rose to call attention to the present financial situation of the Channel Tunnel; and to move for Papers.
The noble Lord said: My Lords, I am grateful for the chance of raising in the House today the recent judicial decision reached in France for the rescue plan for the Channel Tunnel. I am also grateful that other noble Lords have come along today to join in this discussion. I am especially grateful to the Minister for being present.
I must declare an interest, both emotional and literal. I was long a fan of this wonderful and amazing project. I am an amateur train buff anyway, and especially pleased that the original plan was accepted as “trains only”. I also had the privilege of riding on the inaugural Eurostar passenger train in May 1994, when the tunnel was officially opened by Her Majesty the Queen and President Mitterand of France. Finally, my family seem to have a minuscule residual shareholding which was left behind in a reorganisation of some portfolios a long time ago, too small to qualify for fare reductions, but the shares in their old form are suspended anyway because of the recent crisis.
Although this debate should logically focus on the details of the court decision at the Paris commercial court, some noble Lords may inevitably wish to raise matters of transport, train and freight policy. I heartily welcome that; it fits in with the debate, as well as consideration of the future perspectives for the company in its new form. Not least, I notice the noble Lord, Lord Berkeley, in his place. No one in the whole country could be more of an expert in these complex matters than him. I am also grateful to the noble Lord, Lord Harrison, for coming in today, with his European expertise. Although this is a bilateral project, it has a European emotional flavour and is part of the overall trans-European network plans, even though it has not thus far received any European money directly.
I supported the original plan for many years, as an enthusiastic supporter of the need for France and Britain to get even closer. I declare an interest as a regular shuttle user, going at weekends to where we have now lived for quite a few years in Normandy. I also supported it as a keen European, hoping that the physical linkage to the Continent would help to dissipate some of the last vestiges of our irritating and unnecessary insularity in this country. Indeed, that positive psychological effect has taken root among the public in general. Agreeably, it has helped thousands of mainly young French professionals, but older ones as well, to commute regularly or live and work in the UK as executives and in other professions and activities; they are estimated as some 350,000, but no one has exact figures.
I was therefore always very frustrated and dismayed that the project start was delayed for some time, with prolonged negotiations between the two Governments, the original earlier plan having been suspended by Tony Crosland anyway; a painful memory. Much time was wasted. When the scheme was agreed after many complex discussions and the Thatcher Government insisted on the project being in the private sector, the French authorities could not believe their ears. An ideologically right-wing Government in Britain was adamant, and especially suspicious of the devious ideas of the fairly new French socialist Government of Monsieur Mitterand.
As we remember, the then British Government were quite happy to use unlimited taxpayers’ money on endless new motorways—with no tolls of any kind for gas-guzzling Jaguars and, of course, heavy lorries to use on a heavily subsidised basis—but, oh no, there could be no public money available for what was and is still the greatest single transport link in the history of the world. Fortunately for the project itself—because otherwise the project would not have got going—the President gave in. It was unfortunate, however, for the form and shape of a hugely expensive costs and debt structure which no normally viable private company could have managed. It was the biggest privately funded infrastructure project for transport linkages at that time; it probably still is, although the figures can always be argued about.
The way that the French Government gave in reflected their anxieties. The Nord Pas de Calais department was at that time a depressed area, with massive closures of textiles, mines and other old industries, with little to compensate. The British Prime Minister was happy to fund the entire Docklands preparation scheme with public money only—the famous pump-priming exercise mentioned by Mrs Thatcher—and equally happy to prepare major UK entities for lucrative privatisations with massive cancellations of private debt to make them attractive share prospects. That was all regarded as okay. I recall, incidentally, that the entire development costs of the Concorde project were borne by the public sector account, allowing right-wing businessmen to travel faster to New York for unnecessary meetings. Many journalists at the time thought that this revealed the Thatcherites’ emotional antipathy to trains as a concept, as often reflected and commented on at the time by the well known Mr Robert Adley, MP.
True to quite realistic expectations, the final construction costs were hugely in excess of original estimates. The original company and the revised company never had the slightest chance of paying off the debt and interest accumulations. As noble Lords may recall, the Eurotunnel company has now undergone debt refinancing and restructuring on a number of occasions, with the banks getting increasingly alarmed and difficult as the company’s future looked more and more shackled.
Thus was this, the first and only major Europe-wide infrastructure project, set up for its inevitably shaky career, from the original equity fundraising from founder shareholders and institutions, to the public flotation in November 1987 raising nearly £800 million, mainly from the British and French. There were subsequent issues of equity in November 1990 of £566 million, another in May 1994—the opening—of just over £800 million, and then a further £160 million at the end of 1999. Meanwhile, the banks put in £5 billion in November 1987, £1.8 billion in October 1990, nearly £700 million in 1994 and £740 million in 2002; good business indeed. Over that period, various short-term advances by the banks were converted into bonds.
At the end of 2005, total net debt reached £6 billion, with £240 million of contractual interest charges for a company with an annual revenue of about £500 million. As we were able to observe over the years of pain and travail, with the excellent physical train operations contrasting with the Byzantine debt burden, the centre of gravity of the downtrodden equity shareholders moved substantially from the UK to France and elsewhere on the Continent. Ironically, this has helped to save the company from extinction.
In April 2004, a revolt of French registered shareholders at the AGM ousted the entire board and a three-year recovery plan was announced in the following October. Prolonged negotiations for a debt-for-equity swap were launched, and the new chairman, Monsieur Jacques Gounon, rejected the banks’ initial standard terms for negotiations. As the complex talks unfolded, it became clear that a major cancellation of the by then colossal £6.4 billion debt would be needed. Monsieur Gounon also decided bravely to resist the debt-for-equity dilution that would hit hard at the long-suffering shareholders and courageously advocated two-thirds debt forgiveness. With an agreed-terms waiver in place to keep the creditors at bay temporarily, the chairman decided to postpone the results in the spring of 2006. He also decided that Eurotunnel had cash flow only until the end of that year and if the debt holders did not like the rescue proposals, they would have take over the running of the company. There was no other solution.
The ad hoc committee that had been created signed the memorandum of understanding for the restructuring plan by May. The plan was also bolstered by the financing commitment of a group of lenders led by Goldman Sachs and Barclays Bank. A preliminary agreement was signed in May 2006 as a binding deal that would help the company to continue. It was then rejected by the lowest tier of bondholders—Deutsche Bank proved to be particularly difficult in this context—so the company had no choice but to apply for bankruptcy in July because the final waivers had expired. Eurotunnel initiated legal proceedings to place itself under the protection of the commercial court of Paris under the procédure de sauvegarde of French law. The request for bankruptcy protection was granted at the beginning of August last year. The court appointed two judicial administrators to assist in securing agreement from the joint board and creditors on a restructuring plan.
