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Eurostar seeking financial aid


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Written by JAYNE ADYE

Jayne Adye is the Director of cross-party, grassroots Eurosceptic campaign Get Britain Out

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The COVID-19 crisis has exposed a fundamental flaw within the European Union – it is one rule for Germany and another for everyone else.

Data which has been released over the past week has now shown nearly 50% of all State Aid approved by the EU was for Germany. The United Kingdom on the other hand received a lowly 3.9% of all State Aid. These are facts which expose the simple detail: we cannot continue to allow the EU to govern the level of State support we in the UK give to British businesses. If we concede to EU demands for a ‘Level Playing Field’ on State Aid we will end up being trapped under the thumb of Brussels, unable to compete fairly with massively subsidised German businesses..

 

To demonstrate the current influence of Germany: in the past month huge amounts of subsidies – totalling nearly £10 billion – have been given to the German airline Lufthansa and vast Corporation Tax breaks have been given out by the German Government, with the rubber-stamped green light from Brussels after minimal scrutiny. Alongside German giants receiving massive subsidies, the EU has just given the green light to a €5 billion rescue package to the French manufacturer Renault – despite the French State already owning 15% of the company. In what way is this a ‘Level Playing Field’?

 

 

I have to raise the issue of State Aid and Eurostar, State Aid and the Level Playing Field was a stumbling block in the path to the Brexit Agreement,  it is quite hypocritical that while  the UK economy is  chained  and shackled to  a level playing field,  a French  State owned   company comes knocking on the door of 11 Downing Street seeking  free State Aid

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33 minutes ago, Ron Ron Ron said:

 

A fair point Phil, but (playing devil's advocate for a moment) if it was the other way around, with Eurostar being 60, 80 or 100% UK owned, do you think the French government would be prepared to help bale them out?

 

 

 

I think it would depend greatly on how much of an impact the demise would have things like French employment etc or their strategic interest to be honest.

 

One thing that is impossible to deny is that French companies, many of which the French state has a large shareholding in have been very active in buying up companies in other EU states but using said shareholding to try and prevent others doing the same in France itself.

 

I note the only reason the Newhaven - Dieppe ferry still runs is the French state subsidises it on the basis that its demise would adversely affect the employment and economy of the Dieppe region which stands in stark contrast to the UK Governments approach that state assistance for international travel is not acceptable and job losses or a lack of local economic activity should be sacrificed for pure free market principles.

 

But to return to your question, the French are known as a world leader in high speed rail and equally are not afraid of trying to build up influence in companies they perceive as being important to France. They did after all buy out the UK interests in Eurostar some years ago to further this aim. Also the French trade unions are not afraid of causing trouble if it looks like there will be job losses or cutbacks so if the situation was reversed and a British company owned 55% of Eurostar I think the French might well be persuaded to help in some form - particularly given the wider climate change considerations that will still be around long after the Pandemic has faded will still favour rail over air travel or the private car.

 

 

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2 hours ago, phil-b259 said:

 

No its not!

 

The UK Government has an obligation under climate change accords to push environmentally friendly travel methods and a global pandemic DOES NOTHING to change that obligation.

 

 

We are under no obligation to subsidise Eurostar its a TOC, as for meeting our climate change obligations,  its a great pity many of the larger industrialized countries do as much as up. Look at both China and India. !!!  Eurostar will survive in one format or another. If they want further state aid they should offer something in return. We are supporting our own rail transport infrastructure, which is far more important 

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24 minutes ago, Pandora said:

Written by JAYNE ADYE

Jayne Adye is the Director of cross-party, grassroots Eurosceptic campaign Get Britain Out

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I have to raise the issue of State Aid and Eurostar, State Aid and the Level Playing Field was a stumbling block in the path to the Brexit Agreement,  it is quite hypocritical that while  the UK economy is  chained  and shackled to  a level playing field,  a French  State owned   company comes knocking on the door of 11 Downing Street seeking  free State Aid

 

Eurostar is only officially a 'French state owned company' because the UK Government sold its stake to them for a quick buck!

