17:00 - The House divided: - Ayes: 350 / Noes: 34 - Question accordingly agreed to.
Mrs Gillan
I thank the hon. Gentleman for that intervention. Of course, it echoed the words of Lord Mandelson, who really does know an awful lot about the genesis of this project. It certainly has that vampiric touch about it, as I think Members on both sides of the House can appreciate.
The Secretary of State for Transport (Mr Patrick McLoughlin)
If HS2 is going to suck the lifeblood of the northern cities, as the hon. Member for Huddersfield (Mr Sheerman) suggests, why are the leaders of those northern cities, such as Sir Richard Leese and Albert Bore, the loudest demanders of this service?
Mrs Gillan
Oh simple, simple question, Secretary of State! What leader of any council of any political colour or persuasion would turn down the millions and millions of pounds being thrown at their areas? It would be completely stupid of them to do anything other than support it.
Mrs Ellman
The Committee was very clear about the fact that this is about the future, and about long-term thinking. I strongly believe that while it is always essential to scrutinise spending, it is also essential to have vision. If we do not have vision, we do not have a future. I note that the aim of Lord Deighton’s taskforce is to maximise the economic benefit that can result from High Speed 2, but I am not sure whether that includes expanding connectivity and making the maximum use of freed lines, as well as more economic development issues. I ask the Minister to give us a response at the relevant time as to who, if anybody, is in charge of expanding connectivity and the opportunities offered by HS2 so the maximum economic benefit can be realised. HS2 is needed for capacity reasons, and it produces major economic development opportunities for most parts of the country, but they must be grasped, and unless somebody is in charge of making sure that happens, they will be squandered.
The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)
Of the amendments in this group, I was delighted to be able to add my name to amendment 17 tabled by the Labour Front-Bench team. That demonstrates the cross-party support and co-operation we will need to deliver this project, which is so vital to the future of our country. Indeed, when I offered to add my name, I was asked, “Would you like to go on first, Minister?” I said, “No, no; I wouldn’t want people to get the wrong idea.” Our intention has always been for this landmark project to be part of a truly connected and integrated transport system, and the amendment would ensure that any preparatory work needed to integrate HS2 with the rest of our transport infrastructure can be funded using the Bill’s expenditure powers.
Phases 1 and 2 of HS2 will directly link eight of Britain’s 10 largest cities, serving one in five of the UK population. HS2 will also connect to the existing rail network, so as soon as phase 1 is built, high-speed rail trains can start directly serving 28 cities in the UK.
I welcome the reference to “footpaths” and “cycleways” in amendment 17 tabled by the hon. Member for Wakefield (Mary Creagh), and I should point out that as part of the Government’s wider commitments to boosting cycling in the UK, in August 2013 the Prime Minister announced the commissioning of a feasibility study to explore how we might create a new cycleway that broadly follows the proposed HS2 corridor. Such routes would also be open to pedestrians—presumably this is a case of great minds thinking alike. The cycleway could provide cycling and walking routes for the public to enjoy, linking local communities and stations to the countryside and tourist destinations along the way, and benefiting those living along the HS2 route.
HS2 will be at the centre of an unprecedented level of investment in the nation’s transport infrastructure. From 2015-16 to 2020-21 the Government have committed £56 billion-worth of investment in road and rail, on top of the £16.5 billion investment in HS2. We are investing more than £6 billion in this Parliament and £12 billion in the next on road maintenance, enough to resurface 80% of the national road network and fill 19 million potholes each year.
Mrs Gillan
I am grateful to the Minister for confirming the billions of pounds the Department for Transport is going to spend over the next five or six years, but how does he respond to the National Audit Office, which has highlighted serious doubts over the ability and capacity of both the Department for Transport and its subsidiary company, HS2 Ltd, to deliver the project successfully? He is now claiming to have one of the largest infrastructure budgets of any Government Department, but the NAO does not think the Department is fit to run it.
Mr Goodwill
The Department has gained a lot of experience in managing big projects from projects such as Crossrail. Following the appointment of Sir David Higgins to head HS2 from January onwards I feel very confident indeed that we can deliver this project on budget and on time. Indeed, the budget is about £50 billion. Therefore, if rolling stock were excluded and nothing else was done with the Department’s budget, this project would be the equivalent of about 10 months of the Department’s total budget. That puts it into context.
