Channel Tunnel (Hansard, 16 June 1982)

§ 13. Mr. Whitehead
asked the Secretary of State for Transport if he will make a statement on the progress of negotiations for a Channel tunnel.

§ Mr. David Howell
The report of the Franco-British study group is published today. It concludes that existing services could be developed to cope with foreseeable traffic growth, but that a fixed link could be economically advantageous. The group confirms the technical feasibility of rail tunnels, which could provide both through rail services and a vehicle shuttle. Forms of link permitting vehicles to be driven across the Channel require further technical study.
The question of organisational, legal and financial arrangements for the construction of any fixed link lay outside the group's terms of reference, and the two Governments have agreed that, before a decision is reached, these aspects should be examined. This further work should be completed by the autumn.

§ Mr. Whitehead
In view of that statement, will the Minister comment on what appeared on the tape this afternoon and was presumably from his Department? It was to the effect that work on Channel tunnel studies will now be indefinitely delayed. Will the Minister also comment on the widespread stories that the Prime Minister vetoed the agreement on the Channel tunnel at her recent summit meeting with President Mitterrand? Is he aware that in this matter Government strictures on productivity, and on the railways in particular, look very dim in view of their own productivity record?

§ Mr. Howell
I cannot comment on press speculation. I advise the hon. Gentleman to stick to the points that I just made and possibly to study the Franco-British study group joint report. The present position is that we have to see whether it can be demonstrated that any of the schemes can be financed on the terms laid down. The interests of the two Governments are concerned and that is the line along which we must proceed.

§ Mr. Dorrell
In view of the large number of investment projects requiring public sector capital, will my right hon. Friend repeat his previous assurances to the House that no public sector capital will be used to build the Channel tunnel? Will he also assure us that British Rail will not be required to give a traffic guarantee to whatever consortium may choose to build the Channel tunnel?

§ Mr. Howell
Yes. It has been made clear from the outset of this phase that any proposals for constructing the fixed link would, on the British side, be without financial guarantees. That would also exclude a non-commercial throughput guarantee by British Rail, an arrangement which, of course, would fall to be met by the British Government.

§ Mr. Anderson
The Minister will know that the target dates have been pushed back further and further. We are now told that it will be autumn before the remaining two studies are completed. Are further studies proposed after the autumn, or can we be assured that after completion of the two further studies the ball will firmly lie with the two Governments for a decision?

§ Mr. Howell
I would very much wish, with the hon. Gentleman, that we could reach an early decision, having examined the financial, organisational and legal aspects 941 that were not included in the original report. As hon. Members have pointed out, I realise that uncertainty provokes great difficulty for those who want to invest, whether in ferries or in anything else. Therefore, I recognise the hon. Gentleman's point and assure him that we aim to reach a decision.

§ Mr. Ward
Does my right hon. Friend agree that any progress on the Channel tunnel involving private enterprise would depend on a reasonable economic return to the investors? Will he comment on that aspect?

§ Mr. Howell
Yes, that is certainly correct, but it also depends on being able to organise the finances needed to promote a particular scheme. This is a major project, bearing in mind that the first returns from the finance invested will come only many years hence.

§ Mr. Booth
If it is the case that the Government's intention is that there must be private investment for the British element of the cost of tunnel building and that no commercial guarantees will be given to the investors, does it not logically follow that those who invest in the tunnel will have complete control of the levels of traffic and the charges that may be made for use of the tunnel?

§ Mr. Howell
Those arrangements would have to be worked out in consultation with the French, when we could determine which scheme was most desirable. However, I emphasise to the right hon. Gentleman that Governments on both sides of the Channel have ruled out the provision of public finance and that the proposals for relying on the market are now very similar on both sides of the Channel.