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Stewart Hosie (in the Chair)
Before I call the right hon. Member for South Northamptonshire (Andrea Leadsom) to move her motion, eight Members have notified me that they intend to speak, and I suspect many more may wish to intervene. We only have an hour. I do not want to limit the key points that anyone wishes to make, but if we can have a little brevity, it would be greatly appreciated.
Andrea Leadsom (South Northamptonshire) (Con)
I beg to move,
That this House has considered the business case for High Speed 2.
It is a pleasure to serve under your chairmanship, Mr Hosie, in my first debate as a Back Bencher in more than five years. I am delighted to have this opportunity to discuss one of the biggest concerns for many of my constituents, and to outline why I believe that the business case for High Speed 2 must be urgently reviewed by the Government.
I first became aware of HS2 when it was proposed in 2009 by the then Labour Government. Investment in infrastructure, creating jobs and growth, improving travel times between our major cities, and closing the north-south divide were all put forward as reasons in favour of the UK’s second high-speed train line. However, those supposed benefits unravelled one by one, and it quickly became apparent that HS2 is not the right infrastructure project, will not improve point-to-point travel times, and will not close the north-south divide. It will create jobs, yes, but at an eye-wateringly expensive rate, far beyond what we might expect from a similar project.
Those of us who expressed concerns about HS2 even while it was still in consultation were dismissed by others as nimbys and told that we were flat wrong about the wider benefits that HS2 would bring to the north. I was then and continue to be willing to be proved wrong, but with the delay to the notice to proceed, growing concerns about the project’s spiralling costs, ongoing engineering and design difficulties and, even now, the rumours that the line past Birmingham might never be built, it is high time for the project to be thoroughly reviewed to ensure that it will actually deliver for taxpayers.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
It is a pleasure to hear the right hon. Lady speaking in a debate, rather than her listening to me asking for one. Does she recall the number of times that I have said in the Chamber of the House of Commons that HS2 will cost much more? Every time I said it, £10 billion more, and going past that. Now, it is accepted that it will cost £100 billion. Does she agree with that figure?
Andrea Leadsom
The hon. Gentleman has raised the issue a number of times, and it is true to say that many think the costs will overrun. I will come back to that.
For me, both as a concerned constituency MP and as someone with 25 years of experience in finance, including project finance, I am alarmed at just how much the business case for HS2 has changed since the project was initially proposed. The business case that HS2 relies on now bears little resemblance to what Parliament was told at the start of the process—if I cast my mind back to when I first became an MP in 2010—nor to what we voted on when the enabling legislation was passed, which I voted against, or when the subsequent main legislation was enacted.
First, we were told that HS2 was about reducing journey times and improving the economy by bringing businesses and workers from the south to the north to spread economic prosperity around the country. Then we were told it was about capacity constraints on the west coast main line, and managing the continual growth in annual passenger numbers. Both arguments no longer stack up.
On improved journey times and associated productivity gains, the underlying assumption built into the business case for HS2 was that any time spent travelling for business purposes was wasted time, and that business travellers undertake no productive work while travelling. In the 21st century, technological advances such as mobile devices and improved wireless internet connections clearly mean that work and leisure activities are increasingly mobile, and increasingly affordable and accessible for rail passengers. Such advances are expected to continue.
Graham Stringer (Blackley and Broughton) (Lab)
I have great respect for the right hon. Lady, but she is fundamentally wrong on this issue, although she is right to criticise the way in which the Department for Transport uses travel times. In the assessment of all transport infrastructure, the Department fails to take into account the economic investment that always follows investment in transport. The case is the opposite of what she is saying: it underestimates the benefits from HS2.
Andrea Leadsom
The hon. Gentleman makes my point for me: the business case needs to be reassessed with accurate underlying factors taken into account. It is the case that the more productivity on trains increases, in particular as faster fifth generation—5G—mobile internet is rolled out across the country, the less valuable the journey time savings are, and therefore the smaller the estimated benefits of HS2 become on those measures.
Maggie Throup (Erewash) (Con)
My right hon. Friend is talking about journey times, and I completely agree with her that this is not about journey times. She also mentioned capacity, and it is about that, but it is also about one more thing—connectivity. We have not had a new railway line north of London for 150 years. Surely now is the time to improve our infrastructure and to make our trains and lives fit for the 21st century.
Andrea Leadsom
My hon. Friend is absolutely right—we certainly need to invest in our rail infrastructure—but my question is whether HS2 is the right piece of infrastructure.
The argument for the business case around journey times and productivity quickly collapsed, and HS2 Ltd turned to arguing for capacity instead. That capacity argument has been questioned almost since it was first made, and most recently by the Lords Economic Affairs Committee in its report of May this year, “Rethinking High Speed 2”.
The original business case for HS2 was put forward at a time of strong and continued growth in passenger numbers in the preceding years, and the expectation was always that this growth would continue unabated. That is not the case. I made that point in 2011, when I led an HS2 debate on the Floor of the House. As I said then, HS2’s forecasts were “heroic” when compared with Network Rail’s numbers over the same period. According to the Commons Library, across the entire rail network, annual passenger growth peaked in 2011 at about 8%, and growth has been on a downward trend since then. Passenger growth between London and the west midlands has now fallen to 2% growth per annum, against a decadal average of 6%.
