Written Statements

Monday 19th June 2023 Written Statements

Monday 19 June 2023

Developing Countries Trading Scheme

Monday 19th June 2023 Written Statements

[The Minister of State, Department for Business and Trade (Nigel Huddleston)]

On 19 June 2023 the developing countries trading scheme entered into force. A written ministerial statement announcing the developing countries trading scheme and detailing proposed changes was issued on 6 September 2022 following the launch of the scheme by the former Trade Secretary on 16 August.

The developing countries trading scheme provides generous access to UK markets for 65 developing countries. The scheme is an important component of the Government efforts to maximise the benefits of trade for developing countries. The scheme delivers greater market access by cutting more tariffs, simplifying rules so more goods qualify for duty free tariffs and enabling more countries to have access to more generous tariffs.

Developing countries trading scheme tariff rates offer tariff savings of over £770 million per year, helping to reduce prices and increase choice for UK consumers, particularly for household items such as clothes and food.

The UK’s approach to trade for development as set out in the international development strategy is to combine generous market access with aid for trade and advocacy at the WTO to increase trade with developing countries. By championing free, fair and inclusive trade, the UK maximises the benefits of trade for developing countries whilst building resilient supply chains and markets for the future for the benefit of the UK.

The developing countries trading scheme represents a marked increase in UK market access for developing countries, in particular for 37 least developed countries. When combined with our network of eight economic partnership agreements, the new scheme means that the UK now offers duty free or nearly duty free trade in goods to over 90 developing countries.

In addition to this, the UK has spent over £830 million on aid for trade since 2015, delivering major impact in beneficiary countries by addressing burdensome regulations and delays at customs, increasing the role of women in trade and supporting developing countries to negotiate and implement trade agreements.

Changes to the UK’s trade preferences are possible because as an independent trading nation we can go further and offer developing countries one of the most generous sets of trade preferences in the world, surpassing those of the EU and USA. Since its launch the developing countries trading scheme has received widespread praise in developing countries and at the WTO.

Further information on the developing countries trading scheme can be found here: https://www.gov.uk/government/collections/trading-with-developing-nations. A series of detailed guides has been developed alongside an interactive tool which provides product or country specific information on tariffs and rules of origin. Digital guides make it easier for businesses to understand and use the scheme.

Developing countries trading scheme regulations can be found at these links:

The Trade Preferences Scheme (Developing Countries Trading Scheme) Regulations 2023: http://www.legislation.gov.uk/id/uksi/2023/561

Rules of Origin: The Customs (Origin of Chargeable Goods: Developing Countries Trading Scheme) Regulations 2023 (legislation.gov.uk)

[HCWS863]

Post Office: Horizon Compensation

Monday 19th June 2023 Written Statements

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

The Government are determined that postmasters affected by the Horizon IT scandal receive the compensation that they deserve. The historical shortfall scheme has made good progress in achieving this outcome, with over 99% of original claimants receiving an offer to date.

However, the tax treatment of awards has in some cases had the effect of unfairly reducing the net compensation received by postmasters. In particular, the problem that has arisen on the historical shortfall scheme is that awards for loss of earnings are paid as a lump sum through compensation, but if the postmaster had stayed in employment and received that income over several tax years, they may have faced a lower tax bill.

The Government are today announcing that we will support the Post Office with an estimated £26 million of funding to make additional payments to postmasters in the historical shortfall scheme to ensure that compensation is not unduly lost to tax.

Every postmaster involved in the scheme will benefit from these additional payments. To avoid further complexity, the Government intend to legislate to make these additional payments exempt from income tax, capital gains tax and national insurance contributions.

So that payments can be made as swiftly as possible, the top-ups will be calculated so that no postmaster pays more than the basic rate of tax on the taxable elements of their compensation. This approach ensures that postmasters do not need to provide any further information.

Additionally, all claimants involved in the scheme will be able to access funding for tax advice of up to £300 to support them in filling out their tax returns.

[HCWS860]

Procurement Bill: Consultation on Draft Regulations

Monday 19th June 2023 Written Statements

[The Parliamentary Secretary, Cabinet Office (Alex Burghart)]

One in every three pounds of public money—over £300 billion a year—is spent on public procurement. By improving the way public procurement is regulated, the Government can save the taxpayer money and drive benefits across every region of the country.

Following the UK’s exit from the EU, we now have an opportunity to develop and implement a new procurement regime. The Procurement Bill will help deliver the Prime Minister’s promise to grow the economy by creating a simpler and more transparent system that will deliver better value for money, reducing costs for business and the public sector.

The Government want to make it easier for small businesses to work with the public sector by ripping up unnecessary rules and tackling late payment in the supply chain. We will ensure that all public bodies consider small and medium-sized enterprises when designing their procurements.

