High Speed Rail (West Midlands–Crewe) Bill

Lord Rosser Excerpts

2nd reading (Hansard): House of Lords
Monday 9th September 2019 Lords Chamber

[Lord Rosser (Lab)]

My Lords, not only does High Speed 2 get delayed but even this debate on the Government’s latest High Speed 2 Bill has had to be rescheduled to today from last week. This Second Reading debate is taking place in something of a vacuum. The Government are inviting us to support the Bill, which gives statutory powers to enable the construction and maintenance of phase 2a of High Speed 2 from the West Midlands to Crewe, yet they apparently do not know whether they will be pulling the plug on the whole project in a few weeks’ time. We await the outcome of the review, which is considering whether or not HS2 should still proceed, and if so on what basis, or whether it should be cancelled.

There must be a real prospect of the Government cancelling HS2, first, because the Prime Minister, as with the third runway at Heathrow, has a direct constituency interest and is neither project’s number one fan, and secondly, because the Government have a noteworthy track record of cancelling projects extending railway electrification which they have previously promoted or supported. As recently as 15 July the Government were fully committed to HS2. In the Commons during the final stages of this Bill, the Minister said of HS2:

“It will be transformative not only because it will increase capacity and reduce the time it takes to reach eight of our top 10 cities, but because, along the way, it will smash the north-south divide, creating jobs and opportunities for people in the midlands and the north”.—[Official Report, Commons, 15/7/19; col. 646.]


Earlier, in a Written Statement on 6 February this year, the Government described HS2 as,

“a transformational infrastructure project that will improve people’s journeys, create jobs, generate economic growth and help to rebalance our country’s economy. HS2 is more than a railway and the project’s vision is to be a catalyst for economic growth. It has cross party support and support from councils, LEPs, Metro Mayors and businesses who can see the transformational potential”.—[Official Report, Commons, 6/2/19; col. 15WS.]

Cross-party support includes us, but does that reference to HS2 having cross-party support include the Government? If it does, why was the inquiry set up with a remit that included looking at whether HS2 should proceed at all? This was a point raised by my noble friend Lord Adonis and we expect an answer from the Government when they respond to this debate.

What have the Government just found out that led them to set up the review last month, but of which they were presumably unaware when they were extolling the virtues of HS2 so enthusiastically in the Commons the month before? Will they say by when they expect to receive the findings of the review and when they expect to announce their decision on the future or otherwise of HS2? I ask that in the context of contradictory statements from the Government. On 25 July, in response to a Commons Question on constructing from the north, the Prime Minister said:

“I have asked Doug Oakervee, the former chairman of Crossrail, to conduct a brief six-week study of profiling of the spend on HS2, to discover whether such a proposal might have merit”.—[Official Report, Commons, 25/7/19; col. 1476.]


Which is right about the purpose of this review: the Prime Minister’s statement that it is,

“a brief six-week study of profiling of the spend on HS2”,

or the terms of reference referring to,

“whether and how we proceed with HS2”?

What is the truth, as opposed to confusing statements, about the timescale of the review? On 25 July, the Prime Minister spoke of a “brief six-week study”. That six weeks is already up. Or is it meant to be six weeks from when the Secretary of State for Transport announced the review, on 21 August, in which case the review report will be ready at the beginning of next month? Yet the Government now say it will be completed in the autumn. Is it a six-week review, as the Prime Minister so clearly said? On the assumption that it is, when did the six-week period start?

It is to be expected in a Second Reading debate on a Bill enabling a further stage of HS2 that the Government would say something about not only the costs and benefits of the further stage, but the extent to which the quoted costs and benefits expected for the first stage were or were not still on track. On 15 July the Government told the Commons,

“there is only one budget for HS2, and it is £55.7 billion. The bit we are talking about today, phase 2a, is £3.5 billion. The benefit-cost ratio is £2.30 for every £1 spent”.—[Official Report, Commons, 15/7/19; col. 647.]

Recently, though, the Secretary of State for Transport said in a Written Statement that the chairman of HS2 did not believe that the current scheme design could now be delivered within the budget of £55.7 billion, set in 2015 prices. Instead, the Government said, the chairman of HS2 now estimated that the current scheme required a total budget, including contingency, of £72 billion to £78 billion, again in 2015 prices; and in 2019 prices, £81 billion to £88 billion, against a budget equivalent of £62.4 billion. On the basis of those revised figures for the cost of completing all stages of HS2, will the Government indicate what percentage of those figures is to cover contingencies?