It is true to say that the west coast main line is the busiest mixed-use rail corridor in Europe, with 15 fast trains coming into Euston in most peak hours of the week and little to no availability in that period for additional train paths. However, capacity on the trains themselves is a different matter. As anyone who travels at rush hour between Euston and Milton Keynes—as I do frequently—will know that there is always high capacity pressure on any of the trains during that peak period: about 95% of all available seats on morning peak arrivals into Euston are occupied, with many trains cramped and uncomfortable. Again according to the House of Commons Library, across the entire day only about 60% of all available seats into Euston are in use. For the other major cities on the line of route—Birmingham, Leeds, Liverpool, Manchester and Sheffield—across the entire day, all of those stations operate at less than half their passenger capacity in terms of seat availability.
Mr Sheerman
As the right hon. Lady knows, I am a very experienced traveller between Wakefield and London, and know the routes well. May I ask her to pay attention to my hon. Friend the Member for Blackley and Broughton (Graham Stringer), from Manchester, because he is wrong? All the research in France and other places shows that having super-speed or high-speed trains sucks power away from the regions. What has happened in France? More power to Paris, and less to the provincial cities.
Andrea Leadsom
I fear that I am very much aware of what the hon. Gentleman says, and I agree with him.
Clearly, therefore, much of the capacity constraint on the west coast main line is spatially and temporally specific, being focused on the peak rush hours, and only in Euston and Birmingham. The biggest issue is crowding on individual trains at those times, rather than crowding throughout the day.
Laura Smith (Crewe and Nantwich) (Lab)
Does the right hon. Lady agree that HS2 will free up the main line so that freight will be able to operate more freely, which will help with congestion on our roads and be far more beneficial to the environment?
Andrea Leadsom
The hon. Lady is right that building a train line frees up capacity for freight lines and all sorts of other things; the question is the business case for this particular project. The question must be asked: is it worth spending £55.7 billion of public money, as allocated by the Department for Transport, to alleviate crowding issues in the morning and evening peaks? The main alternative considered by the Government, known as the strategic alternative, could have achieved the same result at a much lower cost, through a combination of infrastructure and rolling stock upgrades, at a cost of around £4.9 billion in 2011 prices. Additional capacity and more fast-line services could be delivered via Euston to relieve the specific pressure points during the peak-hour rushes, rather than building a whole new line that would create unneeded capacity throughout the day.
The Lords Economic Affairs Committee report concluded that the Government have
“yet to make a convincing case for proceeding with the project”
and it has
“not seen convincing evidence that the nature of the capacity problem warrants building HS2.”
Mr Ivan Lewis (Bury South) (Ind)
On the point about finance, is the right hon. Lady aware that HS2 has entered into an astonishing 270 or more non-disclosure agreements with third parties? Does she agree that the Government should make public the number of non-disclosure agreements, settled agreements, compromise agreements and any other arrangements that include non-disclosure provisions with former staff members?
Does the right hon Lady share my concern that funding from an unauthorised redundancy payment scheme operated by HS2 was used to fund some or all settlement or compromise agreements with former senior staff? In some cases, those staff were regarded as having made serious protected disclosures about their concerns over HS2’s financial statements. Transparency is essential in the funding of this project. Does the right hon. Lady agree?
Andrea Leadsom
The hon. Gentleman mentioned that to me yesterday, and I am gravely concerned. As all right hon. and hon. Members will know, I am extremely unhappy at the prospect of non-disclosure agreements preventing whistleblowers from coming forward with information that is vital to the public interest or their own personal interest. People should not be gagged under any circumstances.
Andrew Bridgen (North West Leicestershire) (Con)
I congratulate my right hon. Friend on securing this debate on a topic we have discussed many times. I voted against HS2 at every opportunity in the House of Commons. In 2013, I predicted that it would cost in excess of £100 billion. The then Secretary of State laughed, and I think he was quite right to—it is clear that the project will be far in excess of £100 billion.
Does my right hon. Friend recall the report by Sir John Armitt in August 2018? His committee stated that, given that hubs are no longer in the centre of cities but on the outskirts, an extra £43 billion of infrastructure spending would be required to make use of the current hub sites that have been chosen. That has not been programmed into the budget at all.
Andrea Leadsom
My hon. Friend makes an important point about the lack of point-to-point movement in HS2. Passengers do not end up at the Bullring in Birmingham, or in the west end of London; they just end up somewhere on the outskirts wondering how on earth they will get to where they want to.
The business case for HS2 is seemingly not based on improved journey or improving capacity on journeys between the cities along the line of route. That was alarmingly confirmed by the chief executive of HS2 Ltd, Mark Thurston, in November last year, when he appeared before the all-party parliamentary rail group. At that meeting, Mr Thurston remarked that to remain on time and on budget, HS2 Ltd was considering fundamental changes to the project, including, but not limited to, reductions in the speed that HS2 trains will operate at and reductions in the total number of trains per hour.
With fewer and slower trains, it is hard to understand how the business case can be maintained, given the growing lack of incentive for passengers to choose to take a more expensive HS2 train over a classic service. I have asked HS2 Ltd to confirm whether it is modelling the impact of such changes, but so far I have been unable to obtain a definitive response.
