THE CHANNEL TUNNEL

HL Deb 06 February 1964 vol 255 cc269-77

4.2 p.m.

THE MINISTER OF STATE FOR FOREIGN AFFAIRS (THE EARL OF DUNDEE)

My Lords, with your Lordships' permission, I should like to repeat a statement being made in another place by my right honourable friend the Minister of Transport on the Channel Tunnel.

"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 the expense involved can best 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."

EARL ALEXANDER OF HILLSBOROUGH

My Lords, there are one or two questions I should like to ask about this. First of all, I see that these conversations have been brought to a certain stage of provisional decision between the two Governments. May I ask Her Majesty's Government whether the Chiefs of Staff and any existing defence committee of the Cabinet have agreed upon strategic and tactical considerations? Are there now no dangers in this method of crossing the Channel? We have had no statement on that yet, and I should like to know about it.

Then, in the penultimate paragraph of the statement there is a reference to the very high cost that would be involved in relation to the present national resources of both this country and France. In the face of that, references later in the statement do not seem to have very much point in them at the moment. Is the situation not that there has been a pretty wild gamble upon these shares of one certain organisation which is interested in the development of a Channel Tunnel? And what is the exact position of that company in the light of what was said by the noble Earl at the end of his reading of the statement? It seems to me to be a pretty extraordinary mix-up between, first, the apparent suggestion that the resources of both countries may be inadequate to deal with the problem and, secondly, what kind of steps would have to be taken by a Government in this country to take control of, and therefore probably to finance, a company which was also concerned with equity capital. It seems a rare mix-up to me.

THE EARL OF DUNDEE

In reply to the noble Earl's first question, the Chiefs of Staff have, of course, been consulted. We would not have made a statement of this kind without being sure of the defence aspects involved. On the last question put by the noble Earl, there is no question of the national resources of Britain and France being unequal to the strain of building a Channel Tunnel. It is not a very enormous amount compared with other projects to which we are committed. The question simply is: what priority should it be given, having regard to the load on the construction industries which both countries have to bear? We have to fit it in with our long-term national planning, and that is a question which is quite distinct from the other question of what rôle may be played by any of the private companies which have been considering this but which have not yet go to the stage of being able to put forward any capital to be employed in it. That is a question which must be decided by the two Governments concerned.

EARL ALEXANDER OF HILLSBOROUGH

My Lords, may I ask, in regard to the finance of this matter, whether very careful attention will be given to the points which have been raised in this House—and I have no doubt some will be raised in another place, also—with a view to considering what are our real resources and how they should be applied? We have one joint organisation at the moment with France with regard to the production of an aeroplane, but, so far as I can tell, there was no agreement made in advance as to which part of the expendi- ture was to be borne by us, although it was most likely, I gather, that we were to pay the majority of it. I hope there is going to be no such element brought into the financial discussions which are now to open. The other point I should like to raise (I should have raised it just now, and I apologise for not doing so) is this: are we to understand that any question of an underground road service between this country and France has now been wiped out altogether?

THE EARL OF DUNDEE

My Lords, on the first question, I would just say again that it really is a question of priorities in the use of materials and skilled labour. The noble Earl's point is a perfectly relevant one. He compared it with aircraft construction. I should not like to say offhand, but I would have thought that the kind of skilled labour needed for that is probably not the same as the kind of skilled labour needed for building a tunnel under the Channel. But these things have all got to be considered in relation to each other, in the same way as every Government weighs one planning project against another to decide which will come first, what kind of priority it shall have in our long-term planning. But the total estimated cost of the thing is not so very terrifying in relation to what we are doing in other directions.

With regard to the noble Earl's second question, about roads, our estimates are based on making an underground rail tunnel. We would be willing to consider an immersed rail tunnel if it should prove to be cheaper than that; but our estimates have been made on an underground bored tunnel. A road tunnel would have to be much wider; it would be much more expensive; and, at the same time, it would raise very serious problems of ventilation which might possibly involve construction of shafts in mid-Channel which might interfere with shipping. I think the two Governments are satisfied that it would not only be more economical, but probably more efficient and convenient to have a car ferry service in which there would be very prompt and efficient means of both taking on cars and putting them off at the other end.

LORD MORRISON OF LAMBETH

My Lords, could the noble Earl say whether the railway could itself carry at any rate passenger motor vehicles by wagons suitable for holding vehicles? The other point is this: can the Government say—and it seems to me they ought to be able to say—what is the estimated cost of this work? Can they say what is the estimated cost to the United Kingdom, and the estimated revenue—which is possibly a more difficult one? Nevertheless, may I submit to the noble Earl that it is really wrong for the Government and Parliament to be committed in principle to a very big venture of this sort—for which there is a lot to be said—unless Government and Parliament know approximately the financial liability and financial net result? It would seem to me very bad administration if that were so.

THE EARL OF DUNDEE

My Lords, the answer to the noble Lord's first question about cars is, Yes. But, regarding the second question, I should not like to give an exact figure now before the financial discussions between the two Governments have taken place. Both Governments are agreed in thinking that it would be a good long-term investment; that it would be well within our capacity; that it would pay; and that it would probably be cheaper in the long run than development of other methods now in use of getting across the Channel.

LORD KILLEARN

My Lords, may I ask a couple of very fundamental questions? First, may we take it from the statement that has been read that the Government have definitely decided on the construction of a tunnel? Secondly, if they have, has their decision ever been voted upon and passed in Parliament?

THE EARL OF DUNDEE

No, my Lords, we had decided en principe, as the French say, on the construction of a tunnel; that is to say, the two Governments will now have discussions in order to work out the details.

