High Speed Rail (London – West Midlands) Bill

Jack Straw Excerpts

Monday 28th April 2014 Commons Chamber

[Mr McLoughlin]

I give way to the former Foreign Secretary.

[Mr Jack Straw (Blackburn) (Lab)]

May I offer the right hon. Gentleman, without any caveats, my full support and say to him that most colleagues representing constituencies in the north actively back this scheme, for the very reasons he has spelt out? Does he also accept that those who represent some home counties through which this route is going of course have legitimate constituency concerns but that, for example, the Chiltern railway line has benefited twice over from investment—from the last phase of investment by British Rail and from Evergreen—and that the M40 was far more disruptive to people living in the Chilterns but nobody would now suggest it should be abandoned or greened over?

[Mr McLoughlin]

I am grateful to the right hon. Gentleman and I completely agree with him. One of this morning’s papers, I believe it was The Daily Telegraph, said that this Bill will certainly have been scrutinised more than any major infrastructure project we have dealt with, across the whole piece.

--- Later in debate ---

[Mary Creagh]

Absolutely. It is right for Wakefield council to represent the views of local residents. The costs of HS2 are significant, but I believe, as does the hon. Gentleman, that the benefits are great.

As I said earlier, we want a one nation economic recovery to rebalance the growth across sectors, nations and regions. A long-term high-speed rail investment programme presents huge opportunities for the UK’s design, engineering, construction and manufacturing sectors. It offers a secure future for the railway supply chain and will showcase the UK’s expertise in the global high-speed market. The Olympics, Thameslink and Crossrail have transformed travel in London. It is time for the wider UK economy and society to benefit from the transformational opportunities that a major infrastructure project brings. The first phase will bring more than 40,000 jobs: 9,000 jobs in construction, 1,500 permanent jobs in operation and maintenance, and 30,000 jobs at Old Oak Common, Euston and Birmingham.

[Mr Straw]

I entirely support the case that my hon. Friend is making. Would she like to remind sceptics like the right hon. Member for Wokingham (Mr Redwood) that as much money is being spent on a single railway station that serves his constituents, namely Reading, as is being spent on the electrification of services across the north-west?

[Mary Creagh]

That was an excellent point, well made. My right hon. Friend has triggered my memory. There has been £6 billion for Reading, £6 billion for Thameslink and £18 billion for Crossrail—pretty soon there will be enough for a high-speed rail network. I have read about the debates over the disruption that Crossrail has caused. Tottenham Court Road station was closed for two years, yet the centre of our global capital was prepared to put up with that because it realised the benefits that it would bring through reduced journey times. The right hon. Member for Wokingham (Mr Redwood) has the freight flyover at Reading station, as well as a couple of new platforms and re-signalling work. He will no doubt enjoy the faster journey times to London. I would like the same for my constituents and the constituents of the hon. Member for Skipton and Ripon (Julian Smith).

I wonder when the Government will be able to report on the vocational training elements of phase 1, which were provided for by Labour’s amendment to the paving Bill. We want to see the annual report and to see what is happening. We welcome the new further education college that will train the next generation of young women and men to become rail engineers. Members on both sides of the House have been bidding to host the college. I look forward to hearing where and when it will open.

Sir David Higgins’s report called on the Government to be more ambitious in the development of Euston station. The iconic new developments at King’s Cross and St Pancras show how stations can transform and regenerate their local areas. I hope that that will also happen at Reading. Euston is potentially central London’s biggest regeneration site. Its redevelopment must provide new social housing to tackle the acute housing crisis in Camden, as well as retail and office space. It would be a disaster if it followed the housing developments in the city centre that are sold off-plan to foreign investors, creating ghost towns, rather than going to local people.

I know that my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) and Councillor Sarah Hayward, the leader of Camden council, will continue to battle to get the best deal for their community. It has been inspirational to talk to my right hon. Friend about the life sciences hub that he wants to see around the Francis Crick Institute, which is due to open near Euston in 2015. To have the tech hub at Old Street and a life sciences hub at Euston would be an enormous boost for young people and jobs in his constituency.

