HS2 Funding Referendum Bill

Cheryl Gillan Excerpts

Friday 23rd January 2015 Commons Chamber

[Mr Chope]

Any Bill that has the support of my hon. Friend is obviously a very good one, and I am grateful again for his support.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

May I congratulate my hon. Friend on bringing this Bill before the House? Let me take him up on the intervention from our hon. Friend to my left.

[Philip Davies]

I have never been described as that before!

[Mrs Gillan]

Positionally in the Chamber, I should say—I would not want to be accused of misleading the House. In Buckinghamshire, one of the organisations against this project, as proposed by the Government, has entitled itself “51m”, because it worked out that £51 million could be given to be spent in every constituency in this country for the equivalent cost of the project, as it was at the beginning of the process.

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[Mr Dominic Grieve (Beaconsfield) (Con)]

It is a great pleasure to be able to participate in this debate. I thank my hon. Friend the Member for Christchurch (Mr Chope) for providing the forum for this debate. I regret that I was not able to sign his Bill when he introduced it. One of the advantages of having left ministerial office is that I now have greater scope to express my views on the subject.

One of the responses that has been chucked at Members of Parliament who have raised a whisper of protest about whether the scheme is desirable is that as they largely represent constituents who may be directly and adversely affected by it, the validity of their representations is diminished. As my right hon. Friend the Member for Uxbridge and South Ruislip (Sir John Randall) described so well, the vast majority of letters that I received from constituents were from people who were not directly affected by the construction of this railway line, and who from the earliest stages wrote to register their concern about whether an infrastructure project, which in theory is a good thing for a Government to undertake, warranted the colossal amount of expenditure involved and the environmental damage that must inevitably go with almost any infrastructure project.

I am a realist. My constituency has a history of huge infrastructure projects—the M4, the M40 and the M25—which have all done massive environmental damage, but I accept that my constituents do not routinely write to me asking for those motorways to be ploughed up. That is not to say that we should construct a white elephant. It is abundantly plain that there are real doubts about whether the project justifies the expenditure. The point has, I am sure, been made in the House on previous occasions—and I know that all infrastructure projects have costs that run away with themselves—but it is remarkable that we started in 2009 with an announcement that this railway line would cost some £16 billion and we are currently on what we have been told is a fixed, definitive and final figure of £50 billion, after a process that took us to £29 billion, then to £32 billion. Why should any of my constituents have any confidence in the costings of the project?

[Mrs Gillan]

The costs that we are referring to now are at 2011 prices, and there has been no updating of those costs, so we could already be talking about underestimates.

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[Mr Grieve]

Indeed, Madam Deputy Speaker. The whole point is that the Bill, by facilitating a referendum, would enable these matters to be crystallised and discussed and would largely compel the promoters of the project to come up with all the answers that have been left hanging in the air.

I do not want to take up any more of the House’s time than is necessary. I come back to the point made by the hon. Member for Coventry South (Mr Cunningham) about compensation. Any sensible person in this country must look at the compensation package, because as a good citizen they may wish to consider the interesting issue of their situation if such a thing were to happen to them in future. I am the first to accept that an adequate compensation package might go quite a long way as a palliative to those whose lives are interfered with. The truth is that the compensation package that we seem to be creating is, frankly, pretty woeful. It compares very badly with the sorts of packages produced in countries such as France.

The hon. Gentleman is right: having the referendum would enable us to have a debate on the sort of compensation package we should have. That would go much further than just this project; it might enable us to resolve compensation for the future in a much clearer and more credible way. Public debate, such as a referendum would allow, would be immensely valuable in achieving that.

[Mrs Gillan]

Does my right hon. and learned Friend not agree that a referendum would force the Government to reveal the risks associated with the project? I am referring specifically, as he knows, to the Major Projects Authority reports, which have been withheld from Members of this House and from the very Committee that is scrutinising the passage of the major Bill through the House. If there were a referendum, the Government would be forced to let those risks be seen in public by the public who would be voting on the project.

[Mr Grieve]

I agree entirely. It would be to the Government’s political advantage to reveal as much information as possible about how the decision making process took place. Of course, I am mindful of the rule that Ministers must have the possibility of confidentiality so that they can make informed decisions. I am very respectful of that; my time as Attorney-General made me understand how important it is, and the matter is very much for our ministerial colleagues to determine. However, my right hon. Friend is absolutely right. Wherever possible, documents should be put forward. Even a document that might appear disadvantageous to people would at least have the merit of their being able to explain why, notwithstanding it, they had changed their minds. To come back to the Bill, that is exactly why the public debate at the moment is not adequate for the magnitude of the project that the Government have been creating.

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[Frank Dobson]

Yes, indeed.

Apart from those who are paid supporters of the scheme, it has virtually no supporters. When I say “paid supporters”, I am including some of the civil engineering advisers and consultants who are producing reports in favour because they are paid to do so. There is a danger that they are damaging the reputation of British civil engineering consultants.

[Mrs Gillan]

People watching these proceedings will probably be remarking that there are not many MPs in the Chamber, but historically we do not get many people here on Friday morning for debates on private Members’ Bills. Is it not remarkable that so far there have been no interventions in support of this project on which £50 billion of taxpayers’ money, at the very minimum, is being spent? I am sure that the Front Benchers will support it, but no other voices have rushed here to do so.

[Frank Dobson]

That is so. I think that the right hon. Lady is probably regarded as being in the south-east, where 51% are against and 30% are in favour. In the London area, 48% are against and 34% are in favour. And so it goes on. The supporters of every political party are, on balance, against.

