High Speed 2

Jo Swinson Excerpts

Tuesday 23rd November 2010 Westminster Hall

[Steve Baker]

I agree. I shall return to the economics of HS 1 later.

Some 59 different protected species have been recorded within 1 km of the route of HS 2. The recommended route involves tunnelling directly through an aquifer, risking reducing the water table and exacerbating low flow in the Chess and Misbourne. It also risks possible contamination of the ground water. The environmental impact of the recommended route of HS 2 would be enormous. I am therefore calling for an official environmental impact assessment of the preferred route well in advance of the planned consultation, so that interested parties can fully digest its findings. In Kent, the route was altered to run beside the existing M20, a major strategic transport corridor, which reduced incremental noise pollution and landscape damage. I am surprised that a similar approach has not been adopted for HS 2. The M40 in my constituency is infamous for its proximity to housing and for its meandering path.

Opposition to high-speed rail is substantial in Buckinghamshire. On 7 November, an HS 2 rally took place in Great Missenden, where more than 2,000 people demonstrated their opposition. At the rally, the noise that HS 2 will make was played to the audience. Many were shocked by what they heard. The noise over the speakers may or may not accurately represent what HS 2 will sound like, but it reinforces the need for HS2 Ltd or the Department for Transport to provide noise maps and proper analysis of the noise impact that people will face. HS2 Ltd said, in a letter dated 8 October about noise assessment studies:

“On the subject of noise assessments, an Appraisal of Sustainability is currently being finalised and will be published ready for the launch of the consultation in the new year”.

We are impatient. It is now well over a month since then, but there is no sign of any further information. It is unacceptable for HS2 Ltd to keep delaying this important study.

Part of the planned preferred route slices through a corner of my neighbouring constituency at Denham in Buckinghamshire. The route enters the constituency through a site of special scientific interest in the Colne valley. There is no doubt that the railway line, which at that point would be on some type of viaduct, will have a seriously adverse impact on the environment. For example, the railway would culvert the River Colne along a several hundred yard stretch in an area where there has been a long struggle to maintain the rural aspect of a river valley that has significant environmental importance. With all this in mind, will the Minister please ensure publication of the environmental impact assessment at the earliest possible moment?

There is no benefit to Buckinghamshire from accepting high-speed rail. The project would have to be bullied through against the well-grounded wishes of those affected, causing not just the environmental damage described but also infringing the property rights of large numbers of people. Doing so would thoroughly undermine the Government’s commitment to increasing people’s power over their own lives. From Buckinghamshire’s perspective, the answer to whether HS 2 should run across the county is, of course, a resounding no. Buckinghamshire people are bound to object to a programme that would merely blight our beautiful county and trespass on local people’s businesses and the quiet enjoyment of their homes. I find myself asking, “Should any area of the country be forced to accept high-speed rail?”

Having had the privilege of living in many areas of the country throughout my adult life, it is my view that Buckinghamshire’s arguments would find parallels in most parts of the country, particularly those with designated areas of outstanding natural beauty. Why should anyone tolerate the demolition of their home or business? Why should anyone accept the ruination of a swathe of countryside? Why should anyone agree to so much noise and disruption? The answer, of course, lies in the national interest.

To justify so grotesque an intrusion into property rights and local collective enjoyment of the natural environment, the Government must be certain that the benefits of HS 2 to the whole nation would far outweigh the high costs that would be imposed along the route. Clearly, if a high-speed rail network will usher in a new age of incomparable prosperity for the whole country, regenerating the industrial north and reuniting it with the south, we must all support it.

[Jo Swinson (East Dunbartonshire) (LD)]

I congratulate the hon. Gentleman on securing the debate. He makes a strong case, as one would expect from a constituency MP working on behalf of his constituents. Does he accept that there may be some benefits for his constituents? The alternative to high-speed rail is that people do not travel or—more likely—that journeys are made by air or by road. That has an impact on the environment in the form of air pollution, for example, and noise nuisance, which might also affect his constituents.

[Steve Baker]

I am grateful to the hon. Lady for her intervention and I will return to some of those points, in particular how we make a judgment between road, rail and air travel.

If it is not true that high-speed rail is in the national interest, and if such a project will offer only marginal and uncertain benefits at vast expense, it would be in no one’s interest. I am delighted that the Government wish to ensure the prosperity of the whole nation, but it has not been demonstrated that HS 2 will deliver that. To justify such a grievous impact on the people and landscape of Buckinghamshire—and indeed along the entire length of the route, wherever it is located—the Government must place the economic and environmental case for the programme beyond all doubt. I do not believe they have yet done so.

