Eurostar, which connects the Great Britain to mainland Europe by rail via the Channel Tunnel, is in financial trouble.
The ongoing coronavirus pandemic has caused a huge drop in passenger numbers. So far the government has only provided financial assistance for international airlines and domestic railway undertakings, causing Eurostar to fall between the cracks. Already in December the transport union TSSA wrote to Grant Shapps, expressing concern about Eurostar’s situation.
Now London First, a group set up by business leaders to “make London the best city in the world in which to do business”, has published a letter to the government, asking that swift action be taken to safeguard Eurostar’s future.
“If this viable business is allowed to fall between the cracks of support – neither an airline, nor a domestic railway – our recovery could be damaged. London and the UK would lose out both economically and reputationally. Eurostar currently employs 1,200 people in the UK, with a further 1,500 jobs directly provided by the Eurostar supply chain. But the value and impact of this link extends much further. Students from France account for 1 in every 9 of those from the EU currently studying in London, many of whom benefit from the option to travel via rail rather than air. Taking the train not only has important environmental benefits, which should not be underestimated as the UK seeks to lead the world at COP26, but it is how nearly 4 in every 5 passengers choose to make their journeys between London and Paris/ Brussels.
“Eurostar is not asking for special treatment. We urge you to ensure that they have equal access to financial support as companies in similar positions – at the very least this should include business rates relief and access to Government loans. Maintaining this international high-speed rail connection into the heart of London has never been more important. Having left the European Union, we need to actively set out our stall as an attractive destination for people to live, work and play. Safeguarding the future of this connection to the continent should be a symbol of both our desire to build back better and our new cooperative relationship with our European neighbours.”
Signatories include CEOs, Presidents and Managing Directors from companies such as AECOM, Siemens Mobility, BUPA, Delancey, WSP, and Fortnum and Mason, as well as signatories from Middlesex University and the University of London.
The Railway Industry Association (RIA), which advocates on behalf of the rail supply chain, supporting the message of the letter.
“The Railway Industry Association, which represent rail businesses across the UK – including many of those within Eurostar’s supply chain – will be keen to see what can be done to ensure the cross-border rail line can continue to operate.
“Eurostar is a vital part of the country’s international connectivity, linking the UK with the continent. And it supports thousands of jobs and investment, right across the country. In such turbulent times, following the Coronavirus pandemic, it is vital that Eurostar has the certainty it needs, and rail suppliers have the confidence and certainty they need, to enable it to continue to deliver services, and support the wider UK economy, not just now during these difficult months but also for the future recovery.”
Not everyone is in favour of providing funds for the company, however. Lord Adonis, Secretary of State for Transport under Gordon Brown, said “Eurostar shouldn’t be bailed out by the UK government {…}. This would be a large subsidy to the French state. If Eurostar folds, a new operator will willingly take over the service after the pandemic, without inherited debt”.
The reference to France is based on the fact that Eurostar is majority owned by French state rail company SNCF (55 percent). It is hard to see how access to government loans equates to a subsidy and the same is true for business rates relief. It should also be pointed out that Eurostar International Ltd owns its rolling stock – unlike domestic franchisees. Therefore there would be no trains for a new operator to take over.
Britain sold its 40 percent stake in Eurostar in 2015. Eurostar has its headquarters in London.