In October 2006, in accordance with French procedures, Eurotunnel sent out its draft safeguard restructuring plan on which creditors were required to vote. Under the new proposal, Eurotunnel’s debt would be reduced from more than £6 billion to £2.84 billion, leaving existing shareholders with 13 per cent of a new, restructured company called Groupe Eurotunnel and creditors with the remaining 87 per cent. The plan received approval from a majority of creditors in two separate votes on 27 November and 14 December, although various objections were raised by creditors on technical matters. On 15 January, the court rejected appeals from creditors opposed to the plan and approved the safeguard restructuring plan. Eurotunnel now needs to persuade 60 per cent of shareholders to surrender their shares for conversion into stakes in the new, restructured company—that percentage is regarded as desirable, but is not compulsory. I am glad to say that after all these dramas the creditors voted positively on 27 November—72 per cent of the total senior and junior debt. I am sad to say that some foreign hedge funds stayed away from those decisions. The effect was to leave the creditors with 87 per cent and the equity holders with 13 per cent of Groupe Eurotunnel SA. The bondholders’ vote followed, and in mid-December 82 per cent of them voted to approve the arrangement.
Two years of intensive negotiating and wrangling had produced not only the common sense outcome but the only realistic outcome. It was good at last to see Deutsche Bank coming back on board, so to speak, in the consortium for the new debt configuration with Goldman Sachs, Citigroup and others. The board now feels that the repayment schedules for capital and interest appear to be sustainable and manageable on current cash flow and revenue expectations from a market which, in respect of its two priority services, is reaching a mature stage because of physical capacity limits. However, there are freight possibilities and options, which I leave to other noble Lords to raise today, if they wish.
The long-suffering shareholders can finally allow themselves a small glass of champagne now that the Paris court has approved the safeguard plan, which has full legal effect. The 2,300 employees can do the same. They have been patient and stoic, and accepted a one-third cut to put the company on a lower cost basis. A new listing will be arranged in the two countries this year. There will be an exchange tender offer for the old companies and tier three debt holders will enjoy a cash or shares option in due course. The chairman and chief executive, Jacques Gounon, reminded any further potential troublemakers among the creditors that, even if there were legal appeals against some of the provisions, the court’s decision is binding on all parties to the agreement.
He and his colleagues showed great resilience and imagination, and I was amused by the churlish reluctance by sections of the British press, led by the Financial Times, to praise the agreement. They never used to grumble when this kind of debt cancellation was being done in Britain to put companies in a healthier shape. There is not much difference, except that French law protects employment and jobs. The decision the court reached could not have been reached in a British court under British legislation, so we have to thank the French for having moved in and rescued the company. The shuttle service and Eurostar are now announcing optimistic forecasts of business growth.
The whole saga has been interesting to observe in detail. Millions of passengers, car drivers and truck drivers who have used the tunnel since 1994 can reflect that it took Gallic common sense and fair play to overcome the mistakes made in the 1980s by dotty and arrogant Thatcherites, who saddled the company with an impossible debt mountain. I beg to move for Papers.
My Lords, I thank the noble Lord, Lord Dykes, for opening this debate and for his kind words to me as a fellow supporter of Europe. He mentioned that the Channel Tunnel was a bilateral project, but my view was always that the balance of advantage was with the United Kingdom because it meant that we would have access to the whole of the European Union and belong, whereas the EU had access only to us, delightful as that may be. Although I do not see the noble Baroness, Lady Thatcher, in her place, while I am handing out compliments I should say that I always thought of this as her grand projet. She was not one for grands projets, but I admire the way that she drove this project forward.
The basis on which the project was done and the estimates that were made at the time were less than satisfactory. The costs were underestimated and the projected income was overestimated. I am pleased that these days we have PFI to try to remedy the mistake—which has happened throughout the ages—of underestimating costs on big projects. I am reminded that the House of Lords over-ran its budget tenfold when it was built in the 19th century. That is forgotten today because of the splendour of the building that we have. Before I leave this topic, I say to the Minister that when we are trying to estimate the cost of anything we ought to use the old playground technique of thinking of a number and doubling it.
A big glass of champagne should welcome the debt restructuring plan. As the noble Lord, Lord Dykes, noted, 2,300 employees will rest the better, as will the shareholders. With the backing of Eurotunnel’s creditors, it paves the way for Eurotunnel to leave bankruptcy protection, which I understand is the French version of Chapter 11. It also allows the new Groupe Eurotunnel to make a share-swap offer for the French and UK share units of current Eurotunnel companies, and I understand that Eurotunnel shares, which have been suspended since last May, will start trading this month. Perhaps my noble friend can update us on that.
I have some questions. We were encouraged by the noble Lord, Lord Dykes, to talk about ancillary matters. I welcome the development of St Pancras as the terminus for Eurostar in future but, because of the financial problems that have been experienced, I am less certain that we should phase out Waterloo. I should have thought that London was well capable, and should be capable, of supporting those two points of boarding. Does my noble friend have anything to say on that?
Furthermore, as the green agenda rises in political concerns in this country and, indeed, across Europe, to what extent does that bring into sharper focus the problems experienced by Eurotunnel, and should we in the United Kingdom take a greater interest in these matters, especially as we are now front-runners in trying to reduce CO2 levels in our own country as well as throughout the European Union and in the world more widely? Incidentally, the European Union Select Committee habitually takes the tunnel to go to meetings in Brussels, where it is very good to talk and to act on these environmental issues. I notice that the noble Lord, Lord Berkeley, is in his seat. I very much admire the decision made by the Rail Freight Group to go by train on a future visit to Holland and not to take advantage of flights. We must have this increasing use of trains to try to contribute to reducing CO2 levels.
I have some final questions. As the noble Lord, Lord Dykes, said, chairman Jacques Gounon has been seeking concessions from the British and French Governments on lower regulatory costs and lower licensing costs. Has my noble friend or his colleagues talked to the French Government about that? What is their attitude to that request, especially bearing in mind what I said about the importance of trying to move the green agenda up the political agenda?
