Channel Tunnel says UK investment ‘non-viable’ as it halts projects
Eurotunnel, the operator of the Channel Tunnel, has halted its projects in the UK, claiming “unsustainable” levels of taxation made future investments “useless”.
The company said it had been informed that business rates would increase by approximately 200% from next year.
He lashed out at the government, arguing that high costs were “clearly contrary” to its goal of growing the economy and increasing investment.
The Treasury said it would support firms “most affected” by tax increases and would continue discussions with affected sectors regarding such concerns.
The blast from the Eurotunnel comes ahead of next week’s Autumn Budget, when Chancellor Rachel Reeves will announce the government’s tax and spending plans.
The potential 200 per cent increase in Eurotunnel’s business rates is a result of new calculations by the Valuation Office Agency (VOA), which provides the government with valuation and property advice used in determining taxation and benefits.
A spokesman for Eurotunnel said such an increase in business rates, together with other taxes, could raise the total level of tax on earnings in the UK to around 75%.
VOA told the BBC that the agency “does not set job rates” and that “next year’s responsibility has not yet been confirmed”.
“This unprecedented and unsustainable level of taxation invalidates any future investment in the UK,” Channel Tunnel said.
“It is therefore impossible to develop new services, create jobs and pursue the requirements for the long-term development of our activities.”
The company claimed it “had no choice but to freeze our future investments in rail assets in the UK from 2026”.
The BBC asked Eurotunnel which investments it had frozen. The Financial Times reported that chief executive Yann Leriche told the newspaper he had abandoned plans to reopen a shipping terminal in Barking and run a new direct freight service from Lille.
The Channel Tunnel is an undersea tunnel connecting southern England and northern France. Nicknamed the “Chunnel”, it consists of three tunnels, two railway tunnels used for freight and passenger trains, and a service tunnel.
The connection between Folkestone and Calais is operated by Eurotunnel.
Eurostar, a separate company that is Eurotunnel’s largest customer, operates passenger services through the tunnel between London and several other European cities on the continent, including Paris, Brussels and Amsterdam.
A VOA spokesman told the BBC that it had met with Eurotunnel and its advisers “many times over the last eighteen months to discuss their valuations and fully explain our approach”.
“These discussions are ongoing and we are committed to continuing constructive engagement.”
The spokesman added that Eurotunnel could formally object to the valuation.
Ahead of the budget, Eurotunnel called on the government to “provide certainty on business rates”.
The firm was not alone in issuing warnings to the chancellor, as supermarket bosses claimed some of the government’s business rates reforms were causing problems for the sector.
Business rates; It is a tax imposed on non-residential properties such as shops, bars and offices.
Reeves is expected to confirm further details of the rates businesses will have to pay in the Budget, which will come into force in April 2026.
In response to Eurotunnel’s comments, the Treasury said it did not comment on “speculation about future changes to tax policy”.
He said that once he had a “full” understanding of the revaluation table, he would be in a position to “make final decisions” on support.