We are adding 400 miles of capacity to our busiest motorways thanks to work scheduled in this Parliament and the next, and between 2014 and 2019 Network Rail has put forward plans to spend £37.5 billion on improvements to the railways. We are clearly not putting all our eggs in the HS2 basket, therefore—far from it, in fact.
HS2 will be integrated with the nation’s airports, with direct services to Manchester and Birmingham airports and a short connection to East Midlands airport from the east midlands hub station.
Mr Sheerman
What the Minister has just said is rather confusing, because the Howard Davies inquiry has not yet reported. We can get very lovey-dovey about HS2 in some regards, but there has been no love lost on the London airports question. When are we going to make up our minds about London airports, let alone the rail service to feed them?
Mr Goodwill
The timetable for the Davies commission report is well known, and there will be an interim report in December. Whether or not we put the spur in from HS2 down to Heathrow, in the plans we have published there is already a connection through Old Oak common; there will be an 11-minute connection to Heathrow via the Crossrail service with up to eight services an hour. So Heathrow will have a connection whether or not we embark on the spur.
Karen Lumley
Does my hon. Friend agree, however, that a 38-minute journey time makes it easy to get from London to Birmingham international airport, which means that people in north London would not need to go to Heathrow?
Mr Goodwill
Indeed, that will increase choice for people who have the unfortunate experience in life of having to live in the south-east of England. It will give them more opportunities to visit the north and use airports up and down the country.
We need to ensure that we maximise the cumulative benefit of individual investments by ensuring they are all properly connected. I have to say that amendments 18 and 19 in the name of my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) slightly confuse me. Amendment 19 seeks to limit expenditure to projects under phases 1 and 2 of the Bill, which finishes in Leeds and Manchester, but amendment 18 says that there should be more connectivity in Scotland. There is a degree of contradiction in those two amendments.
David Mowat
My hon. Friend has just said that phase 2 finishes in Manchester, which indeed it does as far as the business case and the benefits statement KPMG produced are concerned, yet under phase 2 we are building a 40 km spur north of Manchester. I wonder about the logic of that, since there is a £1 billion cost with no benefit. Is that an under-run that the Minister could book at this point?
Mr Goodwill
The trains do not stop at Manchester and Leeds; they keep going. In terms of the connectivity of this new system, it is important that we take traffic away from the existing rail network and allow more freight and passenger services so as to address the problem of the 5,000 people every weekday morning who are standing as they arrive at New Street in Birmingham. To address that problem we need to ensure we have the connectivity.
Limiting this legislation to a particular phase, or to particular phases, would simply mean that a further Bill would be required to be placed before Parliament to prepare for any potential future phase.
On Scotland, I would simply say that officials from the Scottish Government made clear during this Bill’s Committee stage that they are content with the Bill as it is, and see no need for the naming of any locations in Scotland. The critical point is that the network is defined as “at least” including the named locations in the Bill. Therefore, not including locations in Scotland will not be a barrier to high-speed rail extending there at some point in the future. The locations named are limited to those which have been named in public consultation documents issued by the Department.
Again I must stress that while some rolling stock will run exclusively on the high-speed network, so-called classic compatible gauge trains will run through to Glasgow and Edinburgh. These new trains are part of the £7.5 billion rolling stock investment in the project and their arrival in Scottish cities will demonstrate how HS2 will benefit Scotland at an early stage.
Mr MacNeil
Can the Minister confirm that once this rolling stock reaches Edinburgh it can go further north up to Aberdeen and cities in between?
Mr Goodwill
That will be for the railway companies to decide; it will be up to them to decide how best to utilise this stock. Obviously, the rolling stock will be rolled out as it is produced, but having trains arriving in Glasgow and Edinburgh at that early stage of the project will make a major contribution to helping to keep our kingdom united.
Lilian Greenwood (Nottingham South) (Lab)
I wish to begin by welcoming the Under-Secretary of State for Transport, the hon. Member for Scarborough and Whitby (Mr Goodwill) to his place. I know that he has a strong personal interest in transport issues. Although I am sure we will disagree on many issues, I am glad that we have been able to reach agreement on a number of today’s amendments, and I look forward to our future debates.