Secondly, do HMG have a view on the minimum user guarantee income charge, which was agreed in 1994 for 12 years, and whose withdrawal, as I understand it, precipitated the current crises? Are we contemplating any help? Finally, I draw attention to Eurotunnel’s Eurotunnel on Track, a publication that came out in 2007. Much of it is good news. It states:
“During the year more than 2 million passenger vehicles and 1.3 million trucks were carried on Eurotunnel Shuttles. These results, which are above the forecast in the business plan, allow me to be optimistic about the future”.
It is true that the revenues have gone up by 5 per cent, but that is interpreted by the fact that they have a targeted higher yielding business. Behind these figures is the fact that actually car numbers have gone down by 1 per cent, truck numbers have gone down by 1 per cent and coaches, which I do not think are mentioned in this publication—I may be wrong about that— have gone down by 12 per cent. That is a little disappointing, and it puts a gloss on these figures which we need to look at more closely and understand better.
As I mentioned before, a glass of champagne is required. We seem to be on track. I believe that Her Majesty’s Government should take a very close interest, and if help is needed it should be well considered and thought about.
My Lords, I declare an interest as chairman of the Rail Freight Group. For about 15 years I worked on the construction of the Channel Tunnel—not, I should say, on the financial side. I congratulate the noble Lord, Lord Dykes, on getting the debate. It is time we had a good airing of the subject of the Channel Tunnel. His support over the years—I remember when I worked on the project—was very important along with that of other European Parliament Members, and I think that my noble friend Lord Harrison was there too. Having political support across not just Britain and France but the whole of Europe was extremely important.
My noble friend mentioned the noble Baroness, Lady Thatcher, who was a great supporter. Without her, as was said, it would not have happened. Of course, by the time we got half way through the construction we felt that we were building her project to the country which was her greatest enemy at the time, but that is how things change. Anyway, it is great that she got it started.
It is good that the French changed the law so that Eurotunnel could survive. It would be nice if we could change laws just like that so quickly, but that is not the way it works. Noble Lords have mentioned costs. It is important to get the definition and the reason behind the cost increases into perspective. There seemed to be a hurry about getting this project going for various reasons. When the finance had to be committed the civil engineering design was virtually finished, and the fixed equipment design was not so finished but it was there, but the rolling stock for the shuttles had hardly started. As a result, the cost of the shuttle design probably trebled, largely because of the needs and wishes of the various safety people involved. They had a blank cheque because the project was committed. The lesson there is that the Channel Tunnel civil engineering was on budget, fixed equipment was a bit over, and the rolling stock just about killed it. That is because the project finance was committed before the design was finished. We all should remember that—get the details right first.
Forecasts are always difficult, as we find on many other projects, but certainly no account was taken—maybe it could not have been—of the competition from the ferries or the low-cost airlines. Therefore, the Governments used the back-door of a contract with the two nationalised railways, as they then were, to guarantee a certain amount of revenue regardless of whether the trains ran. That was called a usage contract and, as my noble friend said, the minimum usage charge, which was payable by both railways to get Eurotunnel off the ground on the financing side, finished at the end of November—a matter that we can come on to.
We now have a 50-year contract with the railways—the British half was sold on to EWS Railway, which is a private sector company—with the rates fixed. The airline industry having rates fixed for 50 years is unimaginable. This complete anomaly is, I believe, illegal under the open access directives, but it is why very little freight is going through. Before I get on to freight, I would like to remind noble Lords that this is not some glorious nationalistic emblem connecting the UK to the rest of Europe; it is an ordinary rail tunnel. If we were able to look at it in those terms, we might not get quite so hung up by all the requirements of the intergovernmental commission, its safety people, its security people and everything else, which are used by everybody as an excuse not to do anything and to add costs. They add a lot of costs. My noble friend is absolutely right; getting some of these reduced will certainly help Eurotunnel.
When I was working for Eurotunnel we virtually managed to get a sleeper service going through the tunnel using mark 3 sleepers, which are the ones that go to Edinburgh and Penzance today. The safety authority said, “All you have to do is put stronger springs on the doors”. We also tried to encourage the regional Eurostar service to use them by day and to get the Gatwick-Lille service, a Thameslink train with very little change in terms of safety. That is how you get more traffic and more competition through. The rules currently say that if you want to have extra or new types of locomotives they must be very special. This is when the rest of Europe is trying to standardise locomotives, signalling, traction power and everything else, so if anybody wants to get a train through this tunnel they can.
I remind noble Lords that the Swiss are building two tunnels under the Alps about the same length—two, not one, at the same time—and there is none of this rubbish. All trains that will be allowed to run on the Swiss track will be able to go through these tunnels. The first, the Lotschberg, opens this coming autumn. Maybe our rail group should visit it next year. But we make life difficult for ourselves with all these petty regulations which do not seem to have much benefit.
When the tunnel opened, the forecast was that 6 million to 8 million tonnes of freight a year would pass with 40 trains. Since then, we have had the illegal immigrants, who trashed the containers and the trains. When trains arrived at the terminal, staff found people with knives coming out at them. For two years, the two Governments refused to increase security on the trains and at the terminals in France and said that that was a problem for the railways. Since when have railway personnel been frontier police? I have said that in the House before. It is a bit as if the German railways were asked to police the Berlin Wall, when it was in existence. The German railways are very good, but their staff are not trained as frontier police.
So customers got very angry and fed up. That is why traffic has reduced from between 15 and 20 trains a day to about three or four at the moment, when UK domestic rail freight has risen by 60 per cent. It is four times down on the Channel Tunnel and 60 per cent up in the UK.
Eurotunnel has published a network statement, which is the document that is supposed to comply with the open access regulations mentioned by my noble friend. The regulations cover access rights, charges and so on. The real problem is the charges. The charges for a train vary between €6,300 and €17,000 a train. The low figure is not bad; the high one is just impossible. The low rate applies to trains that travel at 140 kilometres an hour—none exist in the world except in Europe—and to trains running at night, when the tunnel will be closed for servicing, so that does not work. Call it €12,000 as an average. Eurotunnel does not justify the wide variation in charges, which are supposed to be there only if the infrastructure is congested. It has not been declared congested; it is not and will not be, the way that Eurotunnel is going on.
Eurotunnel should be complying with the Channel Tunnel (International Arrangements) Order 2005. In Article 11, it basically says that, with freight, you should start with the marginal cost. Projects which cost a lot of money can increase the charge, but you must take into account performance, the possibility of reservation charges and so on. Eurotunnel is way out of line with the article. It is not good enough for people to shrug their shoulders and say, “There is nothing we can do about it because these people are in the private sector”. The requirement is quite clear that if there is a higher charge, it must be,
“to increase the efficiency or cost-effectiveness of the project”,
to cite the order.