As the former chairman of HS2 Ltd, Sir Terry Morgan, said when he appeared before the Economic Affairs Committee on the 22 January, nobody, not even he as a former chairman of the project, can say with any certainty what the final cost of HS2 will be. That cost has gone up and up over the years. In February 2011, we were told that HS2 would cost £37.5 billion. By January 2012, that figure had crept up to £40.8 billion. In June 2013, we were told the total cost had risen to £50.1 billion. Today, based on the funding envelope set out in November 2015 —not an estimate of the cost but rather the money available from DFT for the project—we are told that HS2 will cost the British taxpayer £55.7 billion. That is £55.7 billion for a single train line.
We have not actually seen a comprehensive breakdown of the costs for the full Y network of HS2 since 2013, although the National Audit Office has more recently said that, at the time of the 2015 spending review, the full cost should have been estimated at £65 billion. HS2’s land and property budget alone is expected to be five times greater than originally forecast, but that is of no help whatsoever to my constituents. I have had cases in South Northamptonshire where family farms have been cut in half, people have been forced to sell their businesses at a vastly undervalued rate and one constituent has been forced out of the family home that she had lived in for many years through a lifetime tenancy under the Agricultural Holdings Act 1986. There are countless examples where I have had to intervene time and again on behalf of my constituents, due to the insensitive behaviour and slow engagement of HS2.
Maggie Throup
I, too, have had some very sad cases, where HS2 Ltd is not doing itself any favours. Considering the overall spend, the quibbling is over very small amounts. If it got that bit right, it might get more people on its side to make sure it delivered the project, which my constituents welcome, as long as they are looked after. If part of the line is cancelled, those properties will be blighted for ever.
Andrea Leadsom
I certainly agree that HS2 needs to do much more to protect those who have been affected through no fault of their own. There has been real hardship. There are countless examples in my constituency and I am aware of many in other constituencies.
As hon. Members have set out, concerns have been raised by industry experts and former whistleblowers from the company that the total cost for HS2 may very well be in excess of £100 billion. In contrast, DFT has separately announced investment of £48 billion in our railways over a five-year period through to 2024, comprising major infrastructure upgrades across the country and newer, faster, more comfortable trains to improve the passenger experience. I totally applaud the DFT for that decision—it is the right sort of investment and will improve our railways in all parts of our United Kingdom, sharing the benefits among all rail users.
We should consider HS2 in the context of alternative uses for the money for infrastructure investment. I was delighted when my hon. Friends the Members for Banbury (Victoria Prentis), Eddisbury (Antoinette Sandbach) and North Warwickshire (Craig Tracey) advised me they would contribute to today’s debate. I pay tribute to my right hon. Friend the Member for Chesham and Amersham (Dame Cheryl Gillan) for all the excellent work she continues to do to raise concerns about this project.
I am a passionate advocate for better infrastructure. There is no doubt that properly targeted infrastructure investment can massively improve productivity and enable growth and economic opportunity equally for all parts of our United Kingdom, including in the north and the regions, but getting the best bang for our buck has to be at the heart of all that we do. With the benefit-cost ratio for HS2 declining to 1.4 in October 2013 and remaining unchanged in the intervening period, it is vital that we make sure that we are investing in the right infrastructure projects. The Government’s own guidance on value-for-money assessments has said that a benefit-cost ratio of 1.4 for phase one would represent a low value-for-money project.
What can we do? My hon. Friend the Member for North West Leicestershire (Andrew Bridgen) has spearheaded a whole host of alternative transport project proposals with the TaxPayers Alliance—he will expand on that later. I am pleased that the hon. Member for Luton North (Kelvin Hopkins) is here to set out his own ideas about better value-for-money projects. We have to think creatively about our transport infrastructure and be brave enough to scrutinise the value for money of any project if we think it might not deliver the benefit it promises. We have to hold HS2 Ltd to account to ensure that it is open and transparent in all that it does.
In conclusion, I ask the Minister in her response to commit to a full review of the business case for HS2, before the notice to proceed is granted later this year, and to make a clear and open statement on the Floor of the House on whether this project truly does represent good value for taxpayers’ money.
Kelvin Hopkins (Luton North) (Ind)
It is a pleasure to serve under your chairmanship, Mr Hosie. I congratulate the right hon. Member for South Northamptonshire (Andrea Leadsom) on securing this important debate, and on her excellent speech, with which I strongly agree.
I state categorically that I believe passionately in our railways; I have been a daily commuter for 50 years and I have always believed in their future. I continue to support strong investment in our railways, but not in HS2. The alleged business case for HS2 has two essential components: cost and need. The costs have been ballooning, dwarfing the claims of £50 billion by multiples. Even the rumoured likely costs now are way below what an eventual bill would be. With more time, I could give some explanations as to why, but I wish to focus on the supposed need and the likely passenger demand for HS2.
The business case is based on a frequency of 18 trains an hour leaving and reaching London. HS2 has grudgingly agreed that a figure of perhaps 16 trains an hour in off-peak periods might be appropriate. The trains would be some 400 metres long, probably with 16 carriages; they would be rather similar to Eurostar trains, which are 20 cars long, and capable of seating 80 passengers per carriage. That is well over 1,000 passenger seats on each train. With 18 trains an hour over the day, that would mean in excess of 200,000 passenger seats going to and from London. That is a significant proportion of the total population of Birmingham; it is complete nonsense. In any case, 18 trains an hour is just not possible. At a meeting of the Select Committee on Transport in 2011, SNCF witnesses from France with some knowledge of high-speed TGVs were astonished at the 18 trains an hour figure, saying it was impossible, and that 12 trains an hour was the absolute maximum.