--- Later in debate ---

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

I beg to move an amendment, to leave out from “That” to the end of the Question and add:

“this House, while accepting the need to increase overall railway capacity, declines to give a second reading to the Bill because there has been inadequate opportunity for Members and those affected by the Bill to consider and respond to the report of the Assessor appointed under Standing Order 224A, which was not published until shortly before the Easter recess; because assessments of the relative costs and benefits of works envisaged by the Bill have been repeatedly unconvincing and still fail to demonstrate a sound economic case for the proposed works, particularly in relation to other options; because the Secretary of State has declined to publish the Major Projects Authority report on High Speed 2, with the result that Members have been denied access to highly significant evidence on the viability of the project; because the case for starting further high-speed rail construction in this country with a line from London to the West Midlands rather than in the north of England has not been convincingly made out; because the Bill will cause widespread environmental disruption to many areas of the country including areas of outstanding natural beauty; and because the Bill should be preceded by proper consideration of and a strategy for integrating high-speed rail with other transport modes including the UK’s international airport hubs.”

This cross-party amendment commences by stating that we accept the need to increase overall railway capacity, and I make my remarks against that background. It is good to follow the hon. Member for Wakefield (Mary Creagh), but I am afraid my speech will break the cosy consensus over this project between those on the two Front Benches, which will be no surprise to anybody in this Chamber.

It has been four years since Labour first announced HS2, and I want to thank the vast armies of people from all the conservation groups, including the Chiltern Countryside group and the Chilterns Conservation board, lobby groups such as HS2 Action Alliance, district and parish councils, individuals, and volunteer engineers and county councillors, who have contributed to trying to put this project under scrutiny. In Buckinghamshire I am most grateful for the support of my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve) and my right hon. Friend the Member for Aylesbury (Mr Lidington), and to Mr Speaker himself. All our constituencies are affected by this project.

I believe that more than 50 Members have applied to speak about this project, and in the short time available I hope to register the risks associated with it and the pain and anguish that it continues to bring to so many people, and to ask the House whether this is really the top priority and the best way to spend £50 billion of taxpayers’ money. I started as a nimby, but over time I have come to look at this project and I do not believe it is the answer to the UK’s transport issues.

Let us consider some of those issues. Originally, the costs totalled about £20 billion, yet they have now doubled to £42.6 billion and we should not forget that that does not include the trains, which are budgeted at £7.5 billion. An apparent leak from the Treasury to the Financial Times estimated that the costs as they stand could run to £73 billion or more. In fact, such high risks are attached to the project, that the contingency is £14 billion. We are now on the fifth business case for phase 1 and the benefit-cost ratio is now 1.4, so for every £1 of taxpayers’ money spent, only £1.40 comes back. If we strip away the flawed assumptions and replace them with a more realistic value of time, the true benefit-cost ratio falls way below £1, and there would actually be a loss to the taxpayer.

[Mr Straw]

rose—

[Mrs Gillan]

I am sorry; I do not have enough time to give way.

Economists claim that the benefits of HS2 are also exaggerated. Some 79% of those benefits arose from the value allocated to time savings by businesses assuming no valuable work was done on trains and a huge increase in business travellers. If that is now not correct or has been overestimated, the benefits fall again considerably. Looking back, HS1 predicted 28 million passengers per annum—the reality is 9 million. Should we really trust the projections by the Department for Transport? The National Audit Office and the Public Accounts Committee have already raised significant concerns about the project and the passenger projections for HS2, but despite that the figures have not been revised.

[Mr Straw]

Will the right hon. Lady give way?

[Mrs Gillan]

I am awfully sorry, but if I give way to the right hon. Gentleman I will have to give way to others, and so many people want to speak that I will eat into the time allowed to them. The right hon. Gentleman can make his own speech.

The Secretary of State for Transport claims that HS2 is essential to deal with an impending capacity crisis on the west coast main line. However, the available figures show that intercity trains on the west coast main line coming into Euston are on average just 52% full in peak hours. There is severe commuter overcrowding on many commuter lines into all our major cities, and HS2 will do very little, or in many cases nothing at all, to relieve that. Is the commute into Euston really the priority over other areas?

