Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence


Examination of witnesses (Questions 216 -239)

WEDNESDAY 16 DECEMBER 1998

MR ROY GRIFFINS and MR MIKE FUHR

  Chairman

  216.  Gentlemen, thank you very much. I am sorry we are a little late in starting. Would you like to tell us who you are and if you have any preliminary remarks we would be delighted to hear them.
  (Mr Griffins)  Thank you, Madam Chairman. My name is Roy Griffins, I am Head of the Railways Directorate at the Department of the Environment, Transport and the Regions. Next to me is Mike Fuhr, a member of my Directorate, he is Project Director of the Channel Tunnel Rail Link which encompasses the Eurostar business.

  217.  You look astonishingly cheerful. Is that a sign that you have something to say to us, Mr Griffins?
  (Mr Griffins)  Just a few opening remarks, if you will permit. The Government welcomes this inquiry. The Integrated Transport Policy White Paper of July, "A New Deal for Transport", made it clear that the country relies on good transport links for its vitality and prosperity. On the same day the Government published its policy document on the railways in the form of a response to this Committee and reiterated its commitment to improving the quantity and quality of rail services, that is freight and passenger; we are talking passenger here. In fact, what I use as a litany is the goal which the Government stated when it came to power: "the overriding aim must be to win more passengers and freight on to rail". On the subject of the Committee's present inquiry you will already know that the Deputy Prime Minister has received a report from the consortium with whom you have just been talking. He sent the report to the Committee, put it in the Library of the House and he has commissioned an independent review of the issues raised by the consortium's report and by the alternative proposals put forward by the Virgin Group. Here I think I am returning to the theme that came up in the last hour. It would be helpful to have more information from Virgin for the purposes of that independent review and we shall be requesting it.

  218.  Have you already done so?
  (Mr Griffins)  Only in the context of requesting Virgin's full disclosure for the purposes of the review conducted by the consortium, we have not done so in connection with the——

  219.  The second review?
  (Mr Griffins)  The review announced by the Deputy Prime Minister. We have not commissioned that yet.

  220.  Were you aware that Virgin had not replied fully to the initial inquiry?
  (Mr Griffins)  Yes, we were.

  221.  Please continue. I am sorry.
  (Mr Griffins)  The Government's overall policy then is that Scotland, Wales and the English regions should share fully in the benefits of the Channel Tunnel and the Channel Tunnel Rail Link when it happens. The Government wants the regions and nations of the United Kingdom to have convenient, effective and efficient access to international rail services.

  222.  And that includes Northern Ireland as well in the United Kingdom?
  (Mr Griffins)  Yes, in so far as the international rail services connect.

  223.  Ah! We were talking about aims, were we not, Mr Griffins? It must be the Government's aim to extend high quality rail systems throughout the United Kingdom, must it not?
  (Mr Griffins)  Yes, it must.

  224.  Good. We got that on the record.
  (Mr Griffins)  Can I give you that one?

  225.  Thank you, Mr Griffins. I am always pleased when I get one up on a railwayman I can tell you that.
  (Mr Griffins)  Before closing the general remarks could I mention one tiny issue which we could deal with now or later if you wish. It goes to the relationship between the review which the Deputy Prime Minister has just announced and the work of your own Committee.

  226.  Please. Any enlightenment is always welcome in this Committee, we are very broad minded.
  (Mr Griffins)  It is mechanics rather than substance. Ideally the Government would like its review to be informed by the conclusions of this Committee. There is an excellent precedent for this. About a year ago I sat in this Committee room, I sat there, saying a lot less than I am saying now, in fact saying nothing at all, I was sitting next to the Deputy Prime Minister. He outlined the Government's policy on rail regulation and the Strategic Rail Authority. The Committee deliberated and produced a report. The Government took it in, digested it, considered it, adopted part of it, stole some of its ideas and produced not only the railways part of the Integrated Transport White Paper but the daughter document on the same day. That was an example of what seems to me to be a very constructive dialogue. It would be galling if we could not do that kind of thing now. I just signal it now and I will discuss it with your clerk later.

