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Lord Mountevans: My Lords, I am grateful to the noble Lord for giving way. The Bill was not withdrawn in this House. I was one of the two people who took it through this House. It was not given Royal Assent, but the original King's Cross Bill passed through both Houses.

Lord Newby: My Lords, in a sense that strengthens the point I made. The Bill reached the final point in the legislative procedure but was then withdrawn. Years were wasted and by that stage hundreds of millions of pounds had been spent on bringing forward the plans. We were left with a total hiatus of policy making. Clearly, the position today is much more satisfactory in that at least we have a plan for getting the CTRL built, albeit in a slightly fractured way. Anyone who has followed the history of the decision making on that will want to pay tribute to the Deputy Prime Minister and other Ministers for working hard to make that part of the link a reality.

However, I am aware of no plan that looks 10 or 20 years ahead which has any firmness to it--and to which the Government have put their name--and which addresses how we shall get beyond London. That seems to me to be a critical problem. I believe that when making the announcement in another place on 3rd June, the Deputy Prime Minister became slightly exasperated when people asked him what he intended to do about links north of London. He replied, in effect, "For goodness' sake. I have nearly killed myself getting links to London. Don't try my patience and ask me to do the impossible". Although that is an understandable reaction, it is not satisfactory. Having reached this point, I hope that the Government will soon be able to produce at least a vision--if not detailed plans--as to how international rail services might be developed. It is possible, of course, that that will appear in the transport White Paper, but I somehow suspect that it will not.

I conclude with a couple of questions for the Minister. I believe that on 3rd June the Deputy Prime Minister said that he had asked the consortium to consider bringing forward plans for international rail services north of London by the end of the year. Has the Minister any news on the timetable for that? Might something emerge a little earlier than the end of the year? I would also welcome anything the Minister can tell us about the proposals for an international service from Heathrow by 2001. From the point of view of the northern regions, that is an interesting suggestion. But in a sense it is rather a threat because if everyone suddenly becomes terribly enthused about having international rail services going that little bit further to Heathrow rather than further north, all attention will be focused on that. In thinking of that proposal--if one is going that far--has any thought been given to linking up with the North West and thus benefiting that region? We need a fast service with the minimum number of stops to get people from the North West across the Channel. Going via

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Heathrow really is a case of going somewhere via Slough. I cannot believe that going via Heathrow would be the solution.

I refer to the Virgin proposals which have been raised by other noble Lords. Do the Government have a view on these proposals? Are they feasible? Instinctively, I feel that a plan which has at its heart a station called Watford International has something missing. It does not have the brio even of Lille, but perhaps that is pure northern prejudice. Do those proposals cut across the ideas and plans that the consortium is currently developing? If Virgin can do that,- why cannot the consortium?

Railways clearly have a tremendous potential to bind together countries and regions both economically and politically. The Government still have the opportunity to ensure that despite all the delays and confusion to date the Channel Tunnel eventually fulfils its potential for the North West and the other northern regions. I hope that the Minister can give us some reassurance this evening that that opportunity will at last be seized.

8.36 p.m.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman): My Lords, I, too, am grateful to the noble Lord, Lord Inglewood, for his introduction to this debate and--if I may say so--for the context in which he set us thinking about the issues before us tonight. As he suggested, it is important that we consider the Channel Tunnel Rail Link in the context of transport links within the European Union.

It is interesting to note that the West Coast Main Line, the East Coast Main Line and the Channel Tunnel Rail Link all form part of the EU's plans for the trans-european network. It is important to view the problems that we are approaching in that context as well as to view them in the economic and regenerative context that the noble Lord, Lord Newby, referred to, and indeed the political context. I can assure the noble Lord that if I had any doubts about the strong feelings of those in the regions of the North of England my noble friend Lady Farrington, sitting beside me, would make sure that I was well aware of those concerns.

We recognise the frustration that has been expressed by I believe everyone who has spoken tonight that the services to the regions for which they have argued not just on this occasion but also on many occasions in the past are not yet in place. It is important to recap briefly the background to the current situation, to which the noble Lord, Lord Newby, referred.

The deal put in place by the previous government with London and Continental Railways to build the CTRL and operate Eurostar was flawed from the start. In January it almost collapsed. The company could not fulfil its contract and requested an additional £1.2 billion of taxpayers' money, on top of £1.8 billion already committed. That was unacceptable.

We were faced with a clear choice. We could have abandoned the contract with LCR and invited new tenders or we could have asked LCR to reconsider the financing of the project and come forward with

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proposals to meet all of its original obligations. We chose the latter option because abandonment of the contract and a further delay of two years or more, would have led to further uncertainty and blight and would have resulted in two-thirds of government grant being spent on Eurostar's debts and continuing losses with nothing in return. The deal we secured will provide a high-speed Channel Tunnel Rail Link. I am grateful for the acknowledgement of the role played by my right honourable friend the Deputy Prime Minister that the noble Lord, Lord Newby, mentioned.

The CTRL project can now proceed without delay. The solution we have negotiated ends the uncertainty about the continuance of the project. I should make the following issue clear as it has been raised specifically by the noble Lord, Lord Inglewood, and by other noble Lords who have spoken. There is a commitment to build the entire railway from the Channel Tunnel to St. Pancras. LCR will remain under a contractual commitment to deliver the whole project. It plans to commence work later this year. The first section of construction should be completed by 2003, with the full CTRL, including the vital connection to the West Coast Main Line, planned for completion in 2007.