I do not know whether the Minister can tell me whether that applies, or whether we just go on as we are. If the charges remain as they are, there will be no rail freight by the end of the year. I have been trying to tell people in Eurotunnel that under first-form economics, in a market economy, if you put the prices up you are not necessarily going to get the revenue up. You might actually have no revenue. If you put the prices down—for example, if you halve the charges, as it has at the moment—you will probably get three times the traffic, so the overall revenue will be greater. Until we can get it to agree to that basic philosophy, it will be quite difficult.
The other way to get more rail freight through the tunnel is competition, to which my noble friend alluded. The Government did well in sending a letter in December, basically saying that the capacity through the tunnel should be shared with other operators and must be ring-fenced and that locomotives must be made available. That was a good letter. It is available in the public domain, so I will not bother to read it out. But that is not enough.
As other noble Lords have said, the trucks trundling up the M20 could fill 200 trains a day, and probably half that number from the trucks on the M1 and M6, which would mean that the motorways were a great deal more pleasant to drive on. There would be a great deal less pollution, noise and everything else. There is plenty of capacity on the lines—on the Channel Tunnel rail link and on existing lines in this country. Even if there were only 100 trains a day, compared with four at the moment, that would save quite a lot.
For that to happen, two things need to be achieved. One is lower prices through the Channel Tunnel, for which Eurotunnel needs to comply with the regulations. The other is competition between operators. The Government can and must assist on both those issues. The intergovernmental commission, which is half UK Government and half French Government, could take action against Eurotunnel for non-compliance. As in all these things, the first thing is to threaten action. If a company has any sense, it will start talking, and I hope that Eurotunnel would. Legal action would take a long time and be expensive for everyone, but the threat must start.
The Government can also encourage competition. They must make sure that there is a market. They must reduce the barriers to entry, remove all the safety requirements for locomotives, as for the Swiss tunnels, and everything else. Do we need all the security that we have at the moment? The security in the Channel Tunnel is much more stringent than for the trucks going across on ferries. I was going to ask: do we need an intergovernmental commission at all? We probably need it just for the treaty between the two countries, but do we need all the subgroups that sit around having lots of meetings and costing us all a great deal of money? What are they achieving in safety, security or anything else that could not be achieved in the normal run of things?
The Government have the power and opportunity to set the framework for traffic to grow. In the next few weeks or months, we must see whether they will do that and grow traffic at a rate to catch up with the Swiss tunnels, which will be full almost from the day that they open, or whether they will let it die. It is a government issue, not just one for the private sector.
My Lords, like the noble Lord, Lord Dykes, whom I congratulate on obtaining this debate, I am a small shareholder in Eurotunnel, but I do not anticipate that I shall be partaking of the champagne; I do not own that many shares.
In 1993, it was forecast that between 6 million and 8 million tonnes of freight would pass through the Channel Tunnel. In 2007, 14 years later, a mere three or four trains are passing in each direction—probably carrying well under a million tonnes. Even recently, the numbers have been further reduced because there has been a 24 per cent increase in charges on all freight passing through Europe and the Channel Tunnel, which is far too great a rise for businesses to succeed. Unilog, one of the companies running trains through the tunnel until recently, has gone out of business.
There is provision for 40 trains a day in each direction. The noble Lord, Lord Berkeley, referred to estimates that there is potential for 200 trains a day, given the traffic that is passing by the ferries and the shuttle services. There is supposed to be open access across Europe for freight, and track access is supposed to be on a marginal basis, except where expensive infrastructure is involved, where the infrastructure manager may add a premium. But he must not add more than the market sector can bear and he must demonstrate what additional costs are imposed by, in this case, the freight traffic.
My first question for the Minister—I hope that we shall get some answers today, rather than the letters that we were promised in the previous debate—is: do the Government accept the European Union open access directive for freight passing through the Channel Tunnel? The UK is, I believe, a party to the directive, but do the Government really accept it and will they enforce it? Does the rail user contract within Eurotunnel take precedence over it? If so, how do Her Majesty’s Government justify that? In my view, open access legislation has precedence in this case. The rail user contract and Eurotunnel’s pricing mechanism should not over-ride the undoubted environmental benefits that spring from increased rail usage, to which the noble Lord, Lord Harrison, drew attention.
I shall tax the Minister with this theme in many questions that I ask now and in the future. Every line of government expenditure and every decision that the Government make should be underlined by an environmental theme. What enforcement action will the intergovernmental commission take against Eurotunnel? Probably very little, I think, as it is a somewhat toothless body.
The Channel Tunnel has capacity for 20 standard train paths every hour, which, with some investment, could be increased to 24. However, well under 50 per cent of this capacity is used, despite the fact that the tunnel has been open for 14 years. That must be an indictment of the policies pursued by the French and British Governments. The Channel Tunnel is an underused asset. Although it is privately owned in theory, the taxpayer, both in France and in this country, subvents it, and it should be operated in the public interest and not in private interests.
The noble Lord, Lord Berkeley, referred to haulage. Of the locomotives that are suitable for use in the Channel Tunnel, EWS—English Welsh & Scottish Railway—has the lion’s share, which it must make available at “commercial rates”. I am puzzled about what that actually means. SNCF has a few locomotives and I believe that Eurotunnel also has some, although I do not think that it uses them. Do the Government have solid plans to open this market to competition? If so, what are they?
Competition in locomotive supply seems quite possible. Reference has been made to the tunnels in Switzerland and to the tunnel between Austria and Italy. The locomotives that go through those long tunnels are subject to the same precautions against fire and accident as locomotives that go through the Channel Tunnel are, so there seems no good reason why those locomotives should not go through the Channel Tunnel, too—they use the same electricity voltage. If those locomotives were made available, that would loosen up the market and perhaps attract some of the potential freight traffic to the Channel Tunnel. Will EWS be required to publish the commercial terms on which the locomotives will be made available? Who will judge whether these terms are reasonable—the Government, the intergovernmental commission, the Rail Regulator or the European Commission?
Since December 2006, the Government have been paying Eurotunnel £6.1 million per annum. How long are we going to pay? The noble Lord, Lord Berkeley, mentioned the year 2051. What are we actually paying for? Is it so that freight can use the Channel Tunnel? In my view, we are paying a lot of money for the three or four trains each way that go through the tunnel. Apparently, the money is to compensate Eurotunnel for its operational costs, which I believe must be precious few. If hardly any trains run, what is the money for? What of the charges levied by SNCF and EWS at each end of the tunnel for so-called safety checks? What do these entail? Is a simple walk round a train worth the £1,000 that I believe is charged for it? I hesitate to think so.
