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Mr. Andrew Mackinlay (Thurrock): I thank the Deputy Prime Minister for the reassurance about the second link, although, not unreasonably, I want to study his complicated statement. What hope can he hold out to people with blighted properties, and especially to people in the second stage who are losing their small and medium-sized businesses through the inaction of the old company in response to their reasonable request to purchase their properties and facilitate transfer to new locations?

Mr. Prescott: This is a matter of great concern. My hon. Friend has expressed it from time to time, both in the House and to me. We have inherited the obligations that were entered into in the original agreement. What is most helpful to those people is the certainty of the date--we will start this year. If we had re-advertised and gone out to competitive tender, a wait of two or three years would have added to all the concerns of blight. We have an agreement that means that we can start immediately, which is reassuring, and we have confirmed the completion of the route from Folkestone and Dover up to St. Pancras. That is the commitment we have entered into, and we have arranged the finances to achieve it.

Mr. Matthew Taylor (Truro and St. Austell): There is no doubt that the Deputy Prime Minister has had an extremely difficult job in sorting out an appalling mess left by the previous Government. I congratulate him on many aspects of this complex and clever agreement, albeit that it could leave larger liabilities on the public sector. I hope, with him, that that will not occur.

However, the agreement has not secured a guarantee of the completion of phase 2. It is hard to understand why--perhaps the Deputy Prime Minister will explain--given the incentives to which he referred and the assurance he felt able to give the House that phase 2 would be built. Did any of the consortiums at any stage offer such a guarantee and did he seek to obtain one? Given the long gap between the completion of phases 1 and 2, what will happen on the commuter lines into Waterloo, which already operate at capacity, and into other London stations? Will Eurostar not operate during rush-hour periods, or will commuter services have to be cut to accommodate the Eurostar service?

Mr. Prescott: I am grateful to the hon. Gentleman for his remarks. The negotiations have, indeed, been complex, and I offer my congratulations to all those on the private

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side, in the public sector and in the Government who have been involved: difficult situations have arisen, and they have done well. All of us can be satisfied with the result, and I am therefore pleased to accept the hon. Gentleman's congratulations on behalf of everyone involved in the detailed negotiations.

Train services will be no different from those under the original agreement.

Mr. Taylor: And that collapsed.

Mr. Prescott: There is a problem, but it is not changed by this agreement. Inevitably, we must start at one end and proceed to the conclusion, St. Pancras in this case. As different sections are built, we shall begin to use the track, which will relieve some of the pressure. For example, going for the route near Ebbsfleet will mean that we provide more space, but that is not the most congested area--as the hon. Gentleman said, that is the Waterloo area.

The only concern over any differences must be that construction may not be completed. That was the hon. Gentleman's first point.

We have a contract with LCR, under which it will complete the work. Railtrack is building the section up to near Ebbsfleet. One of the problems is that, as a private company, Railtrack has certain obligations. The fact that its access charges will probably have to be reassessed twice by the regulator, if matters remain as they are now, causes great uncertainty. If Railtrack were publicly owned, we would not have those difficulties, but I have to live with companies as they are. Certain commercial problems have been created, especially for companies with share prices and equity, which must take such obligations into account.

What we have done is ensure that two thirds of the amount necessary to complete the work is available in Government funds and grants. That is a considerable incentive for any company, and I believe that, under the contractual obligation agreed with LCR, it will complete the work.

Mr. Chris Pond (Gravesham): I welcome the Deputy Prime Minister's statement, and congratulate him and his team on their difficult negotiations.

The Ebbsfleet development, which is in my constituency, is essential to the economic regeneration of north Kent. The statement has lifted the uncertainty, and that means that we can get on with not just the development of Ebbsfleet, but the economic regeneration that is so important in other areas.

The uncertainty that the collapse of the original LCR proposal caused so many people has now been removed. Many of our constituents were very anxious about the likely outcome, and there was also much anger about the fact that the last Government had provided the consortium with such a generous wodge of public money--some £6 billion in cash and other resources. As someone said at the time, it was a case of, "Buy the train set and we will throw in the toyshop as well." However, everything collapsed because of unrealistic assumptions about Eurostar traffic. My constituents, and many others--

Madam Speaker: Order. I am sorry to interrupt the hon. Gentleman, but a great many Members want to ask

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questions. We must have direct questions to the Deputy Prime Minister, rather than long statements. I understand how welcome the news is in some parts of the country, but the hon. Gentleman must now ask a direct question. I want to call as many hon. Members as possible.

Mr. Pond: I apologise, Madam Speaker. I will now ask a direct question.

Will the Deputy Prime Minister give us a clear assurance that the second stage will also proceed as quickly as possible? That, too, is important, not only for the regeneration of east London, but to ensure that the whole project in north Kent is effective in terms of economic regeneration.

Mr. Prescott: Yes, I can give that assurance. As I said in my statement, the second stage will start in 2001.

Sir Brian Mawhinney (North-West Cambridgeshire): We shall want to read the right hon. Gentleman's statement, but I compliment him on finding a solution to a complex and difficult problem. I am one of the few Members who know how difficult were the issues that he had to address.

As the Secretary of State who insisted that Stratford should be part of the line because of the regenerative benefit that would be experienced by the east end of London, may I also compliment the right hon. Gentleman on ensuring that the whole line will be completed? I hope that he will forgive me, however, if I take with a pinch of salt his comment that he was appalled that the last Government had accepted the lowest tender at the time. I can imagine what he would have said if we had not done so.

Can the right hon. Gentleman give us some estimate of when the policy that he has again confirmed this afternoon will come into effect? There are to be non-stop services from Peterborough down the east coast to Paris and Brussels, and from Milton Keynes down the west coast to the same destinations. Can the right hon. Gentleman give us any idea when those services are likely to start?

Mr. Prescott: I thank the right hon. Gentleman for his kind remarks. I understand why he should say that he took what I said about the lowest tender with a pinch of salt, but my point was that the last Government's acceptance of the lowest tender had been based on a very optimistic estimate of the likely flow of passengers--some 11 million. So far, the figure has reached only 6 million. The previous Government should have carried out an independent assessment, which is what we did, to determine proper traffic flow. If they had done that before the negotiations, perhaps they would not have accepted the lowest bid, because they would have realised that it was unrealistic, as other bidders for the contract said at the time. I think that it was also said in the House.

I thank the right hon. Gentleman for his remarks. I have asked for an urgent report on regional services, and I should like shortly to report to the House on the matter. The right hon. Gentleman was right in what he said about regions and regeneration. When we continue and complete the phases of the contract, there will be the

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equivalent of about £1 billion of regeneration. There is a connection to Stratford, and we want to get benefits from the investment.

Mr. Stephen Timms (East Ham): I warmly welcome my right hon. Friend's determination throughout the process to secure the whole link, to ensure that Britain is properly connected to the European high-speed rail network early in the new millennium. He spoke about services to Heathrow airport. That is a new element, and presumably those services will run through south London. Can he confirm that the developments and the processes that will be required to put those services in place will not be at the expense of services along the new line that are envisaged in the Channel Tunnel Rail Link Act 1996?

Mr. Prescott: I think that I can confirm that they will not be at the expense of those services. The Heathrow proposal provides not only an opportunity for more people to engage in intercontinental travel, perhaps flying here from America and going by train to Paris, but will ease congestion on, for example, European slots at Heathrow. It is a true example of integration, and it will be useful not only to the south-east but to the United Kingdom economy. As my hon. Friend will know, increased services have been announced for the northern regions as well. Transport is growing at a considerable rate, and our White Paper is about how to integrate these developments, which have a great future.


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