High-Speed Rail

David Mowat Excerpts

Thursday 31st March 2011 Westminster Hall

[Kelvin Hopkins]

High-speed networks work brilliantly in areas where there are long gaps between major conurbations—in Spain, France and so on. Britain is much more densely populated. There are many stops and more towns en route. As I have suggested, we need more investment in the conventional railways that we already have, so that we can get to those destinations more quickly. I am sure that we can easily raise the speeds to Leeds, and certainly to other areas, with a lot of investment.

[David Mowat (Warrington South) (Con)]

The point is often made that high-speed rail works better over longer routes. Would he concede that the Paris-Lille, Osaka-Tokyo and Cologne-Frankfurt routes are all about 120 km long, which is quite similar to the first part of high-speed rail that is planned?

[Kelvin Hopkins]

We would have to be prepared to spend that kind of money. I have been on the Cologne-Frankfurt route and it is fantastic. A third of it is in tunnels, which are vastly expensive. The Germans have decided to build that route and it is a wonderful line. We do not have the resources to build lines like that everywhere. Some high-speed routes do not go through much on the way; we almost invariably have significant towns en route that have to be served on the same line.

[David Mowat]

I was responding to the hon. Gentleman’s point that high-speed rail works only over vast distances. The examples I quoted are not vast distances; they are very similar to what is envisaged in the first part of high-speed rail.

[Kelvin Hopkins]

In the best of all possible worlds, it would be nice to have fast routes everywhere. However, we must consider the resources involved. The significant routes are where people would choose to travel by air, rather than by land; people would go by aeroplane from Madrid to Barcelona, for example. Routes become economical where large numbers of people want to travel between conurbations that are fairly widely spaced, there is not a great deal in between, and it is easier to get the high-speed track without too much cost.

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[Andrea Leadsom]

Yes, indeed. There have been plenty of anecdotal reports from low-cost airlines suggesting that they would welcome the opportunity to put on more cheap long-haul flights.

I plan to challenge four aspects of the case for HS2: the business case, the environmental case, the claims about job creation and the potential for regeneration. I am a firm believer that one cannot attack something without providing an alternative. I will therefore also discuss a viable alternative to HS2. I have based my challenges on phase 1 of HS2, in spite of the fact, unfortunately, that the consultation incorporates the entire Y-shaped project. There is too little detail on the assumptions underlying phase 2 to be able to assess the figures properly. I also need to point out that the original business case, written by Atkins for the Department for Transport in March 2010, was updated last month. The new business case is considerably less attractive than the old one.

I will deal first with the business case for HS2. HS2 Ltd claims a net benefit ratio, which includes the wider economic impacts, of 2. That means that for every pound spent, there will be £2 of benefit. That is about the minimum return that could be expected from a rail project—the bar for roads projects is significantly higher. Even that modest claim, however, makes enormous assumptions. Specifically, one of the core and somewhat ludicrous assumptions is that all the time spent on a train journey is wasted, and therefore that every minute of a train journey that is saved can be given a value in pounds—the number of minutes saved, multiplied by the earnings of an individual. That would not matter so much except that the journey time savings account for more than 50% of the £20 billion of total economic benefit claimed for the project. I urge the Department for Transport to look again closely at that point.

[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.

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[Mr Robinson]

I am grateful to the hon. Gentleman. I was trying not to participate in nimbyism. I have been sworn not to do that. I make no apology: I am here to represent Coventry’s interest. Call me a nimby or whatever. I can find nothing in the proposal that brings any benefit to Coventry. I think that if my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) were here he would agree with that point. I can see that many others have a different point of view. We want capacity, we want modernisation, we believe we can get it, there is an alternative, and we want it evaluated. I cannot see what is wrong with that proposition. I cannot see how anyone could oppose it when, looking at capital costs on present forecasts, it would cost half of what HS1 cost.

[David Mowat]

Will the hon. Gentleman give way?

[Mr Robinson]

We have taken up a bit of time. The hon. Gentleman will have better use of his time if I curtail mine.