Amendment 17 has its origins in the Bill’s Committee stage. Members on both sides of the House contributed to its development, after my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) moved an amendment requiring integration with other modes of transport. The Minister at the time, the right hon. Member for Chelmsford (Mr Burns), who is in his place, said that he was minded to accept it. We want people to have a real choice about how to travel, be it by rail, by car, on a bicycle or by walking. We especially want to make sure that active travel is an attractive option, because it has many huge benefits, including for health and tackling congestion. We want that to be encouraged, so we welcomed the move to have better integration. We warned, however, that any amendment should pay regard to walking, cycling and light railways, so I am pleased that those concerns have been addressed by this sensibly worded addition to the Bill—of course I would say that, because it stands partly in my name.
Light rail will play an important role in linking stations in Birmingham, the east midlands and Sheffield to the high-speed network. The importance of making conventional rail accessible to pedestrians and cyclists is now recognised across the country; we have seen increasingly that railways stations have been adapted in that respect. It is right to enshrine that objective in the legislation for HS2. It is a real achievement that both cycling and walking will now be acknowledged in the Bill on the same basis as other modes of travel. We need to acknowledge that when people make a journey they regard it as starting when they close their front door. Making that whole journey as seamless as possible—not just the train bit, but how they get to the railway station and how they progress at the end—is vital. We therefore welcome the approach that has been taken.
Amendment 17 is a good example of a Bill being improved through parliamentary scrutiny. Integration between high-speed rail and the conventional rail network will benefit communities far beyond the areas directly served, and we want to make sure that HS2 is fully accessible to everyone, irrespective of their mode of travel. I am happy to commend the amendment to the House.
Lilian Greenwood
The whole point of the project is to provide extra capacity, including on the west coast main line. Obviously, the detail of what timetables will be in place needs to be worked out, but we would hope that they will be able to provide additional services to many cities, including my hon. Friend’s city, and we will call for that.
Mr Goodwill
There will certainly be very good news for people in Shrewsbury and Blackpool, where operators are keen to provide services but cannot currently do so because of congestion on the existing network.
Lilian Greenwood
The Minister rightly talks about the capacity constraints we already face on the west coast main line, and it is vital that everyone in the country is consulted on how the additional capacity is used when it is created by the high-speed line.
Lilian Greenwood
I am sure that many people who want to go to the north would not, for a minute, wish to get off at Milton Keynes. The fact is that there simply is not enough capacity. I am sure that people who live in Milton Keynes are looking forward to the extra capacity created by HS2 and the possibility of additional services, particularly for commuters, that that will free up on the west coast main line.
Let me now deal with the amendments relating to the links to Scotland. Labour has always supported the principle of bringing high-speed rail to Scotland, which is why the previous Labour Government set up HS2 Ltd to examine possible routes to Scotland. HS2 will bring real benefits, enabling faster journey times and adding to capacity on the main line routes to Scotland. We wanted to put those benefits in the Bill in Committee, but we were told by Transport Scotland that the Scottish Government opposed altering the Bill. It was therefore somewhat curious to see the Scottish National party tabling such amendments.
One purpose of the Bill is to provide a legal basis for future extensions of the high-speed network, providing that the economic case can be made for them. With the Government failing to keep the costs under control, we need to focus today on the HS2 network as planned. I would be interested to hear what work the Government are doing on the costs and benefits of extending the line. We have seen reports in the media that the Government are going to launch a feasibility study into extending the line to Scotland. I do not know whether the Minister would like to take this opportunity to intervene to confirm that and explain the timetable for the study.
Mr Goodwill
I always think it is a good idea not to try to run before we can walk; let us get to Birmingham and Manchester first. I am sure that we will be looking at extensions, but they are not at the top of my to-do list at the moment.
Lilian Greenwood
I thank the Minister for his response; clearly the media reports are wrong. It is ironic that the SNP should be proposing to take this line to Scotland, given that the one thing we can guarantee is that the SNP plans for separation would make the possibility of a high-speed line across the UK even less likely.
