HS2 Ltd: Costs

Wednesday 25th October 2023 Lords Chamber

Question

15:36

Asked by

[Lord Berkeley]

To ask His Majesty’s Government what assessment they have made of reports alleging that HS2 Ltd did not disclose accurate cost estimates for the project; and what plans they have to establish an independent inquiry into that company’s actions.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)]

My Lords, my department and HS2 Ltd have ensured, and will continue to ensure, claims of misrepresentation are taken seriously and thoroughly investigated. Several of the claims recently detailed in the media have already been established as unfounded, including through an independent National Audit Office report in 2018. The HS2 Ltd counterfraud and business ethics team is investigating the most recent allegation about the company, and while this is under investigation it would be inappropriate to comment further.

[Lord Berkeley (Lab)]

I thank the noble Baroness for that interesting response. There were a lot of people quoted in the Sunday Times at the weekend, including experienced HS2 directors who have risked their careers and jobs because they are so worried about what went wrong within the company. Noble Lords will know that the Prime Minister criticised HS2 in his speech at the Conservative party conference, and I quote:

“There must be some accountability for the mistakes made, for the mismanagement of this project”.


Those are tough words from the Prime Minister. Can I suggest to the noble Baroness that, if she will not have an independent public inquiry into these allegations, the Government should sue the Sunday Times and take it to court?

[Baroness Vere of Norbiton (Con)]

As I said in my opening Answer, it is clear that people wish to make allegations against HS2 Ltd, and we would absolutely encourage them to come forward with evidence. There are a number of mechanisms by which that evidence can be reviewed and further action taken if needed.

[Lord Forsyth of Drumlean (Con)]

Is my noble friend aware that there have been two reports by the Economic Affairs Committee of this House on HS2—one four years ago and another four years before that? The first report suggested to the Government that it might be more sensible and represent more value for money if the expenditure was concentrated on east-west infra- structure in the north of England, and pointed to the concern about the viability of the business case. The second report—I was chairman and should declare that interest—pointed out that costs were out of control, and that if this was not dealt with it would result in the Government having to cancel the northern routes altogether and be left with a white elephant. Is the lesson here not that the Government should pay more attention to Select Committees of this House?

[Baroness Vere of Norbiton (Con)]

The Government always pay attention to Select Committees of this House. I well remember when my noble friend and I debated that report—indeed, many other noble Lords took part in that debate. That is just one of the many mechanisms that Parliament has, and that wider society has, for holding the Government and HS2 to account.

[Lord Hunt of Kings Heath (Lab)]

My Lords, when it comes to misrepresentation, can the noble Baroness confirm that Mr Andy Street, the Conservative Mayor of the West Midlands, was persuaded by the Prime Minister not to resign over the decision on HS2 because he was promised that the link to Euston would be continued? It now turns out that that is not certain at all and depends on additional private finance. Why have the Government not been straight about this ridiculous decision not to run it into Euston?

[Baroness Vere of Norbiton (Con)]

As the noble Lord well knows, the decision has been taken to run it into Euston. My colleague the Rail Minister has had a number of meetings with members of the private finance community to start developing plans and options to get that finance together. Battersea Power Station, for example, attracted £9 billion in private sector investment. It is not beyond the wit of man to do something similar, perhaps even more, for the Euston quarter.

[Earl Attlee (Con)]

My Lords, does my noble friend the Minister agree that we need to take a very close look at the legislative process for large infrastructure projects and at the whole planning system?

[Baroness Vere of Norbiton (Con)]

I thank my noble friend for that question, but it goes slightly beyond the topic at hand. After the hybrid Bill for phase 2a of HS2, both Houses looked at the hybrid Bill system. It is something that we should continue to refine and improve. However, some infrastructure projects are so large that a hybrid Bill is really the only option.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I thought this was good journalism from the Sunday Times, but what do I know? It offered a helpful list of what that £100 billion could have been spent on, including 270,000 nurses, 1 million council homes, 200 hospitals or 10,000 schools. Have this Government looted the public purse for so long—13 years—that they do not understand how important it is to keep track of this sort of alleged corruption?

[Baroness Vere of Norbiton (Con)]

The noble Baroness will be unsurprised to hear that I do not agree. I do not normally comment on media articles, but this was a collection of old allegations which, as I said previously, the National Audit Office has established were unfounded. I also said that HS2 Ltd is looking at the allegation that has not yet been investigated, so I cannot comment on it. However, the noble Baroness is right that some good things have come out of the cancellation of HS2, such as the billions of pounds that we have been able to invest in the rest of the transport network in the north and the Midlands.

[Baroness Randerson (LD)]

My Lords, making even less economic sense than the Government’s decision to truncate HS2 at Birmingham is their vindictive scorched-earth policy to sell off all the land they purchased immediately. Will the Government learn the lessons of railway history? Many good modern rail projects cannot proceed because land was sold off following the Beeching debacle—another expert Tory action. Will the Government learn that lesson and undertake a thorough look at all the pieces of land for all potential future rail projects, many of which they are suggesting, to make sure that no land is sold off that will be needed in future?

[Baroness Vere of Norbiton (Con)]

I am delighted to reassure the noble Baroness that that is precisely what we are doing. We have looked at the land for phase 2a and concluded that we do not need it for other rail projects. Therefore, safeguarding will be formally lifted. However, we will not lift the formal safeguarding for phase 2b until next summer, because there is a job of work to be done. The noble Baroness is absolutely right: the Government will not sell off the land until we have established which bits will be needed for projects such as Northern Powerhouse Rail.

[Baroness Taylor of Stevenage (Lab)]

My Lords, as the noble Baroness, Lady Randerson, said, on top of the financial fiasco surrounding HS2 that has already unfolded, it appears that the Government are about to add what High Speed Rail Group calculated as more than £100 million of further losses to the taxpayer in the fire sale of land that had been acquired along the route. Will the Minister respond to comments made by Sir John Armitt and the National Infrastructure Commission that it would be a mistake to sell off the land that the Government bought and that they should keep their options open?

[Baroness Vere of Norbiton (Con)]

The Government are keeping their options open as necessary.

[Lord McLoughlin (Con)]

Will my noble friend assure the House that there is no need for another inquiry into HS2? If anything, there should be an inquiry into how many inquiries there have been into HS2 over the course of its life. However, perhaps an inquiry into the way that the decision was made to not continue with the rest of HS2 would be appropriate. The company for HS2, the Department for Transport and the Treasury will always have the National Audit Office operating and keeping a watchful eye on them, as was made so clear by the chairman of the Public Accounts Committee, Meg Hillier, just a few days ago. I declare my interest as a former Secretary of State for Transport.

[Baroness Vere of Norbiton (Con)]

I cautiously agree with my noble friend that there have been an enormous number of inquiries into HS2 over time. However, so many of them were needed, and indeed will continue to be so. There is an enormous amount of scrutiny of HS2 Ltd, not only from the Public Accounts Committee, where the senior responsible officer, the Permanent Secretary, appears and will appear next month, but from the Transport Select Committee, the committee of your Lordships’ House, and other bodies such as the National Audit Office. I am sure that their scrutiny will continue, and rightly so.