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Channel Tunnel Rail Link

Part of the debate – in the House of Commons at 3:31 pm on 3rd June 1998.

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Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Secretary of State, Department of the Environment, Transport and the Regions, Deputy Prime Minister and Secretary of State for Environment, Transport and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee 3:31 pm, 3rd June 1998

If the right hon. Member would listen to what was being said, he would not be so contemptuous of the rewards that we have gained for the taxpayer.

The Government believe that, in a real public-private partnership, not only costs but benefits are shared. The Government are sharing the risk, so it is only right that the taxpayer should share the benefits. I have therefore agreed with the parties that the Government will take a public stakeholder share in LCR, yielding a 35 per cent. share of the company's pre-tax surplus after 2020. The Government will also have a 5 per cent. stake in the Eurostar management company. That will be a public-private partnership with strong public accountability. Moreover, if LCR decides to sell the business—it cannot do so without the Government's agreement, as we shall hold a golden share in the company—the taxpayer will share at least 35 per cent. of the proceeds.

As I said earlier, those extra benefits should not simply balance the additional £140 million of public subsidy. This deal should provide that, taken over the long term, LCR pays a premium to the Government. Under the original plan, the concession for that agreement was 999 years. Eurostar was privatised for ever. The parties have now agreed to reduce the concession to 90 years. In 2086, the railway and the Eurostar service will revert to public ownership, along with the channel tunnel. I look forward to appearing before the House on that occasion to announce the event—my zimmer frame will be outside.

There is one more point. I have negotiated a share for the Government in any savings in the construction cost. I have also negotiated a mechanism to prevent any of the parties involved from enjoying excessive windfall gains at the taxpayer's expense. In that way we aim to avoid any repeat of the fiascos that have marked railway privatisation, not least the sale of the rolling stock companies.

There is still much work to be done. Regulatory bodies must be satisfied, and there will be many more months of detailed negotiation.

This is an agreement snatched from the ashes of the LCR's collapse. The channel tunnel rail link will be built all the way to St. Pancras. Construction will begin this year and we shall join the fast track to Europe. This deal is good for integrated transport, good for the environment and good for the taxpayer, and it is good enough for me to commend to the House.