Mark Lazarowicz
Interestingly, in Scotland, it is not only those communities and councils that would directly benefit from the high-speed line that are in favour. Communities further north recognise that, although they might not get a direct benefit, it would still be beneficial overall to the Scottish economy. That is the kind of constructive approach that other communities not directly served by the line should note and use as the basis for their approach to the development of HS2.
One of my concerns was the possible temptation to extend the line as far as Birmingham and never any further north. I therefore welcome the commitment in the Bill to go further north in England and the possibility that the line will go even further than outlined in the HS2 documents. I will look for any commitment for high-speed rail to go beyond the current terminus points for HS2. I would also ask why we have to accept a 20-year programme for high-speed rail to go from London to York and somewhere near Wigan when other countries seem to manage to do it much faster than we do. I hope that that issue can be addressed in the preparations for the scheme over the next few months and years.
Mr Goodwill
I can confirm that our new Minister, Baroness Kramer, will be in Scotland tomorrow and we will no doubt hear more on that subject then.
Mark Lazarowicz
I am grateful for that update, which has been circulating over the last hour or so as the information has reached the public domain. I presume that Baroness Kramer will not announce that high-speed is coming to Scotland, but I am looking forward to some positive announcements tomorrow. There is an opportunity here for the Scottish Government—of whatever colour, as we are obviously talking about a long-term process—to work with the UK Government. It is recognised that it will be possible to do some work on high-speed rail in Scotland, perhaps to link Edinburgh and Glasgow but also to provide the basis for a route further south. Although we cannot immediately have a high-speed route all the way from Edinburgh and Glasgow to London, other sections of high-speed rail would certainly benefit the Scottish economy. Just as the business case for high-speed rail further south is strengthened by bringing into it business from Scotland, any high-speed rail in Scotland that would bring passengers into the GB-wide high-speed system would be beneficial for the rest of the country.
I understand why those communities that will not be served directly by the line, especially those that currently have a good rail service, will be concerned that they could lose out as a result of HS2 being constructed. The answer for those communities is to engage as actively as they can with central Government and neighbouring local authorities to try to ensure that they put the case to get the best benefits. It is also important that connectivity is examined, the point of the amendment tabled by my hon. Friends on the Opposition Front Bench.
It is important for the Government, and for Front Benchers of all colours, to use the opportunity of developing HS2 to rebuild the vision for rail in the country as a whole. HS2 is not just a question of trains running on the high-speed line and then going no further; they can serve other destinations in the way they will serve Edinburgh and Glasgow. On the continent, high-speed trains do not just run on high-speed lines; they serve other communities too. That is something we should aim for in Britain.
The case for high-speed developments beyond HS2 is powerful. I understand why a Government would not want to start putting down lines on a map to other parts of Britain, because that would set off scare stories about costs, but the points made by the right hon. Member for Chelmsford (Mr Burns) on possible development should not be lost or forgotten—the lines to Scotland and routes to the north-east of England in particular. There are clear capacity problems between Yorkshire and the north-east of England and they will need to be on the agenda at some stage.
I started my comments by referring to the amendments on Scotland. The amendments tabled by the right hon. Member for Chesham and Amersham (Mrs Gillan) and the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) are superfluous. The Scottish Government have accepted the Bill in its current form. The Scottish Parliament has passed the relevant Sewel motion endorsing the proposals in the Bill. I do not always agree with the current Scottish Government and Scottish Parliament, but on this occasion if it is good enough for them, it should be good enough for this House. I will not support the amendments, as they do not take the debate any further. We have good proposals that have achieved broad consensus across the House. I hope we can continue to proceed in that fashion.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
It is a great pleasure to see you in your place, Madam Deputy Speaker, and a great pleasure and honour to follow the right hon. Member for Blackburn (Mr Straw).
These amendments deal with expenditure, reporting and costs. The Government have set out in a strategic plan the spending plans for High Speed 2, which are £21.4 billion for phase 1 and £21.2 billion for phase 2 —a total cost of £42.6 billion, including £14.4 of contingency. I am convinced that, as the right hon. Gentleman pointed out, that is likely to decline as the date of construction nears. HS2 Ltd has set out a target cost for phase one of £17.16 billion.
