High Speed 2

Andrea Leadsom Excerpts

Thursday 13th October 2011 Commons Chamber

[Andrea Leadsom (South Northamptonshire) (Con)]

I beg to move,

That this House has considered the matter of High Speed 2.

I am delighted to have the opportunity to open the debate, and I am particularly grateful to all the Members —in all parts of the House and on all sides of the debate —who have turned up to participate. It is an incredibly important debate, because it involves £32 billion of taxpayers’ money. I am delighted to see that my right hon. Friend the Secretary of State for Transport is not present, because, being an eternal optimist, I believe that he is delaying his decision until December—as he certainly should—and is keen to listen to the debate as it progresses. I know that not just you, Mr Speaker, but many right hon. and hon. Members have taken a great interest in this subject. Let me mention in particular my hon. Friends the Members for Lichfield (Michael Fabricant) and for Kenilworth and Southam (Jeremy Wright).

It is fashionable for those who oppose HS2 to be dismissed as nimbys. Let me make it clear that I am here today not just as a concerned constituency MP but as someone with 25 years of experience in finance, including project finance, and that I am determined to defend the taxpayer against what I consider to be an unjustifiable and eye-wateringly expensive project. If the route went from Truro to Paddington, or from Leeds to Edinburgh, I would still be here today defending the taxpayer.

When I first heard about HS2 I thought it was a superb idea, but 18 months later all the proposed benefits have fallen away one by one, and there is no hard evidence that spending £32 billion can truly be justified. For instance, there is no evidence that this project will solve the north-south divide. In fact, there is plenty of evidence from the experience in France and Germany, and from our own HS1, that high-speed trains can suck development out of the regions and into the major cities.

I also have an intuitive concern about the point-to-point nature of the project. The north is not a place; it is a region. Those close to the terminals will benefit of course, but it is unclear how people outside those areas can directly benefit. I recently spoke to my former constituency chairman in the Knowsley South seat, which I contested in 2005, and his view is that Knowsley South will end up paying its share of the cost of this project but will get little, if any, benefit.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

The north is not a region. It is made up of three regions—the north-west, Yorkshire and Humber and the north-east—all of which have their own identities, which I hope my hon. Friend will respect.

[Andrea Leadsom]

I thank my hon. Friend for making that point, and I certainly do respect the right of people in the north to economic regeneration. I am speaking as much for them as I am for people in Cornwall and the Isle of Wight when I say that £32 billion spent on this project is the wrong use of taxpayers’ money.

[Several hon. Members]

rose—

--- Later in debate ---

[Andrea Leadsom]

I would like to make some progress, if I may.

There is no hard evidence that this project will reduce unemployment in the north. HS2’s own estimate of 30,000 new jobs—

[Stephen Hammond (Wimbledon) (Con)]

The estimate is 40,000.

[Andrea Leadsom]

The figure is 40,000, my hon. Friend says from a sedentary position, but some 73% of those jobs will be generated in and around London, not in the north. Moreover, every one of those jobs will be associated with £300,000 in costs, which is about five times more than the cost of job creation in other infrastructure projects.

[Several hon. Members]

rose—

[Andrea Leadsom]

I want to make one further point before giving way again.

On HS2’s green credentials, HS2 itself admits that at best the project is carbon neutral. That leaves me pondering whether £32 billion of taxpayers’ money spent on a project that essentially only cures the capacity problems on the west coast main line is good value for money. It blatantly is not. I am not alone in thinking that. Organisations including the RAC Foundation, the Institute of Economic Affairs and the TaxPayers Alliance seriously challenge the business case for HS2.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

London’s Crossrail was given the go-ahead by this House on a consensual basis. Surely what is good enough for London is good enough for the rest of the country?

[Andrea Leadsom]

I am glad the hon. Lady raises that point, because it is ludicrous nonsense. Anybody who has any knowledge whatever of assessing such projects and making sure they offer value for money would say it is nonsense. This is not our money; it is the taxpayers’ money and it belongs to the country. We should not spend money on HS2 on the grounds that we did so for Crossrail. That is just nonsense.

[Several hon. Members]

rose—

[Andrea Leadsom]

I want to make a little more progress, if I may.