Chairman:  That is helpful. We know you are all very intelligent and we are very happy to know that you learn from the work that we do in this Committee.

Mr Stringer

  227.  You say it is the Government's objective that all the regions and countries of Great Britain should benefit from the Channel Tunnel. Is not the real fact that the regions are disbenefiting and you are getting a concentration of investment and transport in the South East?
  (Mr Griffins)  As a result of the Channel Tunnel?

  228.  As a consequence, yes. We have had evidence before this Committee of a great deal of investment in the South East between London and the Channel Tunnel, around Heathrow, extra services to Paris and Brussels, but no benefit to the North West, the North East, Scotland, Wales. If investment goes in it is likely to increase the regional disparities, is it not?
  (Mr Griffins)  Accepting your premise that if that was the only place in which investment was put, yes, the answer must be what you say is true. That is not necessarily the case. Narrowing it down to this particular context, direct regional services through the Channel Tunnel international rail services I think you are giving one of the planks of the rationale for the independent review which the DPM is commissioning which will take into account disparities and social and economic benefits.

  229.  So you agree with me that at the moment there are no benefits to the regions?
  (Mr Griffins)  No. If there was only investment down here—— The benefits to the regions do not come solely from direct international rail services.

  230.  Just looking in the context of the Channel Tunnel, what other benefits are there?
  (Mr Griffins)  I do not know the exact breakdown of passengers through the Channel Tunnel.

  231.  We are not splitting hairs here, we are talking about billions of pounds worth of investment in the South East and what the benefits are for those of us who do not happen to live in the South East.
  (Mr Griffins)  People living outside the South East travel through the Channel Tunnel, goods originating outside the South East go through the Channel Tunnel. It is not necessarily because the Channel Tunnel coincidentally happens to be between the South East of England and the continent that that is something which is engineered to disadvantage the regions.

  232.  You have quantified this, have you?
  (Mr Griffins)  I have not.

  233.  Do you believe that the regional Eurostar services will ever run without public subsidy?
  (Mr Griffins)  No, I do not know, but I would hope to have an idea of that as a result of the outcome of a thorough and independent review.

  234.  If the independent review of the review shows that there is public subsidy, is it the Department and the Government's position that that public subsidy should be agreed to in order that the regions will benefit?
  (Mr Griffins)  I take your question to mean if the review showed that there was a need for public subsidy.

  235.  Yes, that they would not be commercially viable.
  (Mr Griffins)  You are forcing me down a hypothesis. Can I say that there is no public subsidy to international maritime services, there is no public subsidy to international air services, so prima facie it does not seem right that there should be a public subsidy to international rail services. I am sure the Government would want to take a view following the outcome of this independent review.

  236.  What estimate have you made of any benefits to British Airways from transferring their passengers from Heathrow to Charles de Gaulle services on to a rail link?
  (Mr Griffins)  The Government has not.

  237.  So we have a consortium in which one of the partners may benefit by tens or hundreds of millions of pounds by non-direct commercial activity on the railway and you have not assessed that?
  (Mr Griffins)  I think you are making a number of assumptions.

  238.  I am making the assumption that there is value in slots, that British Airways can make more money on its inter-continental services by giving up those slots and I am asking what estimate you have made of the fact that when a contract has gone to a partnership which includes somebody who can benefit by making decisions that will free those slots up?
  (Mr Griffins)  I would not argue with you about the slots. You will know more about the slots than I do. I think the assumption you are making is that the consortium will mount a Heathrow service which I do not know.

Mr Stringer:  I am asking what estimates you have made of the benefit to British Airways if that happens? I would have thought that was a sensible thing to have done.

Chairman

  239.  It would help us, Mr Griffins, if you told us what the parameters were. Who is going to conduct this review? What have you asked them to do and have you taken account of the questions like the ones you have just been asked?
  (Mr Griffins)  Can I take us back to the deliberations for the Channel Tunnel Bill in the mid-eighties which led to section 40 of the Channel Tunnel Act 1987.


 
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