§ Mrs. Gwyneth Dunwoody (Crewe and Nantwich)
When the Channel Tunnel Act 1987 was going through the House of Commons, we were told that, because it was a national project with considerable impact on all the regions of the United Kingdom, extremely good services would be provided outside the London area and there would be no concentration on what used to be called the golden triangle of the south-east. That was the basis on which the legislation was accepted and on which Members of Parliament were prepared to support the expenditure of very considerable sums. So far, the taxpayer has paid well in excess of £320 million.
The original company put in a bid that many of us believe, in the light of subsequent circumstances, may have been pitched deliberately too low. The company was subsequently replaced, and none of the regional services are now running. That seems to many of us to be a subject for considerable worry and regret.
The Environment, Transport and Regional Affairs Committee produced a report that examined in detail both the history of the matter and what the House has a right to expect now. We began by saying that we believed that we had been cheated. There have been few signs that the trials and tribulations of the rail service have produced new thinking, imaginative plans or even the suggestion of some services north of Watford that would begin to provide decent regional access.
We said that the Government should make it very clear that they believe not only that the regions have a right to equal access but that that access should be smooth, with a high level of service. We said that we did not think that there were now any significant technical barriers to operating regional Eurostar services on the west coast main line or even on the east coast main line by early 2000.
The regional train sets were almost the ultimate toy for the taxpayer. We now own large numbers of train sets that have never been used; they have been mothballed and it seems to me that they have been treated in such a manner that the taxpayer does not even have an acceptable asset in them.
We believed that the present Government, who took over this mess, were prepared to take urgent and targeted action, but the reality is that there has been no firm decision about regional Eurostar services. We want an immediate response. The Government have said that they will not only ask for plans but use the effective new consultancy to produce some facts and figures for the House.
Some companies have said that they do not accept that regional Eurostar services could not be run efficiently. Virgin has produced a business plan that at least merits careful examination. It may be workable, because of Virgin's marketing skills, which have been shown in other fields, but it should at least be considered. We want to know whether Virgin's proposals are sensible.
What is the attitude to Olympia as a stop? Do the Government accept that one way in which regional services could have been developed would have been to allow access for domestic passengers? The Committee made it clear that we do not underestimate the security 1001 problems that would be produced if domestic passengers were able to use a service intended for international use, but other countries have demonstrated that the problems are surmountable, and I see no reason why the ingenuity of the British should not be applied here.
The Committee said that it thought that Watford was very well placed to become an integrated transport hub.
§ Mrs. Dunwoody
I am glad to have my hon. Friend's totally unbiased support.
We suggested that the Government's review should consider what benefits and costs would be associated with direct services from Watford and with through services on the west coast main line calling at Watford. However, we said that we thought it unlikely that the plan for development and change to Eurostar services at Heathrow would meet universal support from the passengers. We did not believe that people who had flown in to a very large airport would automatically be prepared to join a rail service at that point for the next stage of their journey to Paris or elsewhere.
The review should consider what additional benefits might be gained by British Airways, which is after all one of the partners in Inter-Capital and Regional Rail Ltd., from the introduction of a Heathrow to Paris service. We do not in any way underestimate the advantages of having other transport companies involved in the planning of rail services, but we would expect the Government to examine the matter in detail and with an honesty that will perhaps make it clear where the real commercial benefits lie and what the effects will be on passenger traffic.
We recommend that the Government consider the possibility of regional Eurostar services having regard to the impact of the second phase of the channel tunnel rail link. The last phase of the link will be difficult and involve considerable costs, as it will be built through parts of London that are extremely congested. It will have to be considered as part of the overall service. One cannot suggest that the channel tunnel rail link should end at a point south of the most important and congested parts of the capital city and still expect it to produce the high quality of rail services that we require.
We also said that we think that the promise of regional services implicit in section 40 of the Channel Tunnel Act 1987 should be the concern of Her Majesty's Government. The House of Commons was given clear and sensible undertakings that we expected to be honoured. It is clear that, without ease of access for the regions, the economic benefits of such a service, which will be largely funded by the taxpayer, will be lost to large sections of the United Kingdom.
It is clear that transport has a direct and immediate impact on economic development, and if the regions are to be deprived of the benefit of something that they have been asked to fund, frankly, the Committee will have been right to say that we have been cheated.
§ Mr. Peter Snape (West Bromwich, East)
I served in Committee on the Channel Tunnel Bill, and we thought that the pledge to run regional Eurostar services was based 1002 on the completion of the channel tunnel rail link. Who did my hon. Friend and the Select Committee feel would travel on the trains under the current circumstances?
§ Mrs. Dunwoody
That is precisely why the careful work done by my hon. Friend and by that Standing Committee needs to be treated seriously by the Government. It was precisely because we were concerned that domestic passengers would not have access but would still have to bear the costs, and that if we were not careful the only region to benefit would be the south-east, that we made our feelings so clear in the report.
§ Mr. Graham Brady (Altrincham and Sale, West)
I represent a constituency not far from the hon. Lady's, and I am all in favour of greater choice and greater access to facilities for the north-west. My concern is about her suggestion that the region is losing out. No doubt the south-east is benefiting, but surely the north-west is not losing out, because the journey times by air are shorter.
§ Mrs. Dunwoody
The Committee considered that idea carefully, and history shows us that areas that do not keep up with modern transport, or allow people to move freely in and out, lose out on economic development. We all ask about airport development because we know that without good access by air, rail and road, a region's economic development is stunted. It is not totally shut off, but it does not go ahead at the rate or in the way that it should.
I know that many hon. Members want to speak, so I shall finish when I have made one more point. When the Department's representatives were being questioned by the Committee on the annual report last week, they said that they would give us information about what was happening to those train sets that cost us so much.
We were especially concerned because there had been a suggestion that the company intended to let the drivers of the train sets go, and, in view of the real worth of the assets and of what such a move would mean for the future development of an efficient service, we wanted to know how much that would cost.
I have now received from the Department information that the House of Commons has a right to know:
Eurostar have offered voluntary severance to the 32 regional drivers following consultation with …their unions. 12 drivers have accepted the offer, at a cost to Eurostar of £266,000".That sum must be added to the cost of the original arrangements.