HS2 has been in a mess and a panic for some time about costs. It asked if it would be possible to terminate trains at Old Oak Common and avoid the horrendously expensive costs of tunnelling through to Euston. The idea would be to transfer passengers to Crossrail at Old Oak Common. That would be impractical because of the vast numbers involved. Up to 20,000 extra passengers on Crossrail every hour is not a serious proposition. All this is just not credible. If HS2 goes ahead, we will surely see expensive trains on a very expensive track rattling around the country with very few passengers on them.
I want to end on a positive note. There are some serious and much-needed alternatives to HS2, and I have written a paper setting out some of them. I submitted my paper, prepared with the advice of a range of friends in the railway industry, to the House of Lords Economic Affairs Committee for its inquiry into HS2. I also submitted it to the recent Great British transport competition, supported by the TaxPayers Alliance, and was pleased that one of my proposals was selected as one of the winning schemes.
Most significantly, there is the GB freight route, with which I am involved and to which the right hon. Member for South Northamptonshire referred. This would be a freight priority line from the channel tunnel to Glasgow, built to a large-loading gauge and almost entirely on railway land, capable of accommodating full-sized lorry trailers on the trains. It would take some millions of lorry journeys off our roads every year, with immense benefits. It would link all the majority economic regions of Britain to each other, and to the continent of Europe, and Asia beyond.
There are several serious rail schemes that should be adopted and, if HS2 does not go ahead, all the schemes paused and abandoned by Government in recent times could simply be readopted. Electrifying the whole rail network, with massive improvements to railways in the north in particular, where rail has been disgracefully neglected, could and should go ahead. These schemes could provide many thousands of jobs very quickly, with track work ready to go. This would be money well spent in every sense.
We should reflect on the sensible Eddington report, which recommended rail investment in and around our major cities and conurbations, where real passenger need is most concentrated.
Mr Sheerman
Does the hon. Gentleman not realise—I think he does—that those of us in the north of England just want reliable and reasonably speedy connections between the towns of the north, and would love this sort of investment, sooner rather than later?
Kelvin Hopkins
I agree with the hon. Gentleman; absolutely. Even within the northern region there are some dreadful train services. There are old charabancs on rail tracks that are a disgrace and should have been replaced, and the lines have not been electrified. They should have been.
Laura Smith
It is key to note that for Northern Powerhouse Rail to happen, we have to have the HS2 infrastructure in place.
Kelvin Hopkins
I think I have made my point. I am running out of time, Mr Hosie. I could go into much more detail, but on this occasion perhaps I should conclude here. I think the case against HS2 is overwhelming. I look forward to a sensible Government abandoning it and reinvesting in all the other schemes that are so much more beneficial and needed.
Several hon. Members rose—
Stewart Hosie (in the Chair)
Order. I intend to start the summings-up at around 10 past, so the time for each speaker is obvious, if all three want to speak.
Antoinette Sandbach (Eddisbury) (Con)
It is a pleasure to follow the hon. Member for Luton North (Kelvin Hopkins). I am grateful to my right hon. Friend the Member for South Northamptonshire (Andrea Leadsom) for securing this important debate.
The HS2 business case is clearly deeply flawed, as my right hon. Friend pointed out. When I was first elected, I was in two minds about HS2. I could see the damage it was doing to my constituency, but I thought it might be a worthwhile project for the country, if its administrators were savvy enough to resolve some local issues. Four years on, my view has shifted. The continuing and unceasing lack of care, interest or attention that HS2 pays to my constituents and my community have destroyed any faith that it can deliver the benefits that it promised.
Each individual failure is compounded to create an image of an organisation riven by incompetence and unable to deliver the project. For example, take-up of the need-to-sell scheme for phase 2b continues to be extremely low. The number of new applications has not exceeded double figures in the last nine months. Of applications placed before the panel, only a third have been accepted, whereas half the need-to-sell applications made in phases 1 and 2a were. The process remains time-consuming, and involves frequent requests for additional information and documentation. In spite of revisions, the guidance is still insufficiently detailed to enable applicants to understand fully what information and evidence is required for a successful application.
Further confusion has arisen in respect of the atypical or special circumstances route, which is intended to supplement the discretionary property schemes and provide a safety net where the specific requirements of existing schemes cannot be met. Departmental officials taking part in local public engagement events have been advising applicants that they should be applying under the atypical special circumstances scheme because of their particular situation, but applicants are then informed by HS2 that it is not available to them, as they are eligible to apply under one of the discretionary schemes.
Applicants understandably expect the advice that they are given by officials during public engagement events to be accurate and correct. The fact that that does not appear to be the case causes further unnecessary anxiety and frustration for applicants, as well as reinforcing the sense of distrust in HS2. It gives the impression that the right hand does not know what the left hand is doing.
Andrew Bridgen
Does my hon. Friend agree that HS2 appeared to be trying to create the perception that the project was beyond the point of no return—that we cannot stop it because so much money has been spent? Does she also agree that in business, the first loss is the best loss, and we are throwing good money after bad on this project?
Antoinette Sandbach
I certainly do. I remember stating the figure of £100 billion on television, only to be told that it was ridiculous. Now it looks like a certainty, rather than the ridiculous proposal that others claimed it was.
