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Mr. Alan Clark (Kensington and Chelsea): Free tickets?

Mr. Prescott: 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.

Mrs. Gillian Shephard (South-West Norfolk): I thank the right hon. Gentleman for his statement and for making it, and additional information, available to me in advance. The copy of the statement which I received bears only a limited resemblance to the one he made, but one should be grateful for small mercies.

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I must begin with this complaint: the right hon. Gentleman has mentioned advance press coverage of this statement and, even for his Government, the amount of detailed press briefing has been disgraceful. Last night, some 14 hours before the House was even told that there would be a statement, the BBC was in possession of detailed facts, as were today's newspapers and sound media. I have written to you, Madam Speaker, on the matter, and it is a cause for sadness that the Deputy Prime Minister should treat the House with such contempt.

The right hon. Gentleman began his statement with fighting words. One can only assume from the late arrival of the text that he was engaged in last-ditch battles with the Treasury and spin doctors at No. 10. Indeed, he has almost admitted as much. Eventually he got round to admitting that the project is important for the country, that there is all-party support for the Channel Tunnel Rail Link Act 1996, and that the link offers immense benefits to the whole nation.

The right hon. Gentleman has described the scheme as a public-private sector partnership. Last January, when the Secretary of State made his previous statement to the House on this matter, the hon. Member for Bolsover (Mr. Skinner)--who is, as always, in his place--claimed that this was the first taste of nationalisation. Leaving that aside, will the Secretary of State tell the House whether the Government guarantee should and will be classified by the Treasury as public expenditure, and if not, why not?

Will the right hon. Gentleman confirm that the Government are supporting the scheme to the tune not of £140 million, £700 million or £1.2 billion, but £5.64 billion? Would he call that nationalisation by the back door? If it is, will it be a comfort for the hon. Member for Bolsover? Does the £140 million which the Secretary of State mentioned refer to phase 1 or phase 2?

What will be the contractual obligation for London and Continental Railways if Railtrack does not wish to go ahead, and under what circumstances might that occur? What will happen if the costs overrun the estimates that the right hon. Gentleman has given the House today? On what basis have the passenger projections been calculated? As this matter will interest the taxpayer, will the right hon. Gentleman undertake to make public the outcome of the independent review that his Department has commissioned?

The right hon. Gentleman has described the two phases of the scheme. When is the Ebbsfleet station to be built, and what will be the arrangements for passengers and trains before it is built? Phase 2 of the project will not only regenerate east London but make the huge benefits of the channel tunnel rail link available to the rest of the country. What guarantees can the right hon. Gentleman give the House that phase 2 will be completed, and can he give us a timetable?

How much of Eurostar UK's new management company will be controlled by the state-owned French and Belgian railways, and what control do they already have in the Eurostar trilateral partnership?

It is welcome news that the Thameslink 2000 proposals for the St. Pancras station will go ahead as planned. Can the right hon. Gentleman tell the House when?

The right hon. Gentleman began his statement with fighting words. Conservative Members note with interest that, in order to make progress, the right hon. Gentleman

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is calling on the expertise and success of private industries such as Railtrack, National Express and British Airways. Does he agree that life sometimes has its ironies?

Mr. Prescott: I welcome the right hon. Member for South-West Norfolk (Mrs. Shephard) to her new job. I tried to assist her by providing technical advice, which I hoped would be helpful. Her tone was extremely churlish, to say the least. Many of the questions that she asked showed that she had not read the statement: it contains a number of the answers.

There were some last-minute negotiations about the final details of the percentage. I pushed right up to the last minute to ensure that the taxpayer had the best deal. If the previous Government had had that attitude, we would not have had to raise this kind of money to achieve a deal. Does the right hon. Lady not realise that the private enterprise company that was talked of by the Secretary of State for Transport in the Conservative Administration collapsed and asked for a further £1.2 billion on top of the £1.8 billion given by the previous Government, without any guarantees and with no comeback for the taxpayer? She should have begun her contribution with an apology to the House before she spoke such drivel about the statement.

I was not involved in any leaks to newspapers. I am always concerned to ensure that information is provided to the House first. It gave me great pleasure to note that the leaks to the press and to the radio this morning were wrong. The figure of £700 million additional public contribution was incorrect: it is £140 million. That information was in the statement, and if the right hon. Lady had read it she would have known that. The leaks certainly did not come from us. The House should be delighted that, wherever they came from, they were wrong. People were wrong to follow the Financial Times. It is always difficult, because various parties are involved in such negotiations and it is inevitable that they will talk to the press.

I assure the House that I said absolutely nothing to the press about this matter. I strongly believe that I should always report to the House first. After the collapse of the agreement, I even made a statement to the House at 10 o'clock at night to ensure that hon. Members did not read about it in the morning papers first. If I look offended, it is because I am a little offended. I played the issue absolutely right. I hope that the right hon. Lady and I can have a better relationship on these matters in future.

The right hon. Lady asked about guarantees. Any moneys that are guaranteed under Government- guaranteed bonds--although they are in the name of LCR--must be assessed by the independent Office for National Statistics. It has agreed with the Treasury that, because the risk is very low, the bonds do not count as a public expenditure liability. That practice is followed by all Governments. I am surprised that there is some doubt about that. The only qualification that has changed over the years is that now the European Statistical Office must endorse that judgment. Governments have always used that practice to judge whether such moneys are part of the public sector borrowing requirement.

In respect of incentives and whether we should complete the link, major incentives have been given for the part between Ebbsfleet and Stratford. Most of the grant has been retained for that, and hon. Members should

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look at the memorandum to see precisely what proportion is involved. The previous Administration made the requirement that Government money would come in only after two thirds had been expended by the private sector. The trouble with that was that they could not even raise 10 per cent. of the money, never mind two thirds of it.

In this case, we have reserved the same principle: at each stage, the Government will still require that two thirds has been spent before the additional third comes in from our side. It is a guarantee that construction will take place. We have made sure that the second part, through Stratford into King's Cross, is heavily loaded in the grants with a huge incentive to complete the deal. We have every reason to believe that we have geared and balanced the risks and the rewards, and have made sure of the completion of the deal as the House agreed.


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