What I find really depressing is what the Department says about depreciation:
The Regional train sets were accounted for in the fixed assets of Eurostar (UK) Limited at a cost of £174.6 million as at March 1996.However, they have now depreciated so that their book value went down by £100 million in 1997, and by £45 million in 1998. The letter continues:The current book value of the regional train sets",which cost the taxpayer so much,
is £45.9 million".That is a disgrace. The House of Commons was given undertakings, spent the money and demanded the service, yet finished with nothing to show for it. That should not be allowed to continue.
§ Mr. James Gray (North Wiltshire)
Is the hon. Lady not aware that the value of the train sets themselves has 1003 not fallen at all? All that has happened is that, by standard accountancy procedures, their book value has been decreased. Because they have not yet been used, they are of precisely the same real value as they were when we bought them.
§ Mrs. Dunwoody
The hon. Gentleman can provide as many apologiae pro vita sua as he likes, but the truth is that the House of Commons was sold a nonsensical bill of goods. The House has the right to be indignant and to say that that is not acceptable.
I do not need to wax indignant on behalf of my Committee, because many other Members will do that. I shall simply say that the future of transport and economic development in this country are closely linked. The development of the channel tunnel rail services presents an opportunity to provide not only the taxpayer but the rail traveller with a high-quality service. If that is not taken, either by the Government or by individual Ministers for Transport, we shall all suffer.
I hope that Ministers will be able to tell us today when the report will be ready, what quality of service will be provided, what undertakings the company has given, and how soon the House of Commons can realistically expect to see a company operating the service. The company should be one that does not simply write unrealistic plans that can never be translated into services, but provides for the United Kingdom the level of rail service that we have a right to demand, and which we have paid for over and over again. We should surprise the taxpayer by producing the goods this time. That would be a real development for the future.
§ Mr. Peter Snape (West Bromwich, East)
The House will have heard with interest what my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), who chairs the Transport Sub-Committee, has said. Many of the points that she made were valid.
I begin by declaring an interest as a director and chairman of various companies involved with the National Express group, none of which have anything to do with the railway industry. National Express obviously does not find my railway experience of any value. All the companies with which I am involved concern either the bus or the property interests of the group. I ask the House to accept the fact that I have not been in touch with the group in any way about its views on what we are discussing.
The Committee used strong language, as did my hon. Friend, about the regional Eurostar saga. Its report said that the regions had been cheated—a phrase repeated by my hon. Friend. She will be aware, as will the rest of the Committee, that there is no legal obligation for Eurostar (UK) Ltd. to run regional Eurostars. Section 40 of the Channel Tunnel Act 1987 simply imposed a duty on the British Railways Board to prepare a plan forthe provision or improvement of international through services serving various parts of the United Kingdom".
My hon. Friend will also be aware, as will many of my hon. Friends who have taken an interest in such matters, that in 1989 the chairman of the British Railways Board, Sir Robert Reid, said about regional Eurostars:Our duty is not to run a service because it is desirable; it is to run a service which will be profitable".1004 It appears that that doctrine is still true—or rather, is still believed, although it may not be true,
My hon. Friend suggested some alternatives to Eurostar UK Ltd.—other companies that might run regional Eurostars—and she mentioned Virgin. I have sat in this Chamber several times and heard her say scathing things about Virgin Trains. I live in the west midlands and represent a west midlands constituency, so from time to time I share her anger about Virgin's performance.
As recently as last year, the review carried out by the Deputy Prime Minister, in its submission to the Transport Sub-Committee, described the Virgin proposals as unlikely to be commercially viable. Virgin has been understandably vague. So far, as far as I am aware, it has not provided either the Government or Members of Parliament with detailed costings or information concerning traffic forecasts or the costs of operating the trains. In view of my hon. Friend's strictures about its patchy performance in operating the west coast main line services, if Virgin took on that additional burden, it could lead to even more strident criticisms by both my hon. Friend and other users of the west coast main line in the near future.
There is another reason why I suggest that regional Eurostars should not be introduced now—certainly not on the west coast main line. We have almost had the 1,000 days and nights in which Railtrack promised to refurbish that line and transform it to make it suitable for train operation in the 21st century. We have concrete information, rather than hype, from Virgin this time, and we know that a considerable number of new trains destined for that line are under construction.
I am long enough in the tooth to remember the last time that the west coast main line was rebuilt, and such work is, to say the least, not conducive to punctuality and the maintenance of the existing service, let alone to adding more trains. I am concerned that Railtrack may take much longer than a thousand days and nights to modernise the west coast main line, and its task will not be helped if additional trains are run.
The essential point that the House has to face about regional Eurostar trains without the channel tunnel rail link is who would use them. The hon. Member for Altrincham and Sale, West (Mr. Brady) may wish to justify his comments about the north-west, but it is difficult to imagine business travellers who usually pay a premium being too interested in using a rail service from Birmingham or Wolverhampton that takes much longer than the air service. However, those considerations should not apply once the channel tunnel rail link has been completed.
§ Mr. Jonathan Shaw (Chatham and Aylesford)
Does my hon. Friend understand the concern in the south-east where people have waited years for the CTRL to get off the ground? It is being constructed through my constituency now. If money is diverted to regional trains, that could stall the process.
§ Mr. Snape
My hon. Friend makes his point well. Without the CTRL it is impossible to conceive any economic operation of regional trains. For example, from Glasgow, on the best estimates it would take three times as long by train under current circumstances as it does by air. There may be a leisure market for such a service from cities including Glasgow, but a service at regular intervals is hypothetical rather than realistic.
1005 My hon. Friend the Member for Chatham and Aylesford (Mr. Shaw) reminds me of a point about the CTRL. Those of us who served on the channel tunnel Committee in the mid-1980s presumed that once the go-ahead was given for that great project, the CTRL would be built around the same time. Before too many Conservative Members participate in this debate, I hope that they will accept some responsibility for the appalling mess that the CTRL is in. At that time, a route was settled upon that would bring the trains into Waterloo and, eventually, under much of London and out to the north-west and north-east using the rest of the railway network. It was that great architect of social change, the right hon. Member for Henley (Mr. Heseltine), who decided—having allowed British Rail to spend hundreds of millions of pounds in acquiring property on the original route—to scrap it and to divert the trains via Stratford.
I concede that those of my hon. Friends who fought for that diversion fought a good campaign.
§ Mr. Snape
The hon. Gentleman, who managed to drift in to the Chamber for the debate at seven minutes past 11, agrees that it was an effective campaign, but those of us who wanted to see the project completed sooner rather than later made the point that the campaign for Stratford—I do not wish to upset anyone, but it is not a place that leaps to mind when people talk about visiting the United Kingdom—would delay the completion of the CTRL. It has done so to such an extent that we are still concerned about the second portion of the line.
