High-Speed Rail

Charles Walker Excerpts

Thursday 31st March 2011 Westminster Hall

[Mr Charles Walker (in the Chair)]

There are plenty of hon. Members who want to speak.

[Kelvin Hopkins]

I have made my main points. I have made them before in this Chamber, and I shall continue to make them, because they are rational. A lot of people in the industry also support my view, which is not based on nimbyism but on what Britain really needs. Britain does not need HS2; it needs more investment in conventional rail and, indeed, in rail freight.

[Andrea Leadsom (South Northamptonshire) (Con)]

On a point of order, Mr Walker. For several months, the hon. Member for Coventry North West (Mr Robinson), my hon. Friend the Member for North Warwickshire (Dan Byles) and I have attempted to secure this debate via the Backbench Business Committee. We have been preparing for this incredibly important debate for a long time, and I was assured only yesterday by the Table Office that my hon. Friend the Member for Wellingborough (Mr Bone) would make a few brief comments, and then I would be the first speaker.

[Mr Charles Walker (in the Chair)]

It is always helpful if the Table Office conveys to the Chair the discussions it has had with Members’ researchers. If there has been confusion, I will get to the bottom of it.

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[David Mowat]

On the first point, the ratio of 2 is for the London to Birmingham link. As my hon. Friend will know, the ratio is 2.6 for the link to Manchester and to Leeds. Including the wider economic benefits, it is 2.6. I have the business case for Crossrail, which my hon. Friend may have had the chance to have a look at. The business case in that is 1.87. The final point that my hon. Friend might wish to consider is the idle time point, which is very important.

[Mr Charles Walker (in the Chair)]

Order. We have had too many questions.

[Andrea Leadsom]

I am struggling to follow some of my hon. Friend’s numbers, because I think that he might be looking at the numbers from the original business case, not from the current one. I do not want to address his points specifically because those numbers do not quite register with me. I apologise for that.

Passenger forecasts are another major assumption in the business case, relying on a 216% rise in demand for train travel. That figure remains wildly optimistic, in spite of being downgraded from the original business case, in which growth of 267% was forecast. The Department for Transport’s own national travel survey shows that overall transport demand is no longer growing with GDP. Eurostar’s passenger numbers in 2009 had reached only 37% of the level that was forecast, as a result of building the HS1 link. The Public Accounts Committee took evidence from the Department for Transport on that point and was reassured by it that lessons had been learned and that any future major project would factor in more severe downside assumptions—that has clearly not been the case. The only comparable forecasts for long distance rail travel by 2036 are from Network Rail, which predicts a range of growth of 45% to 89%, versus that forecast by HS2 Ltd in its original business case of 133% growth by 2033. I urge the Department for Transport to look closely again at that assumption.

Of course, in cash terms HS2 will never pay for itself. Once built, only one third of the total claimed benefits will be captured through fares. The value of the net revenues once it has been built—with a presumption of fares of £14 billion, less operating costs of £6 billion over a 60-year project life—will cover only less than half of the capital costs. At a time when families up and down the country are feeling the pinch, we must make sure that infrastructure projects offer value for money. Many people would argue that not a penny will be spent until 2015 anyway, but between 2009 and 2015 the Department for Transport expects to spend around £1 billion just on preparing the way for high-speed rail.

Secondly, on the environmental impact, HS2 Ltd itself says that the project is, at best, carbon neutral. It predicts that 65% of passengers will either transfer from existing rail services, where faster trains inevitably increase carbon emissions, or are additional new journeys as a result of the faster trains, which will also increase emissions. The shorter journeys by air that will transfer to HS2, will ironically, as my hon. Friend the Member for North Warwickshire (Dan Byles) said, provide more capacity at our regional airports for cheaper long-haul flights. It is estimated that the modal shift from car to high-speed train will be approximately 7%. In fact, HS2 Ltd forecasts that the traffic volumes on the M1 will be reduced by only 2% as a result of HS2. So, it is not green. There will also be a significant environmental impact during construction, as well as permanently, to the English countryside, wildlife and historic sites.

