HC Deb 12 July 1984 vol 63 c1350
10. Mr. Adley

asked the Chancellor of the Exchequer if he will make a statement on the availability of Government guarantees for major construction projects funded by the private sector in so far as they affect the public sector borrowing requirement.

Mr. Peter Rees

No genuinely viable projects in the United Kingdom should require a Government guarantee.

Mr. Adley

Is that not a slightly optimistic answer from my right hon. and learned Friend? Does he agree that, for example, the Channel tunnel project, on which I shall not ask him to comment specifically, can be funded by the private sector, but that it requires political guarantees against cancellation by either the French or British Government now or in the future? Is there not a difference between political and financial guarantees, and does the Treasury recognise that?

Mr. Rees

Yes, we do. My hon. Friend will have noticed that in my reply I specifically said projects in the United Kingdom As my hon. Friend will appreciate, the Channel tunnel project will straddle two countries.

Mr. Wainwright

In that connection, will the Treasury now abandon the superstitious practice that anything that has the faintest hint of a Government guarantee is automatically added to the public sector borrowing requirement, and adopt the realistic policy of other developed nations?

Mr. Rees

I hesitate to comment on what other developed nations may do in this regard, but it is, of course, only if the guarantee is called that it becomes a charge on public expenditure.