Welcome as a public consultation is, it is no more than an opportunity for the pros and cons to be stated on a large project on which the Government have already made up their mind. Opening up the mind is very good, and I appreciate what the Minister has said on that point. I have to warn all those who for personal and national reasons are joining us in opposition to HS2 that it is going to require a sustained, strong exercise in parliamentary and people power to get the Government to change their mind. Do not underestimate the difficulties we all face in that respect.

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[Dan Byles]

I give way to my hon. Friend the Member for Warrington South (David Mowat)

[David Mowat]

I want to make the same point. A recent survey by the West Midlands Chamber of Commerce, which I think includes Coventry and north Warwickshire, estimated that there would be £6 billion of wider economic benefits. Does my hon. Friend not believe that some of that would go to his constituency?

[Dan Byles]

North Warwickshire council and, I believe, Warwick district council, as well as Warwickshire county council and Staffordshire county council, have all come out formally against the proposal. They obviously do not believe that there will be wider economic benefits for the midlands and their council areas.

The point made by my hon. Friend the Member for Wimbledon (Stephen Hammond) demonstrates that we need to do more work before spending 17 billion quid of taxpayers’ money. If some reports say one thing, and others say something else, where is the fundamental, independent, root and branch economic analysis of existing high-speed rail systems in other countries around the world? I genuinely do not believe that what HS2 and the Department for Transport published represents that.

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[Frank Dobson]

I know the Minister is an optimist, but if she thinks I am going to leap to the defence of Lord Adonis, she is a super-optimist. There was no connection—oh dear, the great strategists clean forgot. Now they have bodged a connection. There will be a third bore—if hon. Members will excuse the term—from Old Oak Common, coming out at Primrose Hill. The tunnel will be bored in parallel with the other two tunnels coming into Euston, and will proceed along the North London line to connect to HS1. So far, no one has explained whether it will connect to HS1 through the HS1 line, or by going into the HS1 part of St Pancras station. Perhaps the Minister can elucidate, but I doubt it because I do not think the people at HS2 quite know what they are talking about. Something else that did not appear in the announcement is that the proposal is for that tunnel, and the bit on the North London line, to proceed only at conventional speed. It will be HS2, then a slow bit, then HS1—and we are still supposed to regard the people who came up with that proposition as a set of railway strategists.

When HS1 was being built, I recall that the people from Bechtel looked at the possibility of using the North London line as the route into St Pancras. They decided that the cuttings, embankments and bridges along that line were so lousy that it would be cheaper to bore through to St Pancras, which was a considerable distance. When I pointed that out to someone from HS2, they were unaware of that small and apparently irrelevant fact.

If we talk of strategy, we must look at the promises made for the high-speed rail network. People have been told that it will be a great network, and that we will continue it further north. Under the strategy, the line will split at Birmingham and part of it will go to Manchester and eventually to Glasgow. In the east it will go first to Leeds and then to Newcastle and Edinburgh. The proposal is for the line to get as far as Birmingham by 2026. I, however, am confident enough to make two forecasts of my own about the London to Birmingham line. First, it will not be in operation by 2026, and secondly it will cost more than the present estimate. I am willing to take bets from any hon. Members present at the end of the debate. If I lose, they will no doubt have to pursue my grandchildren for the debt.

I do not pay attention to the prognostications, if there are any, about the likely weight of traffic on the route, or what the scheme is likely to bring in. As my hon. Friend the Member for Coventry North West (Mr Robinson) said, if the Office for Budget Responsibility cannot come up with a suggestion for what is likely to happen at the end of the current year, there are slim chances of anyone—whether for, against or doubtful about the project—coming up with an accurate prognostication about what will happen in 2025-26 or, in the case of Leeds and Manchester, 2035 or 2040. Then there are Glasgow and Edinburgh. My grandchildren, who now reappear in this story, are likely to go on the train from London to Glasgow using their senior railcards; that is the time scale we are talking about.

[David Mowat]

The right hon. Gentleman speaks well about the difficulties in forecasting, particularly far into the future. That is why it is extremely important that the business case for the scheme is based on a conservative estimate. Does he admit that while long-distance rail travel has increased by 5% per annum over the past 15 years, in its business case, the Department for Transport has put that increase at 1.4% over the next decade or so? That is pretty conservative.