Issues continue even once applications under the property scheme are accepted. My constituents repeatedly tell me about the unco-operative and, at times, obstructive approach of surveyors acting on behalf of HS2. The surveyors’ repeated failures to acknowledge email correspondence, lengthy delays in responding to correspondence—even after numerous chase-ups and the involvement of members of HS2’s property team—and delays in arranging meetings are not only unacceptable but undermine my faith that HS2 can be delivered on its already inflated budget.
There is considerable concern, particularly for applications under the statutory blight scheme, that property valuations are based on the opinion of a single Royal Institution of Chartered Surveyors surveyor, who is not local and is paid for by HS2, fostering a sense that the valuer is not impartial; in contrast, the need-to-sell scheme has an average of three property valuations. There have been repeated concerns that properties are being undervalued. HS2’s surveyors cite the additional compensation provided under the scheme, the suggestion being that the undervaluation is offset by the additional compensation, rather than there being recognition that the compensation is for the upheaval caused by moving property, and is not related to the value.
I know that the Minister has tried to mitigate some of these issues in the past, but time goes on and nothing changes, despite the Minister’s efforts; ministerial orders are ignored and overruled by HS2, which has come out with legions of excuses. If it cannot deliver for my constituents, how can it deliver for the country? My faith in this scheme is fundamentally undermined, as is my faith in the business case.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
It is an honour to serve under your chairmanship, Mr Hosie. I congratulate the right hon. Member for South Northamptonshire (Andrea Leadsom) on securing the debate and on giving the House a chance to confront a couple of important choices. She is right to say that nettles need to be grasped and bullets bitten, but I think she has chosen the wrong nettles and bullets, and I will explain why in the next few minutes.
As is traditional now, the argument against HS2 is couched in terms of value for money. In any value-for-money calculation, the money is easy to calculate, but the value is much harder to put your finger on. There were arguments in a previous debate about the Treasury Green Book, which is not a wide-ranging analysis. If we measure what we treasure, we will clearly see that HS2 is one of the best value-for-money projects that this country has contemplated for many years.
Craig Tracey (North Warwickshire) (Con)
Will the right hon. Gentleman give way?
Liam Byrne
I will in a moment.
Coming from Birmingham, what I treasure above all is jobs. We have had the slowest jobs recovery since the financial crisis of any city region, and HS2 will bring lots and lots of jobs, not at some distant point in the future but over the next five years. It will bring something like 33,000 jobs around Curzon Street and 77,000 jobs around Birmingham Interchange, in addition to the 30,000 jobs that will be created on the line at peak. This is the most important fiscal stimulus outside London and the south-east. Indeed, if we were to cancel HS2, I would bet my bottom dollar that we would put the midlands back into recession within a year.
Sir Patrick McLoughlin (Derbyshire Dales) (Con)
Will the right hon. Gentleman, with his local knowledge, describe what is happening around Curzon Street now, and what has happened around Curzon Street for the last 20 years?
Liam Byrne
The former Secretary of State is right to make that point, because a number of significant businesses are now relocating to what is the worst unemployment hotspot in the country; the worst unemployment and youth unemployment in the country is in and around east Birmingham. We have a chance ahead of us to wipe out that youth unemployment, but only if we grasp the nettle and drive through HS2.
Graham Stringer
My right hon. Friend makes a brilliant case. If anything, he underestimates the result. When the Transport Committee went to France to look at the impact of the TGV, it found that the go-ahead cities that used the high-speed lines got huge extra investment that had not been calculated in the original assessment. Birmingham, Manchester and Leeds are all go-ahead cities, so I expect more jobs than my right hon. Friend says.
Liam Byrne
Precisely. If we measure what we treasure, and if we treasure jobs, HS2 is, frankly, a project that we need.
However, that is not all I treasure; I also treasure tangible action to decarbonise our economy and our region. I want the west midlands to lead the first zero carbon revolution. Back in 1712, when the Newcomen engine was demonstrated up at Dudley castle, we sparked the carbon revolution the first time around. We need a radical plan that allows us to move trucks off the road and on to rail. Only with the capacity that comes with HS2 can we reopen 36 new freight lines that can take a million lorries off the road each year. We cannot de-clog the M6, the M5 or the M42 unless we get that freight off the road. It is impossible to see how we can drive forward the decarbonisation of a sector that contributes 40% of our carbon emissions each year if we do not drive ahead with HS2.
Luke Graham (Ochil and South Perthshire) (Con)
I share the right hon. Gentleman’s aspirations, but for Scotland. To meet the UK-wide net zero carbon targets we have set for 2050, we need to make sure that these new rail lines work for the entire country. Does he agree that we need to review HS2, not only on its business case, but on making sure that it works for the entire United Kingdom and connects the powerhouses in the midlands with the true northern powerhouse, which is of course Scotland?
Liam Byrne
I am all for that, so long as it does not introduce a moment of delay in driving this forward. Frankly, our economy cannot have any further delay.
I treasure a project that puts the west midlands at the centre of this economy. I particularly treasure the speed, which will result in a journey time of something like 65 minutes from Birmingham International to Canary Wharf, the most important business site in the country, via the connection at Old Oak Common.
The right hon. Member for South Northamptonshire advanced the traditional bang-for-buck argument, which is that if we got rid of HS2, there would be plenty of bucks left for other kinds of projects. I have to say that that is not fiscal realpolitik at all. The fiscal realpolitik will mean that money currently earmarked for HS2 will be quickly absorbed into other projects, and Opposition Members will be forgiven for worrying that it will disappear into the £10 billion-a-year tax cut proposed by the right hon. Member for Uxbridge and South Ruislip (Boris Johnson).
