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Channel Tunnel

Volume 981: debated on Monday 17 March 1980

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Motion made, and Question proposed, That this House do now adjourn.—[ Mr. MacGregor.]

Mr. Eric Ogden (Liverpool, West Derby) rose—

Will the hon. Gentleman wait a moment until the Chamber is quieter? I shall time the debate from the moment when I call him.

10.26 pm

I am grateful for the opportunity to raise in the House in this short Adjournment debate the subject of British and European investment in the Channel tunnel link. You will know, Mr. Speaker—perhaps none better—that an Adjournment debate is usually a matter between one Member and one Minister. With your permission, I wish tonight to share my part of the debate with the hon. Member for Maidstone (Mr. Wells), who, with me, is joint chairman of the all-party group for the Channel tunnel, and with my hon. Friend the Member for Derby, North (Mr. Whitehead), who has special constituency interests in British Rail and considerable knowledge of transport matters, and who is standing in also for our hon. Friend the Member for West Bromwich, East (Mr. Snape), the secretary of the all-party Channel tunnel group, who has to be in Birmingham at this time.

I see other faces in the Chamber—the hon. Member for Folkestone and Hythe (Mr. Costain), the hon. Member for Plymouth, Sutton (Mr. Clark) and others who have from time to time taken part in the whole debate on this issue, so I hope that this can be a mini-debate, leaving ample time for the Minister to reply.

The Parliamentary Secretary has in his time voted for both the main principles of a cross-Channel tunnel on a White Paper and for the Second Reading of a Bill to bring the Channel tunnel towards construction. Through the Parliamentary Secretary we hope to encourage the Minister of Transport and the Government to move the Channel tunnel project one stage further towards reality.

The present Minister of Transport has in the past voted both as Minister and as Back Bencher, as did his predecessor, to support the principle and the practice in this matter on the Second Reading of a Bill and on White Papers. The right hon. Gentleman has some power in his hands now to implement his past votes.

From 1964 British Governments of both parties have been committed in principle, and in varying degrees in practice, to a fixed-link Channel tunnel. We have had studies and opportunities enough. We made a good start some years ago with the actual construction of the tunnels. Then political fainthearts, mostly of my party I am sorry to say, let the project be abandoned—temporarily abandoned, not forgotten.

The project was viable then. In my view and that of many right hon. and hon. Members and people outside, the project is even more viable, more advantageous and more necessary now. To put it in simple terms, to authorise the construction of the British Rail shuttle service Channel tunnel would create employment in the British engineering and construction companies now, would use British steel and British technology, would improve British national transport facilities and would improve British freight competitiveness to and from Europe and, equally, to and from other parts of the world. We would conserve energy, we would improve the environment of the South-East, we would reduce the need for massive public expenditure at new airports such as Stansted, and extensions at Heathrow and Gatwick, we would have a profitable part of the British Rail network—even more profitable than the main line Inter-City services—and the financial benefits from that could, and should, benefit other users of British Rail services.

The British Rail proposal for a single main tunnel, plus a service tunnel, is a practical and modest proposal, which recognises the needs and the limitations of today. It allows for the addition of a second main tunnel, if and when necessary, to meet the needs of the future.

The project is not an addition to the resources of the South-East at the expense of other regions. The rail passenger services, London to Paris and London to Brussels, would certainly be in direct competition with the air services, airports and air transport in the South-East, but less so with the Midlands, the North-East or Scottish 4iloiraiiiransport.

The freight services available through a Channel tunnel would be available to every part of the United Kingdom that has a railway station. For me and for my friends on Merseyside, the entrance to the Channel tunnel—as I have said many times in the House—would be at Liverpool Lime Street station or at the Royal Seaforth docks. For other parts of the country, such as South Wales, the North-East and Scotland, the entrance to the Channel tunnel would be at the nearest convenient railway station or freight yard. That would be the great advantage of the service. There is nothing new in that.