Following wide-ranging public consultation and stakeholder engagement, and close working with colleagues in the devolved Administrations, we have brought forward legislative proposals to establish the new regime. These measures and the training we will roll out to support them will deliver greater value for the public purse, from huge infrastructure projects to services by local councils.

In support of the Bill, which last week completed Third Reading in this place, I am launching a public consultation on the draft implementing regulations that will form part of the new regime. This consultation, which is highly technical and not seeking views on policy development, will be split into two parts, with the first part of the consultation remaining open until 28 July. The first part of the consultation, announced today, focuses on policy areas that require specific detail, such a calculation of thresholds, or lists of services or organisations, in secondary legislation. The forthcoming second part will address the transparency provisions and notices that will be used by contracting authorities to fulfil their legal requirements under the Bill. The second part will also include information on the proposed approach to transitional arrangements for procurements already underway at the time that the new regime enters into force and the position on other legislation that will need to be amended in order for the full provisions of the Bill to take effect. I expect to launch the second part in July.

The consultation we are publishing today, and laying in Parliament, gives everyone an opportunity to help shape public procurement for the future and I wish to encourage all involved in public procurement to have their say.

[HCWS859]

Co-operatives and Friendly Societies: Law Commission Review

Monday 19th June 2023 Written Statements

[The Economic Secretary to the Treasury (Andrew Griffith)]

The Government recognise that co-operatives and friendly societies make an important contribution to the growth and diversity of the economy, supporting competition across all sectors of the economy and providing products in the interests of consumers and businesses across the UK.

HM Treasury will therefore be commissioning the Law Commission—an arm’s length body of the Ministry of Justice—to conduct reviews of the Co-operative and Community Benefit Societies Act 2014 and the Friendly Societies Act 1992. These two pieces of legislation underpin the co-operative movement and the friendly society sector in the UK, respectively.

These reviews will aim to identify necessary updates to the legislation that will set co-operatives and friendly societies up for future growth and success. This will include a comprehensive consultation with interested stakeholders, in line with the terms of reference that will be agreed between HM Treasury and the Law Commission. At the end of the review, the Law Commission will produce a set of recommendations for reform for the Government to consider. Work is expected to start in the autumn.

[HCWS862]

Armed Forces Incentivisation Review

Monday 19th June 2023 Written Statements

[The Minister for Defence People, Veterans and Service Families (Dr Andrew Murrison)]

The Haythornthwaite review of armed forces incentivisation (HRAFI) was an independent review of our service personnel’s terms and conditions, which the Ministry of Defence committed to undertake in the Defence Command Paper of March 2021.

The final report has been delivered and published on time and is available for all those who wish to study its recommendations. I am also placing a copy of the report in the Library of the House. These recommendations are wide-ranging. They provide a potential roadmap out to the 2030s aimed at improving the proposition to those who serve now, and those who may consider serving in the future. I note the report’s acknowledgement of the good work already underway across Defence to improve the lived experience of our service personnel and make it more attractive in a modern workforce marketplace.

The MOD is currently studying the review’s recommendations and I will make a formal response in due course, but overall I agree with Rick Haythornthwaite’s analysis and his conclusions.

I would like to place on record my thanks to Rick and his team for their work in producing this ambitious and comprehensive review. It is my intention to invite Rick, at an appropriate point after the report has been published and implementation has started, to take stock of our progress towards achieving the vision for our armed forces highlighted by his review.

Attachments:

1. Haythornthwaite Review

Attachments can be viewed online at:

https://questions-statements.parliament.uk/written-statements/detail/2023-06-19/hcws857

[HCWS857]

European Political Community

Monday 19th June 2023 Written Statements

[The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Leo Docherty)]

On Thursday 1 June, the Prime Minister attended the European Political Community (EPC) summit in Chisinau, Moldova. The summit brought together 49 leaders from across Europe for the second time to discuss common challenges, including strengthening Europe’s resilience to hybrid threats, energy security, and illegal migration. Hosted by Moldova, it was a powerful demonstration of pan-European unity in support of Ukraine and Moldova, in the face of continued Russian aggression.

The Prime Minister co-chaired a security roundtable alongside Polish Prime Minister Mateusz Morawiecki. The Prime Minister outlined the areas where the EPC could helpfully respond: (1) energy security; (2) our ability to deal with aggression and hybrid threats to our continent; and (3) our ability to secure our borders. On the third point specifically, the Prime Minister noted that illegal migration has become a serious issue for Europe requiring a lawful and compassionate approach and should be part of the agenda for the EPC from now on.

The Prime Minister also met with over 20 leaders including with Spanish Prime Minister Sánchez where they discussed Gibraltar and with Bulgarian President Rumen Radev, with whom he confirmed a new UK-Bulgaria partnership to tackle organised immigration crime.

