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Railwatch 075 - April 1998

Slow progress

Deputy Prime Minister John Prescott made a special statement to the House of Commons on 28 January, announcing the failure of London & Continental Railways (LCR) to raise funds to build the Channel Tunnel Rail Link without a further sum of £1.2 billion from the Government. LCR would have 30 days to find the money some other way, failing which, the company's operations would have to be taken over by the Government until other arrangements could be made.

Reaction to this statement was predictably along party lines with Labour members generally gleeful at this failure of private enterprise and Conservative members either insisting that the whole idea should be dropped or that no more public money should be spent, which amounts to the same thing!

Tory spokesman Sir Norman Fowler wanted confirmation that there was "absolutely no intention whatever of making it a publicly financed project and that it will go ahead with the help of only private investment."

Mr Prescott reiterated that it was the view of the House that "we want to be connected to Europe by a fast, modern railway system." He was prepared to consider any further proposals LCR may have but they were not getting any more public money.

Matthew Taylor (Lib Dem, Truro and St Austell) expressed some sympathy with the Government in having to deal with "an agreement botched by the previous government." He thought putting the liabilities resulting from this situation into the public sector should be a last resort.

Margaret Hodge (Lab, Barking) drew attention to the blight on homes already caused by the delayed construction of the link and the prospect of further blight.

Tom King (Con, Bridgewater) said it was extremely bad news for East London, and he warned that there was the prospect of not getting a fast link at all.

Alex Salmond (SNP Banff and Buchan) said the public contribution went far beyond £1.4 billion and he cited Waterloo International, the Eurostar debt write-off and the gift of land round King's Cross.

Gordon Prentice(Lab, Pendle) said: "The Conservative Party sold the entire British Rail network for £2 billion. We are talking about a 68-mile stretch of line for £1.8 billion." He blamed Lord Parkinson for not getting the link built a decade ago.

Andrew Rowe (Con, Faversham and Mid Kent) wanted Mr Prescott to promise his constituents that they can expect "certainty rather than doubt, and freight-carrying capacity rather than mere passenger capacity for which there is no demand."

Mr Prescott replied that the estimate of LCR for passenger numbers was nine million rather than the six million who are actually being carried at present. He went on: "The guarantee on which most of the loans were based was that public sector rail, both in France and Britain, would have to pay for more capacity than it could use.

Derek Foster (Lab, Bishop Auckland) said that not only the people of London and Kent would feel let down, but the whole nation.

"We have wasted a decade because of the totally ideological view that the link could be accomplished entirely by the private sector," he said.

Mr Prescott was reminded of the earlier Channel Tunnel debates, when members were told the link would have northern route services, only to find that sleeper services were the first casualty when reality had to be faced. In planning the link "about 80% of services and income were based on improved Network SouthEast trains."

Other Labour members contrasted the inability of the private sector to get our link built with the French public sector which had their link built years ago.

Alan Clark (Con, Kensington and Chelsea) said the trains were running perfectly well at the moment so why shouldn't they drop this "monstrous and vandalistic stretch of rail and concrete across Kent? (One wonders if he feels the same way about the M2 and M20, built with despised public money!)


In a full debate initiated by the Opposition on 27 January, Sir Norman Fowler condemned the delay of the Government in bringing forward proposals for private investment to develop London Underground. He said that despite heads of the Underground being summoned to a meeting with Ministers within days of taking office, and a message from the Deputy Prime Minister that urgent action was wanted, here we were, seven months later and nothing has happened. He suggested the delay was due to conflict between transport ministers and the Treasury. He said that policy had been brought to a halt on political grounds and that only complete privatisation could rescue the Underground from lack of investment as it had done for the privatised railways. He extolled the investment record of the previous Government.

Tom Brake (Lib Dem, Carshalton and Wallington) said: "With a record such as theirs on the Tube, Conservative members should mind the credibility gap."

Geraint Davies (Lab, Croydon Central) accused former Tory Chancellor Kenneth Clarke of "tearing the heart out of funding for London Transport".

He accused Tory members of studying in the Arthur Daley school of management and, in 18 years, of doing nothing for the Tube.

Minister of Transport Dr Gavin Strang denied any delay in confronting the issues.

The Government would soon be in a position to announce its proposals. It was better to find the right solution than to rush into hasty decisions. "Wholesale privatisation is simply not an option for us."


He said it was preposterous for Sir Norman to "present that wholly fictional, rosy account of investment in the Underground under the Conservative Government".

He said Labour had inherited a failure to make provision for the cost overrun of the Jubilee line extension, and a huge investment backlog. He reminded the Conservatives that under their regime, the ill-prepared scheme for wholesale privatisation would not have produced action on the investment backlog until 2001.

"It ill becomes the Conservative party to tell the Government that, after nine months, we are somehow letting Londoners down because we have not yet produced our detailed plans."

The Government appointed Price Waterhouse in July last year to advise them on how best to achieve the following objectives:

1. To safeguard and improve LUL's service to passengers, with agreed safety standards

2. To ensure LUL contributes towards an integrated transport strategy for London

3. Quickly to reduce or eliminate the Underground's investment backlog

4. To provide value for money for the taxpayer

5. To attract private sector investment.

The establishment of a new assembly for London will have an influence over the development of road and rail services and general transport planning.

A White Paper would be published in March and a referendum in May.

The new London assembly would have reponsibility for buses and the Tube and influence over the development of rail services.

In Commons questions on 3 February John Cryer (Lab, Hornchurch) said if the Underground was privatised, it would "follow the same pattern as BR and end up in the hands of a bunch of spivs and jackals".

On the same day, Elfyn Llwyd (PC, Meirionnydd Nant Conwy) urged Railtrack to expand the British loading gauge to continental dimensions and he called for road transport to pay for the cost of its infrastructure and for the damage it does to the environment.


In a debate on 9 February, Transport Minister Mr Strang said: "Rail pricvatisation damaged the interests of passengers and taxpayers. It made fortunes for the few but has been a poor deal for the taxpayer."

"We inherited a privatisation that was ill though out and implemented with indecent haste.

"An overall vision is needed. We regard our railway as a national asset."

Norman Baker (Lib Dem, Lewes) said; "The Conservative view of rail privtisation is ma?ana."

Mrs Gwyneth Dunwoody (Lab, Crewe and Nantwich) accused Railtrack of confusing maintenance and capital investment, something which BR did not do.

Transport Minister Glenda Jackson said the strategic rail authority would probably take over the functions of the Franchise Director and some of those of the department of Environment, Transport and the regions. It would also have a strong consumer representation on it.

"If we are to win more passengers on to or railways, the service provided by the train operating companies must be the highest quality."

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