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The Channel Tunnel Ltd: Funding

Volume 569: debated on Thursday 29 February 1996

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Whether any and, if so, what amount of the total liabilities of the Channel Tunnel Ltd. could fall on the British taxpayer.

The Parliamentary Under-Secretary of State, Department of Transport
(Viscount Goschen)

My Lords, the Channel Tunnel has been constructed, and is operated, entirely by the private sector. The Channel Tunnel Act 1987 specifically precludes the Government from any commitment of public funds, either directly or in the form of a guarantee.

My Lords, I thank my noble friend the Minister for the most reassuring Answer that I have ever received from him.

My Lords, I live in hope—so far unrealised. However, can the Minister give the House some indication as to whether there is any truth in the reports that have appeared in the press today stating that the project which is to be undertaken in relation to the Channel Tunnel will in fact cost a great deal more than might have been the case if British Rail had been able to undertake a project in partnership with private finance in 1989? Is it likely that the cost of £ 1 billion then—the partnership being with Trafalgar House—is likely to be exceeded by some £ 2 billion as result of the Statement that is likely to be made elsewhere?

My Lords, the noble Lord, Lord Clinton-Davis, could not possibly expect me to pre-empt the Statement of my right honourable friend which is due to be made in another place reasonably shortly. Those issues will be raised during discussion on the Statement. Suffice it to say, I am sure that the well-known ability of the private sector to inject funds and expertise into large capital projects will be demonstrated.

My Lords, despite the Answer that he gave to his noble friend and bearing in mind the fact that Commissioner Kinnock voted against the Channel Tunnel whenever he could, can I have an assurance from the noble Viscount that there will not be a public subsidy paid for in part by British taxpayers through a subsidy given to the Channel Tunnel by the Commission?

My Lords, I have outlined the situation. Eurotunnel is a public limited company and there is no injection from Her Majesty's Government of funds. That is very clear within the Act. We fully expect that any financial negotiations will have to take place between the company itself and its own bankers. That is the end of the matter.

My Lords, in that case, is the Minister saying that the tunnel will close if the money is not forthcoming from the private sector?

No, my Lords; that is not what I am saying at all. The Channel Tunnel operates at an operating surplus. It is very clear to those who finance the Channel Tunnel that the only way that they will get moneys coming back to repay those debts is through the operation of the tunnel. Indeed, closure of the tunnel would not help in any way.