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[Frank Dobson]

Indeed. When the capacity argument fell through—the proponents threw in the towel—they turned to economic growth. However, if they look at virtually all the foreign experience, they will see that when a high-speed line is put in to a capital city, that capital city sucks in business and jobs from the other places on the line. That is significant to those who live in smaller towns near the cities where HS2 stations are proposed, because there is considerable evidence that those smaller towns will lose business to them. If a station is built in Manchester, towns in Rochdale, Oldham and other surrounding areas could lose trade, jobs and prosperity to Manchester. That might be okay for Manchester, but it would not be too good for Greater Manchester.

Rail improvements are needed in the north of England. The time it takes to travel from York to Manchester and from Leeds to Liverpool is a disgrace. High Speed 3 is now being talked about, but I think there would be a bit more support for High Speed 3 if it became High Speed 2. A lot of local services in the north of England need to be improved, as well as the interconnections between the big cities.

People talk about the economic benefits that High Speed 2 will bring to cities in the midlands and the north. The cost will be £50 billion and it is intended that five cities will benefit: Birmingham, Nottingham, Sheffield, Leeds and Manchester. As I suggested in one debate, if that £50 billion were split between those cities, giving them £10 billion each, and the people of, say, Manchester and Sheffield were asked in a referendum what they would do with their £10 billion, the chances are that they would not say that the first thing they needed to do was to club together for a high-speed railway. That would be pretty unlikely. Perhaps there should be local referendums.

Some of us are decried for being neanderthal and opposed to progress. People say, “What about the wonderful progress that was made by the great railway entrepreneurs of the 19th century?” A lot of those projects in the 19th century were characterised by bankruptcy, fraud, deception, thieving from shareholders and God knows what else. George Hudson of the Great Northern railway invented the Ponzi scheme about 100 years before Ponzi was born.

Those entrepreneurs did get the things built—that is a fair point—but if we want to rely on 19th-century examples, and if High Speed 2 is such a good idea that it could be put to a referendum and people would agree to it, surely we should be asking why the private sector is not desperate to build this new railway. Why should the taxpayer have to find the money, when historically in this country it is not the taxpayer who has done so? There seems to be no rush to come up with the dosh privately to invest in this scheme. Perhaps that is because outfits such as the Institute of Economic Affairs and the Institute of Directors—not organisations I usually quote, I freely admit—think that it is a total waste of time. Broadly speaking, they think it is crackers.

That brings me to the most recent report of the Public Accounts Committee, to which the hon. Member for Christchurch (Mr Chope) referred. To say that it is a lukewarm endorsement of High Speed 2 is to wildly exaggerate the Committee’s enthusiasm for it. I need my glasses to give you the full benefit of the report, Madam Deputy Speaker. It says:

“The Department for Transport is responsible for a number of ambitious, expensive transport infrastructure programmes including the planned High Speed 2 programme. We are not convinced that these programmes are part of a clear strategic approach to investment in the rail network… The Department told us it will deliver the full High Speed 2 programme within its overall funding envelope of £50 billion.”

For a start, it is not £50 billion, because HS2 admits that if the scheme were to work, Euston station would not be able to cope with the extra passengers and would be overwhelmed. Crossrail 2 would then be needed, at an additional cost of £20 billion. If the scheme were to work—if all the optimistic prognostications of those who are in favour of it came to be—it would require a further £20 billion. Quite frankly, it is deceptive of the Government and High Speed 2 to talk about £50 billion. Usually, they do not even like to talk about £50 billion: they talk about £43 billion and then reluctantly admit that they need another £7 billion for the locomotives—it was perhaps going to be a train-free railway at one time—and we have to bear that point in mind.

I want to express my own views and those of the people who live in my constituency. Crossrail 1 is causing a bit of trouble here and there, but, broadly speaking, people have been willing to go along with it. Originally, the proposal for the channel tunnel link was that it should come into a huge concrete box under King’s Cross station. The sort of people who are now proposing HS2 said, “This is the only way to do it. There is no possible alternative. We are the experts. We know everything.” They ended up having to admit to a Committee of this House that was considering the Bill that their concrete box was too short for the proposed train. That was the quality of thought that went into the proposal.

When I first suggested to the planners that the best thing to do would be to use St Pancras station, which was grotesquely underused, I was treated like a total idiot: “Pathetic! How could he possibly come up with such a silly idea when our concrete box under King’s Cross is a masterstroke?” They eventually abandoned the masterstroke and we now use St Pancras station. I am pleased that if someone gets a train from St Pancras to the Gare du Nord, they really know that Britain is best, because the Gare du Nord is horrible and St Pancras is a credit to everybody except the railway planners, because they were not in favour of using it originally.

Similarly, despite the problems that have been caused in my area, there has been, broadly speaking, full support from nearly everyone there, including myself, for the massive improvements at King’s Cross station, all of which were started under the Labour Government, with the support of myself and local people.

I believe that it is necessary to say to Parliament, “Look, you are letting people down.” The proposals are a disgrace: they are amateurish and grotesquely expensive. Parliament has not been doing its job properly. I mean no criticism of the people who are serving on the legislative Devil’s island that is the Committee stage of the hybrid Bill. Those people should, at the very least, receive double salaries and free passes on the railways for ever. Our procedures let people down and do not reflect the views of people in this country.

[Mrs Gillan]

Would the right hon. Gentleman also like to mention in dispatches the excellent Clerk, who is doing a first-class job for that Committee and has gone a long way to ensuring that people feel that they have been or will be listened to?