The Prime Minister also met Moldovan Prime Minister Recean and welcomed the UK-Moldova announcement to begin negotiating a readmission agreement, as well as the UK’s recent full liberalisation of tariffs to support Moldova’s economy. The Prime Minister underlined our continued long-term support to Moldova, including £10 million announced in March to support reforms in the energy sector as well as £12.5 million to UN agencies to support Ukrainian refugees in Moldova. The Prime Minister was also pleased the UK could support the security of the EPC summit including through the participation of the RAF in a joint US-France-Romania-UK exercise during the event.

The Prime Minister reiterated the UK’s continued commitment to supporting Ukraine, attending a meeting with Ukrainian President Zelensky and leaders from Belgium, Denmark, Netherlands and Sweden. They took forward discussion on further ways to support Kyiv, including building on the G7 announcements on air capability.

The Government look forward to hosting the EPC summit in the UK in spring 2024, and are working closely with EPC leaders, including Spain who will host in October 2023, to promote coherence across the summits.

[HCWS856]

UK and Overseas Territories Joint Ministerial Council

Monday 19th June 2023 Written Statements

[The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (David Rutley)]

My noble Friend, the Minister of State (Overseas Territories, Commonwealth, Energy, Climate and Environment), Lord Goldsmith of Richmond Park, has made the following written ministerial statement:

On Thursday 11 and Friday 12 May, I chaired the tenth UK-Overseas Territories Joint Ministerial Council in London. The Council was attended by elected leaders and representatives from Anguilla, Ascension Island, Bermuda, the British Virgin Islands, the Cayman Islands, the Falkland Islands, Gibraltar, Montserrat, Pitcairn Islands, St Helena, the Sovereign Base Areas of Akrotiri and Dhekelia, Tristan da Cunha and the Turks and Caicos Islands.

The overseas territories are a core part of the British family. The 14 overseas territories span the globe and allow the UK to lay claim to being a truly global Britain. The UK has a constitutional responsibility to ensure security, good governance and prosperity for the British nationals and inhabitants of the territories.

The key themes of discussion at this year’s Council were the partnership between the UK and the overseas territories, law enforcement and irregular migration, economic and financial resilience, environment and climate change, healthcare and maritime strategy.

I, in my capacity as Minister for the Overseas Territories, chaired the Council. Other ministerial colleagues attending the discussions included the Treasury Lords Minister (Baroness Penn), the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Copeland (Trudy Harrison), the Minister for Health and Secondary Care, my hon. Friend the Member for Colchester (Will Quince), and representatives from the Maritime and Coastguard Agency.

The Council agreed priorities and set out commitments and areas for joint work in the year ahead. Representatives welcomed the announcement of a new UK Government strategy on the overseas territories, towards a modern partnership, which will be developed in collaboration with overseas territories Governments. The overseas territories also welcomed the announcement that each Government Department will have an assigned Minister responsible for their Department’s relationship with the territories. I will chair meetings with these Ministers to ensure all parts of the UK Government are working collectively to provide our overseas territories with the support required.

We discussed the importance of protecting the unique environments and biodiversity in the overseas territories, recognising that the territories are on the frontline of the effects of climate change. Overseas territories leaders reaffirmed their support for net zero and energy transition ambitions. We discussed and agreed a new ministerial-level annual dialogue focused on tackling illicit finance and a technical working group on beneficial ownership transparency.

Representatives welcomed the progress in implementing the long-awaited reforms to the NHS quota system, which brings equity in approach to the overseas territories enabling access to the NHS for a limited number of people from each territory.

We agreed a joint communiqué, which was issued following the conclusion of the conference and was published on the gov.uk website.

The communiqué and associated press statement reflects the joint commitment of the Governments of the overseas territories and the UK to deepen our unique and modern partnership. We will continue to fulfil our constitutional and moral obligations to the overseas territories. In line with the commitment set out in the June 2012 White Paper, “The Overseas Territories: security, success and sustainability”, we will continue to report to Parliament on progress by Government Departments.

[HCWS855]

Sight Testing in Special Schools

Monday 19th June 2023 Written Statements

[The Parliamentary Under-Secretary of State for Health and Social Care (Neil O’Brien)]

I am pleased to announce that NHS England will make available sight testing to all special schools from 2024-25.

We know that children with a learning disability are 28 times more likely to have a serious sight problem, and over 40% require glasses. Whilst free NHS sight tests are available for all children, the Government acknowledge the particular challenges faced by children and young people who attend special school settings in accessing high street sight testing services and also the benefit of these settings in receiving personalised advice on optimising the environment for learning.

