High Speed 2 (Economic Affairs Committee Report)

Lord Kerr of Kinlochard Excerpts

Thursday 23rd January 2020 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

Having heard the noble Lord, Lord Bradshaw, speak, looking forward to hear the noble Lords, Lord Adonis and Lord Berkeley, rereading the 2015 and 2019 reports from the Economic Affairs Committee, and hearing the noble Lords, Lord Hollick and Lord Forsyth, I am reminded of what a huge amount of expertise and interest in rail transport there is in this House. It used to be said that we were all about hunting and shooting, but it is clear that we are now seriously into shunting and hooting.

I sat on the Economic Affairs Committee under the noble Lord, Lord Hollick, and then the noble Lord, Lord Forsyth, and I have little to add to what they said. The two reports, and in particular the 2019 report, make an extremely powerful case for reappraisal, reprioritising and linking Northern Powerhouse Rail and HS2.

One point that has not yet been made in this debate, which perhaps I can make—I have no particular railway expertise—is about sunk costs fallacies. I am sure that in this debate we will not fall into the two fallacies which are all too evident in the public debate in the press. What worries me is that critics of the project forget that the important cost-benefit analysis now starts with all future costs; sunk costs are sunk. The enthusiasts for the scheme need to remember that the worst reason for proceeding with any investment project is, “With so much spent, we can’t stop now”. That is the road that takes one to two white-elephant carriers in a grossly underfunded, vestigial, tragically small Navy.

It is absurd that it takes 90 minutes to travel the 67 miles from Birmingham to Manchester, and that it takes another hour to go from Manchester to Leeds—about 45 miles. It makes sense only if you are a Scotsman and you are accustomed to dealing with the unreliable snail that spasmodically crawls between Glasgow and Edinburgh. It does not sound too bad in comparison with them. I am not allowed to talk about Glasgow and Edinburgh, which are sadly irrelevant to this HS2 debate, although they were not irrelevant at the start of the project. I am strongly in favour of improving connectivity between the Midlands and the north, and east-west within the north. However, if that is the aim of this exercise, and the Government really mean what they say about levelling up, it is a bit perverse to start by digging a tunnel under Primrose Hill.

I hate the 1968 Euston station and mourn the wonderful Grecian arches of the old station. However, improving London’s architecture does not do much for connectivity in the north. In fact, this project does not do much either for connectivity in London. As the noble Lord, Lord Forsyth, pointed out, we on the committee established that if you wanted to go from, say, Birmingham or Manchester to the West End of London, Westminster, the City of London or Canary Wharf, you would certainly get off at Old Oak Common, and you would reach your destination much faster than if you stayed on the train and went to Euston. I cannot see why this end—the Primrose Hill end—has to be part of phase 1. If we had unlimited sums to spend, yes, we could replace Euston and tunnel under Boris Johnson’s father’s house. That is fine—perfectly okay. However, if it is about connectivity in the north, let us start in the north.

NPR is clearly needed much more urgently than HS2. However, on present plans, NPR does not start spending any serious money for another five years, and it will not be complete for another 20 years. That is a very long time to wait.

It is very important, while the Government have the wind in their sails and while they can take bold and brave decisions, that they should show what they mean by levelling up. We want a proper reappraisal, rephasing and reprioritising. I therefore strongly support what was said by the noble Lords, Lord Hollick and Lord Forsyth.

--- Later in debate ---

[Lord Adonis (Lab)]

My Lords, for reasons I cannot begin to fathom, when I was Secretary of State for Transport, they called me the “thin controller”. Whether or not that was true, I bear some responsibility for this scheme and should therefore participate in the debate.

My noble friend Lord Hollick referred to the National Infrastructure Commission, which I had the privilege of founding and was its first chairman. I agree entirely with him that it should be put on a statutory basis. We need much stronger and more robust long-term infra- structure planning in this country. Having a permanent commission on a statutory basis would be a good step forward. However, when I chaired the National Infrastructure Commission, one of my principle recommendations—I urge it on the House very strongly —was to avoid the curse of stop-start infrastructure planning, which has bedevilled our development of infrastructure over the past 100 years, and which we are in acute danger of doing again with HS2.

I pay great tribute to the work of the Economic Affairs Committee and the noble Lord, Lord Forsyth, but he presented his report as if these issues were being considered for the first time when the committee debated them. They have been considered exhaustively since the scheme was first announced, and I had the privilege of presenting it to this House on 11 March 2010. Not only have they been considered exhaustively but they have been decided by Parliament. Four years ago, on 23 March 2016, the legislation that is now being implemented to build the line from London to the West Midlands was agreed by the House of Commons by 399 votes to 42 votes. That is one of the most emphatic votes in favour of a large project in the history of Parliament. That came after months of consideration by a hybrid Bill committee of the other House looking at all the issues which my noble friend Lord Hollick and the noble Lords, Lord Forsyth and Lord Kerr, have raised.