 

One thing people need to bear in mind is that many EU governments still have significant shareholdings in private companies and thus contribute as private shareholders do rather than dolling out grants.

 

Are such shareholder investments accounted for in the same way as Governments dolling out cash?

 

Are the UKs rules on state aid the same? - the discrepancy might well be because the UK and its obsession with the free market means all Government involvement in companies counts as 'state aid' where as in Germany 'state aid may only be counted that way if it comes in the form of grants.

 

Its one things that the Brexiters continually fail to recognise - the main reason that the UK seems to do so badly is due to our own mismanagement! Gold plating EU rules by our domestic law makers and regulators in Whitehall was a PROVEN self inflicted problem and nothing to do with the EU while the French and Germans were very good at procrastination or re-wording directives to minimise their effect if they got in the way of national priorities including state aid!

 

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4 minutes ago, hayfield said:

 

 

We are under no obligation to subsidise Eurostar its a TOC, as for meeting our climate change obligations,  its a great pity many of the larger industrialized countries do as much as up. Look at both China and India. !!!  Eurostar will survive in one format or another. If they want further state aid they should offer something in return. We are supporting our own rail transport infrastructure, which is far more important 

 

Sorry, you are still talking from a monetary point of view.

 

Get your head out of the sand and consider the wider future of our planet including the generations to come. Climate change does not stop 12 miles from the UKs shores so stop acting like it does.

 

The UK has an obligation to ensure the Eurostar train service continues and is supported for many decades to come. That obviously doesn't mean writing a blank cheque, but it does confer a moral obligation to not let the service be sacrificed because a bunch of politicians want to play politics with it. There are many options out there for further assisatnce - including the UK Government taking a stake in the operation (just as they did with banks) for example as the price of extra funding and thus showing a commitment to not only Eurostar, but the whole concept of international train travel as opposed to polluting aircraft trips.

 

 

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4 minutes ago, phil-b259 said:

 

Sorry, you are still talking from a monetary point of view.

 

Get your head out of the sand and consider the wider future of our planet including the generations to come. Climate change does not stop 12 miles from the UKs shores so stop acting like it does.

 

The UK has an obligation to ensure the Eurostar train service continues and is supported for many decades to come. That obviously doesn't mean writing a blank cheque, but it does confer a moral obligation to not let the service be sacrificed because a bunch of politicians want to play politics with it. There are many options out there for further assisatnce - including the UK Government taking a stake in the operation (just as they did with banks) for example as the price of extra funding and thus showing a commitment to not only Eurostar, but the whole concept of international train travel as opposed to polluting aircraft trips.

 

 

 

Why don't you first read what people actually wright. Of course we need a train service to the continent, in fact we are badly served by Eurostar, its a joke as when I want to go to either the south of France or Italy we have to change stations in Paris, as there are no interconnected services. But Eurostar is a TOC, if it goes bust another TOC will step in to give us a service, wjhich infact may even be better.

 

Global warming has nothing to do with it. There is no way we should be propping up a European state's nationalised companies. THe French, Belgians and Dutch have deep pockets they should use them. Also where is this great EU which is supposed to be so beneficial, let them support it !!!  

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It can be no surprise that Eurostar is on its knees and has lost 99% of its business.  In these troubled times overseas travel is discouraged to put it mildly.  History may yet show that if something had been done earlier to curtail inward air travel there would have been many fewer Covid cases in the UK.

 

I am no fan of flying, or of airports come to that.  What can you see from an aircraft?  Oh look, there's a cloud.  I would far rather look out of a train window and see France whizzing by at 186 mph!  I wonder whether Eurostar could ever be allowed to behave like a railway company rather than an airline, given suitable amendments to legislation?  Perhaps their marketing experts could focus on the services that already go beyond Paris and Brussels and/or somehow persuade the hesitant traveller that changing stations in Paris really isn't that difficult.  Gare du Nord is 15 minutes' walk from Gare de l'Est but 35 minutes by taxi, while Gare du Nord is either two stops on the RER from Gare de Lyon or one of the hairiest taxi rides on the planet.  Sadly one of my favourite travel companies now avoids Paris at all costs.  Isn't there an element of adventure in travel?  With or without aid from one or more governments, I do hope that Eurostar will recover once we are allowed to go places again.

