Economic Case for HS2 (Economic Affairs Committee Report)

Lord Monks Excerpts

Wednesday 16th September 2015 Lords Chamber

[Lord Monks (Lab)]

My Lords, I start by adding my thanks to our chairman on the committee, my noble friend Lord Hollick, for his excellent presentation of the report. Just to remind everybody, we are the Economic Affairs Committee and focused on the economics of HS2, asking searching questions to which we still await some convincing answers and perhaps feeling that, so far, the replies we have had are rather perfunctory and verging on the impatient with what seems to be regarded as nit-picking by the Department for Transport. I hope that the noble Lord, Lord Ahmad, will be able to correct that impression of the Government’s approach a bit later on.

I support HS2, but not because I am convinced particularly by the economics of the moment or the different studies that have been done. HS2 is not just an economic matter. The noble Lord, Lord Shipley, put that very well earlier. It is as much about politics as economics. If you go to France and on the TGV system, as many noble Lords will have, you would not call that a vanity project or just for the glory of having a high-speed train. It is well used. It was expensive in what it cost the country but it is a huge national asset. You can go to Germany and use the ICE network developed there. What was the reason for that? It was after the fall of the Wall and the need to reunify the country. As much as anything else, Germany needed new sinews of transport to pull the country together and give it some sense of unity. Spain has problems as severe as ours and perhaps worse in maintaining its integrity, yet the high-speed train system there is as much about holding the country together and bringing parts closer together as about economics.

Although economics are important, they are not the only thing. In this country, some of the arguments could have been avoided if this had been put in a national context: a national network of high-speed trains, extending to Scotland and including the north-east of England, and perhaps with an emphasis put on those parts of the country that we want to develop more quickly than has been the case so far. That certainly includes the north of England. At the moment, our plan for HS2 ends half way up Britain and seems to exclude significant parts of the north and west, and Scotland and Wales. I am one of those who thinks we should put HS2 in a broader context than it is at the moment.

Also, it is important that we make a start somewhere. HS2 has going for it the fact that it has private money behind it, not least because of the opportunities for property development in the areas of Euston and Old Oak Common. These seem to be the rich plums that will attract private money, rather than what happens anywhere else. To some extent, that will help fund the rest of the railway.

As my noble friend Lord Prescott said, it is important to bear in mind all the time the differential spend on infrastructure in London compared to elsewhere in the country. That differential is growing and certainly needs correction. A high-speed line across the Pennines would be one way to help redress that and bring together cities that are geographically close together but culturally rather far apart. In a debate on productivity last week, we heard from the other side somebody explaining this. They have a business with premises in Warrington and Irlam, which is sort of west Salford—all of 12 miles apart. Yet they said how difficult it was to get people to move across, compared to the south-east of England where people think very little of commuting 30, 40 or more miles to their workplace. The value of better communications in the north of England—no doubt people can quote me other parts of the country that they know best—is very important.

My noble friend Lord Berkeley can see further ahead than me. My horizons do not get much further than two-hour traffic jams on the M6 trying to get round Stoke and other places. The idea that on a crowded island such as ours we have not invested in any major new railway since before 1900 seems crazy. The environmental argument that has been made is surely in favour of the train over the plane or new motorway, much as though they will probably be necessary unless my noble friend Lord Berkeley is right and we find alternative means of transportation and communication.

No one doubts that HS1 is a national asset. It has not lived up to all the dire forecasts, let us be clear about that. HS2 can be the same, especially if on the back of it we can rebuild a British railway engineering industry that has become very small compared to what is necessary. Invest in engineering, invest in Britain and invest in high-speed rail. That seems to be the way forward.