LORD KILLEARN

My Lords, I understand French fairly well. En principe is a phrase I know of old. It is all very well to decide en principe with somebody; but have the Govern ment decided they wish to support the construction of a tunnel?

THE EARL OF DUNDEE

My Lords, the reason why I use the term "en principe" is because I think it is generally recognised that things that are agreed en principe very often do not take place. I think that is common form; that is why I use the term. It is rather associated. We want the tunnel and so do the French. We both think it practicable; but we are not yet finally committed to it.

LORD KILLEARN

My Lords, if you agree en principe, has it been endorsed in Parliament? Is that what it means?

THE EARL OF DUNDEE

My Lords, that is exactly what it does not mean.

VISCOUNT AMORY

My Lords, as we are all getting very Continental, should I be right in thinking, that the rough interpretation of en principe would be "in principle"?

THE EARL OF DUNDEE

My Lords, it seems to me that my noble friend's French translation is unexceptionable; and, indeed, impeccable. The reason why there is some associated difference between the two phrases is, perhaps, that the French are slightly more apt than we are, to begin with the generalisation and not end up by doing anything definite.

LORD MERRIVALE

My Lords, as one who has raised this matter once or twice in this House—whether it is a question of en principe or in principle, thus speaking both languages fluently—I should like to say how much I welcome the Government's decision to go ahead with this project and to carry it a step further. I also welcome the fact that they have reached the conclusion that a rail tunnel is technically possible and would be a sound investment. But since I understand that among other problems which still have to be settled by the experts of both countries is the question of finance, may I ask my noble friend to bear very much in mind that one of the reasons why fiscal concessions have been asked for (and are considered by many to be desirable) is the great variation between taxation structures in this country and in France? And certain writers in the Press have argued that such concessions if granted would be only on a scale that are now given to shipowners in this country.

THE EARL OF DUNDEE

My Lords, all these details are to be discussed in the conversations referred to in the original statement which I read out. We must not make any presumptions about them at the present time.

EARL ATTLEE

My Lords, may I ask the noble Earl whether Dr. Beeching has been consulted as to the possibility of this line as compared with others?

THE EARL OF DUNDEE

No, my Lords, I do not think he has been consulted; but it may be that these plans will fit in well with some of his.

EARL ALEXANDER OF HILLSBOROUGH

My Lords, I want to ask the noble Earl this question: will the Government produce a White Paper at once to Parliament; and give an opportunity for a very early debate on the acceptance in principle which the Government have made of this enormous commitment? Shall we then be able to have Parliament assured of what the expected estimated figures would be; and what would be the terms upon which Parliament would be expected to approve the construction of this Tunnel? The last question is: In view of the references in the statement to-day to finance, may I ask whether the Government are making any suggestions or instructions to the Stock Exchange to stop dealings now in the present companies dealing with equities.

THE EARL OF DUNDEE

My Lords, with regard to the possibility of a discussion, that, of course, is a matter to be discussed through the usual channels and decided by the Leader of the House and the Opposition together. On the question of the White Paper, I could not give any undertaking about another White Paper. There was one before Christmas; but I have no doubt it will be considered and notice will be taken of what the noble Earl has said.

With regard to speculation on the Stock Exchange, the Government do feel it is only fair to those private companies who have been considering this matter to give the opinion that we find it difficult to see how, in any project of this sort, private equity capital could participate on any basis normally associated with the rôle of equity in a private company. And, in his original statement, my right honourable friend stated that the fact that private finance would require a Government guarantee must inevitably affect the final decision. But I would remind your Lordships that this is a joint Franco-British undertaking, on which we have both got to agree. We have to agree with the French on what rôle, if any, private equity capital should play. Therefore, this statement of the Government's present view of the subject is in very general terms, and it is subject to those discussions on financial proposals with the French which are referred to in my right honourable friend's original statement.

EARL ALEXANDER OF HILLSBOROUGH

My Lords, does not that mean that the Government ought to have found time to advise the City what they ought to do with regard to private equity at the present time? I agree that the statement goes far in suggesting what might be the position in general in future, but surely some advice should have been given to the people concerned. The noble Earl stated that we must agree with the French. Perhaps we may. But I do not think we are getting as good a settlement as we had over Suez.

THE EARL OF DUNDEE

Surely it two countries are making an equal contribution to the construction of a tunnel between them, they must have an equal say in the method of how it should be done, and one of them cannot dictate to the other. That is why I cannot go further than the general statement which I have made and which the Government only make because they think it is fair to make this general statement of their own views, subject to discussions with the French, in order that private concerns may not be given a false impression, which may be disappointing.

LORD HAWKE

My Lords, may I ask my noble friend whether he is aware that it is not only on the Opposition Benches that a debate on this momentous subject would be welcomed? Even though we may be in favour of it, we should like to have an opportunity of debate. Further, on the financial part, would my noble friend not agree that to the voters of this country, whether they vote Labour or Conservative, it would seem most extraordinary if a railway link between the two State systems of railways were to be financed by a private company?

THE EARL OF DUNDEE

My Lords, I am quite sure that many people are eagerly desiring a debate, and it is only a question of discussing, through the usual channels, what is the most convenient and useful time, from the national point of view, at which to arrange one.

LORD LATHAM

My Lords, can the noble Earl say whether General de Gaulle approves this in principle?

THE EARL OF DUNDEE

My Lords, the statement which my right honourable friend made in another place, and which I have just read, has been equally approved by the French Government.

LORD REA

My Lords, may I refer to the noble Earl's statement that the next step is envisaged, and remind the noble Earl that the last step has taken about a hundred years to take and I hope that the next step will be rather quicker?

THE EARL OF DUNDEE

My Lords, I think that both Governments will share the noble Lord's hope in that matter.