My conclusion is obvious. Although I understand the ire of the Select Committee, I do not see any alternative to what has been proposed. My hon. Friend the Member for Watford (Ms Ward) enthusiastically supports a quicker way to Europe than we have at present, but that will depend on the completion of the full CTRL if the trains are to compete with the airlines.
§ Mr. Andrew F. Bennett (Denton and Reddish)
Does my hon. Friend agree that while the Select Committee may be angry, the people in the north of England feel that they were cheated? They travel on train sets that frequently break down and they want to know why carriages should stand idle when they could be used to transport them to London and perhaps on to Paris.
§ Mr. Snape
I visit my hon. Friend's constituency occasionally, and he is aware of my one vice these days of supporting Stockport County. I have not been conscious of his constituents' anger that they cannot travel direct by train to the fleshpots of Paris and Brussels, which might be because they are not interested in such things in my home town and the town that he represents. However, he makes a valid point.
There is no point in running empty trains, because that will not benefit the north-west, the midlands or anywhere else. The task of all of us involved in that great project is to ensure the completion of the CTRL, and the use of Watford as a transfer point for passengers for Paris and Brussels. However, with the best will in the world and having spent most of my life working in the 1006 railway industry, I cannot see a regular interval service from some of the cities represented so ably by my hon. Friends present today being sensible or viable in the short term.
§ Mr. Tom Brake (Carshalton and Wallington)
I welcome the opportunity to contribute to this debate. We are in another fine mess, as Laurel and Hardy would say. That is the best way to describe the state of the railways bequeathed to the nation by successive Governments. Hardly a day goes by without reports of increases in trains failures and cancellations. Today's free paper, Metro London, contains details about a report from the Office for Passenger Rail Franchising. It states:Rail firms have been forced to pay about £1 million in fines because they have failed to meet basic performance targets.On almost half Britain's rail routes, reliability worsened while fewer than a third showed any improvement.
Where does responsibility for the chaos lie? It is partly down to decades of under-investment in rail, and that was the responsibility of previous Administrations, and it is also down to the absence of a level playing field between road and rail freight. The failure so far of regional Eurostar services to emerge is another example of the UK's inability to provide train services of a quality that travellers on the continent take for granted. Their services are fast, frequent and, when I make use of them, they seem to be fairly crowded.
It is true that in France and other European countries much higher subsidies are given to rail services. However, they have other advantages that we should not discount and which may offset the additional subsidies. Why do French towns fight so hard to get the TGV to stop there? It is because they expect economic development to result from a train station being built in or close to the town. It is good for business and for tourism in the area. We should not underestimate that potential.
Rail services carry other advantages that should be taken into account. They bring clear environmental benefits, for example. Transport is a major growth area for CO2 emissions. Eurostar compares itself with the aviation sector in which CO2 emissions are increasing quickly and significantly. They tend to have an impact in the higher atmosphere, so it is perhaps even more damaging.
§ Mr. Gray
We are not talking about the advantages of air over rail in general but about regional Eurostar services. Why should any business man consider spending six hours on a regional Eurostar service from Manchester when he could travel for an hour and 20 minutes by air? Even if it is environmentally better to go by rail, why would he wish to do so, particularly if the service is more expensive?
§ Mr. Brake
I shall come to that point. I hope that the hon. Gentleman will feel later that it has been adequately addressed.
Rail can provide the potential for shifting passengers from short-haul flights to rail services. Rail is less noisy when the impact of airports on communities is taken into account. Rail generates less congestion. I have no evidence to support that proposition; it is merely a hunch, but I suspect that the congestion associated with airports, which are placed outside cities, is much greater than that 1007 created by rail stations, which tend to be in the centre of cities. People more often use public transport to get to and from the rail stations.
The Government must also consider the costs of CO2. If they identify the cost of each tonne of CO2 emissions, they will be able more clearly to compare the impact of train and air services.
Let me return to the point made by the hon. Member for North Wiltshire (Mr. Gray). Even if rail has benefits for wider society rather than Eurostar or its passengers, they will not be achieved if Eurostar decides that services cannot be commercially justified because they cannot compete with air travel times. However, Eurostar's time comparisons for journeys to Glasgow by train and by air fail to take a significant factor into account—the time taken travelling from the centre of a city to an airport, to another airport and on to the centre of another city. Many journeys are from city centre to city centre rather than from, say, Gatwick airport to Charles de Gaulle, and a more accurate comparison would take that into account.
The business man or business woman may consider only the time factor, but other people travel by train. My family frequently travels by train to the south of France. Our two-year-old is much more manageable on a train than she would be if cooped up in a plane for two hours. We have made that choice not only on how long it takes to get there. It would be much quicker if we flew to Avignon, although I do not know whether there are any scheduled flights from Gatwick, so we might have to resort to a charter flight, which would cost considerably more.
Cost is important if people decide to travel at the last moment because air fares are significantly higher. Eurostar should consider the time and cost factors in their deliberations on regional services. Other matters on the horizon may affect the relative competitiveness of rail and air. Only an hour ago, the Minister for the Environment said that supported the introduction of an aircraft fuel duty. Although he did not substantiate it with hard evidence, he took the view that there was widespread support for such a measure in Europe. If such a tax were introduced in Europe, it would affect the balance between rail and air services.
Eurostar should not underestimate the commercial benefits that could be derived from regional services. Nor should the Government underestimate the other benefits. The review that will be conducted should consider socioeconomic benefits. If the benefits are shown to be enormous, the Government will have to consider finding imaginative funding for the schemes.
§ Mr. Snape
The hon. Gentleman is making a very Liberal speech. If the owners of existing train sets are correct in thinking that the loss on regional Eurostar services is about £95 million, does the hon. Gentleman think that the Government should produce that money, or could it come out of the ever-expanding penny that the Liberal Democrats would put on income tax?
§ Mr. Brake
Of course they are. I have stated clearly that if clear socioeconomic benefits could be derived from 1008 regional Eurostar services, the Government would have to consider how they should be funded. Eurostar will not fund the services as a social initiative, but only if they are competitive and profitable.
