Cross-Channel Rail Freight (Hansard, 14 June 2004)

§ Lord Davies of Oldham
My Lords, the Government's proposals for rail freight will be announced as part of the conclusions of the rail review. Current arrangements for cross-Channel freight services derive from the contract between Eurotunnel, British Railways Board and SNCF. The Government hope that the parties can agree a way for services to continue for the benefit of freight users.
With regard to the long term, we await the new Eurotunnel management's plans for the development of freight services through the tunnel. Until those are available, no definitive proposals can be put forward by other interests.

Lord Berkeley
My Lords, I am very grateful to my noble friend for that reply. I declare an interest as chairman of the Rail Freight Group. Is my noble friend aware that, as part of these negotiations, there is a good chance that all services will stop from next April or May unless someone finds about £25 million to bridge the gap in the serious contractual situation that he has outlined? Given the Government's duty under the Transport Act 2000 to promote rail freight, will he take that into account and ensure that there is no disruption in service?

§ Lord Davies of Oldham
My Lords, the present situation is serious but perhaps not quite as serious as the total suspension of freight through the tunnel envisaged by my noble friend. However, we are in a very difficult position. My noble friend will recognise that, in these circumstances, the Government's scope to play a role with state aid is very limited. But he will also know that we are about to announce our general proposals regarding rail services, including freight, and we shall seek to safeguard as far as possible, and, in fact, enhance, freight services through the tunnel.

§ Viscount Astor
My Lords, does the Minister remember that it was John Prescott, the Deputy Prime Minister, who created the Strategic Rail Authority, and Stephen Byers, the then Minister for Transport, who created Network Rail, but that the structure of the railways has just been called a "crazy bureaucracy" and an "absurd system" by Kim Howells, the current Minister for Transport? Does he agree with those statements and, if that is the case, how can anyone plan a proper rail service in the future?

§ Lord Davies of Oldham
My Lords, the development of those two concepts relating to rail services was derived from the fact that, following the previous government's privatisation, we found rail services in chaos. The noble Viscount will recognise that we are not satisfied with the position. That is why the rail review is currently being carried out, the results of which will be announced in June or July. We intend to identify a structure for the railway system which enhances its performance and enables it to recover from the years of underinvestment by the previous administration and the chaotic system that they left behind them.

§ Lord Bradshaw
My Lords, perhaps I may return to the Question. Freight services through the Channel 503 Tunnel face a real crisis because of the need to conclude a new arrangement for the financing of Eurotunnel. If that has to be done by next year, we do not want to send out an uncertain message to freight forwarders. Can the Minister give some kind of assurance that there will be no increase in the amount of money which freight forwarders must pay for the use of Channel Tunnel freight services, whatever the outcome of the negotiations between the Government and the owners of Eurotunnel?

§ Lord Davies of Oldham
My Lords, the noble Lord is asking for an assurance from the Government which would involve a degree of subsidy, but that would cause real difficulty in the way in which provision for the Channel Tunnel is managed. I accept what the noble Lord says. This is a serious situation. There are two aspects to it: there is a short-term dimension, to which the noble Lord alluded; and there is the long-running issue of freight services through the tunnel. I assure the noble Lord that these are major issues which concern Ministers.

§ Lord Faulkner of Worcester
My Lords, does my noble friend agree that, while SNCF has many admirable qualities, a willingness and a determination to promote interoperability between the different railway systems of Europe is not terribly high on its list of priorities? When my noble friend's colleagues in government speak to their French counterparts, can they do their utmost to ensure that the French are prepared to move on the issue of interoperability?

§ Lord Davies of Oldham
My Lords, that is, indeed, a critical concept. We all know that SNCF is extremely jealous of its own services and that, at times, it is reluctant to come to terms with the necessary interface that the Channel Tunnel offers in terms of both freight and passenger traffic. But, of course, this is a matter for negotiation, and I am grateful to my noble friend for helping to strengthen the hand of the railway system in this country.

§ The Earl of Caithness
My Lords, as this country depends on imports and exports and as only a limited amount of trade can go through the Channel Tunnel, what are the Government doing to help our importers and exporters with respect to shipping and ports, given that they have just turned down the extension of Southampton at Dibden Bay?

Lord Davies Oldham
My Lords, the noble Earl is right to refer to planning consent not being granted for that particular project. However, he will also recognise that there is extensive investment in the development of rail freight services in relation to several of our major ports, including Felixstowe. We plan to enhance rail links with the main rail routes throughout the United Kingdom on the basis of investment in those areas, and I can assure the noble Earl that freight is a significant dimension of that work.

§ Lord Lea of Crondall
My Lords, I refer to the answer given to my noble friend Lord Faulkner of 504 Worcester. Given the attitude of SNCF, which can be compared with the defence of the Maginot Line, is it not likely that this line is to be breached in the very near future? Does this not go back to the original Question asked by my noble friend Lord Berkeley; that is, that as interoperability becomes the norm between France, Germany, the Netherlands and so forth, it would make cross-Channel freight through the tunnel economic? That is the gap that we have to bridge, or in this case, tunnel, I suppose.

§ Lord Davies of Oldham
My Lords, my noble friend is right to refer again to the fact that SNCF is very clear about its interests. However, we should not exaggerate the position. The real problem with regard to the Channel Tunnel, as all noble Lords will appreciate, is with the border, the control of the company, and the strategy that the company has less than 90 days to produce in order that users can make appropriate arrangements. That is a very real difficulty, which at this stage probably outweighs the issue of the negotiations with SNCF on interoperability of services.