The NHS Long Term Plan made a commitment to provide sight testing in special residential schools. To meet that commitment, NHS England commenced a proof-of-concept programme in 2021 to pilot a potential sight testing service model. This pilot was subject to an independent evaluation. As a result of that evaluation, NHSE is proposing to build upon the Long Term Plan commitment and extend provision to all children in special education day schools.

NHS England now intends to undertake a period of engagement with key stakeholders, schools, and the public over summer 2023, in order to share the learning from the proof-of-concept scheme and further develop the care model that will underpin the proposed future of the new expanded sight testing scheme. Following which NHS England will publish a revised service specification and roll-out plans.

Whilst this engagement is undertaken existing contractors will continue to operate under the current proof-of-concept arrangements until such time as NHS England complete its engagement and confirms the future commissioning arrangements.

I hope this will be welcome news and I thank those from across the eye care sector who have helped to shape this valuable service.

[HCWS861]

Elections Act 2022: Implementation

Monday 19th June 2023 Written Statements

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)]

My hon. Friend the Minister for Faith and Communities (Baroness Scott of Brybrook) has made the following written ministerial statement:

Through the Elections Act 2022, Parliament legislated to improve the accountability of the Electoral Commission. Following the electoral fraud exposed in Tower Hamlets, then, Sir Eric Pickles’ 2016 report “Securing the Ballot: Review into Electoral Fraud” recommended that a greater emphasis needed to be placed on tackling electoral fraud in Great Britain and that the existing system of oversight of the Electoral Commission by the Speaker’s Committee on the Electoral Commission did not provide an effective third-party check on the Commission’s performance.

To facilitate scrutiny by the UK Parliament of the Electoral Commission’s work while respecting the Commission’s operational independence, sections 4A and 4B of the Political Parties, Elections and Referendums Act 2000 (“PPERA”)—inserted by section 16 of the Elections Act 2022—provided for a power for the Secretary of State for Levelling Up, Housing and Communities to designate a strategy and policy statement for the Commission.

The draft statement sets out the Government’s strategic and policy priorities and the roles and responsibilities of the Commission in enabling the Government to meet those priorities, such as the Government’s determination to tackle issues such as voter fraud, to improve accessibility of elections and to improve participation. These are important aims and ones it would be wholly appropriate for an electoral regulator to support. The draft statement also sets out guidance relating to particular matters in respect of which the Commission has functions.

The procedural requirements for the statement—set out in new sections 4C to 4E of PPERA—require, among other things, the Secretary of State (Michael Gove) to consider the views of the Electoral Commission, the Speaker’s Committee and the Levelling Up, Housing and Communities Committee on a draft statement, making any changes the Secretary of State deems necessary, before laying a draft statement and a report on the Government’s response to the consultation before Parliament for representations to be made.

On 22 August 2022, the Government published a draft statement on www.gov.uk and wrote to the statutory consultees as well as Members of the Parliamentary Parties Panel and other relevant stakeholders to inform them about the start of the statutory consultation. The statutory consultation closed on 20 December 2022. We also received and took into consideration comments from the Public Administration and Constitutional Affairs Committee and the Association of Electoral Administrators. The Government are grateful for the consultees’ time and engagement with the consultation on the draft statement.

On 8 June 2023, the Government laid before Parliament a document containing the revised draft strategy and policy statement. Specifically, pursuant to section 4C(4) of PPERA, the document includes the explanation of the Secretary of State’s proposals, those proposals set out in the form of a draft strategy and policy statement and the report prepared in accordance with section 4C(3) of PPERA that sets out the Government’s response to the consultation carried out in accordance with section 4C(2) of PPERA. The Government are clear that the statement must always be compatible with the foundational principle that the Commission should remain operationally independent. The Commission will only be required to have regard to the statement in the exercise of its functions. Notwithstanding this, the Secretary of State has listened to the feedback of the consultees and has amended the draft statement to make a number of clarifications and provide additional reassurances that the statement in no way amounts to the Government directing the Commission.

Pursuant to section 4C(5) and (6) of PPERA, this document has been laid before both Houses for a 60-day period within which Members of both Houses may make representations in relation to the document. The Secretary of State must consider these representations, before preparing the draft statement for laying for parliamentary approval. The 60-day period excludes any period when Parliament is dissolved or prorogued, or when both Houses are not sitting for more than four days. It will end on 14 September 2023.

To facilitate parliamentarians’ access to the document and exercise of their right to make representations, the document has been deposited in the Libraries of both Houses on 13 June.

[HCWS864]

High Speed 2 Parliamentary Report

Monday 19th June 2023 Written Statements

[The Minister of State, Department for Transport (Huw Merriman)]

I am reporting continued progress on High Speed 2 (HS2) with the Government’s sixth update on HS2 to Parliament.