Thirdly and fourthly, on the prospects for job creation and regeneration, the Department for Transport claims that HS2 will create 30,000 new jobs. Some 9,000 will be construction jobs and are likely to be temporary. The rest are skewed towards property development and retail near stations.

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[Damian Collins (Folkestone and Hythe) (Con)]

I am interested in my hon. Friend’s core argument that high-speed rail may suck economic growth from the regions, because that seems to run contrary to what most people lobbied for—greater speed of connection to the capital. Most places in the regions that have travel times to London of one hour or less market themselves heavily on the basis of the shorter journey time. They see it as a positive advantage, and that seems to run contrary to what the academics in Barcelona are saying.

[Mr Charles Walker (in the Chair)]

Order. I do not want to impede debate, but a huge number of hon. Members want to speak this afternoon.

[Dan Byles]

I will sum up with a quote from the conclusion of the report from the university of Barcelona, which looked at five high-speed rail systems around the world. It states;

“Finally, the economic impacts of HSR are somewhat limited. The largest cities in the network might receive limited gains, but this is not the case for intermediate cities, which might see economic activities being drained away and suffer an overall negative impact.”

The report is not definitive, but before we spend £17 billion of taxpayers’ money, the issues raised in it should be addressed. I will be delighted if the Transport Committee looks at that, and I shall certainly send it a copy. We must thoroughly understand what we are doing, because we could do untold damage to our country at very great cost if we do not get it right.

[Mr Charles Walker (in the Chair)]

Order. It is not within my powers to impose a time limit on debates, but hon. Members could look at the huge number of colleagues who want to speak and do the mathematics themselves—it is about six minutes each.

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[Angie Bray]

Will the right hon. Gentleman give way?

[Mr Charles Walker (in the Chair)]

Order. We are now in the 11th minute of the right hon. Gentleman’s speech. If hon. Members wish to speak they should stop intervening. If they do not want to speak, they can continue to intervene.

[Angie Bray]

I will be very brief. The right hon. Gentleman’s case seems to be that we should never do anything on the basis that we might not be absolutely certain about it. Sometimes projects have to be started. If we never start a project, we will never get any progress.

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[Mr Slaughter]

I can only say that if I could end all my speeches with a quote from Perivale I would be a much greater orator.

[Mr Charles Walker (in the Chair)]

Colleagues seem to have a fairly elastic idea of six minutes, but six minutes is a good idea.

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[Thomas Docherty (Dunfermline and West Fife) (Lab)]

It is a pleasure to serve for the first time under your chairmanship, Mr Walker. The hon. Member for Banbury (Tony Baldry) suggested that when both Front-Bench teams are in agreement, we should count the spoons. Given that I broadly agree with him, I am not sure what we should be counting. Hopefully, as a member of the Transport Salaried Staffs Association and a former Network Rail employee who worked on a number of civil engineering and major projects, I will bring something to this debate.

The past 30 years of rail infrastructure projects in the UK have been somewhat chequered. There are some great successes: we have reopened a number of rail lines; reconnected communities; and brought social and economic benefits to large parts of the United Kingdom, and a permanent link to mainland Europe. Those are, I hope, benefits in everyone’s eyes. However, we have had some significant failures in those rail projects. Each one has been over budget, if we look at what the politicians claimed originally and the actual bill the taxpayer received. Many require ongoing subsidy and many communities have been blighted, including one in my area, thanks to the Stirling-Alloa-Kincardine railway.

The hon. Gentleman was right to make a point about budgets. This is not a party political point. The channel tunnel came in desperately over budget, and there has been talk about ongoing problems with High Speed 1. To look at a small-scale project, the Stirling-Alloa-Kincardine railway, which only involved the reopening of seven miles of track, went from being £20 million originally to £77 million when it was finally delivered, and compensation cases are still to be resolved. The Airdrie Bathgate project, which I helped to deliver, was £40 million when it was first mooted and £300 million when it was actually delivered. For that reason alone, I do not believe a single figure that has been bandied around for the cost of any section of HS2 and its successor projects.

