HS2

Lord Spellar Excerpts

Monday 13th September 2021 Westminster Hall

[Taiwo Owatemi]

I thank the hon. Gentleman for raising that point. I know he is a champion for his constituents in Northern Ireland.

There are many reasons to be vocal about the benefits of HS2 if it is built as initially promised. In many ways HS2 should be a green and environmentally friendly new railway. It should present an important asset in achieving net zero carbon in the UK, creating an alternative to an emission-heavy mode of transport. By shifting more commuters to rail travel, not only will carbon emissions be 76% lower than those of an internal flight, but it would compete on journey time and cost.

[John Spellar (Warley) (Lab)]

We are starting to move to the nub of the question. First, HS2 was greatly flawed in its initial assumptions about the costs and benefits. The costs have escalated, but, most importantly, covid has brought a dramatic change in demand. At the moment, only 50% or 60% of journeys are made by rail. On inter-city it is probably even less. Does that not fundamentally undermine the case, and is there a need for a reassessment by Ministers? Could we ask the Minister whether he has done that reassessment?

[Taiwo Owatemi]

I hope the Minister will be able to provide an explanation to the question asked.

--- Later in debate ---

[Taiwo Owatemi]

Thank you, Mr Mundell, and I will try not to take any more interventions.

The benefits that I have just outlined are dependent on the Government following through on the entire project. As was highlighted by my right hon. Friend the Member for Leeds Central (Hilary Benn), earlier this summer the Department for Transport directed HS2 to stop all work on the leg linking Birmingham with the east midlands, Sheffield and Leeds. I know that the Government have made efforts to quell rumours that this leg of HS2 will be scrapped, but they have not issued any outright denial of that possibility.

That certainly brings into doubt some of the predicted economic benefits of constructing HS2. To be clear, the Government’s business case for HS2 depends upon building an entire railway network, not just fragments of HS2 for the favoured few. Failing to build that network would not only break the Government’s promise regarding the returns on HS2, but destroy their promise on levelling up the west midlands and, indeed, the midlands as a whole.

The Government must be clear about which part of HS2 will in fact be constructed, so that MPs have all the facts. As is evidenced by this petition, the potential benefits of HS2 have often been overshadowed by the controversies over how the Government have so far managed this major project. The petition refers to the extraordinary increase in the bill for building HS2. Back in 2009, the projected cost was £37.5 billion. By 2020, that figure had ballooned to £107.7 billion—an increase of 361%—and that hike is before much of the construction has even begun. That is completely unacceptable—how in the world did it even happen?

A review by the National Audit Office concluded that the key reason the price of HS2 skyrocketed was the Government’s failure to estimate accurately how quickly and cheaply they could build HS2 and the constantly changing scope of the project. In many ways, this project has clearly been mismanaged and there are no guarantees that the cost of it will not continue to rise.

[John Spellar]

Will the hon. Member give way?

[Taiwo Owatemi]

Due to the time constraints, I will proceed quickly and then I will give way later on.

As I was saying, there are no guarantees that the cost of this project will not continue to rise and I am deeply concerned that taxpayers will not receive the promised returns on their investment if the cost continues to climb. The taxpayer has already seen a diminished expectation on that return. Indeed, in 2011 the initial economic case presented a benefit-cost ratio for the full train network that was nearly twice the current estimated return. The cost and benefit to the taxpayer must be at the forefront of our minds during this debate.

Separately, there is the very legitimate concern about the cost of constructing HS2, and I will also talk briefly about the cost of using HS2. One of the main reasons why I originally had some hope for the construction of HS2 was the understanding that a high-speed rail link such as HS2 would not only provide better mobility for commuters, but improve social mobility. However, if the only people who are able to take HS2 are the wealthiest among us, I cannot see how it will be used as a tool to boost social mobility—