I want the Government to act quickly on the train sets that sit in sidings. I suffer from overcrowding every day as I travel into London. If rolling stock can be released—
§ Mr. Brian H. Donohoe (Cunninghame, South)
I shall be brief. My hon. Friend the Member for West Bromwich, East (Mr. Snape) said that the Select Committee on the Environment, Transport and Regional Affairs had used strong language in its conclusions. By contrast, I would say that our language was moderate under the circumstances. To say that we were badly let down is to be extremely moderate. Scotland has been totally conned given what Eurostar now proposes.
Charlie Gordon, chairman of Strathclyde passenger transport authority, is jumping up and down with rage about what the company has done, and is threatening legal action. It is nonsense to suggest that Strathclyde should accept what is proposed under section 40 of the Channel Tunnel Act 1987 when one considers the investment that the authority made when the services were first introduced. They did not invest directly in the rolling stock, but indirectly by creating travel centres dedicated for Eurostar services at Glasgow central station and other service centres.
All that was funded by Strathclyde PTA, but for what? The authority has been completely conned. Compensation is to be offered to drivers, which is ridiculous. The Government must deal with that as a priority. I understand that Charlie wrote to the Department as far back as December and is still waiting for a reply.
As we say in our conclusions to the report, why have the Government or the company not conducted any research into the usage of Eurostar services through the tunnel? During the Select Committee investigation, we asked where passengers were coming from. We were given no information. The Government did not seem to know the facts. The brief that I received from Eurostar does not mention where clients come from. It is a priority to find that out so that we can make conclusions about the value of continuing to argue for a regional Eurostar service.
I said that I would be brief so I ask my hon. Friend the Minister to take note of what I have said and to give us answers to our questions.
§ Mr. Eric Martlew (Carlisle)
I, too, shall be brief. The Whip has permission to give me the nod if I go beyond five minutes. I welcome the report and congratulate the Committee. The Chairman is right. We have been cheated. There is no doubt about it. We have not got the services and we have spent more than £300 million of taxpayers' money not to get them.
1009 I am joint chair of the west coast main line all-party group. We take a particular interest in regional Eurostar services. We are disappointed by what is happening, or not happening. The group is used to being disappointed. We have existed for six or seven years now and all that we have seen is services getting worse on the west coast main line. I understand that today's results from the Rail Regulator show that services are getting poorer, although in Scotland, in which Carlisle is counted for this purpose, we have a better service—only one in five trains are now late. That is an improvement on last year.
We have a poor service in Cumbria, and we expect better. Two proposals have supposedly been made by the companies, but in reality only one has been made, because Eurostar UK's is not a proposal. It is not even an apology, which it should be. The only proposal on the table is from Virgin. Harsh things have been said about Virgin in the past, especially by me and by the Chairman of the Select Committee, and rightly so, but it has made a proposal. My hon. Friend the Member for West Bromwich, East (Mr. Snape) said that it had not, but I have it here. It was a supplementary proposal that went to the Select Committee. It give details of pricing, the number of sets a day, where the trains would call and the cost. I am disappointed that it does not say that the trains would come from Glasgow via Carlisle and down the west coast, but I accept that that will not be an option in the near future. There is a vital link to be made with the station at Watford.
§ Mr. Martlew
The proposed services start from Glasgow and go to Edinburgh and then down the east coast, not from Glasgow to Carlisle and down the west coast. I think I am right on that one.
Points have been made about the option of flying. The reality is that people who live in my constituency will probably have to leave home three and a half hours before their flight from Manchester airport. Parking is expensive. Many people do not like airports. They find them uncomfortable and unsatisfactory. They are stressful places. It would be much easier to get on a west coast main line train, get off at Watford and go through the channel tunnel. We should not underestimate people's dislike of airports. We need a rail service.
I greatly admire my hon. Friend the Member for West Bromwich, East and respect his expertise on railways, but all that he seems to offer us on the west coast is that things will get worse, there will be no extra services and it may take much longer than one thousand days to 1010 modernise the west coast main line. That is a negative estimate of what will happen. I hope that I do not become as cynical as my hon. Friend as I spend longer here.
§ Mr. Martlew
I accept that, but the technology used 30 years ago when my hon. Friend was a signalman has advanced considerably.
If I am not to have Eurostar services on the west coast main line, I make a plea that the seven train sets be made available to Virgin West Coast. There is no doubt that our rolling stock is unsatisfactory. To use a technical term, it is clapped out. The seven sets would make a great deal of difference. Instead of being in sidings gathering graffiti, which I am sure they are, they should be put to good use on services to Europe down the west coast or, if not, on the west coast main line.
§ Mr. Bill O'Brien (Normanton)
I want to make a plea for my county and the region that I represent. I attended the Second Reading debate on the Channel Tunnel Rail Bill as an Opposition Member, regularly making the plea that the regions should be serviced by Eurostar. We were promised regional services on several occasions. One has to ask why the company is reneging on that promise and what the Government will do to ensure that it is fulfilled.
I shall not go into technical details. They were covered by my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody). People suggest that there would be no passengers on regional Eurostar services and that, if people want to travel to Europe, flying is best. If hon. Members read our reports on aviation, they would find that we want a service into the hub airports. We have no service from Leeds-Bradford into the hub airports. We are moving fast towards a similar situation with the hub airports on the continent. There will no slots for regional connections from our regional airports. I deprecate that. We need such a service.
It is important that West Yorkshire—Leeds and Wakefield, my own area—should have a rail link into Europe. There are passengers who want such a service. We need an opportunity for people to demonstrate that they want to travel by train. Rail passengers benefit a great deal from the freedom that the railways offer as compared with flying. It would be wrong for a conurbation such as West Yorkshire, with a population of 2.5 million and five large authorities-—eeds, Bradford, Calderdale, Wakefield and Kirklees—to be denied Eurostar services.
My right hon. Friend the Minister for the Regions, Regeneration and Planning is familiar with Yorkshire. We have a regional development agency, and we need a service to sustain it. He is dedicated to developing the regions. If we are to succeed in generating economic development in the region, we need a regional Eurostar service. I cannot imagine or envisage that the area in Yorkshire where I live will be denied this service. We must press the company at all levels to ensure that the promises that were made when we were discussing the then Channel Tunnel Bill are fulfilled.
1011 There has been talk about people being cheated. I shall consider that my constituents have been cheated if the service is not extended into the area where I live. The rail paths are clear and a system is in place. We need an additional service and the trains that will provide it. There is a demand for the service and, along with my parliamentary colleagues, I plead for the service to come into the area of the Yorkshire region that I represent.