[Frank Dobson]

I do not wish to be rude, but the only thing to add to the hon. Gentleman’s contribution is, “Or I will eat my hat.” I do not have the faintest idea which of those estimates is true, and the odds are that neither will prove true. He knows that as well as I do. We should not be whacking in all this money on the basis of estimates that nobody can back up. All we are really faced with is the proposition that we should support a fast shuttle between Birmingham and London.

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[David Mowat (Warrington South) (Con)]

I congratulate my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) on securing this debate. I shall start by agreeing with her on a few points, but, unfortunately, our paths will then diverge. We should not do high-speed rail just because the rest of the world is doing it. Just because every other country in Europe is forging ahead with this does not mean that we should—I accept that argument. We should not do High Speed 2 just because the business case for High Speed 1, and the reason why it went to St Pancras, was that it could be linked to the north. That should not be the reason why we do it. We should not do it just because of the carbon saved. As has been pointed out, the modal shift is quite small. We should not do it as cover for our plans in relation to Heathrow.

We should do it only if three conditions exist: the business case has to be robust; we must be satisfied that there are transformational benefits; and, on a cash-flow basis, it has to be affordable. My hon. Friend the Member for Warwick and Leamington (Chris White) has talked about that final point, and I shall address that first. Roughly speaking, the cost in cash-flow terms is £2 billion a year, which is a great deal of money. However, it is, roughly speaking, the same as we are currently spending on Crossrail—I see the Minister nodding, which encourages me—and, by and large, it will start as Crossrail finishes. I support Crossrail and have no issue with it, but it is important that that point is understood.

We agree that the business case is vital, and this debate must centre on it. Some of the points that have been made about the business case during this debate are misinformed. Yes, there have to be forecasts of the future—that is what a forecast does. As I said in an intervention, rail usage has increased by 5% per annum over the past decade and a half. The business case upon which this project is justified assumes that it will continue to increase at 1.4% per annum. I agree that that might be too high, but it is certainly not radical.

The hon. Member for Coventry North West (Mr Robinson) made the point that the project is predicated on time savings. Yes, it is—it is a transport project and that is how we tend to justify such projects in terms of benefit. That is how Crossrail was justified and it will be how this is justified.

Another point is often made—I want to address this before it gets too much currency. We can work on the train these days. We have personal computers and so on, and are therefore productive. That is true and the business case does not properly take it into account. It does not take into account the fact that productivity of that nature exists and that, if someone is standing up on a crowded train, the losses are enormous. In fact, that precise issue is addressed on page 51 of the Department for Transport’s business case. The fact is that the business cost ratio increases if productivity due to internet usage on a train is taken into account.

I want to put a couple of things on the record in relation to transformational benefits. We can take the Barcelona view or we can take other views. During an earlier speech, somebody said that the train might not stop at Warrington. I agree, but that is not the point. The point is that the North-West chamber of commerce believes that the scheme will bring £8 billion-worth of benefits to my region. Those benefits will accrue to Warrington in the same way that they will accrue to Banbury and—dare I say it—Northampton. Let us at least get that clear.

A recent report that KPMG produced for Greengauge 21 estimates that there will be an incremental, steady-state increase in jobs of 40,000 in the north and the north-west due to the scheme. That might not be right—I am pleased that the Select Committee on Transport is going to validate the numbers—but these are important transformational issues, and they must be taken seriously.

My hon. Friend the Member for Colne Valley (Jason McCartney) is signalling to me—I think he wants to speak next. This debate must not be tarnished by nimbyism and all that goes with it. It is more important than that and too important for it. I accept that the most vociferous opposition comes from those counties that are impacted the most. In all fairness, I live in Cheshire and it may well be that, when the next bit is announced, I will be a nimby as well. Members are entitled to respect their constituents. I want to put on the record that I discovered during my research yesterday that two of the consultants who represent one of the most influential rail action groups against the proposal both live in Great Missenden. It is important, as we evaluate the scheme, that we get it right.

Finally, mitigation is important and the hon. Member for Hammersmith (Mr Slaughter) has made some good points about it. We need to take it seriously, but it is not as important as the transformational benefits that may accrue from the scheme if it happens.