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[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

It is a pleasure to follow the right hon. Member for Holborn and St Pancras (Frank Dobson). If we had a secret, unwhipped ballot across the House, I think we may find less support for this project than those on the Front Benches would like.

I congratulate my hon. Friend the Member for Christchurch (Mr Chope) on bringing this Bill to the House and giving me and my colleagues the opportunity to sponsor it. My right hon. and learned Friend the Member for Beaconsfield (Mr Grieve) was not free to sponsor the Bill, but it is good to have his affirmation that he would have added his name to it had he not been on the Front Bench. I have been liberated for some time, and fortunately I have been able to speak about this matter. For the first two years of this Parliament, however, owing to Cabinet collective responsibility and observing what is right and proper in the House, I was unable to air my views about this project on the Floor of the House.

Friday mornings are never convenient for Members who want to spend time in their constituencies, and it is commendable that colleagues have joined the debate this morning, probably on their way to their constituencies. My right hon. Friend the Member for Aylesbury (Mr Lidington) has asked me to mention the strong feelings in his constituency about the huge cost of this project, particularly because the lack of any interim station means that local people are set to gain no benefit from the line, while facing massive disruption to their lives for years to come. I echo that point for my constituency and constituencies in Buckinghamshire that will be severely disrupted should the project go ahead. My hon. Friend the Member for Stafford (Jeremy Lefroy) supports the Bill but is unable to attend the debate, and I am pleased to put that on the record to show that many Members up and down the line—and now beyond the line—feel uncomfortable with the proposals.

That we are debating giving people a vote on this project is absolutely right, and if the Minister, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes)—

[The Minister of State, Department for Transport (Mr John Hayes)]

Right honourable.

[Mrs Gillan]

I do apologise; I meant no disrespect. If my right hon. Friend realised how unpopular this project was, he might not make the speech he is about to make. I recall that while I was driving—I think I was listening to “Any Questions”,—one of the questions involved HS2. The audience on the radio booed, and I thought, “Well there’s a popular project for the Government to pursue, particularly in the light of its so-called limited cost.” This project has not captured imaginations up and down the country, and it is certainly not held dear by the people I talk to, including those way beyond being affected directly by the line.

The trouble is that HS2 is slipping under the radar in many ways. The organisation led by Buckinghamshire county council is an amalgam of many other organisations and, as I said earlier, it has called itself “51m”, because the equivalent cost of HS2 at the moment, if spread among our constituencies, would give each Member £51 million to spend in those constituencies. The right hon. Member for Holborn and St Pancras said that if we gave £10 billion to the five cities, they would not immediately club together and want to build HS2. In the same way, if constituencies up and down the country received £51 million, they would not immediately club together to build HS2.

Like the right hon. Gentleman, I wanted to find out what people thought about HS2, so I went along to the Institute of Directors. In Transport questions last March, I raised that issue because the IOD—the very business people to whom the project is supposed to appeal—surveyed more than 13,000 directors for its spring report last year to get their views on HS2. More than half those directors thought that HS2 was poor value for money, and more than 60% thought that the budget earmarked for the project would provide a better return if it were used to improve existing road and rail networks. Frankly, when our business community comes out against a project to that extent, I do not understand why the Government do not listen. I am not afraid of asking people what they think, and neither are most of my colleagues in the House. I therefore believe that the proposal for a referendum is well made and should be put, not least so that the business community can express its views.

It is all very well for the companies that are already earning highly from the project. I was amazed at some of the sums that have already gone to potential advisers and contractors on this project, all of which have been printed in Hansard in response to questions—I will not go into the details of the companies, but they are there if people want to look at them. Those companies are in favour of the project, as are Manchester and Birmingham, which see vast swathes of taxpayers’ money coming in their direction. Sir Albert Bore and Sir Richard Leese will be absolutely delighted and will put pressure on Labour Front Benchers to go along with the proposals, because taxpayers’ money will go into those Labour-controlled authorities, but what does that say to the rest of us?

[Frank Dobson]

Even in Birmingham there are doubts. There is a site called Washwood Heath. Everybody in Birmingham ranging from the far-left Trots to the chamber of commerce was in favour of redeveloping it with about 3,000 modern jobs in IT and bio-engineering, but—lo and behold—HS2 says, “Tough. We need it for some sidings. Total employees: 30.”

[Mrs Gillan]

The right hon. Gentleman is right. A constituent of mine who owns a business in the Birmingham area will be adversely affected by the project. He will have to re-site a profitable factory, which will involve losses and a great deal of interruption to the business.

It is five years since the announcement of the project. Its genesis has been well documented by other hon. Members, including in this debate. We are five years in and we do not know what the costs are. Inevitably, those costs are rising. In 2009, the costs for HS2 were identified as £16 billion. A year later, they went up to £29 billion. By 2010, they were £32 billion. As everybody knows, the costs now stand at £50 billion, particularly if we want the luxury of a few trains running up and down the lines.

What worries me is that I do not believe the costs will stop there. First, there is the unknown quantity of Euston and the implications, which could run into millions, nay billions, of pounds if the right hon. Member for Holborn and St Pancras is to be believed—and he is to be believed.

There are unforeseen costs after that. For example, I am not convinced that the countries that make up the United Kingdom will not press for Barnett consequentials on that spend, not least because, as I know, there was a dispute with Wales on whether Barnett consequentials would be applied on the transport elements of the Olympics and the Olympics project. It was decided that the transport spend elements would be Barnettised, and therefore extra funds had to be found to pass to Wales and Scotland and so on. The first phase of HS2 is Birmingham to London. There is a powerful argument to make, and there is no reason to think that more funds will not have to be found to deliver those Barnett consequentials to the other countries that make up the United Kingdom.