 

Chris

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40 minutes ago, hayfield said:

 

Why don't you first read what people actually wright. Of course we need a train service to the continent, in fact we are badly served by Eurostar, its a joke as when I want to go to either the south of France or Italy we have to change stations in Paris, as there are no interconnected services. But Eurostar is a TOC, if it goes bust another TOC will step in to give us a service, wjhich infact may even be better.

 

Global warming has nothing to do with it. There is no way we should be propping up a European state's nationalised companies. THe French, Belgians and Dutch have deep pockets they should use them. Also where is this great EU which is supposed to be so beneficial, let them support it !!!  

 

Your last paragraph is very telling. Its clear you are unable to see past your political views, or grasp that the interests of the planet do not always align with business ownership. Moreover your rant about the EU does not stand up to scrutiny - Eurostar operates between the UK and the EU so the UK is most definitely an interested party in this (unlike say the Talys service between France, Belgium and the Netherlands which is obviously an internal EU matter).

 

I repeat who owns Eurostar is irrelevant. The train service it provides an important service to the UK and one which is vital to our planets future. On that basis there is an obligation on the UK Government to make sure it survives regardless of who owns it.

 

Moreover there is a fundamental issue of fairness. If (and I accept its an if) Eurostar are correct and airports / airlines (99% of which are owned by foreign cooperation lest you forget) have been given extra support over and above the Furlough scheme and Eurostar is being denied the same extra funding then it stinks.

 

Air travel is by far the most polluting form of transport and a global pandemic is no excuse to start pandering to the most polluting form of transport yet ignore the needs of one of the cleanest.

 

As I pointed out earlier it was the choice of the UK government to flog its stake off for a quick buck many years ago, otherwise we would actually still have part ownership of the enterprise too! That decision to sell it off does nothing to remove the underlying UK responsibility to keep the service running for the purposes of fighting climate change.

 

Its a mistake many right wing politicians and those on who support them fail to appreciate. Just as passing the 'risk' on to private rail companies through franchising has been shown to not work in the face of changes to travel patterns (note the demise of GNER, NXEC and the way SWR + Northern were in trouble well before the pandemic hit), so it is that abandoning something to the 'freedom of the market' does nothing to absolve the Government from being responsible for their actions if they conflict with Government policies and international agreements.

 

THAT is the nub of the issue here. Exactly what forms of extra support might be the best way forward, or indeed exactly how much is a separate discussion and I have been careful to make it clear the 'blank cheque' approach is not appropriate, however the principle that the train service should not stop completely and also those running it be in a position to rapidly expand as soon as travel restrictions allow remains sound. Consequently while Mr Shapps is right to not act rashly in rushing to provide extra support - he should be doing more than turning round and gloating that "its a French problem"

 

 

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3 hours ago, Pandora said:

Written by JAYNE ADYE

Jayne Adye is the Director of cross-party, grassroots Eurosceptic campaign Get Britain Out

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I have to raise the issue of State Aid and Eurostar, State Aid and the Level Playing Field was a stumbling block in the path to the Brexit Agreement,  it is quite hypocritical that while  the UK economy is  chained  and shackled to  a level playing field,  a French  State owned   company comes knocking on the door of 11 Downing Street seeking  free State Aid

I rather suspect anything written or quoted by that rather unpleasant and bigoted organization (Get Britian Out) can be safely dismissed as complete "testicles".

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1 hour ago, phil-b259 said:

 

Your last paragraph is very telling. Its clear you are unable to see past your political views, or grasp that the interests of the planet do not always align with business ownership. Moreover your rant about the EU does not stand up to scrutiny - Eurostar operates between the UK and the EU so the UK is most definitely an interested party in this (unlike say the Talys service between France, Belgium and the Netherlands which is obviously an internal EU matter).