I hear arguments that lots of other countries have high-speed rail so we need it to be able to keep up and compete with them, but the truth is that France, Germany and China are very different from our country. They each have a far greater land mass and much longer distances between cities. Furthermore, their high-speed railways follow existing transport corridors, and their non-high speed trains are extremely slow, unlike our existing inter-city trains, which are technically high-speed, with a top speed of 125 mph.

I also hear arguments that we should replicate the fabulous experiment with HS1. Yet a wealth of evidence suggests that commuter services running parallel to the HS1 link have become more expensive, have far more stops and far fewer trains running along the line, in order to subsidise HS1. Even the chief engineer of HS2 Ltd told me that, as a Kent commuter, he has had to get used to more expensive train fares in order to subsidise those using the HS1 service.

If all else fails, we hear that killer argument, “This is about a vision for Britain. This is like the great Victorian railways. It is like the fabulous post second world war motorways.” I am sorry, but I just do not buy that argument. The Victorian railways were largely privately funded The motorways are fabulous, but they have benefited every town and village in this country, because they have junctions every few miles. By contrast, every family in Britain will pay £1,000 for HS2 but 99% of people in this country will use the service less than once a year, and the wealthiest will use it four times more often than the poorest. That is a massive skewing of scarce resources.

[Mark Garnier (Wyre Forest) (Con)]

Does my hon. Friend agree that although £32 billion is a great deal to spend on an infrastructure project, it is probably a welcome sum to spend on the supply side of our economy? Does she further agree, however, that it could be better spent on more local projects, such as the Stourport relief road in Kidderminster?

[Andrea Leadsom]

My hon. Friend makes a good point, and we could have a fabulous relief road for £32 billion. He makes the serious point that there is a huge opportunity cost to spending this amount of money on HS2.

[Several hon. Members]

rose—

[Andrea Leadsom]

I will give way in a moment, but first I wish to discuss the business case for HS2. HS2 Ltd claims that there is a net benefit ratio of two, which means a £2 return for every £1 spent. That is pretty much the minimum we could expect from a rail project, but even that modest claim makes some enormous assumptions. For example, a core, but ludicrous, assumption is that the time spent on a train is completely wasted, so we can attribute a value in pounds to any minute saved on travel. That would not matter so much if it were not for the fact that more than 50% of the £20 billion return claimed for this project comes from the time savings. That is simply ludicrous.

A second enormous assumption is made in the passenger forecasts. HS2’s forecasts are heroic when compared with Network Rail’s own assumptions over a similar period. Surely we should learn the lesson of history. By 2009 Eurostar had achieved only 37% of the passenger numbers forecast when the HS1 link was built. We simply cannot continue to make these massively optimistic forecasts. The Public Accounts Committee took the Department for Transport to task on this point, and the DFT agreed that it would put in far greater downside assumptions for its next infrastructure project.

[Hugh Bayley (York Central) (Lab)]

If the hon. Lady represented a constituency further away from London than Northamptonshire, she would value the time savings that would allow businessmen to meet their business contacts more quickly. Has she not seen the PricewaterhouseCoopers assessment that within three years of the line being completed the Government could cover their costs and get £6 billion or £7 billion in addition by floating the railway to the private sector?

--- Later in debate ---

[Andrea Leadsom]

I thank the hon. Gentleman for that intervention. Has he seen the Mott MacDonald report showing that since the advent of wi-fi and the internet the value of time spent on a train has been increasing exponentially every year? It is ludicrous to assert that there is no value in time spent working on a train.

[Several hon. Members]

rose—

[Andrea Leadsom]

I wish to make some more progress. Families up and down the country are feeling the pinch desperately. We are in an economic crisis, yet this project is costing the taxpayer £1 billion even before a single piece of track is laid in 2015—that sum is just to pave the way for HS2.

I wish now to discuss the ludicrous time frame. Nothing is going to get built before 2026. When I commute between Euston and Milton Keynes in peak hours, as I often do, it is not a case of, “Can I get a seat?”; it is a case of, “Can I physically get standing room on the train?” There is a massive capacity problem right now, and it cannot wait until 2026. It certainly cannot wait for 21 years, until the full “Y” is completed. Man might not land on Mars by 2032, but it is entirely possible that there will be technological changes by then that mean that HS2 is out of date before it is even finished.