The big picture is the claim that HS2 will heal the north-south divide. Even today the Institute of Economic Affairs has again questioned the promises of an economic transformation of the north. There is no academic peer-reviewed evidence to show that the presence of a high-speed rail line will lead to increased economic output at the levels suggested in what is now a questionable report from KPMG, commissioned by HS2. The report claims that HS2 would bring benefits of £15 billion per year. However, it assumes that rail connectivity is the only variable driving local economic growth. We know that that is simply not the case; if it were, Ebbsfleet in Kent would be a boom town.

However, London could be the winner. The majority of academic evidence available in other countries shows that where a high-speed rail line connects a dominant city to a less dominant town or city, it is the dominant city that gains. HS2 will suck skills and businesses to London rather than to our regions. If HS2 had a viable business case, it should have been built starting in the north, connecting the northern cities to each other and then eventually to London.

We are getting a project that has markedly changed since it was first proposed. HS2 was going to allow someone to jump on a train in Manchester and travel straight to Brussels, but that has now been ditched. The direct link to Heathrow has of course now been dropped, but in any event why are we not going for maximum connectivity to our airports in the south by finalising our high-speed rail policy after the result of the Howard Davies commission?

My right hon. and learned Friend the Member for Beaconsfield would also like assurances from the Government on the so-called Heathrow spur, on which he still has many questions. Even the much vaunted connections between the towns and cities are far from perfect. In fact, HS2 connects only four city centres. The proposals for Euston are not settled and Old Oak Common will require an enormous amount of work to connect it to the rest of London’s transport infrastructure. The HS2 station in Birmingham is a 15 minute walk through an underpass to Birmingham New Street, where the rest of the city’s trains come in. If we look to the plans for Sheffield Meadowhall, Toton and Derby, the HS2 stations will be miles outside city centres. The latest business case included £8.3 billion of cuts to existing rail services, affecting many towns and cities, and the KPMG report showed that many local economies away from the line of the route would suffer. The main objective to shorten journey times drastically has now been questioned by calls from the Environmental Audit Committee to decrease average speeds. That means that HS2 may not even achieve its original aims on either speed or connectivity.

Finally, HS2 is not really green. A meagre 1% of HS2 passengers are predicted to transfer from air, and just 4% from cars. The remaining 95% of passengers are predicted to be new journeys or transfers from less polluting modes of transport, and that is before we examine closely the vast amount of power needed to power the railway. If the project goes ahead, it is important that we protect the environment and the people who will be affected. People expect the project to be implemented to the highest standards, ensuring the best environmental protections and giving support to the communities and individuals who are severely affected.

The Chilterns area of outstanding natural beauty is in my constituency, as everybody now knows. It is known as the lungs of London and is the last large expanse of protected unspoilt countryside in the south-east of England. There are more than 50 million visits annually, and many of the villages, hamlets, ancient woodlands and hedgerows remain largely unchanged since Norman times. The Chilterns is designated under the Countryside and Rights of Way Act 2000, and the Government have a legal duty to adhere to those protections: anything less would make a mockery of all the Government’s pledges to protect our natural environment.

The Environmental Audit Committee’s report of 7 April was highly critical of the project and said that the Government have “significant work to do” to prove that they are prioritising environmental protection. Some 40% of the route is yet to be examined. If the project does proceed, I now believe that the only way to mitigate properly the damage to the AONB is to fully tunnel the whole area. The demand for longer tunnelling through the AONB was the most frequently raised concern in the responses to the environmental statement, with more than 8,000 people raising it as an issue. The line will already have a devastating impact on the AONB, including destroying 10.2 hectares of irreplaceable ancient woodland, as well as communities such as South Heath and Wendover.