The Channel Tunnel rail link is a public asset into which the Government have put considerable funds. What provision for freight has been made on this line? I believe that there are some loop facilities on the line, but, as the noble Lord, Lord Berkeley, said, apparently no paths will be available during the day for freight. Why not? This line is not so different from the west coast main line. I admit that the Eurostar trains go fast, but there are not many of them and there are big gaps in between. The purpose of loops is to enable you to use the line and I believe that it should be used. The Minister should bear in mind the fact that this is the only way in which continental-gauge rolling stock can reach the terminal at Barking. He could refer to the fact that freight trains could trundle around through Kent by various circuitous routes, but the rolling stock would not be able to follow—in fact, the locomotive would not get there, either, because the gauge is not suitable.
When the Government handed over the £6.1 million to Eurotunnel and put lots of money into the Channel Tunnel rail link, were they a knowledgeable buyer? Did they know what they were buying, or were they spending taxpayers’ money without realising what was being purchased? Have the needs of freight as well as passengers been fully considered? Have the needs of the market and users been fully taken into account?
On the subject of passengers, I wonder whether the Government have considered giving a directive to Ministers and officials to follow the example of the noble Lord, Lord Harrison, and his committee, so that, when they are travelling to Paris, Brussels and other near European destinations, the train will be their mode of travel except in the most exceptional circumstances. The Government need to give a lead. It is all very well pontificating about climate change, but we want to see a bit of action.
We on these Benches want the Channel Tunnel to be fully exploited, opened to competitive operation and used to keep our roads and airports clearer. The asset exists. The maintenance and operating costs of the tunnel are very low. Unlike the noble Lord, Lord Berkeley, I am not a civil engineer, but I think that as a civil engineer he would say that, now that the tunnel has been built and equipped, it is very cheap to maintain because very little goes wrong with it. We could, as he said, lower costs by undertaking a thorough examination of all the commissions and their sub-committees and working groups that exist to regulate and police the activity. As far as I can tell, the Swiss do not seem to need all those bodies to regulate their tunnels.
We want a link like the Oresund link over the narrow entrance to the Baltic between Denmark and Sweden. It is easy to use and not too expensive for the market—and it is the market that dictates the price that people will pay. We could set whatever rates we liked and say that we will charge a huge price, but in fact it is the market that sets the rates. In Scandinavia, the link is recognised as a showpiece. When you go to either side of the Oresund, to Malmö or Copenhagen, you can see the positive effects of the link on the economy on both sides of the water.
The use that is currently being made of the Channel Tunnel is an awful indictment of the Government. I fear that the Government are locked into worrying about the financial effect on the banks, rather than thinking about the effect on the British public.
My Lords, first, I apologise to the House for the absence of my noble friend Lord Hanningfield, who has been stuck in the snow—I hope not on a train. I am extremely grateful to the House for allowing me to stand in for him. I also thank the noble Lord, Lord Dykes, for generating this debate. I feel like a great amateur among the professionals. There was a short spell in my life—I have been struggling to remember exactly when it was; I think it was in the early 1990s—when I spent a remarkable amount of my time discussing rail freight and the tunnel, when Eurostar was first formed. I long to ask the noble Lord, Lord Berkeley—he may be able to tell me afterwards—whatever happened to the piggyback trains. We were very engaged by the fact that trucks were going to be able to drive straight on to bogies and go straight through the tunnel, thereby ensuring that a great deal of freight went through the tunnel from all parts of the country. Perhaps that happens a little now. It would be quite nice to know whether it does; it would take me back a great many years.
As a frequent traveller on Eurostar, mainly to Brussels but occasionally to Paris—I have no other monetary involvement in this process—I am a committed advocate of the value of this service and the great advantage which this country in particular has gained from the vision that saw the tunnel constructed. I thought that the noble Lord, Lord Dykes, was just a little churlish about the role that my noble friend Lady Thatcher played in bringing the tunnel into being, and I was very glad that his points were somewhat redeemed by the noble Lords, Lord Harrison and Lord Berkeley, who at the very least recognised that it would not have happened without her.
The movement of people and goods, although obviously not as great as originally anticipated—I have to say that whenever I travel on Eurostar, it seems to be packed to the gills—is significant. The journeys are convenient and comfortable, and the timing is always excellent. As has been said, Eurostar is a more than adequate alternative to having to battle at the airport. So it is a shame that the financial position of the Channel Tunnel is, and has been, so perilous. This has always been a flagship project with the potential to boost our national prestige, and one that is valuable to our relationships with Europe. But it has been marred by repeatedly flawed forecasting and a perceived lack of prudence on many occasions by the various management teams. The Government’s involvement has been erratic due to inaccurate passenger number forecasts, which, when coupled with an ambivalent attitude to the potential benefits for the public, has resulted in poor returns on the capital employed. However, in light of record passenger numbers in 2006, I hope that there is light at the end of the tunnel and that Eurotunnel now has a prosperous future. I agree, however, that the under-use of the freight capacity remains a concern, as freight would generate considerable revenue.
I do not expect to be able to emulate the analysis given by the noble Lord, Lord Dykes, of the whole process of Eurotunnel’s financial difficulties, but it is a sad fact that Eurotunnel’s management of the whole project from the outset has been mired in difficulty. This has culminated in the Paris Commercial Court’s backing for the re-structuring of the company’s colossal £6 billion debt. That this debt was accumulated in the first place signifies the firm’s woeful performance in bringing in and regulating the investment required for the tunnel. The court’s move is about the only feasible one for digging the firm out of bankruptcy. Despite this, the solution appears to be sensible, and the need for further public money has been avoided, which is a considerable plus. As the noble Lord, Lord Dykes, has said, unanimous approval for the restructuring seems to be unachievable, but it is obvious that this is a suitable plan and that the condition of gaining approval from 80 per cent of shareholders is sufficient in the circumstances. If successful, this restructuring of the debt will pave the way for an assured future, which, given that Eurotunnel has a concession to operate the tunnel for the next eight decades, will be welcome relief for investors, shareholders and partners alike, as well as for both private and commercial users.
