High Speed 2

Kate Green Excerpts

Tuesday 14th January 2014 Westminster Hall

[Sheila Gilmore]

I agree with the right hon. Gentleman and will be coming on to that issue. The underlying purpose, I would argue, is to be able to distribute our investment in our economy more generally, and connectivity is important to that. We have seen, for example, what has happened in Salford with the development of Media City and the BBC’s sometimes apparently painful move up there, which some people obviously felt meant going to the end of the world. That development led not merely to one large company moving part of its operations out of the south-east, but to supporting media industries locating in Salford deliberately because of the bigger pool there.

[Kate Green (Stretford and Urmston) (Lab)]

I apologise, Sir Edward, that I will have to leave before the debate ends, but I congratulate my hon. Friend on bringing this important subject to the House for debate this morning. Although the debate is predominantly about the economic benefits of HS2, does she accept that there are also environmental benefits? If as a result it means that, for further-flung destinations in Scotland and the north of England people are less likely to use air travel, and for areas nearer to London people are less likely to use the roads, there will be green benefits for our economy too.

[Sheila Gilmore]

I accept my hon. Friend’s point about green benefits in the long term, certainly in terms of air travel, although that will not necessarily be the case in the short term, as people will constantly argue.

--- Later in debate ---

[Mrs Gillan]

I am so glad that my right hon. Friend can remember his brief from when he was a Minister. I am grateful for the tunnel, as are my constituents and the environment, but the fact remains that the area of outstanding natural beauty will be drastically affected by the project. If the issue is about connectivity and capacity, there is no reason why alternative routes cannot be found. The reason why it goes straight through my constituency is speed. There are alternative strategies—I am sure that he remembers the 51m alternative strategy that was produced. There are ways of achieving the connectivity and economic renewal of the country other than HS2.

The business case, which the hon. Member for Edinburgh East mentioned, is dreadful. At the end of October, the Government released yet another version of it, which confirmed the shrinking benefit. The benefit-cost ratio for phase 1 is now estimated to be 1.4, excluding the wider economic benefits. However, experts working on the figures—particularly those in HS2 Action Alliance, which includes some great experts on transport and economics—have estimated that the real figure could be under 0.5. That is less than 50p back for every £1 spent. Even the official figures now beg the question whether the project is value for money.

In order to deal with the bad publicity that HS2 was getting about the benefit-cost ratio and the project’s value for money, which is a shrinking benefit, a report from KPMG was commissioned. That was supposed to build a positive view of the railway, as we all now know. It claimed that the economy would be boosted by £15 billion a year. Within days of that report being published, that claim was challenged from many angles. In September, Robert Peston, the BBC’s business editor, drove a coach and horses through the report. He rightly pointed out that many of the gains that KPMG had calculated were based on a reasonable notion that companies would be established in places where there were better transport links, but the report took no account of whether those regions contain available land to site new or bigger companies, or actually have the people with the relevant skills to employ. As those two features are the fundamental causes of poor growth in many parts of the UK, it is amazing to me that the report even stated:

“The methodology employed makes the implicit assumption that transport connectivity is the only supply-side constraint to business location.”

That was a coach and horses through the report.

[Kate Green]

I recognise how strongly the right hon. Lady feels about the matter and on behalf of her constituents. She referred to the KPMG report and the criticisms that were levelled at it. I also point out—and invite her comments on this—that aspects of economic gain were not referred to in the report. For example, it did not take account of the added economic benefits to us in Greater Manchester of investment in a station and of bringing the line through Manchester airport.

[Mrs Gillan]

The hon. Lady could be right. An awful lot was missed out of the report. It was in September that Robert Peston came up with the criticism. In October, a freedom of information request from “Newsnight” revealed the bad economic news that was missed out in detail from the report. The potential losses to some of our regional economies from this rail link will cause real problems. The negative impact on the north-east of Scotland, for example, was described as “significant to say the least” by the Aberdeen chamber of commerce. Areas from Cardiff to Kettering have been identified as ones that will lose millions of pounds from their annual GDP. I agree—that was missed out of the report. There was a nice little map that was supposed to disguise the figures behind, but a freedom of information request from “Newsnight” flushed out that important detail.

By November, the Select Committees were getting their teeth into the HS2 project, and so they should, although one cannot help feeling that the Select Committee on Transport is really an extension of the Department for Transport, given its latest thin and rather inadequate report.