 

I repeat who owns Eurostar is irrelevant. The train service it provides an important service to the UK and one which is vital to our planets future. On that basis there is an obligation on the UK Government to make sure it survives regardless of who owns it.

 

Moreover there is a fundamental issue of fairness. If (and I accept its an if) Eurostar are correct and airports / airlines (99% of which are owned by foreign cooperation lest you forget) have been given extra support over and above the Furlough scheme and Eurostar is being denied the same extra funding then it stinks.

 

Air travel is by far the most polluting form of transport and a global pandemic is no excuse to start pandering to the most polluting form of transport yet ignore the needs of one of the cleanest.

 

As I pointed out earlier it was the choice of the UK government to flog its stake off for a quick buck many years ago, otherwise we would actually still have part ownership of the enterprise too! That decision to sell it off does nothing to remove the underlying UK responsibility to keep the service running for the purposes of fighting climate change.

 

Its a mistake many right wing politicians and those on who support them fail to appreciate. Just as passing the 'risk' on to private rail companies through franchising has been shown to not work in the face of changes to travel patterns (note the demise of GNER, NXEC and the way SWR + Northern were in trouble well before the pandemic hit), so it is that abandoning something to the 'freedom of the market' does nothing to absolve the Government from being responsible for their actions if they conflict with Government policies and international agreements.

 

THAT is the nub of the issue here. Exactly what forms of extra support might be the best way forward, or indeed exactly how much is a separate discussion and I have been careful to make it clear the 'blank cheque' approach is not appropriate, however the principle that the train service should not stop completely and also those running it be in a position to rapidly expand as soon as travel restrictions allow remains sound. Consequently while Mr Shapps is right to not act rashly in rushing to provide extra support - he should be doing more than turning round and gloating that "its a French problem"

 

 

 

Again

 

Read my replies, The service is important, who runs it is irrelevant. You are the one showing a political bias, mine is based on finance and ownership. Why does the state need to own/run the franchise ? Its decided not to !!!

 

Eurostar as a company which we do not own, and have no responsibility for it. Like other TOC's when they go bust (like some have ) the government can take back temporary ownership to ensure the service until such time that other arrangements can be found.  Its a foreign government owned company and its the owners responsibility to ensure its survival .

 

At least you have stopped banging on about global warming which is a totally different subject.  The operating of the railways was privatised years ago, due to the pandemic arrangements have been made to ensure an adequate service is maintained for internal franchises. Hardly standing back and gloating.

 

According to the Bank of England the recovery this year looks very promising, its our governments duty is to get GB PLC up and sprinting. If the TOC collapses the UK should ensure trains run, but not to prop up another countries state aided railway company

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When Eurostar folds next  April, it will be the breaking up of an established  monopoly train service between London and France.

While operating as a monopoly, Eurostar has enjoyed a healthy 10% profit margin, breaking the monopoly and introducing competition by splitting the principle assets of rolling stock over two  or more independent operators may see savings to travellers by  lowering of fares together with the cost reductions by improved  efficiency within each business of  competing operators

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9 minutes ago, Pandora said:

When Eurostar folds next  April, it will be the breaking up of an established  monopoly train service between London and France.

While operating as a monopoly, Eurostar has enjoyed a healthy 10% profit margin, breaking the monopoly and introducing competition by splitting the principle assets of rolling stock over two  or more independent operators may see savings to travellers by  lowering of fares together with the cost reductions by improved  efficiency within each business of  competing operators

Pray tell me what is "healthy" about that.

I know the supermarkets work on a far lower return but such low profit levels are unsustainable in the long term and can only lead to stagnation and lack of investment.

Or, as my old boss would say "Don't be busy fools".

Bernard

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36 minutes ago, Siberian Snooper said:

When I was looking to buy a retail business in the 90's the accountant told me not to touch anything with less than 30% profit margin.

