Channel Tunnel Rail Link (Supplementary Provisions) Bill

This is a short, but highly technical Bill. I agree with the Conservative spokesman in appreciating the fact that we will get a briefing on the Bill next week, and I am also conscious that there will be work to be done in Committee. Although the Bill's clauses seem narrow, the consequences have significant monetary value, whether for the taxpayer or the fare payer ultimately using the range of services. Like others, I was caught up in the excitement of the completion of the channel tunnel rail link and the glittering opening of St. Pancras station. It was a glorious evening, and there was a certain satisfaction in seeing a project such as High Speed 1 come to a successful conclusion and feeling that we, too, had a high speed service, not just the continental Europeans. I shall not go into detail on the history, because others have, but it has some warnings embedded in it. It would be best to keep some of those warnings in mind as the Bill makes progress. I suggest to the Minister and the Conservative spokesman that it is wise to be cautious about using the phrase ““on time and on budget””. When the right hon. Member for North-West Hampshire (Sir George Young), then Secretary of State for Transport, announced the award of the contract to London and Continental Railways in 1996, the total Government contribution was set at £1.7 billion—with no guarantees or loans—and the completion date was 2003. It was only with the rescue package—I commend the Government on their willingness to push that forward in 1998—that we actually got the project that people now describe as being on time and on budget. Most people agree that there may have been some flaws in the procurement that made it a much easier target to achieve. The Government now stand credit behind £3.7 billion in bonds issued by London and Continental Railways. There is still a potential for the Government to loan directly up to £400 million, and up-to-date figures on the likely figures would be welcome; although that seems to be a constant moving target. The Government, for their pains, have in effect obtained the equivalent of an equity stake of approximately 35 per cent. in the company and, in 2006, LCR was reclassified as a public sector company. The flaws in procurement raise several issues. It is clearly evident that the private sector managed to out-negotiate the Government into entering a contract in which the risks remained overwhelmingly with the public sector, with precious little remaining with the private sector. The Government—I suspect that the problem lies largely with the Treasury—were far too naive in their analysis of passenger numbers. The original forecast that Eurostar would have 21 million passengers by 2004 was ludicrous. Even the revised and re-revised downside cases of 8 million passengers by 2006 have been missed. Passenger numbers are starting to move up a bit now, but I would be interested to hear from the Minister about the greater risk profile for passenger numbers now that the base has been moved to St. Pancras. As many in the industry recognise, the business commuters based in south London are an important element of Eurostar's passenger numbers. They have taken advantage of the Heathrow, Gatwick and Waterloo triangle, but they will now be lost. I shall be interested to know the potential impact of that loss on the project, and to what extent the money that the Government have put in may be put at risk.