The original purpose of the reporting duty on the Government was to give Parliament an opportunity to scrutinise the manner in which we were spending the preparatory expenditure and to get a sense of how we were making progress on the project. Amendment 25 is very much in the spirit of that objective. I am happy to provide the commitment that the Government will ensure that the reporting duty makes information on underspends and overspends explicit.
Managing costs is at the heart of how the Government intend to manage this project.
Stephen Hammond
If I were to do that, as my right hon. Friend the Member for Chelmsford (Mr Burns) has pointed out, I would be making a commitment of £50 billion on the preparatory expenditure. I do not intend that we spend anything like £50 billion on that. As my right hon. Friend said in response to my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan), this Bill is about the preparatory expenditure.
Mr Simon Burns
There seems to be utter confusion about this. The cost of the project is £42.6 billion, with £7.1 billion for the rolling stock, but the Bill is about the preparatory work. It is preposterous to grant, in legislation, the Government of the day £50 billion to spend on preparatory work.
Stephen Hammond
I thank my right hon. Friend for that intervention. He is absolutely correct in his understanding; of course he would be, as he has so skilfully managed the Bill so far.
Stephen Hammond
I am going to make some progress because I think that my hon. Friend is going to refer to amendment 20. If he waits for a moment I will deal with that.
We have always made it clear that HS2 will provide a significant opportunity for vocational skills across the lifetime of the project, giving a real boost to British industry. This Government are committed to raising skill levels and creating an environment for small and medium-sized enterprises to succeed. Amendment 26 would place an obligation on the Government to report on their progress in delivering those opportunities and to demonstrate what we mean when we say that HS2 is an engine for growth. I have always been convinced, as have many Members across the House, that we will be able to do that. HS2 is a generational scheme, and as such we need to make sure we have the right home-grown talent that allows us to deliver it. I am delighted that there is cross-party support for amendments 25 and 26, and I hope that the whole House will be able to support them.
Mr Chope
Will my hon. Friend turn his mind to amendment 30, which seeks to limit the amount of expenditure on preparatory works to £5 billion—a pretty substantial sum, but obviously not as large as £50 billion? Will the Government undertake not to spend more than £5 billion on preparatory works?
Stephen Hammond
I might be prepared to consider that. However, my hon. Friend needs to be absolutely clear that this is about the preparatory works on phases 1 and 2 as opposed to preparatory works for the whole scheme were it to go further and create a network. His amendment does not cover that, and that is why it is unnecessary.
Mr Simon Burns
As I understand it, this Bill relates not only to phases 1 and 2 of current high-speed rail projects, but to phases 3, 4, 5, 6 and 7 of such projects at any time in the next 40 to 60 years. How could the Government of today restrict the amount of money available without knowing the value of money in 40 years’ time?
Stephen Hammond
My right hon. Friend is completely correct. This Bill is about the preparatory expenditure. It is also about not only phases 1 and 2, but the whole network as it may be conceived in the future. It would, therefore, be completely erroneous to restrict ourselves to a limit on preparatory costs, because we do not know the future extent of any network. That is also why I agreed with my right hon. Friend a moment ago that amendment 20 is unnecessary.
I know that the intention of my right hon. Friend the Member for Chesham and Amersham was to put a limit on expenditure and I understand why she wanted to do that, but the amendment does not explicitly address preparatory expenditure, which is what this Bill is about. I note that she said it was a probing amendment.
Mrs Gillan
The Minister knows exactly what my intention was with my amendments. I will not press any of them to a vote, but what is worrying about the Bill is that it is not restricted in any way, shape or form. It is totally open-ended, as my right hon. Friend the Member for Chelmsford (Mr Burns) has just admitted, and this House has no control or say over what moneys will be spent on the preparation, and on the HS2 project itself. That is what I object to and that is where I think the Government have failed.
Stephen Hammond
It is rare that I disagree with my right hon. Friend, but in this case I do. What this Bill does is explicitly place reporting obligations on the Government for the preparatory work. Moreover, it is the hybrid Bill, which my right hon. Friend has mentioned, that will provide the opportunity to scrutinise all stages and costs.
