Railways: Passenger Demand

Baroness Kramer Excerpts

Thursday 31st October 2013 Lords Chamber

[Lord Faulkner of Worcester]

To ask Her Majesty’s Government what estimates they have made of the cost of upgrading the West Coast and East Coast main railway lines to bring them up to the standard likely to be required to meet passenger demand after 2020.

[The Minister of State, Department for Transport (Baroness Kramer) (LD)]

My Lords, the only viable option for solving problems on the west and east coast main lines beyond 2020 is HS2. The Government have looked at alternatives, including upgrading these routes. The lead alternative looks to enhance all three existing north-south main lines at a cost of £19.2 billion, £2.5 billion of which is required for the west coast and £11.5 billion for the east coast. None of these alternatives delivers the scale of benefits of HS2.

[Lord Faulkner of Worcester (Lab)]

My Lords, I welcome the Minister to the Dispatch Box for her first Oral Question and warmly congratulate her on that Answer. With the number of people travelling by train now higher than at any time in the history of Britain’s railways, with growth over the past five years running at 5%, does she agree with Network Rail’s assessment that a make-do-and-mend approach to the main lines built by our Victorian ancestors would require 2,770 weekend closures, endless bus substitutions and increased journey times over 14 years, and do little for economic growth for our great cities outside London?

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[Baroness Kramer]

My Lords, I could not agree more with the noble Lord. I would also say that the benefit-cost ratio for HS2 assumes a growth in rail demand of 2.2% while, as he has said, the actual growth in demand over recent years has been much closer to 5%, which would significantly increase that cost-benefit case. Capacity is the issue; the alternatives just do not offer the scale. For example, HS2 will deliver over 13,000 peak hour seats to west coast destinations compared to just 3,000 for the alternatives.

[Lord Berkeley (Lab)]

My Lords, how many years of closure at weekends or at other times of the three main lines going north from London would be required to meet the demand of passengers and freight—and freight will double in the next 20 years—if that was to be a substitute for HS2? I declare an interest as chairman of the Rail Freight Group.

[Baroness Kramer]

My Lords, we would be looking at something like 14 years of weekend closures, which is extraordinary disruption. That assumes a very aggressive construction schedule of two simultaneous schemes on each route at any one time. If it was done in a more usual pattern, there would be even more weekends of closures. The question of freight is a serious one, because the alternatives would not add a single additional freight path on the southern section of the west coast main line, whereas, by transferring long distance passengers to HS2, there is a possibility of up to 20 additional freight paths on that same congested set of lines.

[Lord Palmer (CB)]

Could the Minister explain why the Government are so keen to denationalise the east coast main line when it is performing so well and contributing so generously to Treasury funds? I declare an interest as a frequent traveller on that line.

[Baroness Kramer]

My Lords, I shall reply only briefly, because this wanders away from the topic of the Question. The important issue is that we need significant investment in the east coast main line. The Government and DOR have done an excellent job of stabilising the service; we look to the future and to investment and growth. That is why the Government are making the decision to move ahead with the franchise, to provide a far better and improved service in future.

[Lord Bradshaw (LD)]

Did the Minister see the report in the Evening Standard yesterday that the noble Lord, Lord Sugar, has spent £24 million in acquiring a property the value of which is expected to rise when Crossrail is opened? The HS2 route will see significant rises in value but these are neither credited to the scheme in the economic assessment nor captured by the public purse. Is any work going on to secure some credit for such effects of these large infrastructure schemes?

[Baroness Kramer]

My noble friend Lord Bradshaw is right that the economic case is looked at within fairly tightly defined contours. There are many additional benefits. My noble friend Lord Deighton is working on making sure that the growth potential of HS2 is absolutely maximised. My noble friend made the point that there is an uplift in value. My goodness, we have seen that around places like King’s Cross/St Pancras, at the stations on the Jubilee line and in the benefits to Canary Wharf. That economic uplift has not traditionally been captured to help fund infrastructure. We will look closely at ways to do that in future.

[Lord Snape (Lab)]

My Lords, does the Minister accept that the problems on the east coast main line are due to the shoddy way in which electrification took place in the 1980s, a fact that Ministers at the time boasted about? Electrification masts were more widely spaced, and the catenary of lightweight construction means that it blows down in anything above a summer breeze. These matters have nothing to do with the train-operating companies. The Minister’s welcome response about the future of HS2 today ought to be answered by those in my own party, some of whom appear to be more interested in playing politics than worrying about the future of our railway industry.

[Baroness Kramer]

Again, I am afraid that the noble Lord, Lord Snape, wanders away from the subject of today, but it is crucial to understand that when HS2 goes forward, it does not mean we are stopping other transport investment on crucial lines. As he will know, in the next Parliament £73 billion has been committed to transport improvements and only £17 billion of that goes on HS2. Definite improvements are scheduled for the east coast. Since that is away from the topic, I will not pursue those today—and I cannot find them under my tab. I will write to the noble Lord in detail.

[Lord Cormack (Con)]

Is my noble friend aware that many do not share her enthusiasm for HS2, and believe that the points made by the noble Lord, Lord Mandelson, deserve real consideration and that the environmental cost that this nation will have to pay is really disproportionate to the benefits that might be achieved? We hope very much, even at this late stage, that common sense will prevail.

[Baroness Kramer]

My Lords, the Government—and I—regard HS2 as a vital project. As I said, the underlying rationale is capacity. We are out of capacity on critical lines going north out of London and those are essential for the economy. We must also continue to build the economy of the north of England rather than just constantly focus on the south. I believe that the project has found a good balance between the environmental challenges—of course, they are many—and value for money. This is an absolutely essential project and most of those in this House who specialise and focus on transport and rail will confirm the view I have just expressed.

[Lord Davies of Oldham (Lab)]

My Lords, why is the public operation of the east coast main line not allowed to continue or bid for the franchise when bids from the German and French state railways appear to be welcome?

[Baroness Kramer]

My Lords, I am delighted to find that HS2 has now become so uncontroversial that questions on other topics enter into this brief exchange. I just repeat what I said on the future of the east coast main line. It has gone through a period of being stabilised by the Government. That has meant that new investment has not come in on the scale that passengers on that route require. We wish to see a strong future for the east coast main line.