What is the reason for the spiralling costs and the unsustainable debt that has induced government intervention to contain the losses? Why has Eurotunnel been unable to pay back the loans and had to resort to government grants time and time again? Several speeches today have gone into at least some of the reasons, but the fundamental problem that has stanched repayments and financial sustainability has been the grossly inaccurate forecasting of the likely revenue to be obtained from both passengers and freight, and the under-use of the tunnel’s capacity. The forecasts were optimistic in the extreme. The predictions have often exceeded the actual demand by as much as 300 per cent. Yet lessons do not appear to have been learnt during subsequent planning stages. My predominant concerns relate to the now as yet incomplete Channel Tunnel rail link, which has soaked up government grants of a far higher value than was anticipated. It is imperative that this forecasting is more accurate and that there is much better scrutiny of this project as well as of the Eurotunnel.
The Channel Tunnel rail link is indicative of the difficulty of delivering large-scale engineering projects. The Department for Transport is committed to providing over £1.8 billion of funding, which accounts for over a third of the total cost of the project and is far higher than that originally granted to the private sector consortium that won the contract to build the railway. This sum, although immense, would be acceptable if the value of that investment to the taxpayer exceeded the initial cost. However, the Public Accounts Committee report argued that the cost of the link could not be justified on the basis of passenger numbers alone. The committee suggested that significant regeneration benefits were essential to justify the outlay.
Noble Lords will be aware that the rail link was divided into two sections. The first section was opened in 2003 and is linked to Ashford International station, where the regenerational impact has boosted the town’s economy, as well as that of the whole of Kent. The Government’s laudable objective to redevelop Ashford was significantly enhanced by integrating the station so prominently into the Channel Tunnel service. That was a sensible and considered move that provides a wider context to justify the investment into the first CTRL section.
Why, therefore, are the Government acting so complacently over the decision to reduce Ashford’s role in the future operations of the CTRL? The second section will be opened in October, and there will be a subsequent cut in Eurostar services offered from Ashford, which could undo the good that the station has brought to the area since 2003. The Government have thus far denied that this will have a significant impact on the town, stating that 80 per cent of current demand for the station will be retained. Surely this cut of roughly a fifth of demand will be detrimental to the town. Furthermore, judging by the forecasting that has soured the rest of the project, I suspect that the damage could be far greater.
My Lords, that was what I was saying. The service from Ashford is to be cut by a fifth. I was very much deploring that, because clearly a great number of people get on and off at Ashford. It is a very valuable intersection. However it came out, I meant that there will be a reduction in the service, which will be of detriment to Ashford itself, which has been the subject of much regeneration as a result. I join my honourable friend in the other place, Damian Green, MP for Ashford, in urging the Government to persuade Eurostar to review that reorganisation of services to ensure that the links with Ashford are maintained as they are now.
The CTRL has mirrored the financial black hole of the entire Channel Tunnel project. There appear to be significant deficiencies in managing not just rail but any large-scale construction project. Almost without exception, such projects are not delivered within the intended timescale and cost far more than originally projected. One wonders what the ramifications are for other projects, such as Crossrail, Thameslink 2000, the Thames Gateway, widening the M25 and, of course, the Olympics. The track record of financial stumbling blocks and botched project management does not bode well for future large-scale projects. It is imperative that improvements are made in their delivery and management.
I must reiterate the obvious: the financial situation of the Channel Tunnel remains bleak. It is bleak because of the huge debts, its virtual bankruptcy and the poor value and return to the public from significant investment in it. However, there is potential for it to become successful and it must become so. The trains provide a clean, efficient and attractive alternative to plane travel or ferries. Regeneration can and should be achieved in communities that are ready and able to support the project. I am optimistic about the future of the Channel Tunnel itself. The most important point in this debate is not necessarily about the tunnel itself but about our country’s approach to transport and construction projects. More emphasis must be put on measures that provide concrete solutions and make our country a better place to live and work in.
My Lords, I am very grateful to the noble Lord, Lord Dykes, for stimulating this debate, for a number of reasons. Since taking on this brief, this is the first opportunity I have had to talk about trains, about which I am very enthusiastic. I am grateful for the opportunity to meet all the other train-lovers in your Lordships' House as a collective, and I intend to deepen our relationship over the coming weeks and months because I am very passionate about the subject. It is always a delight to talk about the Channel Tunnel because it provides access to Paris, one of the great cities of the world, and has brought me many hours of pleasure with my family and my partner as a mode of travel. Noble Lords have not disappointed me in their questions; although I may not have the answers to all of them, they have often puzzled me over the years, too.
I particularly liked the introduction to the subject by the noble Lord, Lord Dykes, with his political and economic history of the Channel Tunnel. I probably agreed with a lot more of what he said today than I might have done in years gone by, when he sat on different Benches. No matter; the noble Lord said many things with which I found it easy to agree.
I was struck by the observation of the noble Lord, Lord Harrison, that this was Mrs Thatcher’s only grand project. Perhaps she also saw the M25 as a grand project; sadly, she probably found more favour with it. There we are; that’s history.
The debate is designed to focus on the economics of Eurotunnel, although noble Lords understandably strayed far and wide from that. They asked a wide range of questions, and I shall answer as many of them as I can, perhaps not as adequately as I would like. The noble Lord, Lord Dykes, set out very well the financial position of Eurotunnel. I will rehearse some of what he said and add some extra detail if I can.
As all contributors to the debate will appreciate, the financial situation of Eurotunnel, the private-sector owner of the companies operating the Channel Tunnel, is not a matter for which the Government have responsibility, just as they are not answerable for the financial situation of any other private-sector company. It is a matter for the board and its shareholders.
However, the Government recognise that the Channel Tunnel is not just a unique piece of international transport infrastructure but a very important link to Europe, economically and environmentally, which no doubt will assume greater importance, for the many reasons mentioned by noble Lords. It could make a big contribution to reducing carbon emission levels and so on.
The tunnel was created by virtue of the 1986 treaty of Canterbury and the ensuing concession agreement. The Government are concerned with the Channel Tunnel, if not with Eurotunnel’s financial situation. The treaty of Canterbury between the UK and French Governments paved the way for the construction of the tunnel. In particular, it declared that the Channel Tunnel would be constructed and operated by private concessionaires, without recourse to government funds or government guarantees of a financial or commercial nature. As many noble Lords have said, Mrs Thatcher was very determined to ensure that the project worked in that way. In the subsequent concession agreement, the two Governments awarded the rights to construct and operate the tunnel to the Channel Tunnel Group Ltd and France Manche S.A., which are the companies—one English and one French—within the Eurotunnel group. The agreement gave the concessionaires, among other things, freedom to determine tariffs and commercial policy. It also dealt with lenders’ security, giving lenders the right to put in their own substitutes to operate the concession, in the event of default by the existing concessionaires.