§ Ms Claire Ward (Watford)
As someone who much appreciates the opportunity to travel on Eurostar at any time, I am particularly enthused by the prospect that I can get on the service at Watford and end up in Paris three and a half hours later.
The Select Committee has correctly identified that Watford is well placed to be an integrated transport hub. Indeed, the town is already on its way to becoming that. For example, the Silverlink service takes 20 minutes to get into Euston and there are Virgin services on the west coast main line. If the Government support the regional Eurostar scheme, there is the prospect of the Croxley rail link, which will bring tube links direct into Watford Junction.
I share some of the concerns of my hon. Friend the Member for West Bromwich, East (Mr. Snape). There are capacity difficulties on the west coast main line, even given the modernisation of that line. I recently held a rail summit, bringing together all the train operating companies that serve Watford and Railtrack. When we considered potential new services and regional Eurostar, it emerged that there is no capacity for any new or innovative services. That is the position now and, even with modernisation and upgrading of the west coast main line, there will not be much capacity for additional services. There will be only the improvement of existing services.
We may have real problems in extending regional Eurostar to other areas, and there is no doubt that the solution lies in Watford. The town can provide a real hub for trains coming along the west coast main line from all parts of the country and connecting with Watford. Watford has other good connections. It is very close to the M1 and the M25 and is only a short distance from Heathrow. A proposal was put forward by Anglia Railways Train Services to link Watford and Heathrow by rail. Unfortunately, that has been turned down by Railtrack because of capacity issues. I believe that the link could offer more opportunities for regional Eurostar services. As I have said, there is a tube link. Many people will be surprised to know that it extends as far as Watford. We hope that, eventually, it will be brought into the Watford Junction service.
There are cost issues. The Select Committee report correctly identifies that the costs involved in making Watford a base for regional Eurostar would be considerably less than those of extending the service much further beyond Watford. I understand that investment of about £2 million would be needed at Watford for new passenger facilities and for immigration controls. There is no doubt that the cost would be much lower than that of an extended service and it would be a much quicker alternative. It would ensure that we see Eurostar services extended beyond London. It would be much cheaper than extending them from Glasgow, for example.
1012 I understand that other hon. Members are keen to speak in this debate and I do not wish to prolong my contribution. I merely say that my constituents would greatly welcome the extension of the regional Eurostar to Watford. The town can cope with such opportunities and provide much better onward travel links for anybody who wishes to come from Europe straight through into Watford. I hope that the Government will consider this option as soon as possible. I look forward to seeing Eurostar operating from Watford to Paris as quickly as possible.
§ Mr. George Stevenson (Stoke-on-Trent, South)
The Select Committee report does not say that we want any delay in the construction of the high-speed rail link. It says specifically that we do not want that. For those hon. Members who seem to have written off the regions in terms of Eurostar, the report specifically does not say that we want to see empty trains running into the regions. I am disappointed that some hon. Members have made contributions that seem to write off the regions. I can only conclude that the Members responsible have not read the report. If they have—
§ Mr. Stevenson
Yes, I am referring to the hon. Gentleman, who represents a constituency in the north-west.
§ Mr. Brady
Will the hon. Gentleman give way? Mr. Stevenson: I do not have time.
I suggest that those who seem to have written off the regions should either read the report or read it again more carefully.
The report also states that the one assessment of, or piece of research into, regional Eurostar—it was carried out by Capital and Continental Railways—lacks credibility. That company was appointed by the Secretary of State in July 1998. It knew then that it would be appointed as the leader of the regional Eurostar consortium. It had made it clear that its preference was for Eurostar to be based at Heathrow.
Lo and behold, at about that time, British Airways took a 10 per cent. stake in the consortium. There we have it. That is why the Select Committee said that the research that was carried out by Capital and Continental Railways, or its assessment, lacked any credibility. Indeed, when the company gave evidence to the Committee, a number of us asked a specific question: "Which is your preference for the development of Eurostar services?" The answer was clear—Heathrow. The representatives of the company told us that their assessment of Heathrow was that, if they could develop a service there, they would take passengers away from Waterloo. Nevertheless, their preference was development in the south-east. That was all that they were interested in.
We were delighted when my right hon. Friend the Secretary of State announced that he was not completely satisfied with the outcome of the assessment by Capital and Continental Railways. He decided that there should be another inquiry with different terms of reference. Crucially, they include economic benefits to the regions, 1013 something which was not included in the terms of reference of the first inquiry. The credibility of the first assessment, on which some hon. Members have based their opinions, must be treated with great caution. We are delighted that the Secretary of State has recognised that. We are delighted also that there will be a further investigation. I ask my hon. Friend the Minister to ensure that the next inquiry is conducted as speedily as possible but consistent with a thorough job being done.
I have no doubt—I think that the majority of members of the Select Committee, if not all of them, equally have no doubt—that, when the next inquiry takes place, with the terms of reference that my right hon. Friend the Secretary of State has laid down, very different conclusions will be reached about the need and demand for, and the essential nature of, regional Eurostar services.
§ Mr. Graham Brady (Altrincham and Sale, West)
I sorry that the hon. Member for Stoke-on-Trent, South (Mr. Stevenson) did not give way, having referred to me in his contribution. I understood that that was a normal courtesy in the House. As a point of correction, I ought to make it clear at the outset that it was his hon. Friend the Member for West Bromwich, East (Mr. Snape) who referred to empty trains. I do not see anything wrong in that—the hon. Gentleman made a sensible and intelligent contribution to the debate.
Like the hon. Member for West Bromwich, East, I feel that the important question about regional Eurostar services is not whether there is outrage and anger on one side or another, or whether it is fundamentally right that there should be rail services from the regions to Europe, but simply whether there is a demand for those services.
I speak with some care and caution on the matter, as I am aware that my constituents are fortunate in numerous respects, but particularly fortunate with regard to transport. They are well connected for motorway transport, reasonably well connected by rail, and extremely close to Manchester airport, which is a major regional hub airport. In terms of time taken to travel from one place to another, they are therefore on the other side of the debate from the constituents of some of the other hon. Members who have spoken.
§ Mrs. Louise Ellman (Liverpool, Riverside)
Does the hon. Gentleman accept that residents of the north-west living in Liverpool, Lancashire, Cumbria and elsewhere are many miles away from a suitable airport, and that, in any case, the existence of an airport in no way obviates the need for rail links to the channel tunnel—a need which was identified by the north-west chamber of commerce and manufacturing industry in the north-west?