The Government remain committed to delivering HS2 from London Euston to Manchester and the east midlands to bring our biggest cities and economic regions closer and giving companies and workers more choice about where they locate and live.

Since notice to proceed on phase 1 three years ago, we have seen significant progress on construction of the Birmingham to London section, Royal Assent to the High Speed Rail (West Midlands to Crewe) Act 2021 and the introduction of High Speed Rail (Crewe to Manchester) Bill to Parliament.

On 9 February 2023, Sir Jon Thompson was appointed as the Chair of HS2 Ltd following an extensive search. The Secretary of State for Transport, my right hon. Friend the Member for Forest of Dean (Mr Harper) was pleased to meet him and the HS2 Ltd Board in Birmingham on 12 April 2023 to discuss the programme.

Progress on building the railway has been achieved in the face of significant challenges from the effects of covid-19 and the impact of excess inflation driven by the war in Ukraine.

As the Secretary of State for Transport outlined in his written statement to Parliament on 9 March 2023, the Government have acted to balance the nation’s books, necessitating deferral of some of the Department for Transport’s capital spending including rephasing the delivery of parts of HS2. As set out in previous reports, the Government remain concerned about the increasing projected costs to complete phase 1 reported by HS2 Ltd.

Construction of the Old Oak Common to Birmingham Curzon Street section continues at full pace, which will provide initial passenger services to schedule. There has been notable progress on this section in this period.

HS2’s tunnel boring machine (TBM), Dorothy, began and completed her second one-mile tunnel bore under Long Itchington Wood in Warwickshire and the Chiltern TBMs reached the halfway point of their 10-mile drive at Christmas. Six TBM journeys have now been launched on phase 1 and driven a total distance of approximately 14.5 miles. Work is progressing north of Birmingham but has been rephased south of Old Oak Common and at Euston.

We remain committed to delivering HS2 services to Euston. We have decided not to proceed with construction at Euston over the next two years both to reduce expenditure during that period and to address the affordability challenge set out in the recent National Audit Office report. We will use this time to develop a more affordable scheme design that delivers for passengers, the local community and taxpayers.

The Government will not be proceeding to construction on phase 2a—west midlands to Crewe—in the next two years to reduce expenditure. We will use the time to develop mature designs and delivery approaches to ensure that this section is delivered in the most cost-effective way.

The High Speed Rail (Crewe to Manchester) Bill Select Committee Members have now been appointed and the Committee has begun hearing petitions against the Bill and first additional provision (AP1), which gives effect to Parliament’s instruction to remove the Golborne Link from the bill while alternatives are considered.

Other notable milestones of the HS2 programme in this reporting period include:

HS2 Ltd and its supply chain have now begun over 1,200 apprenticeships, more than halfway to the target, with the programme now supporting over 28,500 jobs as of March 2023.

There are now 19 diesel-free work sites on the HS2 programme. This is a significant step towards the project’s aim to cut carbon emissions during construction and improve air quality for workers and local communities.

In North Warwickshire, the Marston Box Rail Bridge—the world’s longest box slide—was successfully installed. During a short closure of the M42 over Christmas 2022,450 people worked to move the 12,600-tonne box structure 165 metres across the motorway into position.

Despite the global economic challenges, this Government are continuing to invest in the country’s future infrastructure. HS2 is not just a railway: it will drive economic growth and opportunities across the country, provide a low-carbon alternative to car travel and domestic flights and train a skilled workforce for the UK’s future infrastructure sector.

This report uses data provided by HS2 Ltd for phases 1, 2a, 2b and HS2 East and covers the period between September 2022 and February 2023 inclusive. Unless stated, all figures are presented in 2019 prices. Data on benefits performance is reported on quarterly; the data included in this report is taken from March 2023.

Programme update

Schedule

The forecast date for initial HS2 services between Birmingham Curzon Street and Old Oak Common remains within the range of 2029 to 2033.

On the phase 2b western leg, we continue to aim for the delivery of the railway within the estimated delivery-into-service date range of 2035 to 2041, as provided in the Strategic Outline Business Case. The High Speed Rail (Crewe to Manchester) Bill is currently working its way through Parliament.

Following the decision to rephase the construction of Euston and phase 2a, revised delivery-into-service ranges for these elements of the railway will be confirmed once plans have been redeveloped.

Affordability

As set out in the last Parliamentary Report, HS2 Ltd has advised the Department for Transport (DfT) that its projected costs for phase 1 would exceed the target cost of £40.3 billion if unmitigated.

HS2 Ltd’s Executive and Board are currently reviewing the estimate at completion for phase 1. This will assess the previous pressures and further emerging costs as well as the work the Government commissioned from HS2 Ltd to address these pressures.