My right hon. Friend the Member for Aylesbury and I have worked together on considering HS2 and the long tunnelling option. He has said to me that if he is not satisfied with the arrangements for mitigation of the AONB and compensation, particularly where Dunsmore, Wendover Dean and Wendover are concerned, he will join me in the Lobby and vote against the project on Report and Third Reading. As it stands, Buckinghamshire will take all the pain and have no gain. My right hon. and learned Friend the Member for Beaconsfield has constituents in Denham who remain entirely unpersuaded by the arguments put forward both in respect of the generality of the proposal for HS2 and of the detail. The impact of the Colne valley viaduct travelling through a site of special scientific interest, with no details on how the noise will impact on the local community, is a source of real anxiety. His constituents have argued for further tunnelling under the Colne. It is important to remember that the voices of our Buckinghamshire colleagues in Government are as equally important as the voices of Back Benchers, if not more so. I want allies inside the Government, as well as on the Back Benches, as we scrutinise this project.

On compensation, we have had no fewer than five consultations and still those people whose homes and livelihoods have been devastated by HS2 have had to wait for over four years for the final compensation scheme to be announced. The eventual compensation announcement on 9 April was not popular. I know that the concerns are shared by Mr Speaker. He believes that the fact there is no provision for homeowners whose properties are further than 300 metres from the line but who have seen their property fall in value as a result, is unacceptable and so do I.

--- Later in debate ---

[Mr Jack Straw (Blackburn) (Lab)]

I want to compare the relative wealth of the home counties, including Buckinghamshire—with Chesham and Amersham and many other constituencies—with that of the north-west, using figures provided to me by the House of Commons Library. Sixty years ago, the GDP per person in the home counties was just below that of Britain as a whole, and it was identical to that of the north-west. In the four and a half decades to 2001, a large gap opened up. By 2001, the home counties were on average nearly 20% better off than the average for mainland Great Britain, while the north-west had fallen back relatively to more than 10 percentage points below the average, 30 percentage points below the home counties. Similar data apply to the north of England as well.

Part of this widening gap is a consequence of factors that were, to a great extent, beyond the control of any Government—not least the fact that mass manufacturing migrated to the east of the globe. It was also due to factors within our control, however. I am not suggesting that, in the intervening period, the great cities of the north—Liverpool, Manchester, Leeds, Sheffield and Newcastle—have sat and wallowed in self-pity. When my hon. Friend the Member for Blackley and Broughton (Graham Stringer) was leader of Manchester city council, for example, that city pulled itself up by its bootstraps. A big gap remains, however.

Among many others, there is one significant reason for that gap. Ironically, a clue is to be found in today’s report by the Institute of Economic Affairs that is otherwise noteworthy only for its internal incoherence. In the report, the institute comments on the regeneration of London’s docklands, which it says

“has been subsidised by taxpayers through large sums spent on government transport schemes and other projects”.

It lists some of those projects. They include

“the Jubilee Line Extension, Docklands Light Railway…the south-east leg of Crossrail”,

as well as many road schemes. This is the same engine of growth that has benefited Buckinghamshire and the home counties, and that has led to the widening gap.

I do not blame any Member for speaking up for their constituency. I have no direct constituency interest in this matter. In any configuration, the line will not go through Blackburn, but I believe that it will greatly benefit us. I part company with those who have spoken in defence of their constituencies, however, when they try to elevate their understandable constituency concerns into some overall economic case against the project; that is frankly disingenuous.

The amendment speaks of its acceptance of the need to increase overall railway capacity. Had I been able to make an intervention on the right hon. Member for Chesham and Amersham (Mrs Gillan) in her untimed speech, I would have asked her, given that she accepts that need for increased capacity, how she intended to achieve it in the absence of HS2. I have been in the Chamber since the moment the debate started, and everyone has accepted that the west coast main line is full to capacity—[Interruption.] I hear someone say no. They have obviously not been on that line.

[Mr McLoughlin]

Does the right hon. Gentleman agree that one of the biggest problems of capacity relates to the feed into London? That is our biggest capacity problem. A lot of people have said that we should start in the north, but although that is tempting, the biggest capacity problem is in the south.