Naturally, the costs have risen. As I mentioned, the costs quoted are at 2011 prices. I sit on the Select Committee on Public Administration. Last week, the Treasury permanent secretary was before us. During the course of our investigation, I asked him about the costs of HS2 and pointed out that we were dealing in 2011 prices. I have asked him for an up-to-date costing of the project, which I believe he has agreed to provide by means of a letter to the Committee. I hope that, very shortly, the House will be better informed as to the real costs—the costs as of today’s date. It is hard for people to understand the full implications of the costs of the project if we do not keep pace with current prices.

The assumptions that have been made about the benefits of the project are grossly overestimated. The benefit-cost ratio for phase 1 of HS2 has dropped to 1.4 from 2.4, as it was when the first business case was issued. For phase 2, the ratio stands at 2.3, which is down from 4. One thing is not highlighted: the business case includes an £8.3 billion cut to existing inter-city services. When HS2 was first announced, my colleague the Foreign Secretary, who was Secretary of State for Transport, said it would be necessary to “seriously review the viability” if the BCR dropped below 1.5. That has happened, but as far as I know there has been no review. The reliability of the assumptions are widely questioned, but in a project of that size that will cost the taxpayer so much, we need to be certain before we press ahead.

If we strip out from the assumptions the questionable elements—for example, the overvalued benefits of the reduction in journey times, which are questionable because people do valuable work on trains—we calculate that the more realistic BCR is 0.5. If that is the case, the project will be one of the poorest value for money projects that this country has ever seen. It compares unfavourably with many other infrastructure projects. Many road improvements have BCRs of as much as 10. The optimised alternative to HS2 originally proposed by “51m”, the group of councils that have lobbied against HS2, had a BCR of 5.

Basically, by anybody’s reckoning, the project is based on dodgy assumptions. We do not know the real costs. It is five years in, but we do not have the final route and the final plans. We do not know what the risks entail. It bears repeating that the Major Projects Authority was set up to identify the risks of such projects. As far as I was aware, it was supposed to be transparent. As I understood it, we were going to be one of the most transparent Governments ever. Those reports, which we know are classified as amber/red, have not been released. I repeat that it is not right or proper that the House can be said to have scrutinised the project properly on behalf of our constituents and the taxpayers if the Committee that considers the project Bill in detail does not have access to the clearly identified risks laid out by the Major Projects Authority. If Members of the House are not allowed to have them, members of the Committee at least should have them. If the project is to be done, it needs to be done properly. People need to see that each of those risks has been addressed by the Government, and by HS2 Ltd or whatever organisation delivers the project.

[Mr Chope]

Is there an analogy with people seeking investment from shareholders? They have to produce a proper, transparent and open prospectus for shareholders. In this situation, taxpayers are in the role of shareholders, and they are not getting a proper prospectus from the Government.

[Mrs Gillan]

As far as I am concerned, it is “Don’t do as I do, do as I say.” We are always dictating to the banks and corporations that they must have transparency in their dealings, but we are not doing it ourselves. I find it rather disturbing, and it is certainly not fair on my constituency and the other constituencies that are going to pay the ultimate price for the delivery of this project if it goes ahead.

If one is going to put in a piece of infrastructure that disrupts an area of outstanding natural beauty—that is, an area of the country that has been nationally designated as something that is precious—it is not right that it should only be half protected. I am very grateful to my colleagues, because following my representations I was able to increase the tunnelling that protects my constituency. It was originally to come out in the middle of a football field at the back of old Amersham. I was able to persuade the then Secretary of State for Transport that we needed more tunnelling. I envisaged that that tunnelling would carry on to the end of the area of outstanding natural beauty, but it was moved to a place called Mantles Wood. There is no logic for why it should come out at Mantles Wood. If we are going to spend this money, I think it should go to the end of the AONB, so that that nationally designated area of the country is fully protected.

[Frank Dobson]

I think the right hon. Lady will confirm that she was present when our colleague, my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith), asked Sir David Higgins about the fact that they were going to tear through two bits of ancient woodland in her constituency. He reassured her that it was all right, because they would replant it!

[Mrs Gillan]

The depth of ignorance knows no bounds in some instances. I am very depressed by the fact that people actually believe that one can replace ancient woodland. I have worked with the Woodland Trust. When I was first elected, Penn Wood in my constituency was one of the first major woods that the trust purchased and saved for posterity. The complexity of ancient woodland, with its soil and the way in which it is made up, cannot be replaced. We can have substitute woods put somewhere else, but they can never be replaced. Once they are gone, they are gone for ever. I am grateful to the right hon. Gentleman for that intervention.

If one is going to spend £50 billion and disrupt the lives, businesses and homes of a number of people, money ought to be spent fully on compensation, as well as on protection of the environment. If one cannot afford to compensate people properly, as my right hon. and learned Friend the Member for Beaconsfield said, it is a crying shame, because they are paying not once through their taxes but twice with the blight. It is unfair that the burden should fall disproportionately on those nearest to the ultimate route.