We have created the reporting duty precisely to ensure that Parliament can scrutinise the expenditure and see that we are spending it responsibly. Planned expenditure on design works for the financial year 2013-14 is about £2.5 million, and for 2014-15 it is about £9.2 million.
There are a number of other amendments in this group and I know that other Members want to get in. I sympathise with the spirit of amendment 8, but it does not clarify the exact level that most people recognise as the number of people employed by small and medium-sized enterprises. Moreover, it would restrict a small or medium-sized enterprise that had fewer employees, but that hoped to secure a high-value contract that would result in many UK jobs. The amendment goes beyond the direct nature of the contract.
Stephen Hammond
On amendment 31 and the transparency of the project, I do not believe it is necessary to produce six-monthly reports of spending estimates in addition to the annual reports to which we have already committed. Given what my right hon. Friend the Member for Chesham and Amersham has said, I am sure my hon. Friend the Member for Christchurch (Mr Chope) would not want us to waste money or create bureaucracy just to produce six-monthly reports. Such a requirement would be onerous on the Government.
Stephen Hammond
The Government accept that we need to come to the House to explain our actions and report on our preparatory expenditure. As has been discussed extensively this afternoon, the initial target cost for phase 1 is £17.16 billion.
My right hon. Friend the Member for Chesham and Amersham has tabled amendments on the monitoring of tax avoidance and the payment of bonuses to those who work on High Speed 2. We must manage the costs, but we must balance that with ensuring that the staff reward arrangements attract the right talent. We need to ensure that those who work in the public sector demonstrate the highest standards of integrity and meet their tax obligations.
Following the review of the tax arrangements of public sector appointees last year by the Chief Secretary to the Treasury, all Departments and agencies have a duty to seek assurances about the tax arrangements of their long-term specialists and contractors to ensure that they are paying the right amount of tax. The Government are committed to tackling all forms of tax avoidance and have taken a wide range of measures to close tax loopholes.
It is essential that we guard against the payment of bonuses that are not in line with the Government’s goal of reducing the public sector remuneration package. However, we must ensure that we have the right reward structure in place. We must not put provisions in legislation that would tie the hands of the whole supply chain. I am happy to confirm to my right hon. Friend the Member for Chesham and Amersham that Sir David Higgins will move to High Speed 2 on the same salary that he received at Network Rail and that he has guaranteed that he will not accept any bonuses. I hope that that satisfies her.
I hope that the House will support amendments 25 and 26.
Lilian Greenwood
I am pleased to speak in support of amendment 25, which represents a significant strengthening of the financial reporting requirements in clause 2.
Taxpayers need to know that the costs are being controlled. Under this Government, the budget for HS2 has swelled from £773 million to at least £900 million in this Parliament. The botched design for Euston pushed the cost of that station from £1.2 billion to £1.6 billion, even though some of the features of the design were downgraded. The Government announced in June that, with a sizeable increase in contingency funding, the headline budget for the project had increased by £10 billion to £50.1 billion.
Mr McLoughlin
I beg to move, That the Bill be now read the Third time.
Let me begin by thanking all Members who served on the Public Bill Committee. In particular I thank my right hon. Friend the Member for Chelmsford (Mr Burns), not only for his work on the Bill, but also for the hard work that he put into the Department for Transport during his time there. It was a great pleasure to work with him.
For a project as important as this, everyone should have their say—indeed, it sometimes feels as if they do. At the same time, however, we need to move the debate forward, which is what the Bill does. This is the point at which the debate starts moving from “if “ to “when”. The House has already voted overwhelmingly in favour of the principle of a new high-speed, high-capacity rail network. I hope it will do so again this evening because the decisions we take today will benefit our country for decades to come.
Just this week, with the storms that hit the south and east, we have seen how crucial our railways are to national life. When trains are crowded and disrupted, life for hard-working people gets more difficult. That is why the new north-south line is not some expensive luxury.
Mr McLoughlin
I will, but I do so reluctantly because of the number of hon. Members who want to take part in Third Reading.