With around half of the phase 1 budget spent and significant work completed on enabling and main works, this is an appropriate time to review the projected costs against the budget noting that significant judgments remain in any projection. I will update Parliament further once this important work has been concluded and assured.

As reported in the recent National Audit Office report on Euston, the latest proposed target price from the construction partner—Mace Dragados joint venture—is £4.8 billion—around £2.2 billion over HS2 Ltd’s budget and a higher cost than the previous design.

I visited the Euston site on 5 April 2023 and saw for myself the challenges of constructing a complex station in a dense urban environment that will integrate with the existing conventional station and London Underground and local transport, as well as enabling oversite development.

Nonetheless, the station is not affordable at this cost, nor in any case, does the Government have the financial headroom to proceed with the construction over the next two years. We will, therefore, use the time to look again at the Euston station design to ensure it delivers for passengers, the local community and taxpayers. This will include considering how we might partner with the private sector to capture benefits for customers. It will require careful prioritisation of requirements and a willingness from stakeholders to compromise.

I welcome the NAO’s report and recommendations, and we will act upon them as we look again. Officials are now working with the Euston Partnership, HS2 Ltd and Mace Dragados to understand the causes of the additional costs and to develop alternative delivery options. I will update Parliament as this work progresses through future publications of this report.

As it was noted in the last Parliamentary report, like the rest of the economy, the HS2 programme has experienced higher-than-expected levels of inflation, which HS2 Ltd is actively seeking to mitigate alongside its supply chain.

The Secretary of State’s written statement to Parliament of 9 March 2023 outlined the action we have taken over the short term to rephase certain parts of the programme in order to live within annual cash budgets.

HS2 Ltd is working with its supply chain to understand the wider cost and schedule implications for the programme, including identifying mitigations that seek to protect taxpayer value-for-money from these deferrals. Nonetheless, the decisions I have made will ensure that spending on the programme in the next two years remains within the annual budgets that have been allocated to HS2, and reflect the need to manage the inflationary pressures that the UK is facing.

Reporting progress on the programme in 2019 values does not reflect the significant inflation that has occurred since and I intend to work with HM Treasury to update the price base.

Delivery

Phase 1 delivery continues to build momentum with around 350 active construction sites between the West Midlands and London. Six years after beginning work, all the early works contractors have now left sites having prepared them for the main work civils contractors who are entering peak construction effort this year.

Tunnel drives are making good progress across all three sites. In March 2023, the TBM named Dorothy completed its work under Long Itchington Wood in Warwickshire, completing its second one-mile drive and marking the first complete twin-bore tunnel across the project. In the Chilterns, the TBMs called Florence and Cecilia have successfully reached Amersham Vent Shaft, which represents the halfway point of their 10-mile drive. Sushila and Caroline, the two TBMs used to create the first section of tunnel that will make up the 8.4-mile Northolt Tunnels between West Ruislip and Old Oak Common station, are also making progress.

Overall, five of the 10 TBMs boring the tunnels for the route have launched, two of the 12 TBM journeys are now complete and approximately 14.5 miles have been dug.

In November 2022,1 attended the launch of a 1.7-mile-long conveyor system that is removing spoil excavated from three London construction sites: Old Oak Common Station, Victoria Road Crossover Box and Atlas Road. The conveyor transports excavated material to Willesden Euro Terminal, where earth is processed and then removed by rail freight to three sustainable sites in Kent, Rugby and Cambridgeshire, significantly reducing HS2’s carbon footprint.

To date, approximately 125,000 tonnes of excavated material has been transported by the conveyor, removing circa 7,400 lorries from the roads, significantly reducing the traffic congestion and carbon emissions for residents.

At Old Oak Common, the excavation of the underground box that will house the subterranean HS2 station platforms is well underway. In line with the programme, groundworks for the conventional rail station that will accommodate eight platforms on the realigned Great Western mainline and relief tines commenced in October 2022, which together will provide a step change in connectivity for the area. This is a crucial step forward in realising the potential for creation of jobs and provision of housing enabled by the station, which together with the Mayor we are working hard to achieve.

Stage 1 of the 2 two stage design and build contracts for Birmingham Curzon Street Station and Interchange Station at Solihull are expected to conclude later this year, subject to agreement of affordable target prices.

HS2 Ltd continues tendering for phase 1 and 2a rail systems packages, including track, catenary, mechanical and electrical power, control and communications. The tendering process has been extended to clarify scope and provide opportunity for tenderers to submit updated competitive bids.

On phase 2a, early environmental works have demonstrated good progress, with design complete for all sites. Five utility diversions have been completed along the phase 2a route. These have predominantly related to diversions of high-pressure gas pipelines, which are works that only the network provider can perform and have annual windows for outages that constrain when works can be done. Further construction work will be suspended for the next two years, but we expect to continue some design work in preparation for the start of major construction works.