If the line reaches Edinburgh, a whole new station would have to be constructed, because Edinburgh cannot take high-speed rail. The current station is right in the city centre and there is no capacity left for any more track or platforms. That means that a whole new set of connecting track would need to be laid from the parkway station that would be required to the network, and those costs have not been worked out.

The question is: who benefits from high-speed rail? It only works if it travels great distances between stops. It needs to get up to high speed to make the time savings. This is a blindingly obvious thing to say, but every time we add a stop, it adds several minutes to the journey. That is not just because the train has to slow down and pick up speed again, but because passengers have to get off and on the train.

I hope that the Minister will learn from successive Ministers, both in Scotland and elsewhere in the UK, that leadership is required. When a route is set out, she must not give in to the very eloquent lobbying that she will get from many Members who will say, “Of course I support it, but you need to add my local area to it.” The line can only work if it is genuinely high-speed and connects only the great conurbations. I doubt that either Warrington or even Carlisle will qualify on those grounds, despite the eloquent cases that will be made for them.

The Minister must recognise that we need to have rolling stock in place before we start to build. One of the great reasons for the failure of the Edinburgh airport rail link was that Ministers in Scotland tried to build a rail link under a live airport without any clear sense of what the rolling stock would actually look like. For instance, for safety reasons, it is impossible to send a diesel train underground, and a whole network would need to be electrified. That project floundered because it was impossible to find suitable rolling stock that worked anywhere in the world. One of my great concerns about High Speed 2 and its successors is that I have not heard a clear articulation of what the required rolling stock is. Perhaps when the Minister responds to the debate she can say whether the Government have identified suitable rolling stock that actually exists somewhere on track, rather than on paper.

I sound a final note of caution about the independence of the business case. The Minister is fully aware of the ongoing dispute between the TSSA and Network Rail, which she has been helping to mediate. That dispute is about the past leadership of Iain Coucher, the former chief executive of Network Rail. I do not wish to detain the House, but there are some very serious concerns about Mr Coucher’s financial practices and about why he has spent so much taxpayers’ money lobbying for a high-speed rail project. I hope that the Minister will give a cast-iron guarantee that Mr Coucher and his associates will play no part in the delivery of high-speed rail, if and when it goes ahead.

In conclusion—I am trying to stick to your six-minute limit, Mr Walker—there are five key things that the Minister must demonstrate for this project to go ahead. First, there must be robust and independent analysis of the business case and the time savings. Secondly, clear leadership must be given on delivery. Thirdly, there must be no compromises on stations once the route is set out. Fourthly, there must be rolling stock that actually exists on track somewhere, rather than in someone’s head. Fifthly, there must be honesty about ongoing costs for the subsidy of the line of route and the rolling stock.

[Mr Charles Walker (in the Chair)]

I call Graham Evans. Six minutes.

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[Graham Evans]

Well, I am sorry that I gave way to my hon. Friend. [Laughter.] I can only go on what business men in the north of England are saying and it is true that markets in the south-east of England should be open to the whole of the UK. That is why many high-profile business leaders have backed high-speed rail and why it will help to reduce the north-south divide. My colleague from Yorkshire, my hon. Friend the Member for Calder Valley (Craig Whittaker), is no longer in his place but he made that point earlier.

There are many reasons why the south is more prosperous than the north, but one of the most obvious is the south’s proximity to our major trading markets in Europe. High-speed rail allows us to close that gap between north and south, and to bring our country closer together. I am therefore very proud to support the Government’s high-speed rail plans and I also praise the previous Labour Government and Lord Adonis in particular for the important steps that they took.

Having said that, I am increasingly concerned about the current Labour party and its position on HS2. The shadow Transport spokesman, the hon. Member for Garston and Halewood (Maria Eagle), has indicated that HS2 has been dumped by Labour, along with every other policy now that Labour has started again with “a blank piece of paper”. Last week the deputy Leader of the Opposition, the right hon. and learned Member for Camberwell and Peckham (Ms Harman), said that most of Labour’s cuts would come from holding back on capital investment. Some clarification is urgently required. If Labour were to oppose this once-in-a-lifetime investment in the north, I know that my constituents would never forgive them.