Mr Cash
I understand why the Secretary of State is reluctant to give way. Throughout the whole of this land, people are deeply disturbed by the manner in which the Bill is being rammed through. Furthermore, as he well knows, the arrangements he has described as benefits are not accepted by my constituents and many other people, nor by the many reports emanating from the Public Accounts Committee and others that demonstrate that HS2 is not a straightforward benefit, and is in fact quite the opposite.
Mr McLoughlin
I know my hon. Friend is not in favour of the new line—he loses no time in telling me that. I dare say that similar comments were made in debates on railways in the House over the centuries. The truth is that the line will be the first line built north of London in 120 years. I understand the concerns of hon. Members whose constituencies the line goes through. I do not dismiss them and have never done so. I want to ensure that we have a fair compensation scheme in place. I believe that the scheme is, without any doubt, right for the future of the UK.
I find it rather ridiculous that I can go from London to Paris on a high-speed train, and that my hon. Friend can go from London to Brussels on a high-speed train—I know he keeps a close eye on what goes on there—but we cannot go from London to Birmingham, Manchester or Leeds on a high-speed train. The time has come for a steep uplift in our transport system.
I should tell my hon. Friend that there is still a long way to go. We must take the hybrid Bill through the Commons. There will be plenty of opportunities to debate it in detail. As the right hon. Member for Blackburn (Mr Straw) said, HS2 will be debated in far more detail than roads that now go through various constituencies when they probably caused greater environmental damage.
Mr McLoughlin
I do not want to take too long because I know many hon. Members want to speak. I will give way—for the last time—to my hon. Friend.
Andrew Bridgen
I thank my right hon. Friend for giving way. It is true that this is a high-speed debate. Does he agree that an hour is completely insufficient parliamentary time for a Third Reading debate on the largest infrastructure project the country has ever seen?
Mr McLoughlin
My hon. Friend has taken part in the Third Reading of many Bills—they have always been hour-long debates. In fact, it is only recently that we have had debates on Third Reading. Back in the days when the right hon. Member for Blackburn was Leader of the House, we sometimes did not have debates on Third Reading because we simply did not have the time. The Government are trying to help everybody we can—[Interruption.] I do not want to get any more partisan now that I have the right hon. Gentleman on side.
The Bill is about helping communities and businesses, and helping the cities of the north and the midlands to compete on equal terms with London. Nobody begrudges the money we are spending on Crossrail or Thameslink. They are huge investments in our capital city, but it is time we looked at what is happening in the rest of the country.
Three important words—room for growth—sum up why the project is so important. They are at the core of the strategic case we published on Tuesday. The responses to the report show the crucial message of growth. The British Chambers of Commerce states:
“This report bolsters the economic case for HS2…HS2 is the only scheme that can transform capacity on Britain’s overstretched railways.”
The CBI has thrown its considerable weight behind the project. It did so because the new line is part of the answer to the infrastructure deficit that faces our country. The leaders of our great cities back HS2. Sir Richard Leese, leader of Manchester city council, has said:
“It’s straightforward and simple. We need more capacity and the only way is through this new network.”
Since 2008, the country has learned some tough lessons, but we must make ourselves more resilient and competitive as an economy. That will not happen if we do not take the long-term decisions on investment and stick to them. Our society is changing, our population is growing, people are travelling more, and demand for inter-city rail travel has doubled in the past 15 years and will continue to increase.
As I have said all along, I welcome suggestions for creating more capacity, but the so-called alternative suggestions from the critics simply do not add up. We have looked at the case for building new motorways and dramatically expanding domestic aviation. Neither does the job. Some people believe we can carry on squeezing more room out of our current railways, patching up our problems. The work we published this week shows that, if we tried to create the capacity we needed by upgrading the three current main north-south lines, we would face 14 years of weekend closures. That is not an alternative to the new line, it is disruption on a nightmare scale.
We are already investing record sums in the existing railway. Network Rail will spend £38.3 billion in its next five-year control period, and the Government have a £73 billion budget for wider transport investment over the next Parliament. Despite all that, we will still need new rail capacity. If one accepts that—and that we need room to grow—there is no choice about how to provide it. As the strategic case makes clear, a new high-speed north-south line is not just the right way, it is the only way.