[Angie Bray (Ealing Central and Acton) (Con)]

Does my hon. Friend not accept, however, that HS2 was a manifesto promise that was extremely valuable to people like me who were campaigning against a third runway at Heathrow? We were going to put people on trains, not planes, and phase 2 of this project will deliver precisely that.

[Andrea Leadsom]

I thank my hon. Friend for that intervention. All I can say to her is that when the facts change, we should change our minds. HS2 has not fulfilled its early promise. We simply cannot say that we will spend £32 billion because we broadly scoped something out in our manifesto that looked as if it would deliver the earth.

[Dr Julian Huppert (Cambridge) (LD)]

Will the hon. Lady give way?

[Andrea Leadsom]

I will not give way again. I am sorry, but lots of people want to speak.

I am no rail expert, but there are lots of people who are, and they have put forward a broad range of different options that the Government and the Department for Transport should consider as alternatives that would offer more jobs, and faster and greater capacity while improving our existing rail infrastructure. I want to mention a few. We could lengthen existing trains from nine carriages to 12, and we could convert more from first class to standard.

[Stephen Hammond]

rose—

[Andrea Leadsom]

I will not give way again.

We could consider solving the bottlenecks and pinch points that are so frequent along routes that slow down the system and give us less capacity. We could consider reopening old branch lines, particularly those that would enable passengers to switch between the east coast and west coast main lines and the Chiltern line. That would solve part of the problem in the firewall argument. We could consider solving the artificial peaks in demand generated by our appalling fare structure. We could even consider a new line just between London Euston and Milton Keynes so that the west coast main line could be dedicated to taking passengers to the north of England far faster and on a far more frequent service.

[Julie Hilling (Bolton West) (Lab)]

I thank the hon. Lady for giving way, because it strikes me that her argument is that HS2 is a bad, bad idea, but that it is all right if we build an extra line between London and Milton Keynes. Is she then saying that those of us who live in the north, the north-west and Yorkshire and Humberside should not be allowed to travel on trains? I am bemused.

[Andrea Leadsom]

If the hon. Lady had listened, she would have heard that I said we should consider building a dedicated local line so that the west coast main line could be exclusively available to those wishing to travel fast to the north of England on the inter-city train. It is nonsense to say that we should build a dedicated £32 billion line instead of considering a proper solution to the capacity problem. The final potential solution we should be considering is giving the right spending priority to rolling out superfast broadband.

Archie Norman, the chairman of ITV, has said:

“Scrap HS2 now and announce instead £17 billion of spending…to bring about the biggest improvement in history of Britain’s existing railway.”

I am genuinely sorry to be so at odds with my Government and with many Members over this project, but we must seriously consider whether spending £32 billion of taxpayers’ money on a project that will deliver nothing until 2026 is worth while. In my view, it is not. It is monumentally expensive and the time scales are so long that they become satirical. As a result, HS2 risks being a vast white elephant that is out of date before it is even completed.

HS2 is not visionary, it is not green and it is definitely not economically sound. We can and must do better. I urge the Government, in the strongest possible terms, to reconsider this project so that it does not become a triumph of political will over economic sense.

[Several hon. Members]

rose—

--- Later in debate ---

[Andrea Leadsom]

Does my hon. Friend accept that if we are going to make the case for “not only but also”, as he described it, the case for HS2 needs be made after the “not only”? In other words, if we are trying to make an economic argument, we have to add on the incremental improvements to be made and then justify HS2 expense on top of that.

[Stephen Hammond]

There is one fallacy with my hon. Friend’s argument. Simply speeding up the current network and alleviating some minor problems is no substitution for high-speed rail. It is clear that high-speed rail would at least double capacity, and on certain parts of the route, the capacity increase would be significantly more than that.

The Y-shaped high-speed network across the UK would bring a benefit-cost ratio of about 2:6. For the London to Birmingham section, the ratio would be 2:0. That shows that the case for going further north becomes more compelling and adds to the economic benefit. The proposals in “A Better Railway for Britain” would have a benefit-cost ratio of 1:4. Those ratios prove that high-speed rail is significantly better than some of these hotch-potch alternatives in “A Better Railway for Britain”.

