HS2: Economic and Environmental Impact

Lord Berkeley Excerpts

Thursday 16th November 2017 Grand Committee

[Lord Berkeley (Lab)]

My Lords, the points made by my noble friend Lord Stevenson about the hybrid Bill process are very interesting. I will not speak about them today but I think they need further debate, starting from the basis of why building a new railway is so different from building a new road. It needs modernising; we have talked about it before but we will return to it some time, no doubt.

As has been suggested by a few noble Lords, I will talk about the costs of HS2, because my noble friend Lord Snape talked about a lot of the benefits. I support the scheme—I have said it before, on the record, and I still say it—but I worry about the amount of money that has been committed and will be committed, whether it is good value and what can be done about it. It is interesting to reflect that the recent settlement of about £45 billion for Network Rail for the next five-year control period is to keep the whole of the network operational and safe, not including enhancements. Compare that with the cost of HS1 phase 1: £24 billion, which is about half that figure, or £48 billion if you include phases 2A and 2B, once the five-year period is over. In the Government’s figures, the cost of phase 1 is 50% of all the money given to Network Rail to keep the network going. We can debate whether that is a good balance, but the problem is that very few people outside the Government believe that £24 billion is the likely outturn cost of phase 1, as said by the noble Lord, Lord Framlingham.

I have spoken about working on useful alternatives before; I will not repeat them, but there are issues with Wendover, such as the cost of the trains and the speed of the line. The estimate that we came up with, which started off in the appearance of a friend of mine before the House of Lords Select Committee, suggested that the costs, if aggregated for the whole of phase 1, would come out at about double the cost that the Government were estimating for phase 1 of HS2—about £48 billion. Adding phases 2A and 2B would take us up to £100 billion. In the committee, we were never challenged by those at HS2; they said they did not agree, but I asked them where the evidence of their disagreement is and we still do not have it. I am still in discussion with Paul Maynard, the Minister responsible—I will come back to that—and I would like an answer on how the department came up with the cost estimate and where we differ. We must discuss that. It is surprising that the Government have spent £1 billion on consultants for HS2 so far, but cannot come up with a cost that can be looked at.

Compare that with Crossrail and HS1, as the noble Lord, Lord Freeman, said. Crossrail is on time and on budget, as far as I know; it is a very successful project. HS1 was pretty successful too, so there are ways to get the cost right. Since public money is being spent, it is reasonable to suggest that we should get that.

I have suggested to Ministers and officials ways of reducing the costs of HS2 without cancelling it. I do not want to see it cancelled but the costs need looking at. It is a bit of a vanity project. Initially it was said that trains would run at 400 kilometres an hour. They do not run anywhere in Europe at 400 kilometres an hour, and I do not think they do in Japan either. There is an argument for high speed in big countries—such as France, Germany and Italy—but we are not big. The cost increase of the technology needed to go up from the standard 320 kph to 400 is dramatic. Train manufacturers and the people who design and build the track are talking about something like 30% or 40% on costs to achieve that because it takes more power, the tracks have to be straighter and the tunnels have to be bigger, and we must not forget the extra maintenance cost. Once the trains are there and working, the track and train maintenance is much more expensive.

To be fair, the latest HS2 spec has brought the speed down to 360, which is an improvement. However, there are other ways of saving money, such as stopping at Old Oak Common in phase 1. We have all looked at that and agree it would work. Local people have come up with an alternative for the Wendover tunnel which will work very well. It is cheaper and would reduce the environmental impact. There are many other things which I have not got time to go into.

My real worry—I have had discussions with the Minister’s predecessor, the noble Lord , Lord Ahmad, on this—is whether it is acceptable for so many billions to be spent before there is a firm cost estimate. Demolition has started in Camden—people have been moved out and the ball and chains are starting to fly. We know that this is the kind of estimate at which the MoD is very good when it comes to aeroplanes and battleships and so on, but I am a civil engineer and I expect to get a reasonably firm estimate of a cost before there is a go-ahead to spending so much money.

I hope the Minister will be able to give me some comfort that this can be resolved. Perhaps we can have a meeting. I am due to have a meeting with the Minister, Paul Maynard. The cost needs nailing before it gets to the stage when Ministers say—this may well be after Ministers have changed and so they will no longer be responsible—“Well, it has started and it is too late to stop”.