Another aspect that worries me, and which the Bill plays to in putting a referendum on this project before the people, is that I do not feel new technology and developments have been taken into account fully. I put a question to the Department for Transport on whether the impact of driverless cars had been taken into account when looking at the future development of the railways and other forms of transport. The written answer came back that they had not been taken into account, but that a study was going to be carried out. One cannot go ahead with a costly project over such a long period of time without looking at the impact of new technology. When I first came into the House, my secretary worked on a golf ball typewriter. I now carry with me an iPad on which I can FaceTime the world—all my e-mails come in and I can go on Twitter. The change in technology over 20 years has been absolutely phenomenal. That is the time scale of HS2. There will be all sorts of developments, not least if we can finally get good, first- class, rapid broadband into all parts of Buckinghamshire and all points north, east, south and west. There are going to be changes to business patterns, patterns of travel and style of travel. It is important that we look at horizon planning holistically before we commit to this sort of expenditure, and that we give people the chance to say what they want through a referendum, as envisaged in the Bill.

The Public Accounts Committee report was quoted extensively by the right hon. Member for Holborn and St Pancras. He produced the summary, which is exactly the part I had underlined to read out to myself. What struck me is that the Department takes a piecemeal approach to rail investment. That is one of the most damning aspects of the report. It is important for the Department to go back to the drawing board and do some real horizon planning across the whole piece, looking at all our methods of transport, interoperability and connectivity. Otherwise, the white elephant that has been adopted as a sign by the anti-HS2 campaigners, will come to fruition. The PAC and the National Audit Office have consistently criticised the project, and that counts for a great deal. The NAO and the PAC are set up to scrutinise the type of expenditure envisaged here, and to tell it warts and all. The PAC is a cross-party Committee, so there is no political bias. Once again, it is not being listened to seriously at the highest levels of Government.

I will not go on for much longer, but I will leave the last words to my constituents. I have received literally hundreds of e-mails about the Bill. My hon. Friend the Member for Christchurch has been mentioned in dispatches many times. E-mails have come not just from my constituents; they have come from around the country. Many people would like the Bill to come to fruition, although I know that at this time of the electoral cycle we do not have much hope of it going any further. I will leave it to my hon. Friend to decide what he wants to do with it.

[Mr Chope]

I do not know whether my right hon. Friend is in the habit of responding to such e-mails, but one point she might be able to make is that people should challenge candidates in the forthcoming general election on whether they would support such a Bill in the next Parliament, so that there can be a popular vote on whether we should spend this amount of money on HS2.

[Mrs Gillan]

I certainly will. I stand proudly as a Conservative and will be standing proudly as a Conservative, but I think my Front Benchers and my party know that I cannot subscribe to this project, will be speaking out against it and will continue to speak out against it. I am sure there will be opportunity politicians who will try to claim their opposition to this project. I am well aware that there is one party that claims it is the only party that opposed high-speed rail. I seem to recall that it had three high-speed rail promises in its manifesto at the previous election. I have no reason not to believe that in areas of the country that perhaps welcome this project it will be singing a different tune. As far as I am concerned, this is a policy I cannot agree with and will not agree with.

I want to give the last word to John Gladwin, from the Chiltern Society HS2 team. The Chiltern Society is an excellent local organisation set up to praise and cherish the Chilterns, which is an asset not just for my constituents but the whole country, particularly Londoners. He writes:

“While the country is running a substantial deficit, requiring restrictions on spending on the NHS and forcing local government to cut services, is it sensible to invest in a project that offers a poor Benefit Cost Ratio, and takes forever to deliver benefits to the North and the Midlands? Add to this the fact that the Government does not have a coherent Transport Infrastructure Plan, as evidenced by there being no Airport Commission Report until later this year, and Sir David Higgins coming up with HS3 as a way of delivering the benefits of HS2 to the North. Would it not seem sensible for the taxpayer to decide whether to fund this project or not?”

The Bill is simple: it allows for a referendum to be held on whether the UK taxpayer should financially support the HS2 railway. The referendum must be held before the commencement of construction of the railway, although I have to tell my hon. Friend the Member for Christchurch that nearly £1 billion will already have been spent by the time we get to the general election. The simplicity of the Bill appeals to me and I know that it will appeal to a much wider audience. Although this is a Second Reading debate, I know that the Bill will not progress much further, but I wish it a fair wind as it would mean that the people could decide on this project.

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[Lilian Greenwood (Nottingham South) (Lab)]

Although I count myself as a supporter of HS2, I congratulate the hon. Member for Christchurch (Mr Chope) on securing a Second Reading for his Bill. I know that he has a long-standing interest in these issues as a former shadow transport spokesman, and it is always important to debate how public money—taxpayers’ money, if you will—is spent and to subject major public projects to close scrutiny.

The hon. Gentleman has said outside this place and has contended today that the House has not had an opportunity to scrutinise HS2’s funding and the costs and benefits of the project, but speaking as a veteran of the Public Bill Committee that considered the High Speed Rail (Preparation) Act 2013 and as a Front-Bencher during the introduction of the phase 1 hybrid Bill, I am not sure I can follow him that far. The truth is that the House has already imposed tighter spending controls on HS2. I submitted an amendment to the preparation Act that was accepted by the House and introduced a duty on the Government to declare any overspend, against both the annual and the total budget. The noble Lady Baroness Kramer conceded in the other place that that was

“a very vigorous reporting process under which the Government must report back annually and record any deviation from budget…which has put in place a very intense scrutiny process around the budget.”—[Official Report, House of Lords, 19 November 2013; Vol. 749, c. 949.]

Of course, there can be no room for complacency. Delays after the election and substantial cost increases have not been to the Government's credit, and I would agree that the Government, perhaps distracted by their rail franchising fiasco, failed to communicate properly the reasons why the project is necessary. Of course, the overall figure, the £50.1 billion, includes a sizeable contingency buffer—as well as funds for new trains, some of which will run on existing lines—but that is not money that we want to see spent. We need to have a laser-like focus on bringing down the project’s costs. There cannot be a blank cheque for this or any other project.