§ Mr. Brady
The hon. Lady makes a valid point. Of course, she has an airport in Liverpool, and it would be nice if it were used more than it is at present, perhaps with a greater variety of services. She makes a sensible point, and one that I was trying to develop. There are parts of the regions where there may be demand, which may lead to full, rather than empty, trains. However, in most circumstances, my constituents would 1014 recognise that it would be a more sensible choice for them to fly, rather than to take a regional train service, were it available.
The matter must be addressed in a commercial sense. By that I mean not that the profit element should be put first, but from the perspective of demand for the service. The hon. Member for Carshalton and Wallington (Mr. Brake) referred to the environmental benefits of train travel over aviation travel. That may well be true if the train is full, but not if the train is empty or nearly empty.
I shall not detain the House for long, as I know that there is little time. I want simply to bring the House back to the sensible contribution from the hon. Member for West Bromwich, East, who sought to focus the debate on whether demand exists. There may well be demand in West Yorkshire, Stoke-on-Trent, Carlisle and Liverpool. 1 have no difficulty with that possibility, but the debate should focus on the real question of whether there is demand and whether the services will be used, not whether people feel angry or let down. That may be a legitimate feeling, but it should not be the motivation for creating a new rail service.
§ 12.3 pm
§ Ms Jenny Jones (Wolverhampton, South-West)
I am pleased to have been called to speak in the debate. I am not a member of the Select Committee, but Eurostar regional services are a matter of great interest to my constituency and my region.
I have a copy of the front page of the Wolverhampton Express and Star on 9 December last year, the day after the announcement about the feasibility or otherwise of Eurostar services. The headline states:Rail link for the chunnel hits buffers—midlands route to Europe shunted into siding".The article goes on to reflect accurately the frustration and disappointment with which people in Wolverhampton and the surrounding region greeted the news that the long-expected services might not take off.
The other reason why I pointed out the article is that there is great interest in the regions. People are following the debate, and we should not underestimate that.
The key recommendation in the report is that the Government should carry out a review of the economic and social impact of a regional Eurostar service on the regions. The report acknowledges the alternative of upgrading Watford and running passenger links to Watford. I believe that that would be a good alternative.
My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) was spot-on when she said that the issue was the economic development of some of the regions. It is not just a matter of how profitably or otherwise passengers can be shunted round the rail service to Europe. It is a matter of economic development. I shall use Wolverhampton as an example.
Wolverhampton is the rail gateway to Staffordshire, Shropshire and Wales. In the 1980s, its economy collapsed. It has worked hard to restructure its local economy, but there is no doubt that a decent transport infrastructure is vital to its future growth. People who want to travel to Paris and Brussels have the choice of Birmingham airport or a complex and time-consuming 1015 journey involving several other modes of transport. The midland motorway system is so congested in parts that it is a liability, rather than an asset.
The business community of Wolverhampton wants the rail link. More than half of the new firms moving into Wolverhampton since the 1980s recession are from the European Union. They form the economic base of the town, and European trade is vital. The business community is asking for a direct rail link into mainland Europe.
Wolverhampton is a visitor centre. It has 3.5 million visitors a year, which may come to some people as a surprise. Wolverhampton has a growing tourist industry, but it needs a rail link into mainland Europe to realise the full potential of attracting visitors to the town.
A Eurostar link or a link through Watford would be a major asset in attracting inward investment. New companies that want to relocate to the area have pointed out that the congestion on the M6 north of Birmingham is a major barrier to economic development in Wolverhampton and the surrounding region. An alternative direct link to mainland Europe would be a significant factor in the economic regeneration of Wolverhampton and the region.
Finally, the report states that the regions have been cheated. They most certainly have. They are being cheated out of realising their full economic potential. As a matter of some urgency, the Government must carry out a review of the economic impact of regional Eurostar services. I point out to my hon. Friend the Minister that the majority of people living in this country who are likely to use those services live south of Scotland, east of Wales and north of the Watford gap.
§ 12.7 pm
§ Mr. Bernard Jenkin (North Essex)
First, I apologise to the House for arriving a little late for the debate.
§ Mr. Jenkin
I cannot blame the train. The hon. Member for West Bromwich, East (Mr. Snape) fairly had a dig at my slightly late arrival, so perhaps I may reciprocate and wonder where he has gone, as he does not seem to be in the Chamber to hear—
§ Mr. Jenkin
Perhaps the hon. Gentleman's apologies will be conveyed by the Minister.
I congratulate the Select Committee, under the chairmanship of the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), on the report, which raised issues of concern to all parts of the House. When her Committee, which was unanimous, says that it feels cheated, we should all feel that.
It is not just a matter of the important emblematic issues involved. The fact that the promise was made to the regions and to Scotland but not delivered rather reinforces the unfortunate impression that the south-east does not care about the rest of the country. That is a sad indictment of the accretion of economic forces in the south-east.
1016 There are important strategic issues for areas such as Wolverhampton, which were described by the hon. Member for Wolverhampton, South-West (Ms Jones). It is not the great volume of people who will use the service, but the key decision-makers who need access to the continent for their business. They need to be attracted to places such as Wolverhampton, Manchester and ultimately to Glasgow and other parts of the United Kingdom. They attract the business, so they are crucial for economic development. We share those concerns.
I shall keep my remarks as short as possible, as the House deserves a comprehensive reply from the Minister—[Interruption.] I shall do my best. I take the House back to the statement about the channel tunnel rail link on 3 June last year, when the Deputy Prime Minister said:
1 can assure the House that LCR remains under an obligation to provide the infrastructure for regional Eurostar services. The trains for those services are currently lying idle. I have therefore asked the consortium to review urgently the feasibility of such services, and to put proposals to me before the end of the year. I shall inform the House of the outcome of that review in due course."—[Official Report, 3 June 1998; Vol. 313, c. 369.]The Deputy Prime Minister did not promise to make an announcement before the end of the year, but there was a clear impression that the matter was urgent. However, those trains have been lying idle during the two years in which the Government have been in office. No decisions have been made and, understandably, people are becoming frustrated.
The first point that I ask the Minister to address is why, in the 1997 bidding process for the Eurostar services that included the regional services, did the Government accept the consortium bid when it was subsequently announced that that bid did not include an obligation to run the regional services? The alternative—the original Virgin bid—seemed to be—
§ Mr. Deputy Speaker (Sir Alan Haselhurst)
Order. The Minister must not reply prematurely from a sedentary position.