High-speed rail is not commercially viable, so the expense is justified with a wider cost-benefit analysis. That analysis relies on assumptions, including excessive demand, generous benefits and a flawed analysis of the alternatives. I shall only touch on each point today, but I am sure that campaigners will furnish us with full details during the course of the inquiry.

The projected increase in demand is open to challenges that include demand saturation, a broken relationship with GDP, out-of-date data, neglect of new technology, and inadequate anticipation of competition from classic rail—a problem that blighted HS 1. The case for benefits neglects the fact that many of us work on the train, and it depends on implausible levels of crowding. The Department for Transport’s alternative, Rail Package 2, is paid too little attention, despite meeting demand with less crowding than would occur should the HS 2 programme go ahead. At £2 billion, the package is much less expensive. It is better value for money and capable of incremental delivery, setting it free from the risks associated with long-range economic forecasting. Rail companies could lengthen trains to nine, 10 or 11 cars. That would increase capacity from 294 to 444 seats—an increase of 51%. Unused first-class capacity could also be swapped for standard seats, thereby further increasing total capacity.

It is a myth that the UK lacks a fast national railway network; we have had one for a long time. We have routes capable of 125 mph, with quicker rail journey times between the capital and the five largest cities than in other major western European countries. For instance, the average journey time in the UK is 145 minutes. It is 151 minutes in Spain, 184 in Italy, 221 in France and 244 in Germany. In short, it appears that for £2 billion, the Government could have a complete, low-risk but unglamorous solution to the problem of rail capacity, and rather sooner than HS 2 could be delivered. Therefore, I am not convinced that £30 billion—or more—of taxpayers’ money would be wisely risked on HS 2.

[Steve Baker]

My hon. Friend makes an interesting point that we should explore at some length. In the final part of my speech I shall set out why I think we have been taking the wrong approach to infrastructure in this country.

Targeted investment in existing infrastructure would ultimately offer greater benefits to the whole country not served by HS 2, including the south-west, south Wales, East Anglia and the north-east. Such an approach would provide a visible demonstration of productive investment during a time of austerity. I am aware that the environmental case for HS 2 can be similarly attacked, but given the time, I shall simply quote Mr Steve Rodrick, chief officer of the Chilterns Conservation Board:

“The case for HS 2 is largely built on capturing the internal aviation market, but 80% of all journeys between Manchester and London already involve the train…These trains will use double, possibly triple, the energy of normal trains. Where’s that energy going to come from? You either have to bank on nuclear coming on stream or, more likely, power stations running on fossil fuels, which will involve significant carbon emissions.”

I also recommend Christian Wolmar’s 15 September article for RAIL magazine, which states that the arguments against HS 2 are mounting. His tour de force concludes by explaining that HS 2 would absorb money that would otherwise be spent on classic rail in an environment of reduced funding. He writes:

“We cannot have it all. Let’s work to protect what is essential, rather than trying to reach for the moon.”

Finally, I will turn to rail policy and transport strategy in the round. If transport resources and the necessary land and capital are scarce, what is the best approach to ensure optimal resource allocation? It has long been argued by the Conservative party, as it was once argued by Liberals, that unhampered social co-operation in the free market is the most efficient and effective way to allocate resources and relieve scarcity. With that in mind, I asked the House of Commons Library to prepare a summary entitled “Price controls and state intervention in the rail market.” It is not, of course, a simple statement that there are no price controls or state interventions in the rail market; it is six pages long and covers passenger franchise specification, the control of fares and rolling stock procurement. It also sketches the process of almost continuous organisational change that has dogged rail since nationalisation in 1948. Contemporary rail is not characterised by property rights, freedom to contract, open competition and unhampered prices.

My task today is not that of setting out a new free market transport strategy, and I will not pretend I am able to do so. However, I wish to emphasise that rail, and road transport in particular, are not capitalist systems in the conventional sense but hybrid systems of heavily regulated and subsidised public and private companies. We have inherited a rail system whose franchise agreements descend into such detail as specifying a “biennial talent management programme” and even “time with your manager sessions.” That is not freedom to contract, and clearly rail operators are not free to set market fares.

Of course, I do not want fares to rise any more than my colleagues do, but we should admit that the rail system does not operate in a free market and that therefore economic calculation is likely to be hampered, if not irrational. We simply cannot know whether today’s rail economics are optimal, but it seems likely that they are not.