Nevertheless, I do not see the case for such a dramatic course of action as that proposed in the Bill. We did not have a referendum on Crossrail, which is due to cost £16 billion, nor did we have a referendum on HS1, which cost £6 billion. I am happy to be corrected, but I am not aware that the hon. Member for Christchurch called for such a referendum at the time. On a day when an important Transport Committee report called for

“a fairer allocation of rail investment across the country”,

it would seem very strange to set such a precedent for a railway that will primarily benefit the midlands and the north. Moreover, a referendum would itself cost £85 million, given that that was the cost of the AV referendum.

Finally, and importantly, the phase 1 Bill Committee is now deep in its work. Three days a week, in Committee Room 5, mitigation is being agreed and the project is being improved. I cannot accept that further and prolonged uncertainty would benefit people on the route. Labour Members—albeit with one or two right honourable exceptions—believe that, provided costs are kept under control, HS2 will bring enormous benefits to the country.

[Mrs Gillan]

As was expected, the hon. Lady is in favour of HS2 and against the Bill, but would she care to tell us at what cost point her party would decide to abandon the project? She said that we must keep costs under tight control, but given that she must now know what the limits are, will she share them with the House? I think that that information is important.

[Lilian Greenwood]

The right hon. Lady has, of course, been a strong advocate on behalf of her constituents, and I know of her long-standing opposition to the hybrid Bill. Labour’s position is clear: we support HS2. It was a Labour proposal, and we want that Bill to be passed. However, I can do no better than quote what was said by the hon. Member for Christchurch, who, when he was an Opposition Front Bencher 10 years ago, said in the context of Crossrail

“no serious prospective Government—such as we are—would be prepared to write a blank cheque for any project, however desirable people might think it is.”—[Official Report, 7 April 2005; Vol. 432, c. 1607.]

A budget has been set out for this project, which includes a significant contingency element. We must maintain our focus on ensuring that the project is delivered within that budget, and, I have said, it would be preferable for the contingency money not to be spent.

[Lilian Greenwood]

I have already said that the necessity for Crossrail 2 and whether it would attract a favourable cost-benefit analysis should be investigated. Crossrail needs to be considered on its merits, as do all other investments in transport infrastructure. A case must be made on the basis of the benefits that it can deliver and whether it represents a good use of taxpayers’ money.

[Mrs Gillan]

The hon. Lady said that my hon. Friend the Member for Christchurch (Mr Chope) had not called for a referendum on Crossrail 1. I understand that Crossrail 1 is funded partly through the rates and partly by businesses in London, and not entirely by the Treasury and the taxpayer’s purse.

[Lilian Greenwood]

I agree. Nearly all rail projects’ capital costs are publicly funded, although there are sometimes opportunities for private investment. I have no doubt that there will be opportunities to attract such investment in, for example, over-site development of stations in connection with HS2. However, when we need investment in our infrastructure, we must be prepared to commit public money. As I have said, I do not think that we should set a precedent in this regard.

HS2 will unblock the congested arteries of our ageing rail network, will provide vital additional capacity, and will transform the connections between the great cities of the midlands and the north. Our message to both the Government and HS2 Ltd is clear: take the phase 1 Bill to Third Reading, present the proposals for phase 2, and get this important project back on track.

--- Later in debate ---

[Mrs Gillan]

I think my right hon. Friend has lost his rapier-like focus, because every taxpayer in every corner of the UK is going to be paying for this project. Every single taxpayer will be making a contribution and, as I pointed out before, the sum is £51 million for every constituency, so I am afraid his argument falls at the first hurdle.

[Mr Hayes]

And that is true of the road investment strategy, too. It is certainly as true of the road investment strategy as it is of HS2—it is as true of the £15 billion-plus we are spending on roads across the whole country. That £15.2 billion for the road investment strategy does not just affect people in terms of the value it brings; it is also funded by taxpayers in exactly the way my right hon. Friend suggests.

--- Later in debate ---

[Mr Hayes]

There is no need to apologise, but the hon. Gentleman anticipates what I was about to say, and I did think, rather mischievously, as he intervened, of the Chesterton line that

“He who has the impatience to interrupt the words of another seldom has the patience to”

devise good ones of his own, but that is certainly not true of him, I have to say.

The point the hon. Gentleman is making is a perfectly decent one: once one gives way to the contention that every major matter—and I accept that this is a very major matter—not only requires the consent of this House, but furthermore, between elections, requires the consent through a referendum of the people as a whole, we have the dangerous beginning of a set of arguments which leads to the place suggested by the blessed Margaret Thatcher and the hon. Gentleman, which is almost one might say anarchic.

[Mrs Gillan]

I think that my right hon. Friend is taking this line because he is afraid that if a referendum on HS2 was offered to the people of the UK, they would vote firmly against it. Is he actually saying that an institution such as the City of Edinburgh council, which held a postal ballot referendum in February 2005 on its transport strategy, was wrong? I would say it was absolutely right.The people voted and rejected the proposals by 74% to 26%. The voter turnout was 62%. That vote gave people a chance to say how they wanted their council to spend money on a transport project. Is the Minister saying that Edinburgh council was wrong? Is not the truth that he is afraid that people would vote this project down?