The new north-south line will be the backbone of Britain. It will have 18 trains an hour, each carrying up to 1,100 passengers, transforming the available space on inter-city lines. As long-distance services transfer to the new line, capacity will be released on the existing network. Of course, not every city across Britain will benefit in the same way, but Network Rail estimates that more than 100 cities and towns could benefit from released capacity. It would mean significantly more commuter services, better connectivity and more routes for rail freight, taking lorries off our most congested roads.
We know that HS2 is the best answer to our transport problems, but as with any large infrastructure scheme, we also know we will face opposition. I respect the fact that some people are concerned about the impact on the places they live, and I respect those with serious proposals for improvements. Already, the environmental impact of the new line has been vastly reduced thanks to such improvements. But I also respect what Sir John Armitt said in his recent report on infrastructure—that big schemes need “broad political consensus” as well as “resolution” from political leaders.
HS2 must be a national project with support across the parties, or in the end it will be nothing. Labour leaders in our great cities across the north and the midlands know that HS2 is right. To those who say that there is no blank cheque, I say that there never has been and there never will be. I know that hon. Members want costs controlled. Here are the facts. The target price for the first phase is £17.16 billion. That is the price for construction agreed with HS2 Ltd. For the whole Y-route, the agreed budget is £42.6 billion, including a contingency of £14.4 billion, which we are determined to bear down on. Sir David Higgins—the man who built the Olympics on time and on budget—will make sure that happens. As the new chairman of HS2, he will bring his penetrating eye and expertise to the task to get the best value for our country.
As the strategic case published this week shows, our updated benefit-cost ratio has fallen slightly from 2.5 to 2.3. We have been open about that, but it means that the business case for the new north-south line is still strong, with more than £2 returned for every £1 invested—about the same as Crossrail and Thameslink, and nobody seems to doubt those projects. In fact, the ratio for HS2 could increase to 4.5 if rail demand continues to rise until 2049.
It is still important to recognise that the benefit-cost ratio cannot take account of unpredictable factors. That was true of the Jubilee line extension in London, for instance, which did not include the 100,000 jobs it now supports at Canary Wharf. It was true for High Speed 1, which did not include benefits from redevelopment at King’s Cross and St Pancras. When I first became a Member of Parliament, King’s Cross and St Pancras were places where people did not want to spend any time if they could possibly get away with it. They would try to turn up just before their train was due to leave. Those stations are now destinations in their own right. People go there and look with amazement at what has happened to the UK’s railway system.
Frank Dobson
I represent not just St Pancras, but Euston and King’s Cross. Does the Secretary of State accept that virtually all the people in my constituency who are now opposed to HS2 were strongly in favour—indeed, the first advocates—of the transformation of St Pancras and the improvements at King’s Cross?
Mr McLoughlin
Of course I do. I am more than happy to meet the right hon. Gentleman to discuss the particular issue of Euston station, because the redevelopment will bring specific problems. But we must also ensure that we get the very best deal for his constituents in the redevelopment of Euston station. I am meeting the leader of Camden council next week, although I do not know if the right hon. Gentleman will be there. I do not discount the concerns of local residents about the work on major infrastructure projects, and we have to take them into account.
Jonathan Edwards
Last week it was disclosed that the Treasury had made a mistake and awarded Barnett consequentials to Wales in the 2015-16 spending round. Subsequently, the Treasury said it would claw the money back in the next spending review and that it did not set a precedent. Will the Secretary of State confirm that there will not be a clawback, that the precedent has now been set and that Wales will have the consequentials? Unless he does so, we will vote against him on Third Reading.
Mr McLoughlin
It would be a brave Secretary of State who started second-guessing the Treasury, and I will not do that now. I understand the hon. Gentleman’s representations and will bear them in mind.
I will briefly explain the next steps. We intend to submit the hybrid Bill before Christmas. In February, the growth taskforce reports. I know the challenges ahead, but also the opportunities. We are not here to patch up our railway once again, only to spend far more later when it turns out that we should have invested properly at the start. It will take determination to strengthen our country. I urge this House to support the Bill. It is our chance to get ahead and to invest in our long-term prosperity.