However, over the past months a new dimension has become prominent. There is the possibility—or, if we believe recent newspaper reports, the probability—of some financial support, some financial guarantee and some real investment by the EEC as part of its European commitment to the European transport infrastructure.

The House should be grateful to The Guardian, The Sunday Times, and The Observer, which provided information of real value, research and interest, which has not been available from the Government. Sometimes one learns more from the Sunday newspapers than from any Government or any party at any time. We should put on record our appreciation of the information that the newspapers provide. There are reports from usually reliable sources that the Minister will make a statement on 19 March. I am grateful that he has taken time to attend the debate. Perhaps he has come in case his Parliamentary Secretary is tempted to pre-empt him on what he is likely to say on 19 March. We shall try to tempt him, but he is unlikely to succumb to that temptation.

The purpose of the debate is to encourage the Ministers to hold their own in their Departments, to encourage them to give permission, to show that there is all-party support in the House and outside—greater possibly than at any time over the past 200 vears—and to ask the Par- liamentary Secretary to give us as much information as he can.

The Prime Minister claimed recently that all she needs to know to make a good decision is, first, all the necessary information and, secondly, all the options that are available to her. Given those criteria she claimed that she could make the right decisions. I would not argue with every decision that she has made. Presumably the Government have all the necessary information. They know the options available to them. We hope that the debate will encourage them to make the right decision, which is to give, both in principle and in practice, their support to the British Rail shuttle service Channel tunnel.

10.34 pm

I thank the hon. Member for Liverpool, West Derby (Mr. Ogden) for raising this matter. The new proposals are more welcome than the previous ones for Shepway. The Kent county council recently passed a resolution to approve the new proposals, as did the Shepway council. I hope that the Caimcross report will be available before the Minister makes a statement so that we shall have ample opportunity to study it.

10.35 pm

It is essential that Back Benchers do all that they can to foster French good will. I am delighted that my hon. and learned Friend the Member for Solihull (Mr. Grieve), the chairman of the Franco-British parliamentary group, is present. It is essential that we look after the French so that they do not say "perfide Albion" as they did after the last fiasco.

Those of us whose constituents take the mid-Kent railway line are now much happier about the new proposals than we were about the old ones. The improved high-speed track will give a better service to our commuters and the planned "flights" of trains will help our commuters.

The proposed costing of £650 million at 1978 prices spread over seven years means that each of the two nations will spend on the Channel tunnel only 6 per cent. of its normal expenditure on transport infrastructure. That is a modest figure. I hope that the Select Committee on Transport will conduct an inquiry so that we do not need a plethora of outside inquiries. The new Select Committee should be seen to be doing what such Committees should do.

10.36 pm

I am grateful to my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) for initiating the debate. I declare an interest as a member of the National Union of Railwaymen. I have a lifelong interest in the project. Many hon. Members agree that the proposed scheme does not constitute the type of threat to our seafaring services or to the environment of the South-East which the grandiose scheme of the days of Anthony Crosland entailed. That is apart from the fourfold extra cost involved in that scheme.

The present scheme intends to relieve those parts of the South-East which are heavily affected by the great increase in juggernaut traffic. Such traffic has increased by about 25 times in the last decade. The proposed rail Channel tunnel will take a share of that traffic and relieve congestion in the small towns and villages.

It will also be a dynamic boost for British Rail. It is exactly the type of investment that British Rail needs. It will provide a guaranteed return on capital—about 13 per cent. a year. It will also increase the small proportion of international freight which is carried by British Rail. At present international traffic represents about 2 per cent. of all rail freight in Britain, compared with 28 per cent. in France and 48 per cent. in Belgium.

The single bore tunnel is a modest and useful project, costing about £650 million at 1978 prices. We may look forward to that project being financed substantially by the Community and by the British and European money markets. At a time when the Government, rightly, are saying that we should get back some of our Community contribution, this is exactly the type of project to which we should draw the Community's attention. There should be expansion in the new sphere of transport infrastructure.