[Mr Hayes]

It is not out of fear that I resist this proposal; it is out of courage. I am courageous enough to believe in the power, wisdom and efficacy of this place. I am not one of those politicians who is prepared to give ground to that destructive modern insecurity—that guilt-ridden doubt about our ability to originate, to invent, to inspire and to enthral—that so many of the governing class are said to feel. I believe that politicians can make a difference, and that they can take big decisions and be ambitious for what they can achieve for the country. So it is not fear that drives my resistance to my hon. Friend the Member for Christchurch’s argument; it is courage, and the willingness to be bold and to have confidence in the decisions taken by this House. I emphasise the point about the decisions being taken by this House, because this kind of project can succeed only on the basis of consensus.

--- Later in debate ---

[Mr Hayes]

I want to say two things about that. First, the right hon. Gentleman knows that those redevelopment plans have been given life only as a result of this project. Secondly, I concede that it is important that any redevelopment should take full account of the interests and wishes of the people in the immediate vicinity. He made a strong case for them in his speech. It is critical that the communities that will be directly affected by that development should be integrally involved in what takes place there. He has been making this argument for some time and, as a result of the overtures that he has made today, I will commit the Government to engaging with those communities, to ensuring that what is done matches the local interest, and to involving him in that process. I am more than happy to have further discussion on the detail of the development of Euston, given what he has offered this debate today. In that spirit, I say to him that its development can be a good and indeed glorious thing; it does not have to be bad news for him, his constituents or the people in that vicinity.

[Mrs Gillan]

I am sure everybody, particularly the right hon. Member for Holborn and St Pancras (Frank Dobson), appreciates the assurances the Minister is trying to give him. However, I understand that the designers have downed tools on Euston, because they were trying to do it within a £2 billion budget and they cannot redesign and deliver anything meaningful within that. So I would love to know what budget the Minister has set in the Department for the redevelopment, because this is a golden opportunity to inform people of the new budget for any redevelopment at Euston.

[Mr Hayes]

Let me tell hon. Members what I think about the redevelopment of Euston. This will perhaps come as news to my right hon. Friend and others, but I am absolutely determined that the development of Euston should be ambitious and bold in the way she described. I am absolutely determined that we should end with something that takes its inspiration from the arch. We do not want some vile, low-budget, modern monstrosity. We want a building that is grand and fit for the future, that is a landmark destination and that is as glorious as the new redevelopment of St Pancras or the addition to King’s Cross. We have a good recent record on what can be done at these large London stations. Let us do nothing less than that at Euston—indeed, let us try to do more. So, I will not be constrained in my ambitions in the way she says, and I could hardly be so, given that I claimed earlier to believe that politicians in this place should be bold, courageous, ambitious and inventive. I want a neoclassical building on a grand scale at Euston, and it does not take a lot of working out to realise that the inspiration—the genesis for that—should come from the redeveloped arch.

The right hon. Member for Holborn and St Pancras was saying that although he understands that there will be a totemic significance to that building, we also need to consider its environs. I have pledged to him that we will engage with the local community, with local representatives and with him to make sure that the views and representations of the people in the surrounding area are built in to our thinking. I do not think we can say fairer than that.

[Mr Hayes]

The right hon. Gentleman understands that those are not matters for which I was responsible, but I am here today and I can seize the responsibility for saying to him that we will make those proposals available for local consideration and consultation, and I do not think it is unreasonable to say that we should do that by September. What I do not want to get to is a further statement in September saying that they have been further delayed. He is a very distinguished and experienced local representative. The way these things work best is when draft ideas—plans—are put forward, to which people can then add, and they then develop incrementally. That cannot be done until the conversation is started in the way he describes. So I think we need to move ahead with greater alacrity than he suggests has been the case so far.

[Mrs Gillan]

rose—

[Mr Hayes]

I have a lot more to deal with and I do not want to delay my progress, but I will give way to my right hon. Friend.

[Mrs Gillan]

I am sorry to press the Minister further, but I am interested in what he is saying at the Dispatch Box because the rumours are that the budget for any development at Euston is going to increase to about £7 billion. I stress that that is a rumour, but I hope he will be able to comment on it. He seems to be adding another layer of consultation and another delay to this project, which will of course add cost to it, so I would like him to set out the timetable for that consultation on Euston and tell me what sort of delay there will be on it. Will it be delivered in September? What is the budget? What are the proposals? If he is going to be able to say what he has said so far at the Dispatch Box, he must have that detail available. I think it is only fair he does this because any changes at Euston will, of course, delay the entire project between Birmingham and London.

[Mr Hayes]

Let me leave Department for Transport officials quaking when I say that I will give these commitments: the arrangements I have set out in respect of the further discussions and consultation with the people in the area that the right hon. Member for Holborn and St Pancras represents should be completed speedily; they should certainly be done within existing budgets; and the proposals should be brought forward no later and the measures I have set out should begin no later than September, as he requests. That seems to me to be perfectly reasonable, and I am happy to confirm that that has become the Government’s position, because I have said that it is the Government’s position.

I have clearly made the case that the Bill is an inappropriate means to consider HS2 further, on the grounds that a referendum is not the best way of moving forward. I think that I have begun to offer some reassurance to the right hon. Member for Holborn and St Pancras about Euston. I know that he is not entirely convinced, but I hope that he will count it as progress that the Government have recommitted to the kind of proper discussion with the local community that will allow it to shape plans as they move forward. Although I do not wish to delay the House unduly, I shall now move on to other matters arising from this wide-ranging debate that need to be explored.

As she has done a number of times, my right hon. Friend the Member for Chesham and Amersham made a spirited case on behalf of her constituents, and she cannot be criticised for inconsistency in her argument. She suggested that we were—I hesitate to use this phrase, but I will do so, for the sake of clarity—hiding costs by using 2011 prices. She will know that estimates are presented in 2011 prices to ensure that costs can be consistently compared as the project progresses. That is a standard approach for large projects that stretch over many years.