The issue of whether to terminate at Old Oak Common or go through to Euston was considered exhaustively by the Select Committee—I could go through all the arguments for the House. It is true that a lot of passengers will wish to transfer to the Elizabeth Line when it is completed—another project that is over budget and delayed. But it is also the case that there are big resilience factors in having the whole of the rail traffic in this country coming from the north and the Midlands—as my noble friend Lord Hunt said, the Midlands is a crucial part of the scheme—decanting at one station on to just one line. You have only the Elizabeth Line if you terminate at Old Oak Common, whereas coming through to Euston, which the noble Lord, Lord Forsyth, does not seem to think is in central London, there are another three lines—I am all in favour of the arch coming back, like the noble Lord, Lord Kerr, but one could debate that too. Once you join up properly with St Pancras, which is part of the scheme, you will also link in with High Speed 1 and a whole array of other services.

The issues of commuter and freight services have been raised. They were considered exhaustively by the HS2 company that advised me in 2010 and by the hybrid Bill committee before that vote of 399 to 42 in the House of Commons. A key issue raised by the noble Lord, Lord Forsyth, in respect of commuter and freight services is the freeing up of capacity by HS2, by taking all the long-distance trains off the west coast main line; a lot of them off the Midland main line, because the service is to Sheffield; and a lot of them off the east coast main line, which goes up to York and Newcastle. They would all go on to the HS2 line, thus freeing up huge capacity to run additional commuter and freight services into the West Midlands, Leeds, Sheffield, Manchester and Newcastle.

The other vitally important issue is that there is no such thing as a free lunch—I wish there were. If we are not going to invest in HS2, we will have to do massive upgrades of the existing lines. When I was Secretary of State for Transport, the very first public engagement I undertook was to reopen the west coast main line after the upgrade which had taken place. It was a modest upgrade by comparison with HS2 to allow for the faster running of some trains, some additional train lengthening and some additional trains. Many noble Lords will remember that upgrade. For the best part of 10 years, services were disrupted on the west coast main line almost every other weekend. The price, as it was then—now you would have to double or treble the figure—was £10 billion, of which £1 billion was spent on compensating the train companies for not running any trains. I can tell noble Lords that if you are running a train company, the easiest thing you can do is to have big upgrade work done on your lines so that you are given huge payments for not running any trains at all. That is what train operating companies love most: being paid billions of pounds for not running any trains.

If you proceed with the conventional upgrades that would be required—they are huge; you are conducting open heart surgery on a moving patient—you will end up with a colossal cost, estimated by advisers in 2010 to be more, in cash terms, than the cost of HS2. When the Cameron Government made their alternative evaluation, they came up with a credible alternative upgrade scheme that would provide a quarter of the capacity of HS2 for half of the cost. All that is out there: this is not new information; it has all been published. The issue facing us is whether we are now going to do what Parliament itself authorised and build this line. It is under construction at the moment; we are not talking about giving it the green light. Colossal construction is already taking place at Euston: £9 billion has been spent and 2,000 people are working on the scheme. It is being constructed.

The noble Lord, Lord Kerr, is absolutely right to differentiate between sunk costs and future costs, but the crucial point is that if we are going to proceed with this scheme, to pull it up by the roots now with another big evaluation that would add further to the costs would be simply to repeat the curse of British infrastructure planning. The reason we have such a substandard infrastructure compared with so many other advanced industrialised countries is that we start projects, stop them, start them up again, stop them and then start them again. That is an accurate description of what has happened with HS2; this is the fifth review that has taken place since 2010, and the third since Parliament voted in favour of it by 10 to one.

My noble friend Lord Hunt is absolutely right to stress the importance of this project to the West Midlands. This is not a scheme that predominantly benefits the south. Some 200 of the 330 route miles of HS2 will run between the West Midlands and the north-west to Manchester, and the West Midlands to West Yorkshire up to Leeds. This will be transformational for connectivity between the Midlands and the north, and within the north. A large part of the northern powerhouse will depend on HS2, and the noble Lord, Lord Forsyth, mentioned the line from Liverpool to Manchester. Half of the northern powerhouse railway from Liverpool to Manchester will be on HS2 lines, so they need to be, and should be, drawn together.

[Lord Kerr of Kinlochard]

Why is all that not part of phase 1? Why is phase 1 all about tunnelling under Primrose Hill?

[Lord Adonis]

My Lords, this is 330 miles-worth of line. If it could all be put in place in one phase, that would be great. However, setting up a project of that size all in one phase would carry huge risks. Again, I hesitate to keep pointing this out to the House, but all of this has been considered: whether there should be one phase of HS2 with 330 miles of line or whether it should be divided.

I want to make a final point—