--- Later in debate ---

[Hugh Bayley]

My hon. Friend has been a great champion of improving the rail infrastructure in Yorkshire and the north of England, and for connecting the north to jobs and markets in the south of England. We as British citizens have every bit as much right to be connected to our country’s capital—and, through the capital, to Europe—as people living in the south of the country.

[Andrea Leadsom]

rose—

[Hugh Bayley]

I give way to the hon. Lady, as she proposed the debate.

--- Later in debate ---

[Andrea Leadsom]

I thank the hon. Gentleman. If HS2 is such a fantastic project, does he think that the private sector will finance it?

[Hugh Bayley]

That is a really good question, which I ask the hon. Lady to think about. The hon. Member for Wycombe (Steve Baker) made the same point, suggesting that the only test for whether there is an economic case is whether private investors would undertake a project on their own without substantial Government investment. Had that argument been applied to the building of the M40, the connection between his constituents in Wycombe and London, Birmingham and Oxford, it would never have been built. Exactly the same could be said with regard to the link between the hon. Lady’s constituency and London via the M1.

Big public transport infrastructure projects need political backing and leadership from Governments, and this project had it from the previous Government and has it from the current Government, which will give investors confidence. However, it will not get that investor confidence without Government cash. Had we not had the public investment in motorways in the ’60s and ’70s, just think out of the box about the economic state that our country would be in now. There are some local interests to be protected, which I understand, but the real test for the Conservatives now is whether or not they are going to speak for the whole country. I remind hon. Members that the Conservative manifesto stated:

“A Conservative government will begin work immediately to create a high speed rail line connecting London and Heathrow with Birmingham, Manchester and Leeds. This is the first step towards achieving our vision of creating a national high speed rail network to join up major cities across England, Scotland and Wales. Stage two will deliver two new lines bringing the North East, Scotland and Wales into the high speed rail network.”

I wish to make several points in the short time remaining. First, it is important that the high-speed wing of the “Y” that goes to Yorkshire and the north east leaves the line south of Birmingham, so that it can connect the three great east midlands cities of Leicester, Derby and Nottingham, through the Sheffield city region, to Leeds.

Secondly, it is essential that that line joins the existing east coast main line, which for some time will remain the link from Yorkshire to Scotland, south of York. The reason for that is partly self-interest—I am speaking as a York Member—and partly because York is a rail hub and the most interconnected station in the north of England, at least east of the Pennines. If we are to get feeder services, good connectivity with York is important.

Thirdly, the link to Scotland is extremely important, and the most viable first link should be from Leeds to Edinburgh and on to Glasgow, because that would provide connectivity with Tyneside and Teesside on the way, whereas pushing the line north from Manchester faces the environmental barrier of two national parks, and there are very few people, but many sheep, between Lancaster and Motherwell. I ask the Government to plan for the connection first to go through the east coast corridor.

Finally, it is not a case of investing in either the current infrastructure or High Speed 2. The country needs both and the Government must commit to both.

--- Later in debate ---

[Andrea Leadsom]

I congratulate the many colleagues who have spoken in this debate, and I am sorry for those who wanted to speak and did not. In particular, I pay tribute to my hon. Friend the Member for North Warwickshire (Dan Byles), who was instrumental in securing the debate. I am sorry that we did not get to hear from him.

I reiterate that I think we can all agree that there is a massive capacity problem not just on the west coast main line but across our entire rail network, and it is absolutely right that the Government should consider ways to improve capacity, rail infrastructure and economic development across the UK. However, I go back to the fact that HS2 is not a “build it and they will come” project. We should not look at a £32 billion expenditure as something that we can just do on the hoof and expect the return to come. There has been plenty of anecdotal evidence today—so-and-so says this, and so-and-so says that—but I have heard no hard evidence that HS2 will be good value for money. This is not our money; it is the taxpayers’ money. As my right hon. Friend the Minister so eloquently said, let us hope that we, like the Victorian railway owners, do not go bust and lose our shirts over it.