§ Mr. Jenkin
It gives me nothing but satisfaction to have riled the right hon. Gentleman already. However, that is not my intention; I genuinely want an explanation. Virgin was firmly under the impression that it was bidding with a clear obligation to run regional services. The consortium bid was accepted, and the Government then announced that regional services were not an obligation.
There was a second red herring in relation to running services to London Heathrow when, technically, that will not work. We have all seen the picture in Rail magazine of a Eurostar train standing at a platform at Heathrow, but the only way to get that train to that platform to take such a picture would be to alter the platform or to remove bits of the train. That service is not a viable option until terminal 5 is constructed; that is some way off—too far off for most Members of the House.
Thirdly, what have the Government done since last year's statement on the channel tunnel rail link? We have received the reports of Mercer Management Consulting Ltd. and of the Transport Sub-Committee, and the Government have now commissioned another independent 1017 review. That looks suspiciously like a stalling exercise. However, during that period there has been another offer from Virgin. As the hon. Member for Watford (Ms Ward) pointed out, there are great virtues in Watford acting as a hub for regional services and in starting a service from Watford through the channel tunnel to Paris. The Waterloo service takes three hours; the Watford service would take three hours and 20 minutes.
As my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) said, there may be problems about the viability of services running as far north as Manchester and Glasgow. However, that does not apply to Watford. The tracks and the train paths are in place. I understand that Virgin has even discussed with Eurostar (UK) Ltd. the possibility that Virgin should run such services.
Virgin's real interest is in adding critical mass and viability to its services running into Watford and down the west coast main line. I want to correct the hon. Member for Carlisle (Mr. Martlew), who said that it is not viable to run Eurostar services up the west coast main line. I understand that it is viable to do so and that that is Virgin's intention in the fullness of time.
§ Mr. Martlew
I said that Virgin's proposals are to run trains from Glasgow and Edinburgh down the east coast line—not down the west coast line from Carlisle.
§ Mr. Jenkin
I may have the wrong information; I am prepared to stand corrected on that point. However, the question whether those trains could be used to improve the services on the west coast main line is not in doubt. At present, the trains are sitting idle—that might be the information to which I referred.
In paragraph 21 of the Government's response to the report, they half accepted the key recommendation of the Committee, but have merely handed the matter back to the British Railways Board. Paragraph 22 states that the boardshould prepare a plan stating measures which ought to be taken by any person in the United Kingdom or France with the aim of securing the provision or improvement of international through services serving various parts of the United Kingdom.
We want a decision from the Government. Have they merely put the matter into the box labelled "Too difficult"? Transport Ministers come and go; I remember that there was some criticism that were too many Transport Ministers under the previous Conservative Government. The same disease seems to afflict the Labour Government. Perhaps the officials in the Department of the Environment, Transport and the Regions hope that the Minister will not have time to grapple with the matter before he moves on and they can start on the education of a new Minister. On the other hand, perhaps the Government are imprisoned by their interest—the financial stake that they have taken in the Eurostar consortium. They have a 10 per cent. stake, a 35 per cent. share of the profits and a potential 35 per cent. share of the sale proceeds. Has the Treasury told the DETR that the viability and the profitability of the existing Eurostar service should not be compromised because the Treasury has made a financial investment that is tied to the channel tunnel rail link deal?
One of the reasons why the services are in doubt is that there is no obligation on the company running the channel tunnel rail link to build phase 2. We are left with a most 1018 unsatisfactory situation. I want to leave one final thought with the Minister, although I realise that he is not the Minister of Transport, but has responsibilities for the regions. Any solution would be better than the present situation. That is a plea. We share the difficulties that he faces in resolving the situation, but it is absurd that seven good train sets should be lying idle. The right hon. Gentleman's Government have been responsible for that during the past two years; we are anxious to give him any possible assistance and support in resolving it. It is time that the Government took some decisions instead of setting up more and more reviews.
§ The Minister for the Regions, Regeneration and Planning (Mr. Richard Caborn)
First, Mr. Deputy Speaker, I apologise for the sedentary intervention that I made earlier. It was not becoming to a Member on the Treasury Bench.
I congratulate my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) on initiating this important debate. Although the hon. Member for North Essex (Mr. Jenkin) said that I was not the Minister of Transport, I was a member of the Committee when the Channel Tunnel Act 1987 passed through Parliament. I remind the hon. Gentleman that the Labour Opposition at that time forced the Conservative Government to include section 40 of the Act. Labour forced that Government to take on board our belief that the asset of the channel tunnel rail link should be for the whole nation and not merely for part of it. The nature of the Bill was such that financial responsibility could not be placed on its sponsors, so we had to deal with the matter by including section 40. That measure dealt not only with passengers, but with freight as well. It was an extremely important section of the Act that dealt with the well-being not only of the English regions, but of Scotland and Wales.
The inquiry held by the Transport Sub-Committee and its report echoed the views expressed by hon. Members today. The Committee's recommendations have been invaluable in informing the review that the Government are commissioning. We have already announced that we intend the review to be wide ranging. Its terms of reference were drawn up in the light of the Sub-Committee's thinking and encompass a broad range of issues—including consideration of routes, stopping patterns, operational issues, demand for services, impact on the construction of the channel tunnel rail link and, of course, the wider socio-economic benefits of such services. That is set within the broad context of section 40 of the Channel Tunnel Act 1987.
My hon. Friends were the main participants in the debate, which shows the interest of Labour Members in the regions and in Scotland and Wales. Some of that information about the origin of passengers, for which my hon. Friends asked, is confidential, but I assure my hon. Friends that it will be available to the consultants. The consultants' report will take into account Railtrack's modernisation programme for the west coast main line. Services for Watford and the Watford hub will also be considered by the review. My hon. Friend the Member for Crewe and Nantwich made a number of points and I hope that they will also be factored into the review. We want to factor in all those matters, but we want to ensure that there is no delay in the work of the review.
1019 As the House will know, on 12 April, we announced that we had invited five firms to bid for the appointment as consultant to undertake the review. Those firms are Arthur D Little, Booz Allen and Hamilton, Colin Buchanan and Partners, PricewaterhouseCoopers and WS Atkins. The bids were received today, and we expect to make the appointment in June. We shall instruct the successful firm to undertake the broad-ranging study that I have outlined. I hope that that report will be with us by the end of the year. The hon. Member for North Essex shakes his head, but he knows that we inherited one hell of a mess in respect of the financing of the channel tunnel rail link. As my hon. Friend the Member for Crewe and Nantwich said, we hope that the taxpayers and the travelling public are in for a nice surprise, because the first surprise that we gave the taxpayer was to unravel the mess that the Conservatives had left. We would not be having this debate had the channel tunnel rail link itself failed, and that was a high possibility because of the give-away mentality of the previous Government. We had to get a better deal for the taxpayer by unravelling the mess and making sure—
§ Mr. Caborn
I shall not give way to hon. Members who, having only just come into the Chamber, decide to intervene. Only Members who have sat through the debate are entitled to intervene.