On the phase 2b Western Leg, the High Speed Rail (Crewe to Manchester) Bill had its second reading in June 2022 and it was remitted to a Select Committee. The first additional provision (AP1) was deposited on 6 July 2022 and a further additional provision will be deposited shortly. The committee is continuing its work hearing petitions against both the bill and AP1. While the bill progresses through Parliament, HS2 Ltd is working to develop a robust future delivery strategy for the scheme applying lessons from phase 1.

The Government have committed to progressing HS2 East, which is currently in its development stage. HS2 East will feature a new high-speed line between the West Midlands and East Midlands, which will allow HS2 to serve Nottingham and Sheffield (via Derby and Chesterfield).HS2 Ltd and Network Rail are undertaking work to develop advice on these plans, in conjunction with work by Network Rail to electrify the Midland Main Line. The output of this work will be used to inform future decisions by the government on how to progress the scheme, including how HS2 East can support economic growth aspirations in the East Midlands and South Yorkshire.

Benefits

Growth and opportunities for local communities

We are committed to bringing the transformational benefits of HS2 to places as soon as possible. HS2 will act as a catalyst for growth around new station sites and this is already well underway at station sites along the route.

At Old Oak Common, work continues to strengthen collaboration with the Old Oak and Park Royal Development Corporation, the London Mayor and the Department for Levelling Up, Housing and Communities (DLUHC) to bring forward regeneration proposals for the area around the station, with a projected 25,500 new homes and 56,000 new jobs.

Through regional development, HS2 will provide an opportunity to level up the economies of the midlands and the north.

At Interchange Station in Solihull, HS2 Ltd continues to work collaboratively with private and public sector stakeholders to support local ambitions to realise the economic and social benefits of HS2 and provide up to 30,000 new jobs and 3,000 new homes through a high-quality masterplan for development.

In the heart of Birmingham, the West Midlands Combined Authority anticipates 19,600 new jobs and 2,200 additional new homes around the Curzon Street area. DfT and HS2 Ltd are also working closely with DLUHC to make sure that wider regeneration is delivered at Crewe.

HS2 offers an unprecedented opportunity to transform local areas. We are developing an HS2 local growth action plan outlining how this Government will continue to work with host station places to support their local growth ambitions. Alongside this, later this year, we will publish an HS2 investment leaflet and brochure showcasing HS2 places to potential investors.

Green transport for a net-zero future

Environmental sustainability is integral to HS2’s design, with huge efforts being made to minimise the impact of construction on biodiversity, to limit the level of carbon emissions during construction and to respect people and places.

HS2 Ltd’s latest Environmental sustainability progress report was published in December 2022, highlighting key environmental achievements, including how we are continuing to update designs on the project to minimise impacts to sensitive habitats. For example, on phase 1, we have now reduced the ancient woodland impacted by construction by a third.

HS2 Ltd is leading on the decarbonisation of the construction industry.

I was pleased to confirm in December 2022 that HS2 Ltd had launched a Diesel free plan, which sets out how all HS2 construction sites will eliminate diesel use by 2029. Good progress is being made with 19 construction sites on the project now operating completely diesel-free.

Further efforts to reduce carbon emissions in construction include the launch of a construction railhead in Aylesbury to move more materials by rail and the 1.7-mile conveyor system in West London. These initiatives will remove over one million lorry journeys from local roads, improving air quality around sites and reducing noise pollution and traffic impacts for local communities.

HS2 will be an important part of the sustainable transport network. The programme will improve active travel opportunities such as cycling and walking, creating a sustainable transport legacy for local communities.

HS2 Ltd has appointed an active travel team to oversee the delivery of facilities for more cycling and walking in 20 locations across phase 1and to assess five locations on phase 2a. HS2 Ltd has continued to assess opportunities to repurpose some sections of haul roads and access routes into cycling and walking routes, where local communities are in agreement.

Skilled workers for an innovative industry

HS2 is playing a significant role in growing skills for the wider construction industry and today is supporting over 28,500 jobs. The programme celebrated its 1,000th new apprentice and is now over halfway to its target of creating 2,000 apprenticeships over the course of the programme, with over 1,200 apprentices recruited to date. Over 3,200 people who were previously unemployed have been supported into work on the project.

HS2 continues to support businesses across the UK—there are over 3,000 unique UK businesses in the supply chain and over 61% of the overall supply chain are small or medium-sized enterprises. The HS2 supply chain continues to beat industry averages for female and BAME employees, achieving 28% and 23% respectively.

Following the spring Budget 2023 and in light of the rephasing of parts of HS2 , we anticipate that some roles will be redeployed within the programme, or individuals will secure relevant employment that builds on the skills they have gained working on HS2.