I see that the hon. Member for Plymouth, Sutton (Mr. Clark) is dissenting. But we all know that he believes that if the Channel tunnel is built, General Ludendorff will march out of it. That view is not shared by the House in general. We hope to hear that the Government are looking sympathetically at the scheme, that they have evaluated the studies and that they will make an early announcement.

10.40 pm

I congratulate the hon. Member for Liverpool, West Derby (Mr. Ogden) on his initiative. Most of my hon. Friends know that I have supported the Channel tunnel project ever since I came into the House of Commons. I believe that it will be a vital and important link between the transport systems of this country and of Europe and that it will be—and would have been, had it been implemented before—a viable investment.

I welcome it particularly on this occasion because, as the hon. Member for Derby, North (Mr. Whitehead) suggested, it is one of the ways in which the, at present, unfair distribution of the Community budget can be righted. This will be a commendable expenditure of Community funds, as I understand it. Having returned from a committee meeting in Paris only late this evening, I am able to state that the French press yesterday and today has been very strong in its welcome of the proposal.

10.41 pm

I realise that many hon. Members wished to take part in the debate—including my hon. Friend the Member for Plymouth, Sutton (Mr. Clark), with a dissentient voice. But perhaps it would be helpful if I now responded to the debate initiated by the hon. Member for Liverpool, West Derby (Mr. Ogden).

I congratulate the hon. Gentleman on raising the subject and setting the stage for a statement of the Government's policy that my right hon. Friend will be giving at Question Time on Wednesday of this week. I should like first to deal with some of the press speculation, to which the hon. Gentleman has referred, and then to deal with his other points and those raised by other hon. Members.

There are several misconceptions which seem to abound concerning the background to the present Channel tunnel proposals. At the moment, contrary to many reports, there is no immediately available pool of European Community money waiting to be called up to pay for either a tunnel or a bridge. Matters have not yet advanced that far. Some of us—the overwhelming majority in the Chamber at the moment, according to my impression—would wish that they had, but unfortunately that is not the case. Nor, for the immediate future at least, is there any possibility of the flow of funds into a fixed Channel crossing of some kind that would help to meet our budgetary problem within the Community. We need to look, for a solution to that problem, to more immediate steps than the building of a fixed link, with all the complexities that that involves.

The Government believe that there is a very clear-cut distinction between the immediate short-term problem of the European budget and this country's contribution to it on the one hand, and the longer-term problem of infrastructure aid from the Community, on the other hand.

Concerning the short-term problem, my right hon. Friend the Prime Minister and many other members of the Government are bending their minds to trying to find its solution. The Government are determined, with their European Community partners, to find a solution. One of the solutions that has been mooted is the possibility of some immediate spending in the United Kingdom of Community funds. We are interested in the possibility of transport infrastructure for the spending of those funds. Indeed, transport projects can be put forward and are being put forward to the European Community which seem to us to be of Community importance.

What we are looking for is spending in the United Kingdom in the near future to redress the present imbalance in our net budgetary contribution. It would, for many of us, be a happy coincidence if in achieving that we could at the same time provide for the building of a Channel crossing. But we must be realistic about the timing of the Channel tunnel and about the scale of Community assistance that is likely to flow into any Channel tunnel link.

With the best will in the world, any link would require a great deal of preparation, and its building would take even longer. The British Rail-SNCF scheme, about which my right hon. Friend is to answer questions on Wednesday, is the most advanced in preparation. But a good deal more planning and design work would be necessary before its proposers were ready to begin work on the ground.

Furthermore, there must be wide consultation with interested parties. There would be agreements to be negotiated with the French, and possibly others, and there would be legislation to pass through Parliament. It would be optimistic—however enthusiastic one is about the prospects of a Channel link—to suppose that all this could be completed and that expenditure on construction could begin to flow in any significant amounts in less than three years. Thereafter, the estimated building time of such a link is about seven years. Therefore, in our view the short-term budgetary problem is quite separate.

