Mr. Holt

Will the Minister publish a White Paper setting out the grounds for the Government's decision? Will he make it clear whether, after preliminary examination by the two Governments, a decision has been taken that it is worth while pursuing further studies of the project, or has a firm decision been made in principle to build?

Mr. Marples

May I read part of my statement again: The two Governments have, therefore, decided to go ahead with this project. There are certain technical details to be considered—for instance, as I have said, will there be an immersed tube or a bored tunnel? That decision has to be taken. It cannot be taken until we have had further geological surveys and tests. It cannot be done physically by any contractor. Until this is decided it is not possible to say any more about the scheme, except that we shall go ahead with it if at all possible.

Sir W. Teeling

Does my right hon. Friend realise that at least 137 of us who have put down a Motion on the subject will be delighted that we have got this far? If, within the next six weeks or two months, a decision has not been reached about the underground side of the project, are we likely to see it even started within the next year?

Mr. Marples

I cannot add to my statement. This is not a decision of Her Majesty's Government alone. The French Government are involved and it is very difficult for me to answer such questions until we have had further discussions with the French. My opposite number at the French Ministry of Transport and I are extremely keen that we should start these discussions at once.

Mr. Wigg

The Minister told the House that the Government must keep control of the company. Does that mean that, in conformity with usual Conservative practice, the Government will subsidise all the losses and then at the appropriate moment, when the project begins to show a profit, it will be handed over to private enterprise?

Mr. Marples

I do not think that that is an exact description of what the Government are doing concerning some of the nationalised industries which were showing a loss. This Conservative Government have shown how they can be improved.

Mr. Webster

Bearing in mind the necessity for financial and legal undertakings, will my right hon. Friend make certain that if consortia are involved in building the tunnel, keeping in mind what has happened over the Concord, adequate escape clauses are put in the contract so that if either party backs down there is adequate compensation?

Mr. Marples

I have had some experience of contractors' contracts. I will try to bring that experience to bear in this matter.

Mr. Shinwell

If no commitment has yet been made, and if all that is intended between Her Majesty's Government and the French Government is that there should be a geological survey, why was it necessary to make a statement to the House? May not this be the explanation, that the shares have been flopping on the Stock Exchange recently? Will they go up tomorrow as a result of this statement?

Mr. Marples

I have no idea what will happen to the shares. What has happened is that we have decided that the tunnel is technically possible and economically desirable. Therefore, in principle, the two Governments are committed to the project if they can get over the building and operating difficulties and can come to an agreeable arrangement. But there are many more problems to solve. We have decided that, in principle, this is a good thing.

Several Hon. Members

rose—

Mr. Speaker

Oreder. We must get on with our business.