Eurostar International Ltd (TRA0003)
- Eurostar is a vital economic and cultural link between the UK and France, Belgium and the Netherlands. We carry nearly 11m passengers per annum, all of whom start or end their journey in London. Up to 40% of these passengers are business travellers contributing to the wider economy. In addition to our European traffic we carry an increasing number of passengers from beyond Europe. For instance, we now have more passengers from the USA than Belgium; China and the Far East are growing markets for business as well as tourism.
- Eurostar is a wholly commercial business. We have no public contracts and receive no subsidy or State Aid we have no parent company guarantees and all debt is securitised against our own assets and future cash flows. Our shareholding is 55% SNCF, 40% Patina (CDPQ and Hermes infrastructure funds) and 5% SNCB. We are a UK-registered company and pay all taxes directly in the UK. We have consistently been assessed as a “low risk” tax partner by HMRC.
- We employ approximately 1500 staff directly of whom 90% are based in the UK. A further 2,000 are directly engaged in the delivery of our operations through our on board and service partners. We employ a diverse mix of UK, EU and Third Country nationals, reflecting the diversity of our customer base and the expectations and aspirations of our brand.
- As well as a thriving commercial business in its own right Eurostar is an essential economic component to High Speed 1 (which also supports the Kent commuter services of LSER) and GetLink (the Channel Tunnel).
- Eurostar’s mission is to connect people and places.
- Rail Questions
- In its answers Eurostar can speak only to its own situation and not for other sectors of the rail industry (e.g. franchising or manufacturing). We recognise that the issue and considerations relating to the Channel Tunnel system may vary from those applying or appropriate to the Network Rail network.
Is there a positive case for UK divergence from EU rail legislation, including the four ‘railway packages’?
- For the Channel Tunnel system specifically, we believe divergence would have an adverse effect on our services. This is for three principal reasons:
- It would risk undermining the common and consistent application of safety standards and approaches;
- The application of EU regulations and standards will continue to form the fundamental basis of our operations in the EU, and there is a risk that deviation undermines reciprocal rights of access (see also Rail Delivery Group/RDG answer on that matter);
- Our equipment is built, maintained and operated within the context of EU-wide Technical Standards for operability, which has resulted in important financial savings achieved through standardisation across Europe, a larger European rail market for products and services, and better availability of rolling stock (for instance our new e320 trains).
- We support RDG in their general assessment that compliance post-Brexit is best, and that divergence should only occur in domestic cases where additional costs or compatibility issues would arise. When it comes to cross-border services, both RDG and the government in its White Paper have also clearly recognised existing specificities, and the importance to maintain convergence with EU norms. This is important for the sustainability of Eurostar as a business.
What are the implications of the Government's proposed approach of pursuing bilateral agreements with the Governments of France, Belgium and the Netherlands for services through the Channel Tunnel and with the Irish Government for the Belfast-Dublin Enterprise line?
- We support this bilateral approach. We believe that it is consistent with EU Law and precedent. Such agreements have previously been entered into (and approved by the Commission) between Finland and Russia, as well as between Poland and Russia. Furthermore, such an approach would be consistent with the general legal framework for the Channel Tunnel (both the Concession and Immigration etc. are underpinned by Bilateral and Tri-lateral non-EU treaties).
- We also believe that there is general support for such discussions.
Is a post-Brexit agreement on rail transport in the mutual interest of the EU and the UK? If so, what provisions would be necessary for such an arrangement to be effective?
- As outlined above, Eurostar’s immediate priority is to encourage the governments to put in place bilateral agreements in time for the March 29th deadline. We believe that there is a collective desire to do so and that this reflects the recognised importance for all the Governments in a sustainable rail service. We believe that such an arrangement reflects an essential mutual interest.
- When it comes to a possible longer-term agreement between the EU and the UK on rail transport, we believe - like RDG - that any such agreement securing future international services and reciprocal market access for rail goods and services would be beneficial to all parties. It would also support the extremely strong touristic, cultural and business ties that cross-channel rail has allowed between the UK and France, Belgium and the Netherlands.
What would be the implications of ‘no deal’ for the UK’s rail industry? Are there any existing international arrangements that could be utilised instead?
- A separate rail bilateral(s) as outlined above and in the government’s white paper offers a realistic and solid plan for the prospect of a “No Deal” on the Article 50 negotiations. As mentioned, Eurostar believes that all the respective governments are fully and properly briefed on the topic, and that there is a collective will to conclude the discussions.
- Outside of operations, it is also important to consider the possible effect of a “No deal” if it were accompanied by restrictions on immigration and customs controls, which could introduce a risk of significant processing delays.
- Eurostar’s assessment is that “no deal” might also be damaging in commercial and economic terms with reduced business travel, the potential for key clients to relocate and a weakening of the inbound tourist market.