 

 

 

 

Its a lot more complicated than this, first there is a vast difference between gross and net profit, then there is turnover

 

I believe supermarkets work on a 35% gross profit, but they quote a net profit of 5%, but the turnover is massive

 

Luxury goods have an exceedingly high gross profit but very low sales

 

A business needs profits to survive, its actually how many £'s that counts not profit margins  

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It's a curious idea that Eurostar has no competitors; there are the ferries (either carrying people in their own cars, or on coaches) and the airlines, with a high degree of switching between modes depending on convenience, price and availability. I would suggest that there is probably not a large enough market to support two rail operators.

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46 minutes ago, Fat Controller said:

It's a curious idea that Eurostar has no competitors; there are the ferries (either carrying people in their own cars, or on coaches) and the airlines, with a high degree of switching between modes depending on convenience, price and availability. I would suggest that there is probably not a large enough market to support two rail operators.

Never mind Eurotunnel

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1 hour ago, Fat Controller said:

It's a curious idea that Eurostar has no competitors; there are the ferries (either carrying people in their own cars, or on coaches) and the airlines, with a high degree of switching between modes depending on convenience, price and availability. I would suggest that there is probably not a large enough market to support two rail operators.

 

If I want to travel by train from London to Europe unless I wish to break the journey by taking a train to a ferry port there are no alternatives. Given the amount of options available there are very limited services to Europe, but is there enough capacity with the tunnel to add additional services? Is Garde du Nord the best French termini for onward journey, given the hassle of transferring to other lines for southern destinations  

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1 hour ago, Fat Controller said:

It's a curious idea that Eurostar has no competitors; there are the ferries (either carrying people in their own cars, or on coaches) and the airlines, with a high degree of switching between modes depending on convenience, price and availability. I would suggest that there is probably not a large enough market to support two rail operators.

 

I think that DB came to the same conclusion.

 

Chris

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2 minutes ago, hayfield said:

 

If I want to travel by train from London to Europe unless I wish to break the journey by taking a train to a ferry port there are no alternatives. Given the amount of options available there are very limited services to Europe, but is there enough capacity with the tunnel to add additional services? Is Garde du Nord the best French termini for onward journey, given the hassle of transferring to other lines for southern destinations  

I suspect that most non-enthusiasts simply use the means that most suit their particular destination. If going to Paris, then E* or 'plane, if skiing, then E* or drive, if elsewhere in Europe, probably drive. 

GdN is probably not the ideal option, but it is the only station with platforms long enough, and which can be segregated for border controls. Any other existing station would have access/ capacity problems.

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Just now, Fat Controller said:

I suspect that most non-enthusiasts simply use the means that most suit their particular destination. If going to Paris, then E* or 'plane, if skiing, then E* or drive, if elsewhere in Europe, probably drive. 

GdN is probably not the ideal option, but it is the only station with platforms long enough, and which can be segregated for border controls. Any other existing station would have access/ capacity problems.

 

We changed stations years ago for a more modern termini and an easy way north

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1 minute ago, hayfield said:

 

We changed stations years ago for a more modern termini and an easy way north

It was a happy accident that St Pancras was woefully underutilised; since LGV Est has started using Gare d'Est, the last major 'spare' station in Paris has gone. Gare du Lyon now uses Bercy for additional space, and similar solutions have been used elsewhere.

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On 23/01/2021 at 13:20, caradoc said:

 

Let's not forget that, in the absence of through services, there was for a while a direct HST between Edinburgh and Waterloo, to connect with Eurostar. It didn't last very long, because not many people used it

 

Yes, I remember working that service (Newcastle / Finsbury Park / return)

There was generally more staff than passengers on it!

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3 hours ago, Fat Controller said:

It was a happy accident that St Pancras was woefully underutilised; since LGV Est has started using Gare d'Est, the last major 'spare' station in Paris has gone. Gare du Lyon now uses Bercy for additional space, and similar solutions have been used elsewhere.

 

Clearly after the tunnel there is a route south which the Ski train uses, I would imagine if there was an interchange between the tunnel and Paris travelers could easily change trains for their favoured destinations or add a few more trains which  go in the Lyon direction and have a second terminus 

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