[Jo Swinson]

The hon. Gentleman is making the point that the current rail network is not a truly free-market, capitalist system, but will he not accept that there is a role for the state to play in markets where there is market failure—for example, where there has to be a national network—as has been well documented by many economists? Will he also confirm that he stood on a manifesto platform at the election that promised to

“begin work immediately to create a high speed rail line connecting London and Heathrow with Birmingham, Manchester and Leeds”

as the “first step” towards achieving a vision of a

“national high speed rail network to join up major cities across England, Scotland and Wales”?

[Steve Baker]

I am most grateful to the hon. Lady for giving me an opportunity to deal with that point, in which I see she takes some pleasure. In the first place, I note that economists take a range of views on these matters, and mine are perhaps rather more free market than most. On the second point, about the manifesto, Conservative candidates across Buckinghamshire stood for election saying they would oppose HS 2 and knowing that that was in contradiction to the manifesto. I personally made it clear at the time that I would oppose HS 2.

If it is true that economic calculation is likely to be hampered, if not irrational, under the present system—I am certain that it is—we should not be surprised that there is so much disagreement about economics in respect of rail. We should not be surprised when the Institute of Economic Affairs estimates that the return on HS 1 is less than half of 1% of the Government’s investment per year. Nor should we be astounded that some markets for high-speed rail already show signs of saturation. For example, demand on the lines from Tokyo to Osaka and Brussels to Paris is not growing anywhere near as fast as forecast. According to the Financial Times, China is reviewing its high-speed rail plans for affordability and practicality. Its latest high-speed line is operating at less than half capacity, and it is projected that the lines will never make enough money to repay the large loans used to build them.

I shall leave the last word on the economics of high-speed rail to the IEA’s Dr Richard Wellings, who wrote in relation to High Speed 1:

“Perhaps an unsubsidised international service could just about cover maintenance costs, with the sunk capital effectively written off. But far better returns could almost certainly be achieved by shutting down the line and disposing of the assets—which include substantial plots of land, tunnels under London and the Thames, and large amounts of scrap metal.”

HS 2 should certainly not be driven through Buckinghamshire, where it would have an egregious effect on some of our finest countryside, but it is not clear at all that HS 2 should be driven through any part of our country. HS 2 appears economically irrational: it requires tens of billions of pounds to increase the UK’s transport capacity by about 1%. Less money could be better spent. Moreover, that economic irrationality is almost certainly attributable to the prevailing orthodoxy in rail policy. It is an orthodoxy of planning, not the free market. We are at the end of a wasteful century of socialisation. Today, the basis of transport and, more broadly, infrastructure economics presupposes planning. It should therefore be no surprise that transport is characterised by scarcity, excessive prices and political tension.

To return to where I began, I applaud sincerely the Government’s noble intent, but I note that rail has not been governed by the free market for a very long time. There is no doubt that this country needs good-quality infrastructure. We should create the conditions in which unsubsidised enterprise can deliver the optimal solution. That would be the classical Liberal and Conservative approach. In my view, the solution that would emerge is not likely to be high-speed rail. I believe that this programme should be cancelled.

--- Later in debate ---

[David Mowat]

I agree that the Y-shaped solution is the most sensible one, but I do not want to get into which part should be built first. I would like to quote a few numbers on the transformational impact of the potential scheme. We are generating, potentially, many tens of thousands of jobs. In January 2010 KPMG published a report which estimated an incremental increase in employment of between 29,000 and 42,000—not directly from constructing or operating the line but due to the economic and productivity impact on the regions of much closer links with London. In itself, 40,000 jobs would generate a huge bonus for the Exchequer, but none of that is currently in the business case that is being debated.

A lot—in fact, nearly all—of the comments up till now have been on the environmental issues surrounding the line. I do not want to minimise their impact, but the Government are the Government of the whole country, not just of the south-east of England and London. It is important that we properly weigh up some of the unpleasant environmental impacts against the greater good.

[Jo Swinson]

I am very much enjoying the hon. Gentleman’s speech. Does he accept that building high-speed rail with a Y shape going as far as the north-west will bring benefits to other parts of the country, including Scotland? Extending high-speed rail to Scotland would cut the journey time from four and a half hours to more like two hours. Even as it is being built, it will start to decrease the journey times because people will be able to change trains part way through, if they wish.

[David Mowat]

I certainly agree that, in time, the line needs to go to Scotland. I have very much bought in to the productivity improvements and the step change in how we do business in the country that could be achieved with such a line—so, yes, I agree.

Going back to the environmental impact, it is obviously right that compensation is paid and that we do the right thing by the people whose property rights are being impacted. However, that cannot be our pre-eminent concern.