High-speed Rail

Barry Sheerman Excerpts

Thursday 19th December 2013 Commons Chamber

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

(Select Committee Statement): I am pleased to have this opportunity to make a statement about the Transport Committee’s recent report on high-speed rail. The crowded west coast main line currently combines long-distance inter-city, inter-regional and commuter passenger services, together with freight. Network Rail predicts that by the middle of the next decade the line will be unable to meet demand for new train paths and there will be increasing levels of overcrowding. In 2011, we looked in detail at the Government’s proposals for a new high-speed rail line from London to Birmingham and onwards to Manchester and Leeds. Phase 1 is due to be completed by 2025, and phase 2 by 2032-33. This proposed new line is a major piece of national rail infrastructure and must be seen as part of the wider rail network. We commissioned our own research into HS2, and considered the capacity the alternatives could provide. We concluded that only HS2 could deliver the step change in capacity needed to accommodate forecast long-term demand on the line.

Our new report looked again at HS2, in the light of the revised strategic case published by the Department for Transport in October and the research by KPMG on the line’s regional economic impact. The Department’s case rests on a prediction of 2.2% per annum growth to 2036. Demand is assumed to stop growing after that, only three years after completion of the line. Capacity remains the key issue and no new information has emerged to challenge the conclusion we reached on this question two years ago. Alternatives to HS2, based on upgrading the existing line and changes to train configurations, would not provide a long-term answer to the capacity challenge. These alternatives would themselves be costly and cause considerable disruption over a long period.

In addition to addressing capacity issues, the line will increase connectivity between our major cities. It can help to promote growth in the UK’s city regions and contribute to a rebalancing of the economy. This, however, is not automatic. Local authorities and local enterprise partnerships must develop economic development strategies to ensure that this takes place, and the Government must back these. The Department must become more proactive in ensuring that HS2, as part of the nation’s infrastructure, brings maximum benefit.

UK firms and workers must have the opportunity to secure employment from this major investment, starting with its construction. This requires specific initiatives to make businesses across the country aware of the possibilities. Action must be taken to enable all regions to benefit from improved services and a more successful economy. KPMG’s assessment of the regional economic impacts has generated considerable controversy. This is useful work, but there are limitations to its findings and the research should be developed further.

The report highlights the varying effects HS2 can have on different areas. This research reinforces the importance of taking steps to ensure that the benefits are spread as widely as possible. Work should now be prioritised to widen access to the high-speed network, improving journey times on the classic railway and promoting additional local and regional services on capacity freed up by the new line. This means that the Department, HS2 Ltd and Network Rail must work together.

Control of costs is essential. The estimated cost of HS2 over a 20-year period is £28 billion, plus £14 billion contingency and £7.5 billion for rolling stock. These are major amounts of money—

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Will my hon. Friend give way? [Interruption.] I am sorry for trying to intervene.

[Mrs Ellman]

It is vital that the costs are actively managed.

Consideration should be given to speeding up delivery, including looking at options from building north to south, as well as northwards from London. Sir David Higgins, the incoming chairman of HS2 Ltd, should address this. Indeed, Sir David has already told the Committee that he will be looking at these issues, and we will be pursuing this further with him.

Concerns have been expressed that funding for the new line will squeeze other transport budgets. This is a serious issue. There is, however, no evidence that this is happening, looking at projected funding allocations, and we would not accept this situation if it arose. Vigilance is required.

Any major investment of this nature taking place over many years inevitably involves risks, but the risks of not going ahead with HS2 outweigh the risks of doing so. Without this investment, the west coast main line will become increasingly overloaded. Commuters will suffer overcrowding and delayed journeys. It would not be possible to provide new services, and the growth of rail freight will be stifled. Governments will be tempted to raise fares to control demand. The opportunity to reshape the economy and boost growth in the north and the midlands will have been lost. As our continuing debates about airport capacity show, once the opportunity to make a bold investment decision for the future has been missed, it may have gone for decades.

--- Later in debate ---

[Mrs Ellman]

The hon. Gentleman raises very important issues. The KPMG report is a very useful piece of research that identifies areas that are due to benefit from High Speed 2 but also areas that would not benefit. When the Committee questioned KPMG about its findings, it became clear that some considerations had not been taken into account, including the latest information on rail improvements being planned for the areas concerned, the possibilities of rents being increased, and the impact of freight developments. Those are just some examples of aspects that had been missed out. Our report says that further reports should be commissioned, and I am sure that the Committee will take a continued interest in that. More research in this very important area should be pursued. It is vital not just that areas that are seen to benefit are made aware of that, but that areas that are worried that they would not benefit are able to get maximum support so that they could share in the positive aspects of HS2.

[Mr Sheerman]

rose—

[Mr Speaker]

Order. The fact that the hon. Gentleman sought to intervene on the Chair of the Transport Committee when I had indicated at the outset that the procedure was analogous to that of a ministerial statement, in which hon. Members should not intervene but rather wait their turn, suggests to me that he was not present at the outset to hear my wise words. Moreover, I have since been advised that he did indeed beetle into the Chamber a couple of minutes into the hon. Lady’s statement. The concepts of the hon. Gentleman, on the one hand, and brass neck, on the other, are by no means unrelated. In a spirit of Christmas generosity, on this one occasion I shall allow him to put his question, which I think he wants to hear and which he imagines that perhaps the House might also wish to hear.

[Mr Sheerman]

My office is a long way from here, Mr Speaker, and I ran as fast as I could. I apologise to you and to my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman). She knows that I am a great admirer of hers and of the work of her Select Committee, and of Select Committees in general.

My hon. Friend also knows that I started off as a passionate supporter of HS2 until I started reading the international research that suggests that rather than empowering regional cities and making them more affluent and wealthy, such projects have the opposite effect and would drain even more power and influence away from the regions towards London and the south. The Secretary of State for Business, Innovation and Skills came out with a very similar view this morning. Did my hon. Friend take evidence about that research, and did she take evidence from the former Chancellor of the Exchequer? Why did she put so much emphasis on KPMG? Those of us who live in Yorkshire and saw what it did—or failed to do—in the banking sector do not trust KPMG further than we can throw it.

[Mrs Ellman]

I thank my hon. Friend for his question and thank the Speaker for permitting these important issues to be raised. The Committee questioned KPMG because it had conducted the most recent research on this very specific area. However, the Committee’s reports are based on contributors additional to KPMG.

When we conducted our original major inquiry two years ago, we visited France and Germany to see for ourselves the impact of high-speed rail. It became clear that there are major potential benefits to high-speed rail provided that the local and, in the case of France and Germany, regional authorities take advantage of them and provide the necessary economic development support to make them a reality. That is what I would like to happen here in the UK, and that is what the Select Committee report advocates.