The right hon. Member for South Northamptonshire was right to demand choices, but the choices that she proposes are wrong. The real strategic transport choice that this country must confront is not between HS2 and other rail network lines, but between planes and trains. We should drive ahead with HS2 and cancel the ludicrous decision to build a third runway at Heathrow airport for £14 billion. We could use half that money to build a high-speed loop and take passengers from Heathrow to Birmingham, where there is already untapped capacity for 17 million passenger movements a year.
Around the world, a trillion-dollar high-speed rail revolution is under way, and we are being left behind. It is time that this country got on with it.
Stewart Hosie (in the Chair)
I call Victoria Prentis. Please be brief. Then I will call the Front-Bench spokespeople.
Victoria Prentis (Banbury) (Con)
With that in mind, Mr Hosie, I endorse wholeheartedly everything said by the first three speakers, and particularly my right hon. Friend the Member for South Northamptonshire (Andrea Leadsom), who truly eviscerated the business case for HS2. I politely disagree with the right hon. Member for Birmingham, Hodge Hill (Liam Byrne). I do not feel that £100 billion is worth some jobs in Birmingham; there may be ways to assist with employment in Birmingham other than by spending £100 billion of taxpayers’ money. [Interruption.] I do not have time to go through all his arguments in detail, but I look forward to talking to him firmly about it later.
I will make two brief points. The first is romantic, which I make no apology for. We love our area. It is fair to say that some objections to HS2 are a form of—
Victoria Prentis
No, I will carry on, if I may; I have no time.
I reject the nimbyism argument. We are building far more houses in my constituency than in the right hon. Member for Birmingham, Hodge Hill’s, finishing three a day at the moment. We embraced the Oxford-Birmingham canal in the 1790s, we embraced the M40 30 years ago and we broadly welcome east-west rail in our area. We are not against large national infrastructure projects, but we object to large national infrastructure projects with no real benefit, for us or for the nation as a whole. We feel that strongly.
As a former civil servant, the rational argument, as opposed to the romantic one, is that the process to set up HS2 causes me real pain and worry. Frankly, the Committee corridor deals done at the time of the Select Committee stink. They set neighbour against neighbour on purpose, and it was not a pleasant experience to watch. There has been a continual lack of engagement and transparency from HS2. I have a list of questions to which I have repeatedly demanded answers, and it shows no sign of taking me seriously or engaging with me. My right hon. Friend the Member for Chesham and Amersham (Dame Cheryl Gillan) had a very interesting wake-up call when she made a freedom of information request to find out what it felt about her personally. I have not yet grown a thick enough skin to make a freedom of information request about my name and HS2, and I know that my right hon. Friend the Member for South Northamptonshire has not, either.
It is disgusting that taxpayers’ money is being spent on an organisation that behaves this badly. In short, HS2 is a white elephant that is trampling over the dreams and aspirations of my constituents and I cannot support it.
Ronnie Cowan (Inverclyde) (SNP)
I will be very brief —unlike HS2, I plan to run to a timetable. The project could, should and would have worked had it been run properly. Instead, we have burned through £10 billion of taxpayers’ money, including some £600 million for consultants—£600 million for consultants, but not one mile of track laid. If the UK Government want to see how to run an infrastructure project, they should look no further than the SNP Government and our investment of more than £8 billion in Scotland’s railways, including the border railway, the longest new domestic railway to be built in Britain in more than 100 years, on time and on budget. Thank you and goodnight.
Rachael Maskell (York Central) (Lab/Co-op)
What can I say after that contribution, other than that it is a pleasure to serve under you in the Chair, Mr Hosie? I also thank the right hon. Member for South Northamptonshire (Andrea Leadsom) for bringing forward today’s debate in a very candid way.
It is absolutely right that this House scrutinises HS2. I have listened carefully to the debate, and it is absolutely clear that the objection is rooted not so much in the actual scheme as in the governance of it, and I, too, have put question marks over the governance and management of it. Some of that sits fairly and squarely with the Secretary of State and the fact that he is not doing his job of calling HS2 to account. Therefore, it will be absolutely right that, on Monday, hon. Members from across the House support my amendment calling for greater scrutiny of the project. I very much hope that they will join me in the Lobby.
I take issue with the fact that a number of non-disclosure agreements have been issued. We want there to be real transparency. That is about calling management to account for the way they are handling the employment situation in their organisation. It is absolutely right that those questions are asked of HS2 and that it is brought to account for that.
I want now to set out Labour’s position on the whole project. Connectivity and reliability must be at the heart of our railway system. There have been problems, and we need to make improvements. We are determined to do that through our enhancement programme. HS2 should not be segregated; it needs to be integrated into our rail enhancement work, and that is certainly what we want to do. We want to see more capacity built across our railways.
Our driving force is, first and foremost, to decarbonise our transport system. Currently, 29% of emissions come from our transport system, and we are in fact seeing regression on carbon reduction, not least with the deeply ecologically and environmentally damaging road building programme—road investment strategy 2—that the Government propose. We want to see good public transport investment, and certainly that is what people will get under a Labour Government.
We want to drive modal shift. It is so important to have people moving from their cars on to our rail network—we see that as comprising the main arteries of our transport system. But crucially, as my hon. Friend the Member for Crewe and Nantwich (Laura Smith) said, we need lorries coming off the roads and freight moving on to rail. HS2 provides an opportunity to ensure that we have the good connectivity—
Rachael Maskell
I am afraid I do not have time.