I reassure the noble Lords, Lord Mountevans and Lord Inglewood, and others who raised the matter, that once the CTRL is opened the infrastructure will be in place for seamless journeys between the regions and the Continent for which noble Lords have argued. The Government, LCR and Railtrack are working hard to take the proposals forward so that construction can start later this year.

I now turn to the Eurostar service. LCR has chosen a consortium to run Eurostar comprising British Airways, National Express and the national railways of France and Belgium. The consortium members have a strong track record in delivering high-quality passenger services across Europe. I understand that they have plans to maximise growth in Eurostar's existing inter-capital business, to increase frequency of services, to reduce check-in time and to improve on-board service standards. They have already announced their intention to establish a service from Heathrow airport to Paris which, it is hoped, in due course will enable Heathrow to develop as a hub for services across the country and as a gateway to Europe. The Government are committed to a fully integrated transport system. I say to the noble Lord, Lord Mountevans, that the plans proposed by the consortium for a hub at Heathrow are innovative and we hope that they will provide greater choice to those travelling for business or for pleasure.

The noble Lord, Lord Newby, asked specifically about progress. We understand that the consortium is developing those plans urgently for the Heathrow to Paris services. The noble Lord also raised concerns about whether, in the long term, such plans would foster the direct links about which he was concerned. The issue of Watford as a hub rather than Heathrow was mentioned, although not exactly the same view was taken by noble Lords who spoke.

We were asked to give a commitment that the provision of Eurostar services to the north of England would start as soon as possible. The Government understand the desire

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for that commitment and share the desire for direct services to the regions. The noble Lord, Lord Inglewood, put that question directly. However, he acknowledged, as did other noble Lords, that the viability of those services--the length of time they will take; the number of people who would wish to use them; and how attractive a service from Glasgow to Paris which could take around 10 hours would be--has to be considered and an analysis made. Even a service from Manchester to Paris taking around five hours compared with the four hours the noble Lord, Lord Inglewood, mentioned, is considered the crucial journey time in relation to whether business travellers decide to travel by air.

It was because we shared the desire to see those services in place that my right honourable friend the Deputy Prime Minister asked the consortium, as part of the deal arranged to ensure the future of the Channel Tunnel rail link, to review urgently the feasibility of regional services and to put proposals to the Government before the end of the year. The timing remains the end of the year. We cannot prejudge the outcome of the review that has been commissioned.

As several noble Lords mentioned, including the noble Lords, Lord Cadman and Lord Inglewood, a proposal has been put forward by Virgin to run regional Eurostar services. It was acknowledged, certainly in the contribution from the noble Lord, Lord Inglewood, that these matters are sometimes not as simple as they can be made to appear. We have to consider whether the Virgin proposal would in itself divert revenue from the existing Eurostar service, undermining its viability and the viability of the deal that has been struck around CTRL. These matters deserve closer scrutiny. I understand that Virgin made the proposals direct to London and Continental Railways, a company in which, noble Lords will recall, Virgin is a shareholder. I can tell the noble Lord, Lord Mountevans, that London and Continental Railways has asked the consortium to consider Virgin's proposals.

I now turn to the issue of frontier controls raised by the noble Lords, Lord Cadman and Lord Mountevans. The Government recognise that the addition of domestic passengers on regional Eurostar services might make those services more commercially attractive. But, clearly, we have to ensure passenger security. Passengers on international train services must be subject to the same controls used at ports and airports. Provided proper procedures are in place, there are no frontier control reasons why regional Eurostar services which carry both domestic and international passengers should not be operated. The Government would be happy to receive proposals as part of the review that is being undertaken. Whether those controls take place on board the train or at stations is a commercial operating decision for Eurostar. I understand that the original Eurostar plans included on-board Customs and immigration controls.

Noble Lords also asked why it is not possible to begin some services on the West Coast Main Line now, using rolling stock which is not currently being utilised. As was recognised by the noble Lords, Lord Cadman and Lord Mountevans, there are some technical problems which currently prevent the operation of regional Eurostar rolling stock on parts of the existing network. Those

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problems are mainly related to electrical interference associated with track circuits which have prevented the issue of safety clearances required before passenger services can be operated. I understand that Railtrack and Eurostar are working together to ensure that the necessary safety cases can be issued for those trains. The Government have made clear their commitment to the operation of a safe railway network and the need to solve these problems. Until we can guarantee their safe operation it would not be right for the trains to come into use.

The noble Lords, Lord Inglewood and Lord Newby, referred to the issue of rail freight. The Government are determined to put rail freight back at the heart of Britain's rail industry. There has already been considerable traffic growth in freight carried through the Tunnel and, as noble Lords will recall, last year, in return for extension of the Eurotunnel concession, the Government negotiated a valuable package of benefits for rail freight. The opening of the CTRL should also permit an increase in freight on the existing network by freeing up capacity.

In conclusion, the Government recognise the importance to the regions of good international rail links. We believe that the deal that has been agreed around the Channel Tunnel rail link will provide real regenerative and economic opportunities. We look forward eagerly to receiving the review from the consortium later this year on regional services, and I shall inform the House at that time of the outcome of the review.

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