We must also look even wider for solutions to our budgetary problems than a single project, even of the scale of the Channel tunnel. Annual expenditure by the United Kingdom on the BRB-SNCF tunnel would be unlikely at the peak to exceed £100 million in any one year, which, unhappily, represents only a small proportion of the gap in our net budgetary contribution that we are seeking to close.

That is not to say that, in the long term, transport infrastructure may not provide a suitable destination for European Community funds. We are certainly looking for such destinations in other projects in the short term, but a Channel link is not immediately involved in that problem.

In case it is thought that our view differs from that of the Commission or others on this question, I quote from a report in The Times of 13 March, in which there was a report of what Mr. Burke, the Commissioner for Transport, had said about the extent of possible EEC financial aid for the tunnel, which he has been speculating about to a considerable extent. The report said:
"The extent of EEC financial support would be for the Community to decide; there were several possibilities in the form of loans or grants. They should be seen as a longer rather than a short-term response to Britain's budgetary difficulties with the EEC, and would not preclude short-term help for other transport problems."
So we do not see a difference between us.

It is when one turns to the long term that one must look at the possibilities of aid for a fixed Channel link or other forms of transport infrastructure in this country. Mr. Burke said that it was for the Community to decide on the nature of that help. We have no definite proposals at the moment, but obviously we are anxious to look for progress and we are looking at ways in which the Community is moving towards a decision.

May I strike a warning note before I start on the subject of transport infrastructure in the Community in the long term? We must not make the mistake of being parochial or nationalist in our approach. It would be unrealistic for us to suppose that the Commission's very constructive proposals for infrastructure aid are designed solely for the peculiar advantage of the United Kingdom or of one particular project. The Commission has rightly considered the interests of the Community as a whole, and it is trying to look for a Community scheme.

We have responded favourably to the suggestion of aid from the transport infrastructure. But we need to know precisely what the details will be. The Government's position will therefore be to help progressing discussions on transport infrastructure funds from the EEC, but we wish to know very important details about the likely scale of any contribution—certainly about the criteria upon which they would be applied. Clearly, the Government would have to be satisfied both about the scale of any fund and the criteria before we could accept. For example, we would prefer to see ports and airports included as possible projects for aid under any transport: infrastructure funds, because in our geographical position vis-à-vis the Community the ports and airports are an important part of our links with the remainder of the Community.

I am most grateful to my hon. Friend for giving way. His courtesy in doing so is some compensa- tion, Mr. Deputy Speaker, for the fact that I did not catch your eye.

All the talk about funds and help from the Community is very helpful, as far as it goes, but what has my hon. Friend to tell the enthusiasts for the tunnel who say "There is no problem about funds, because it will all come from private sources"? Have we yet decided exactly how it will be funded? It is either one or the other.

The way in which the project might be funded will be considered by my right hon. Friend when he answers questions on Wednesday. I am dealing with the prospect of EEC funds for it. They are plainly more than a gleam in some people's eyes. Certainly, they are more than a gleam in Commissioner Burke's eye, and the idea is backed up vociferously by hon. Members, including my hon. and learned Friend the Member for Solihull (Mr. Grieve).

But we have to look at the exact nature of what is proposed, and we are awaiting more details about what an infrastructure fund will comprise.

We are looking for progress, and the British Government's role is to try to act constructively to encourage some progress. Therefore, we are looking at what the Commission is doing to further the matter. The Commission is taking several lines of action simultaneously. A regulation was agreed by the Council of Ministers in 1978 setting up an advisory committee on transport infrastructure to co-ordinate plans and programmes and examine projects proposed by members for inclusion in the Community aid programme.

More immediately, the Commission has now put before the European Transport Council for its next meeting a draft regulation on Community financial help to transport infrastructure projects. If agreement is reached on this, it would make available funds to help forward schemes important to the Community. I should explain at this point that the Commission's view, as we understand it, is that Community support would, in most cases at least, be in the form of loans or guarantees of loans. Grants might also be available in suitable cases, but they are unlikely to exceed 20 to 25 per cent. of the costs of the schemes concerned.