There is an opportunity to have good connectivity between ports and airports and to ensure that we can bring that right through to urban consolidation centres and then to the final mile. We need to seriously decarbonise our transport system using rail.
We want skills to be at the heart of this opportunity as we build the rail network for the future, and that brings me to one of the questions I have for the Minister today. In the light of Hinkley point being behind schedule and of the number of infrastructure projects the Government have planned, we have a bell curve whereby we have a peak in demand for skills but not the skills to match that. How will she ensure that there are sufficient skills for this project, particularly given that, at its peak, it will provide jobs for 30,000 people? We need to ensure that the project is not delayed because of poor infrastructure planning across the economy.
I agree with my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne), who made a most excellent speech, about ensuring that we measure what we treasure. This is about jobs. Certainly on the Labour Benches, we believe that it is important that we invest in high-quality jobs for those areas of the country that have been missed out to date. Therefore, inward investment in the northern towns and cities, and in the midlands—east and west—will be vital to rebirthing our economy in those areas. At the moment, they are in a lot of pain because we have not seen that investment.
We have a real opportunity, but it has to be managed properly. Building capacity across our transport system is really important. We need sustained freight paths. Part of this will also be about seeing growth in patronage and ensuring that we reduce journey times. We need to lead that right into Scotland to ensure that we can see that modal shift from plane on to train. That is the larger vision of where we are going. But we would also do things differently; we make no bones about that. For instance, with parkway stations, it does not make sense that people have to drive to get the connectivity with the rail network. We would very much want to seek urban connection points; we believe that the situation needs to be reviewed.
The final phase of the project—the 2b stage—has to be fully integrated with trans-Pennine connectivity. This should be one project, not two segregated projects; it needs integrating. We hear that call from Transport for the North, and we hear it now from HS2, and we certainly hear the call from politicians across the north that it is time we brought those projects together into one. There are proposals for constructing things differently from the current Y shape and for making this much more about ensuring, first and foremost, that we get the connectivity across the north. The case was made very clearly in the House of Lords through the paper “Rethinking High Speed 2”, and we would certainly support that.
With regard to the way we proceed on this project, we believe that the missing piece, which is crucial, is that the project is not peer-reviewed. It must be peer-reviewed independently to ensure, first, that the engineering is right and, secondly, that the value is right. That is where the lack of accountability sits. Once we have that information before the House, we can make a sound judgment on whether the project will deliver the value, the jobs and the opportunity for conurbations across this country. Until that occurs, we will put a serious question mark over the governance and over this Government’s handling of the project. We believe that it could be in a different place. Certainly on the issue of cost—the cost financially, but also the cost to the environment—we need to ensure that all these measures are properly brought into check as we move forward in improving scrutiny.
On Monday, we have an opportunity to review phase 2a in relation to the Bill. Labour will bring forward amendments on Report, and we very much hope that people who believe there should be greater scrutiny, governance and accountability of HS2 will join us in the Lobby to ensure that we put in place the right checks and balances for this project, to drive up the very treasure that my right hon. Friend the Member for Birmingham, Hodge Hill mentioned.
The Parliamentary Under-Secretary of State for Transport (Ms Nusrat Ghani)
It is a pleasure to serve under your chairmanship, Mr Hosie. I congratulate my right hon. Friend the Member for South Northamptonshire (Andrea Leadsom) on securing this important debate. I am honoured to be responding to her first Back-Bench debate —I was hoping that it would be on far more compatible terms, but we will have to agree to disagree on a number of the issues under discussion.
The debate provides an opportunity to reinforce the importance of HS2 not only for its capacity or for shortening rail journeys, but for fundamentally boosting the economy and smashing the north-south divide. My right hon. Friend has been a strong advocate for her constituency regarding the impact of the line there. She has quietly and diligently worked behind the scenes to communicate her concerns to the Department for Transport. I value the opportunity to put this on the record for her constituents to see.
Craig Tracey
When the argument changed from speed to capacity, does the Minister agree that there were more options, which could have been considered, to deliver that more quickly and cheaply, and provide greater benefit to our constituents? We are trying to predict rail usage in the distant future, but we have seen huge technological advances since the project was announced in 2009.
Ms Ghani
The business case has not moved from speed to capacity. People hooked on to the speed aspect in the early days, because it was seen as a shiny new train, but capacity, job creation, skilling up and smashing the north-south divide were always important aspects. If hon. Members fixated on one point and now realise there are many more, that is for them to come to terms with.
Sir Patrick McLoughlin
The Minister is right. Those people who say that the case has changed from speed to capacity should read the original document put out by the Labour Secretary of State for Transport at the time, which spoke more about capacity than speed.
Ms Ghani
My right hon. Friend is a huge source of knowledge on this issue, as he is a former Secretary of State for Transport. He is right that all of those arguments have always been there. Unfortunately, people fixated on one or two points and now they are rather surprised that a large infrastructure project, which moves people from A to B, has many other positive impacts.
Luke Graham
One of my constituents, who was recognised as a whistleblower on HS2 and was featured on the “Panorama” programme, cited several problems with the assumptions used in the original business case. What are the Government doing to address those issues? They were raised and it went to the Public Accounts Committee. There are a number of follow-up questions still to be answered.