Let me conclude by saying that railways have always been a crucial part of Britain’s economic prosperity. They drove the massive growth in living standards during the 19th century and created new opportunities for people from every corner of our country, but even then small-minded obstructionists stood in the way of progress who were not too dissimilar to those we have today. The ladies of Cranford eventually came round to the idea of the railway. I hope that the opponents of high-speed rail will also see the light some day, as our future economic competitiveness depends on high-speed rail.

[Mr Charles Walker (in the Chair)]

It is very polite of you, colleagues, to take interventions, but if you continue to do so, you will deny other colleagues the opportunity to speak.

[Christopher Pincher (Tamworth) (Con)]

I shall adhere to your injunction to be brief, Mr Walker. I thank my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) for securing the debate, and also my hon. Friend the Member for Lichfield (Michael Fabricant)—who is not in his place—for leading the charge to secure an inquiry from the Transport Committee into HS2.

I assure my hon. Friend the Member for Weaver Vale (Graham Evans) that I shall not invite him to any of my supper clubs in the near future. My constituents are not nimbys. I have spoken to several hundred of them over the past months, and I saw about 80 last Saturday. They tell me that if it can be demonstrably proven that the business case stacks up, if there are proper mitigations in place in their vicinity, and if they get fair and reasonable compensation for the loss they suffer, they will, through gritted teeth, accept the proposal. The trouble, as we have heard today, is that the business case has not been proven, mitigations are not yet known—the route was announced last December but in the Tamworth area we are still waiting for a roadshow, which we will not get until June—and, although we have had hints about compensation for blight, we still do not know anything about what we might get. People are understandably very concerned.

I will not dwell on the value side of the business case and the holes that have been found in it during the debate, because my hon. Friend the Member for South Northamptonshire has already done that very eloquently, as have other Members. However, let me say this about it: the net value ratio, which has been significantly reduced by HS2 Ltd—so it accepts that it is wrong—still uses as its basis for generating demand the Passenger Demand Forecasting Handbook, version 4.1, which Sir Rod Eddington has said is out of date, uses incorrect views on saturation of demand, future technological advances and competition that might affect demand, and that we should be using version 5.0. I look forward to my right hon. Friend the Minister’s making it clear in her remarks that that particular handbook will be used to generate demand, and that HS2 Ltd will be directed to do its sums again.

I want to focus on the cost side of the business case. Other Members have pointed out that one should never believe a Government when they talk about how much they will spend on capital infrastructure projects. Phase 1 of HS2 has been identified as costing £17.1 billion, but phase 2, the Y-shaped link, adds a further £13 billion or so, taking the total cost to more than £30 billion. We have heard that those figures might be right—they might be wrong—but the fact of the matter is that some figures that do not appear in the cost side should be included.

One of those key figures is the cost of blight. From Eversholt Street down by Euston all the way up to Whittington, businesses and properties are blighted by the proposed railway. They are blighted now, because if people in those places manage to sell their properties, they will lose 30%, 40% or even 50% of the value, and stamp duty accruing to the Treasury will fall. That is not costed in the business case, but it means that estate agents and solicitors will do less business, and vendors’ buying power will be reduced. None of that is in the cost side of the business case, and it ought to be.

Then we come to compensation. We have heard, and I have it in a letter—which I do not have in front of me, so I will not put words into his mouth—that the Secretary of State has indicated that the Government will look at innovative ways of providing some form of compensation. That needs to go into the business case, so that we know the true cost of the proposition, which I think could run into several hundred million pounds, further reducing the proposed net benefit ratio and further undermining HS2 Ltd’s case for building the railway.

I shall end here, as I am conscious that other Members wish to speak. I call upon the Minister to look again at the business case proposed by HS2 Ltd, and again, and more carefully, at Rail Package 2. There is still time for her to change her mind, and I hope that she considers doing so.

[Mr Charles Walker (in the Chair)]

We have 30 minutes before I call the Front-Bench spokespeople and we have eight colleagues who want to speak, so do the mathematics.