Eurotunnel’s financial difficulties are well known. The group has never generated enough revenue to repay the debt required to meet the unexpectedly high cost of construction, but at operating level the tunnel has generated positive cash flows, so with a lower debt burden it would be a potentially profitable enterprise. As noble Lords noted, there was financial restructuring in 1998, but it proved insufficient to overcome Eurotunnel's fundamental problem: too much debt.
Without another, more effective restructuring, Eurotunnel would not have been able to start the debt repayments due at the beginning of this year. To avoid looming bankruptcy, the group applied in July 2006 to the Paris commercial court for protection under the recently introduced Safeguard Procedure, an approximate Gallic equivalent to chapter 11 protection, which is available for companies in financial difficulties in the US. The procedure has given Eurotunnel breathing space to devise and propose to the Paris court a restructuring plan that would reduce debt to sustainable proportions. I understand that the plan would cut Eurotunnel’s debt from £6.2 billion down to £2.8 billion of bank debt and hybrid notes that would have a value of £1.3 billion when issued.
The restructuring plan was endorsed by votes of Eurotunnel’s suppliers, creditors and bondholders before being approved by the Paris court last month. The court has given Eurotunnel 37 months to implement the plan. It appears that a sufficient number of shareholders must now exchange their Eurotunnel shares for shares in a new holding company, if the restructuring is to succeed.
Although the Government naturally discuss matters of current interest with Eurotunnel, as we would with any other major transport organisation, I should stress that they have taken no part in the restructuring plan, given the treaty’s preclusion of government assistance. Restructuring is a matter for Eurotunnel, its shareholders and creditors and, where there are disagreements, the courts.
However, as noble Lords will be keenly aware, we have been observing events closely, in liaison with the French authorities. We did not want to be taken unawares by any potential developments. As I explained, the Government hold no particular brief for Eurotunnel as a company. What counts is that the Channel Tunnel is operated efficiently, safely and, importantly, securely by concessionaires with appropriate financial backing. That said, Eurotunnel’s restructuring plan appears at the moment to be well on track, although there is still the hurdle of shareholder approval to which I have referred.
Whether Eurotunnel’s restructuring plan finally succeeds or not, the tunnel will of course continue to be subject to a regulatory regime overseen by the Anglo-French Channel Tunnel Intergovernmental Commission, to which noble Lords have made much reference—in particular, the noble Lord, Lord Berkeley. Similarly, safety will continue to be overseen by the Channel Tunnel Safety Authority.
Noble Lords made many points and I shall deal with those which are best dealt with from the Dispatch Box. As I said, I admire what the noble Lord, Lord Dykes, has said. He implied, perhaps unfairly to some extent, that problems stemmed from the insistence of the noble Baroness, Lady Thatcher, that no public money should be spent. As I have explained, if this provision had not been in the Treaty of Canterbury, taxpayers perhaps, rather than the private sector, might have had to fund the current shortfall, with all the knock-on implications that that might have had across investment more generally into our transport infrastructure. It is only right to say that investors knew at the time that there was a risk attached to the anticipated costs and revenues. These risks exist in many projects. I think that the noble Lord, Lord Harrison, referred to PFI. Perhaps if we had had PFI in the way in which it is structured now, a different approach might have been adopted. But that is history.
The noble Lord, Lord Harrison, asked a number of questions, one of which was about the Government reducing the cost of regulation. Eurotunnel’s payments to the IGC are just under £2 million per annum. They are fixed as part of the concession agreement, which was signed by the UK and French Governments. The true cost of the services provided by the IGC could increase, particularly with the new regulatory responsibilities that it has taken on. It would be fair to observe that the fixed rate provides Eurotunnel with certainty over the level of its contribution for the duration of the concession. Department for Transport officials have discussed the cost of regulation with their French counterparts, but as yet no clear conclusions have been reached.
The noble Lord, Lord Harrison, also asked for an update on when share trading might resume. That is a matter for the company and the appropriate financial authorities. I have no more insight into that than does the noble Lord. He also made a point about Waterloo International station—a question that I have asked a few times—and why there cannot be two points of embarkation and arrival. Ultimately, it is a commercial judgment which Eurostar is best placed to make. My understanding is that Eurostar does not consider a split between St Pancras and Waterloo International to be commercially attractive.
The noble Lord, Lord Harrison, also asked whether the minimum-use charge could be reinstated. This payment was made under the terms of the 1987 rail usage contract with SNCF and British Railways Board, which guaranteed Eurotunnel a minimum level of revenue when freight and passenger levels were below a certain threshold. It was always understood that this period, and the guarantee that would apply, would come to an end. Of course, it did end in November 2006. It was always intended to be a transitional measure. So I do not see that as a realistic likelihood.
The noble Lord, Lord Berkeley, as ever, asked a number of very perceptive questions and made some very useful points including whether railway operators should have a policing function. Specialist activities are undertaken by the appropriate authorities. The noble Lord will have heard me describe some of those while wearing my other hat as a Home Office spokesman. Of course, we now have Customs officials working in Kent and on the other side to ensure that immigration issues are properly resolved. Transport operators meet costs—not just Eurotunnel, but airports and ferry operators have to meet costs as well.
The noble Lord was insistent that security requirements were too strict and too costly compared with ferries. Security requirements are based on advice received from enforcement authorities, which take a particular view on things. It would be fair to observe that over recent years this has attracted a great deal of controversy. We think that things are greatly improved. I am sure that that is of benefit to passengers and to freight operators. It is right to say that requirements on Eurotunnel are perhaps heavier than on ferries, although I should perhaps point out that the requirements for the aviation industry are heavier still, and I think that we understand why that is the case.
The noble Lord, Lord Berkeley, also raised unfair charges, as he saw them, for freight through the tunnel. Again, that matter is not really for the Government. It is something in which the IGC should become more directly involved, so I do not think that I can properly comment on that.
My Lords, does my noble friend accept that the IGC is at least half the responsibility of the British Government, and the other half the responsibility of the French Government? Therefore, to say that it is nothing to do with the Government seems to me to be stretching it a bit.
My Lords, technically, I guess that the noble Lord is right, but it is something for the IGC to resolve independently and is not something in which we have a direct responsibility. Yes, the noble Lord is right to make the point that there is obviously an indirect responsibility.