Mr Ivan Lewis
Will the Minister make public the number of non-disclosure agreements, settled agreements, compromise agreements or any other arrangements, which include non-disclosure provisions with former staff members? Can she confirm that funding from an unauthorised redundancy payment scheme operated by HS2 was used to fund some or all settlement or compromise agreements with former senior staff, and that in some cases those staff were regarded as having made serious protected disclosures as to their concerns—this is the same point made by the hon. Member for Ochil and South Perthshire (Luke Graham)—over HS2’s financial statements? If she cannot answer today, will she write to me with detailed answers before the summer recess?
Ms Ghani
I know that NDAs are a particularly sore point for the Labour party right now, but we regularly engage with local authorities, sharing work at the early design stage with them, which is why they use NDAs, especially during the planning phase. They are used to protect commercially sensitive and personal information. I will take the point about using taxpayers’ money on the chin. We need to ensure that we are always using taxpayers’ money properly and transparently. We always hold HS2’s feet to the fire on all of those issues. I am happy to put all of this in writing, and to answer in writing any further questions that the hon. Gentleman has.
Victoria Prentis
I do not want the Minister to be in any doubt that worries about NDAs come from only one side of the House. On the Conservative Benches, we are equally concerned about the governance of HS2. NDAs are a real concern to us in getting to the bottom of what is going on.
Ms Ghani
As I mentioned, NDAs are used to deal with commercially sensitive or personal information. This is a large project involving a large chain of people and companies. We will put into the public domain any information that we can. We will respond to all queries from Members of Parliament within the allotted time.
Arguments have been made for and against HS2. I want to explain why this Government are committed to HS2. Every time the House has voted on this project, the Government have always won with a stomping majority. Our current infrastructure is 150 years old. It is an overstretched Victorian network. Passenger numbers have doubled in the past 20 years, and on key routes in the west coast inter-city corridor they are set to triple.
We have an overused and overcrowded railway, which is also one of the oldest. With HS2 in place, we can deal with the pressures on express trains, freight trains and slower local commuter services, which are already operating at peak capacity. That is just one of the reasons why HS2 is crucial: to solve our chronic capacity problems. I was intrigued by the argument that there will not be as many passengers using our railway network in the future. I hope this Government will not make the argument for people to stand still, but will encourage people to go out for social and work reasons.
HS2 is a new dedicated railway for fast inter-city express services, no longer encumbered by the inevitable inefficiencies associated with mixed-use lines, which will also free up huge capacity on the existing railway for more local trains, including for services to places such as Milton Keynes. In fact, 70% of the jobs created across our economy will be outside London, bringing prosperity to the north and the midlands, just as the first railways did, and not only to the cities on the high-speed line. HS2 trains will call at over 25 stations across the UK, from London to Scotland. It has already created 9,000 jobs and 200 apprenticeships. We expect that to rise to 30,000 jobs at peak construction, including over 2,000 new apprentices, many of whom will be trained at the national colleges in Doncaster and Birmingham.
Ronnie Cowan
In 2009, the Labour Secretary of State for Transport, Geoffrey Hoon, said that
“a new company, High Speed 2, has been formed to develop the case for high-speed services between London and Scotland.”—[Official Report, 10 March 2009; Vol. 489, c. 144.]
Will this Conservative Government reinstate that aspiration?
Ms Ghani
Indeed, because the full stretch of HS2 will go up to Scotland. One of our ambitions is to reduce the journey time from London to Scotland. That is why we are continuing to ensure that we get through all the legislation and that the line stays on track.
HS2 will have a big impact on local jobs. At present we have over 2,000 businesses in the supply chain, 70% of which are small and medium-sized enterprises. That is what comes of building an ambitious railway line connecting eight of our top 10 cities.
Kelvin Hopkins
On the Scotland point, in 1990, British Rail ran a special train from King’s Cross to Edinburgh, with a two-minute stop at Newcastle, in three and a half hours—three and a half minutes faster than is planned for HS2. All that is needed is a bit of modification on the east coast main line, and that could be a regular service.
Ms Ghani
I am sorry, I was not in the House in 1990 when that was reported; I am talking about 2026 and 2033, when we will connect faster trains to Scotland.
I will now discuss some real live cases of how HS2 is bringing greater economic benefits than we thought would be possible over a decade ago. HSBC, for example, has brought 1,000 jobs to Birmingham by moving its retail and business banking headquarters. Other cities along the line are seeing benefits from businesses which are relocating, including Burberry investing in a new factory in Leeds, claiming proximity to the HS2 station as a key factor in its decision. Freshfields and EY now employ 1,000 people in Manchester. Locally, places are gearing up for the arrival of HS2: Toton has plans for it to facilitate the Toton innovation campus, with the potential for up to 10,000 new jobs and a range of new housing; and the Cheshire science corridor enterprise zone, which was launched in 2016, aims to create 20,000 jobs by building a golden triangle with Liverpool and Manchester.
I fear that I am running out of time, but the business case is clearly solid: there is one budget and one timetable—HS2 will continue on track. My right hon. Friend the Member for South Northamptonshire asked me to confirm at the Dispatch Box what the budget and the timetable are. I stand here to state confidently that the budget is £55.7 billion and that the timetable is 2026 and 2033. I look forward to continuing this debate on Monday afternoon, when we hope that the Bill will return to the Floor of the House.
Question put and agreed to.
Resolved,
That this House has considered the business case for High Speed 2.