[Mr Straw]

I accept that. I came into the House a long time ago, when the line to Manchester and Liverpool was so slow that there was still a need for sleeper trains. They were very reliable, because they went slowly. I accept that for those travelling from the north-west and from the midlands, the main capacity constraints are those south of Rugby. The amendment proclaims a need for greater capacity, but it fails to provide further and better particulars on how to achieve it.

One reason that the west coast main line upgrade took so long and cost so much was that it had to be added on to the existing infrastructure. That was far more disruptive and costly than the provision of additional lines. I look forward to hearing alternative suggestions, but the only way I have heard of providing additional capacity for passengers and, critically, for freight is through the provision of additional two-track capacity. That would be far less disruptive than the construction of the M40 or any other motorway, and it would produce benefits to constituents in the home counties, as well as to those in the north and north-west, by relieving the present capacity constraints.

I am passionately in favour of the HS2 proposals—all the way: phase 1 and phase 2—but they can go ahead only on an all-party basis. I welcome the decisions of the Cabinet and the shadow Cabinet to back the Bill now and for whoever wins the election to back it, the other side of the election.

--- Later in debate ---

[Mark Reckless]

I agree with the Secretary of State. I would add, however, that further benefits to these northern cities and Birmingham could be accrued if we did more than just fulfil the intention of the direct links through to the continent of Europe. Although I understand why the previously proposed way of doing that has not gained support, I hope that we will still look at the possibility of reinstituting a direct connection between HS1 and HS2, and that when we look at the costs and benefits of that we look not only at the benefits to the north of being able to get through to Europe, but at the benefits for people from Manchester or Birmingham of being able to go directly through to east London, Kent or East Anglia from a connection at Stratford. The work Greengauge 21 did on that shows that the benefits will be huge. Yes, there would be benefits for my constituents and people in east London from being able to go from Stratford or Ebbsfleet through to Old Oak Common and on to the north, but a connection would also significantly add to the benefits for people coming from Birmingham and the north. I hope we will look at that.

I believe that there is scope within this Bill to make such improvements. From listening to some of the opponents, it is as if they assume that the costs are going to spiral out of control and that the benefits are all grossly exaggerated, but when I look through the work and the detail of the estimates and calculations, they strike me as extraordinarily conservative.

We have learned the lessons from the great infrastructure projects of the past. If we consider Crossrail or the Olympics, we see it is possible to deliver projects to time and to budget, and possibly faster or cheaper. Part of the reason for that is the very big estimate for contingency. Some people criticised, and we have heard Opposition Front Benchers saying that perhaps they would not support a project if costs were spiralling, but actually a substantial contingency had been factored in: £14.5 billion of the £42.6 billion is contingency. It is not contingency in order to get to our best estimate of what the cost is going to be; the contingency has been padded to the degree that we are 95% certain that the cost will come in below the number given. It is expected that more than £4 billion of that contingency will not be used, so perhaps some of that could be put towards providing a decent quality link between HS1 and HS2, to everybody’s benefit.

[Mr Straw]

Is the hon. Gentleman further reassured by the fact that this project is led by Sir David Higgins, whose estimates for the Olympics, including a substantial so-called “optimism bias”, turned out to be entirely accurate?

[Mark Reckless]

Yes, I am reassured. I consider there to be a degree of pessimism bias in this case; £700 million has been taken out for the link and it has just been absorbed into even more contingency. I think that the contingency is much too high and that the project will come in significantly below the estimates, and that is just on the cost side. We must also look at the benefits side. We have heard a lot of talk about working on trains and how things are calculated, but there is something much more important when we are projecting the growth in traffic and looking at the benefits.

Over the past 10 years, long-distance rail travel has grown by 5.2% each year on average, yet we are assuming that in the future it is going to grow by only 2.2% per year. I do not understand why there is suddenly to be this collapse in the growth rate for rail traffic, and it is on that basis that projections are made. Furthermore, we are assuming that once we get to 2036, only three years after the project has been completed, there will be no further growth in traffic at all. If we had some more realistic calculations on both costs and benefits, we would see that this becomes an even more attractive project. I believe that it will be more attractive still if we have a proper link between HS2 and HS1, bringing benefits to all.