My right hon. Friend also talked about VAT. Her Majesty’s Revenue and Customs recently confirmed that HS2 Ltd can reclaim VAT. As she will know, that took effect at the start of 2014-15. As the National Audit Office has pointed out, VAT is an internal transfer within government, rather than an additional cost, so it would not be right to include VAT in construction cost elements.

[Mrs Gillan]

I did not raise the matter of VAT, but it is always good to have that information. However, the permanent secretary to the Treasury has given evidence to the Public Administration Select Committee and undertaken to provide us with the costs at today’s prices.

[Mr Hayes]

I am grateful to my right hon. Friend for clarifying her position.

My right hon. Friend did speak about ancient woodlands—at some length, and understandably so. I agree that it is vital that we value ancient woodlands. Whenever possible, it our intention not to destroy ancient woodlands. Furthermore, it is important that we take whatever mitigating measures we can along the line as a whole to deal with environmental effects. I will be speaking shortly at a platform provided by the Campaign to Protect Rural England about aesthetics and infrastructure, and the importance of ensuring that good design characterises all that we do in major projects, whether rail or road. For too long we have assumed that the ergonomic argument was enough or, worse still, that it was enough to make the case just on the basis of utility, but all great infrastructure projects should have a positive effect with regard to what is built and what that looks like. Of course, it is not possible to avoid all destruction of existing landscape, but I nevertheless value my right hon. Friend’s contribution on ancient woodlands and I have something exciting to say in a moment about a particular tree about which there has been a national campaign.

[Mrs Gillan]

The Minister is going down a route which encourages me. Will he support me in calling for the full tunnelling of the area of outstanding natural beauty, and can his Department say now that it accepts full tunnelling of the AONB, as it is a precious piece of landscape that he obviously would want to protect?

[Mr Hayes]

There is already an immense amount of tunnelling in my right hon. Friend’s constituency. I have the map here. Although I cannot give any further commitment today, the Government always have at their heart a desire to do the right thing by the environment. In that spirit I shall speak about the Cubbington pear tree.

As I said, ancient woodlands are an important part of our natural heritage so they need to be protected wherever possible. The best way of doing that is to avoid them in the first place, as my right hon. Friend argued, where that is practical. I repeat that a robust assessment of environmental factors must accompany all aspects of this scheme. As part of that, there has been considerable debate about the 250-year-old pear tree in Cubbington wood. It is not in my right hon. Friend’s constituency but in Warwickshire, but I know she will care about it because she is a great admirer of ancient trees. That pear tree, the second oldest in Britain, I am told, has been the subject of a considerable campaign.

I have asked for a new arboreal study to see whether the Cubbington pear tree can be moved. I do not know if that can be done, but as the rail Minister for the day, I am delighted to say that we will commission that study. If it can be moved, the Cubbington pear tree will be saved. We have already committed to take cuttings if it cannot be saved, but I want to go further and make that commitment in the course of this debate.

The other central element of the debate has been cost. The question that has been raised is why the scheme is going to cost so much and why the target price for phase 1 has gone up. In fact, the target price for phase 1 has come down. It is now £16.34 billion, not the £17.16 billion figure that was originally published. I know that my right hon. Friend and my hon. Friend the Member for Christchurch will intervene in a moment and say yes, that is because of the removal of the HS1/HS2 link, and that is true. None the less, although we have increased the scope of the work that HS2 Ltd must deliver for the target price—the target price now has to include rolling stock, for example—we are determined that despite that bigger ask, there should be a new laser-like focus, to use the words of the shadow Minister, to ensure that this project is conducted as cost-effectively as it can be.

The Department and HS2 have a constant strong focus on ensuring that the project will deliver maximum benefit for minimum cost. The development agreement continues this focus on cost control by making it a key requirement of the delivery arrangements. So yes, this is a very significant project; yes, the costs are very great, but we can deliver it within budget as cost-effectively as possible. Again, perhaps I believe that partly because I am a confident Minister in a confident Government. I am bold about what we can do. I am ambitious. I do not by any means disregard the concerns of Members about these matters because it is important that the Executive are held to account, particularly on issues of cost. But I do say this. Governments and politicians can take one of two views: a reductionist view of politics—a dull, rather mediocre view—or the view that I hold, which is that big projects, with all their economic value and effect on wider well-being, are what characterise big countries.

[Mrs Gillan]

I assure the Minister that I have never had any poverty of ambition either for my constituency or my country in all the years I have served both. He is claiming that the costs have now come down on phase 1. Will he tell us the new cost-benefit ratio?

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. The Bill suggests that we pose this question in a referendum:

“Do you support the use of …taxpayers’ money to pay for the construction of the HS2 railway?”

We are now drifting well away from the subject of the referendum and the total costs. We are discussing not the individual costs, Minister and Mrs Gillan, but that principle. I am listening carefully to the Minister, who could never be accused of not being ambitious and confident. I would like him ambitiously and confidently to return to the central proposition of whether there should be a referendum.

[Mr Hayes]

rose—

[Mrs Gillan]

I apologise, Madam Deputy Speaker; I have been leading the Minister astray. However, my points have been in the interests of the taxpayers who would be consulted in the referendum. I do apologise.

[Madam Deputy Speaker]

No apology is necessary; I am sure that nobody could lead the Minister astray even with the skills you show in representing your constituents, Mrs Gillan. Your points may be relevant, but we have been discussing only the minutiae and we need to return to the big picture.