HS2 is helping to train a skilled workforce for the UK’s future construction industry and it is expected that many of those currently working on HS2 will, in the future, go on to work on other infrastructure programmes in skilled, well-paid jobs.

Innovation across the programme is making HS2 more efficient—HS2 Ltd has established an ecosystem of innovative partners across a world-class supply chain, leading academic frameworks from infrastructure and rail, and an entrepreneurial accelerator to boost and scale digital technology start-ups into the sector.

Local community impact and engagement

The decision to rephase construction for phase 2a and Euston will lead to increased uncertainty around the schedule and status of HS2 works in these areas and we are sympathetic to the prolonged impact on some local communities in the areas where we have rephased work. HS2 Ltd will continue to focus its community engagement to address any uncertainty and ensure that affected communities and residents are kept informed and involved.

The Independent Construction Commissioner and Residents’ Commissioner will continue to report regularly on the delivery of HS2 works, including on the impact of delays and uncertainty, and provide assurance that HS2 is still being delivered in a considerate, efficient and responsible way.

The HS2 Helpdesk has now recorded 204,918 enquiries since its launch in 2018. Of the overall enquiries, 5,469 have been complaints, of which 100% of urgent construction enquiries and complaints have been responded to within 2 working days between April 2022 and February 2023. HS2 Ltd received 1,032 complaints between April 2022 and February 2023. This compares with 1,515 for the same period in 2021 to 2022, a decrease of 32%.

The volume of anti-HS2 protestor activity has decreased significantly since September 2022 when the High Court granted HS2 Ltd an injunction prohibiting trespass on, and obstruction of access to, land acquired. There are currently no protestor sites that directly threaten safety, the supply chain or the delivery of HS2. HS2 Ltd is currently seeking an extension and renewal of the injunction.

To date, illegal protest has cost the project an estimated £38 million in direct costs and around £113 million in consequential costs such as delays.

HS2’s community and business funds, the Community and Environment Fund and the Business and Local Economy Fund, are helping to leave a positive legacy in areas affected by construction near the new railway. Over £15 million has so far been granted to 268 projects from Crewe to London, helping to attract over £65 million in additional match funding.

Land and property

We continue to acquire land between the west midlands and Crewe to meet the five-year limit set by Parliament for phase 2a.

We continue to protect the route from the west midlands to Manchester from alternative development by means of safeguarding directions. We also maintain current safeguarding and property schemes across the Eastern Leg and committed in the Integrated Rail Plan that this will remain in place until final decisions on routing HS2 services to Leeds are made.

We are publishing research into attitudes to a variation to the Need to Sell non-statutory scheme alongside this report. We have concluded that pursuing the variation further is not justified, as any potential improvements it offers to the existing scheme appear marginal.

Programme governance and controls

Following a comprehensive search, on 9 February 2023, the Secretary of State for Transport announced the appointment of Sir Jonathan Thompson as the new Chair of HS2 Ltd. He will be supported by Elaine Holt, whom the Secretary of State has asked to take on the role of Deputy Chair and reappointed for a further term on the HS2 Ltd Board, alongside Dame Judith Hackitt and Stephen Hughes.

These appointments are critical to ensuring the HS2 Ltd Board has the right capability to oversee the delivery of this large and complex project and ensure benefits are fully realised.

Forward look

On phase 1, as we enter peak construction there will be more earth moved, more concrete poured and more visible progress of construction above ground.

HS2 Ltd has appointed a managing director for the rail systems alliance, the team that will be responsible for delivering systems packages including track installation, overhead catenary and high-voltage power in a collaborative and integrated model.

In the coming months, HS2 Ltd will continue to develop its internal processes and capabilities, including governance arrangements, to manage the integration risk between the 14 different systems suppliers in advance of appointing contractors.

On the phase 2b Western Leg, ongoing design development work has enabled HS2 Ltd to identify further scheme changes that may be brought forward in relation to highway, environmental mitigation and utility works. Some of these changes will be proposed in a second additional provision (AP2), focusing on the northern part of the route between Crewe and Manchester.

The Greater Manchester Combined Authority (GMCA) trailblazer deeper devolution deal, in addition to highlighting the benefits of HS2 and Northern Powerhouse Rail for Greater Manchester, confirmed the GMCA’s commitment to engage meaningfully on a locally led funding strategy for scope in the High Speed Rail (Crewe to Manchester) Bill. This is subject to a local funding contribution, with the expectation of significant progress by the end of 2023.1 welcome this commitment and look forward to progress being made on these issues.

I will continue to engage closely with Parliament and provide an update in the next publication of this report.

Financial Annex ^[1]

Forecast costs by phase—2019 prices.