UK: Government accused of ‘gross act of betrayal’ as buyers sought for Eurostar rail service

The Government is today inviting expressions of interest from bidders for the UK's 40% stake in the

The Government is today inviting expressions of interest from bidders for the UK's 40% stake in the Eurostar rail service. - Credit: PA

The Government was today inviting expressions of interest from bidders for the UK’s 40% stake in the Eurostar rail service.

Chancellor George Osborne announced potential bidders should respond by the end of the month, saying the aim was to maximise value for money for the taxpayer.

The decision was attacked by rail unions, while Labour warned it could follow the Royal Mail privatisation as a “rushed and under valued” sell off.

The Government announced last year it wanted to achieve £20billion from corporate and financial asset sales by 2020. Subject to achieving value for money, the Government said it expected to reach definitive agreements in the first quarter of 2015

Since services began in 1994, Eurostar has carried over 145 million passengers, with over 10 million in 2013 alone, while sustaining traffic growth every year for the last decade.

Mr Osborne said: “I am determined that we go on making the decisions to reform the British economy and tackle our debts. So we will proceed with the potential sale of the UK’s shareholding in Eurostar today. Ensuring that we can deliver the best quality infrastructure for Britain and the best value for money for the taxpayer are key parts of our long term economic plan.

“As part of our aim to achieve £20bn from assets sales by 2020, the sale proceeds would make an important contribution to the task of reducing the public sector debt.”

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Mary Creagh, shadow transport secretary, said: “Eurostar is a national strategic asset that is set to grow and to return increased profits to the UK taxpayer with new routes to Geneva, Lyon, Marseille and Amsterdam. After the staggering incompetence of the Royal Mail sale fiasco, which lost taxpayers a billion pounds, people will worry that this is yet another rushed and undervalued sell-off.

“City adviser UBS made millions from Royal Mail and is advising on the Eurostar sale. Lord Myners is still conducting his review into government privatisations after Royal Mail, and ministers should await his report before any sale begins.

“The National Audit Office should urgently conduct a value-for-money inquiry before this sale proceeds. We must ensure that taxpayers are not ripped off again by bungling ministers and poor financial advice from the City.”

Rail, Maritime and Transport union general secretary Mick Cash said: “This is a gross act of betrayal of the British people by a right wing government hell bent on selling off the family silver regardless of the real cost.

“This compounds the issue of foreign ownership of Britain’s railways as the French state have first refusal on our slice of the highly profitable Eurostar cake. The French and Belgians think we are insane knocking off such a valuable and strategic infrastructure asset.

“This sell- off is just a short sighted act of industrial vandalism based on a bankrupt pro-privatisation ideology. RMT will fight this tooth and nail.”

The French state train company SNCF owns 55% of Eurostar and Belgium’s SNCB holds 5%.

Mr Cash added: “With Eurostar a strong contender for the resale of the East Coast franchise we could easily end up within the next few years with the French state having complete control of rail services from Paris to Inverness.”