§ Mr. Jenkin
We are entitled to point out that the forecasts for the financing proposals for the original channel tunnel rail link were thrown out of kilter by the fire—[Hon. MEMBERS: "Oh!"] Oh yes. To be fair to LCR, it should be emphasised that, until the fire, the company was broadly on track in financial terms, but the financing arrangements were thrown off by the fire.
§ Mr. Caborn
I shall not respond to that intervention, except to say that I think that the hon. Gentleman is being slightly economical with the truth. I shall let hon. Members arrive at their own judgment.
We are determined to ensure that the review takes proper account of the views of all interested organisations. We shall therefore instruct the firm of consultants appointed to consult, among others, the Local Government Association, the regional development agencies, and the Fast Tracks to Europe Alliance, to ensure that the views of the regions are properly represented.
There has been concern about Eurostar's reported plans for the regional trains sets and the drivers whom Eurostar employed to operate regional services. The Government understand and share the disquiet that has been expressed about Eurostar taking decisions that might pre-empt the Government's review. However, I assure the House that, although the trains are owned by Eurostar (UK) Ltd. and decisions on their use fall to the company, the Government have agreements in place that prevent assets from being used outside the Eurostar business without the consent of the Secretary of State. That power may well be used.
The Eurostar business is defined as the operation of international passenger services. We have made it clear to Eurostar that any plans it has for alternative uses of the 1020 regional train sets must be within the terms of the agreements that it has with Government and that it must not pre-empt the Government's review. Eurostar clearly understands that.
One alternative use of the regional train sets that I understand Eurostar is considering is their lease to domestic train operators—a point made by several of my hon. Friends. That option was encouraged by the Sub-Committee in its report, and I understand that Eurostar has already approached Virgin, Great North Eastern Railway, Connex, South West Trains and GB Railways to see whether they would be interested. As I have said, under the agreements we have with LCR, the lease of the regional rolling stock to domestic rail operators would be subject to the Secretary of State's consent. However, I can say now that if Eurostar can come up with a commercial arrangement that would enable the stock to be put to use on the domestic network, pending the outcome of the Government's review, my right hon. Friend the Deputy Prime Minister would not stand in their way.
Decisions on the deployment of Eurostar drivers are, of course, a matter for the management of Eurostar (UK) Ltd. However, I have been assured by the company that its action in no way prejudges the outcome of the review. I understand from the company that, as a result of the delay in the introduction of a regional Eurostar service, it is incurring costs estimated to be about £250,000 per month—getting on for £3 million a year. To ameliorate those costs, the company has decided to offer a voluntary—I repeat, voluntary—severance scheme to the 32 regional Eurostar train drivers.
That decision was taken following consultation with the regional drivers themselves and with their unions. Eurostar tells me that 12 drivers have now accepted the offer of voluntary severance, at a cost to Eurostar (UK) Ltd. of £266,000. Those costs will not be met by the Government; they are rightly the responsibility of Eurostar.
As I have mentioned, the Government are keen to ensure that actions are not taken that might prejudice the outcome of our review. We have therefore asked Eurostar's management whether the loss of those drivers would affect the company's ability to run regional services, should that be decided. I am glad to say that we have received an unambiguous assurance from Eurostar (UK) Ltd. that, in the event that our review leads to a decision to start regional services, any requirement for additional drivers could be met and would not delay the introduction of those services. The professionals estimate that it would take only two to three months to recruit and train a driver to run a regional Eurostar train.
I know that many hon. Members remain concerned about the time that it is taking for the regional train sets to be cleared to operate on the west coast main line and east coast main line. I understand their concern. However, Eurostar regional rolling stock is technically complex, because it must be able to draw from four different traction current supply systems. Early testing revealed significant electro-magnetic induction problems when regional train sets interfered with the operation of track circuits. In lay person's language, that could affect all the signalling on the tracks, which would be extremely dangerous. Neither the Government nor Eurostar will act until we have clear confirmation that it is safe to use the 1021 rolling stock. We hope that clearance can be given sooner rather than later, but uppermost in our mind is passenger safety.
Several hon. Members raised the question of regional Eurostar trains carrying domestic passengers, and I am happy to confirm that security is not a bar to Eurostar running regional services. The Government have always said that, provided procedures are in place that satisfy security requirements, there would be no problem with regional Eurostars carrying domestic passengers, and that remains the case. The Government's review will include consideration of the costs and benefits that might be incurred by Eurostar if domestic passengers are carried.
The decision to abandon European night services was made in 1997 by European Night Services Ltd.—not by the Government—following a commercial review of the services. ENS is a joint venture company comprising Eurostar (UK) Ltd and several European railways. The reason the Government became involved was because the lease agreed by ENS and Metro Cammel in 1992 was underpinned by a Government guarantee, given by the Conservative Government. ENS took the view that it would cost too much to complete the building of the stock; and, as there were no plans to use it, the company decided to leave the partially built stock with the manufacturer and allow the lease to terminate. The lease automatically terminated as none of the rolling stock had been delivered to ENS by the manufacturer.
The problem was that, at that point, LCR, which owns Eurostar (UK) Ltd., had just told the Government that it could not continue with the channel tunnel rail link project, and Eurostar did not have sufficient money to fund its portion of the lease termination costs. Payment would have led to the insolvency of Eurostar (UK) Ltd., which would have caused the collapse of the channel tunnel rail link project. The Government decided to allow the guarantee to be called and, on 1 June 1998, the Department of the Environment, Transport and the Regions paid out £109 million for the security left to us by the previous Administration. However, the Government are entitled to recover the payment as part of the restructuring deal agreed with LCR, the owner of Eurostar (UK) Ltd.
Although the rolling stock is now the responsibility of the manufacturer, Metro Cammel, part of the deal in allowing it to keep the trains involves a profit-sharing arrangement if they are sold on. ENS will get a 50 per cent. share of the profits if Metro Cammel—