Would that be done through the European Investment Bank?

That is a possibility that we would certainly explore. I am dealing with the Commission's proposal, and at the moment that is a draft financial regulation. But I hope that the EIB is not sitting out and watching this without considering what its role could be if we can reach agreement on suitable criteria for schemes.

Meanwhile, on this financial regulation, which is an essential prerequisite to progress, the House will be glad to know that the Transport Ministers have called for more rapid progress towards a decision upon it, and the matter will undoubtedly be canvassed at its next meeting.

Further, the Commission has put in hand, through the medium of consultants, investigations into ways in which the benefit to the Community of various transport projects might be assessed. That has led to the Coopers and Lybrand report to the Commission, to which Commissioner Burke drew attention during his visit to London last week.

Again, the Commission has sought to explain in more broad terms its attitude to infrastructure support and to carry European opinion with it in what it is proposing. It was for that reason that it recently published its green paper giving the background to its proposed policy for transport infrastructure and developing some imaginative ideas for the future. We have invited various representative bodies of those interested to send us their views on the green paper so that we can take them into account for the purposes of future discussions, including discussion at the colloquy on the green paper to be held by the Commission in May or June this year. We see all this as a useful background and an important way of stimulating debate. The green paper can then be translated, after discussion, into possible action and detail.

Another matter has also been put in hand. When the Transport Council last considered the draft regulation on transport infrastructure, it invited the Commission to provide it with a report on so-called transport bottlenecks throughout the Community. I believe that the Commission aims to produce this very shortly. Information for the report was gathered from all member States. The United Kingdom's contribution included a statement pressing the Commission to take full account of the need for a substantial part of the Community's transport to cross the sea to gain access to important markets and materials. Our position is obvious to anyone who consults a map. We pressed on the Commission the importance of these cross-sea links, and those included ports and airports. The significance of that for the Channel tunnel will not be lost upon the House.

That is the work which the Commission is doing—most of it very recent—to try to forward its green paper and the necessary financial regulation and to arouse interest in the various member States about the possibility of a new fund which will create transport infrastructure support for member countries.

That is the background against which we have to make our decision on the Channel tunnel and against which my right hon. Friend will be making his decisions on further progress which he will announce in two days' time. At the moment, the most immediate cross-Channel link project that we have before us is the British Rail-SNCF report. I am sure that will not be the only contending scheme to be put forward, but it is certainly one at which we are looking and which will be borne in mind in the statement that is to be made.

I hope that the debate has at least helped the House to see how much is happening at present, not only about a cross-Channel link which is of interest to us all, but also about the prospects for European Community support for a broader United Kingdom transport infrastructure. It would no doubt be some help to our immediate budgetary problems if some short-term spending could be found in this country. In the longer term, I hope that I have indicated that we are looking at this matter sympathetically but without commitment until we know the exact nature of the scheme and the essential criteria upon which it must rest.

As regards the Community aspect, hope that the House will accept that we are not yet at the point of decision. We do not have all the information that we need on the exact quantity, style and availability of Community funds. We have had extremely encouraging press reports, but we do not have in our hands any finalised proposals. My right hon. Friend will go to the next meeting of the Council of Transport Ministers no doubt anxious to discover how much further the Commission has taken the matter and also anxious to discuss with his European colleagues how progress can be made to the advantage of the Community as a whole.

Meanwhile, the shorter-term budget problem is in the hands of the impending European Council, where my right hon. Friend the Prime Minister will be renewing her negotiations against the background of the great deal of work that has been done on the possibilities for short-term spending in this country which will assist us with our budget.

My right hon. Friend the Minister of Transport and I see all these discussions as a potentially long stride forward towards a common transport policy in the European Community. Certainly longer strides seem to be contemplated by some than any that have been taken by the Community so far. The Treaty of Rome formally commits the Community to the idea of a common transport policy. We are interested in that policy coming to fruition as long as it is on terms that are acceptable to—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at four minutes to Eleven o'clock.