The noble Lord, Lord Bradshaw, made a very powerful contribution with his insights. He is a great expert in these matters. I was grateful to him for raising issues relating to freight. I happen to share the view of the noble Lord that, of course, we should encourage more freight, and more freight through the tunnel. We welcome the fact that the EWS has agreed to continue running freight services through the Channel Tunnel. We all want to see growth on that route, which can be sustained only on a robust, commercial basis. Clearly, it is important that marketing works and is improved. We obviously will play our part in urging an earlier agreement to ensure that growth can continue.
The comments made by the noble Lord, Lord Berkeley, on security issues and the problem with illegal immigrants have obviously had a very adverse effect. I have suggested that some of those issues are being resolved and overcome. Of course, it is right that we play our part in ensuring that that is the case. I was also very pleased to see that the number of passengers going through the tunnel is increasing, to which the noble Baroness, Lady Hanham, referred. My understanding is that some 7.9 million passengers travelled through the tunnel on Eurostar last year. I think that the noble Baroness said that it was a record, which is certainly my understanding.
The noble Lord, Lord Bradshaw, asked whether we accept that there should be open access for freight on the Channel Tunnel and whether we as a Government would enforce it. Yes, we are clear that the EU open-access regime applies to the Channel Tunnel. If infrastructure owners of other state railways are not abiding by this, it is obviously open to operators to challenge, with regulators being used or through the courts. He also asked whether the rail usage contracts take precedence. My understanding is that rail usage contracts provide guaranteed paths, but of course there is still sufficient capacity, as the noble Lord said, for other usage. Open access operations are very important to that.
My Lords, my noble friend has answered part of the question on charges asked by the noble Lord, Lord Bradshaw, but while the rail usage contracts set out certain charges, most of us believe that the open access directives provide for different charges. Which of the two takes precedence when it comes to charges, the open access directives or the usage contracts?
My Lords, will the noble Lord make the position quite clear? In any market the ruling factor is what the market will pay. It does not matter if you have spent £5 billion on building something; if no one uses it, you get nothing back. There must be a price at which this will pay. If the open access directives, in my interpretation, state that the market price should be charged, that is one thing. If then there is a supplementary usage charge and a supplementary charge for examining the train and so on, the price then moves away from the market level. Any answer the Minister gives us in writing should make quite clear which charge should apply for open access.
My Lords, the noble Lord makes a fair point and I shall try to address it. Of course markets are affected by the cost of regulations, and operators providing services understand that point. The noble Lord also asked about what is received in return for the £6.1 million-worth of payments received by Eurotunnel. Those payments are intended to support operating costs such as track maintenance for freight and passenger transport. This is a contractual agreement which dates back to the time of the construction of the tunnel.
My Lords, I am sorry to interrupt the Minister again. In his reply, can the noble Lord make sure that it is absolutely clear that this applies to both freight and passenger services? I have an idea that it applies only to freight. If so, and given that so little freight is using the tunnel, what are we actually paying for?
My Lords, my understanding is that it applies to both. The noble Lord raised more general issues of freight on the Channel Tunnel link. I understand that it is not envisaged that freight will use the line. However, as well as Eurostar, fast Kent coast commuter trains will also use the track, thus freeing up capacity on traditional lines for freight. That is very important.
I am conscious that I am running over my time and that I should have responded to one or two further questions, in particular from the noble Baroness, Lady Hanham. She asked about services from Ashford being cut. I understand and share her concern. Since I come in from Brighton, I can confirm that we like using the rail link at Ashford. I wish it was a bit faster, but there we go. It is ultimately an operational matter for Eurostar, which made the judgment that the maintenance of current levels of service is not sufficiently attractive as a commercial operation. The noble Baroness was part of a previous Government that set the terms on which this service would operate and how it was financed, as well as the element of bringing in the private sector.
My Lords, the noble Baroness is very generous and does not usually bristle. I wanted simply to make the point that the original agreement provided that the private sector was invited in to run these services. We are all concerned to ensure that we get the best possible use out of important infrastructure, not least because of the environmental benefits this service can bring. Several noble Lords have quite properly referred to those benefits in the debate.
I am sorry to have run over my time. I shall endeavour to answer the one or two remaining questions put to me in correspondence. I am grateful to the noble Lord, Lord Dykes, for facilitating the opportunity for noble Lords to discuss this very important issue, and there is no doubt that we shall return to it. We all value the Channel Tunnel link. We as a country should celebrate and enjoy it—and long may that be the case.
My Lords, I shall be brief. I am very grateful to the Minister for answering so many of the points put to him in the time available. As an amateur outside observer myself, I hope that noble Lords will not mind if I acknowledge the benefit of two great experts in this area whose contributions have enhanced the debate: my noble friend Lord Bradshaw, who knows a lot about these matters, and the noble Lord, Lord Berkeley, who worked on the Eurotunnel project for many years and helped in the development of these services. I am also grateful to the noble Lord, Lord Harrison, who referred to Jacques Gounon’s campaign for lower regulatory costs. This critical stage when company mark 2—or mark 3—is getting going with full approvals is a great moment for outside official authorities to help as much as possible with regulations and the law.
The noble Lord, Lord Berkeley, was right to say that the project finance was committed before the final costs were known and that it is a lesson for future projects of such a huge size. I was glad that he raised the issue of safety regulations. One must recall the tragedy and grief caused by the “Herald of Free Enterprise” accident. The newspapers did not suggest then that all ferry boats should be closed down for safety checks, and rightly so. But I recall that when someone threw some combustible material into a lorry while it was going through the tunnel, the Sun newspaper and others thought that the tunnel should be closed for five years while it was inspected for safety. Perhaps it was not the Sun; I do not want to be unfair to the Murdoch press—it would be painful to do so.
My noble friend Lord Bradshaw referred repeatedly to open access, and I agree with him. The noble Baroness, Lady Hanham, is to be thanked by all for standing in for the noble Lord, Lord Hanningfield. I am grateful to her for her remarks. I did not want to be too critical about past events, and indeed, as she rightly points out, the plan would not have got going but for the agreement of both Governments. However, I suppose that a different culture operated in both countries at the time.
The Minister was very emotional about Paris and I share his view about la ville lumière. He also gave us some detailed and useful facts. However, it would be helpful to have more answers on the question of the cost of the IGC and other points because they will help us to determine the position in more depth. With that in mind, I want only to say that this has been a useful debate and to beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.