The Government went on to say that HS2 no longer believes that the current schedule of 2026 for initial services on phase 1 was realistic, and that instead there should be a range of dates for the start of the service. The recommendation of the chairman of HS2 was now 2028 to 2031 for phase 1, with a staged opening, starting with initial services between Old Oak Common and Birmingham, followed by services to and from Euston later. HS2 Ltd now, it seems, expects that phase 2b to Manchester and Leeds will open between 2035 and 2040. Significantly for this Bill, the chairman of HS2, according to the Secretary of State, now considers that phase 2a, from the West Midlands to Crewe, should be delivered to the same timetable as phase 1. Furthermore, the chairman was now of the view that the benefits of the current scheme were substantially undervalued. All these views from the chairman of HS2 Ltd would, said the Secretary of State, be assessed by the review panel, which would provide,

“independent recommendations on whether and how we proceed with the project”.—[Official Report, Commons, 3/9/19; col. 7WS.]

I hope the Government can tell the House today that they had no inkling that the costs were rather higher than previously stated and that HS2 would not be delivered within previously announced timescales when, in asking for support for the Bill, they told the Commons on 15 July,

“there is only one budget for HS2, and it is £55.7 billion”.—[Official Report, Commons, 15/7/19; col. 647.]

Even the £3.5 billion the Government quoted for phase 2a, to which the Bill relates, is now apparently £3.6 billion to £4 billion. Will the Government indicate how much has been spent so far on HS2, including the value of contracts that have been signed but for which the work has not been completed?

In the light of the view of the chairman of HS2 that the benefits of HS2 are substantially undervalued, can the Government say what the current figures are for the benefits arising from HS2 and whether they include the potential wider economic impact of changes in land use and values as a result of HS2 and the transformative effect that it can have, both on the locations directly benefiting from the improved transport links and locations on other rail routes where capacity would be released for new or additional services?

Could the Government also say for how many years into the future are the economic benefits, including wider economic benefits, accruing from HS2 currently calculated and taken into account in assessing the overall benefit and value to the nation of the project? Are those overall benefits taken into account only for a specific fixed period—and if so, what is that period—or are they calculated and assessed as delivering effectively permanent wider economic benefits resulting in a higher overall value figure, since presumably, for example, the favourable impact HS2 already appears to be having on regeneration in Birmingham is very much of long-term value and permanent benefit to the city?

We now have the HS2 chairman’s recent report, or stocktake, on the current status of the project. It has been quite extensively redacted. In the Commons on 5 September, the Secretary of State said:

“I am unhappy about having any of that report redacted. I have read the rest of it. It is not hugely exciting. I pushed back on that with the Department, and apparently it is just that the lawyers are saying that it is commercially confidential stuff that I cannot force to be released”.—[Official Report, Commons, 5/9/19; col. 354.]


Could the Government say who determines whether something in a report is commercially confidential and who determines that commercial confidentiality outweighs the public interest in knowing about the information that is being withheld? Could they also say what would be the consequences, and for whom, of the Secretary of State releasing information that the lawyers had deemed commercially confidential? What contracts, if any and with whom, would be broken or breached by releasing such information as is in the HS2 chairman’s report? Who are the signatories to those contracts?

Phase 2a is the first step to delivering the whole of phase 2, which extends HS2 north from Birmingham. It is intended that the opening of phase 2a will result in further west coast main line services transferring on to the HS2 route, freeing up capacity on the existing west coast main line between Lichfield and Crewe. With the completion of phase 2a, the journey time from Crewe to London would be cut from 90 minutes today to under an hour by 2027, while HS2 journeys north of Birmingham would be up to 13 minutes faster than they will be following the construction of phase 1 of HS2.

HS2 has the support of the chief executive of the South Cheshire Chamber of Commerce and Industry, who has already made clear its beneficial impacts for Crewe. It has the support of the Mayors of Greater Manchester and the Liverpool City Region, local authority leaders in Leeds and Newcastle among others, and Transport for the North. It is also important for the delivery of northern powerhouse rail, which requires HS2 infrastructure to provide 50% of the new lines it needs for key parts of its services in and around Leeds and Manchester.

HS2 says that it is one of the most scrutinised organisations in the country, with oversight from the Department for Transport, the Treasury, the Cabinet Office and the Infrastructure and Projects Authority. It is clear from the sudden announcement a few days ago of delay and significant increases in costs that that extensive oversight has proved less than adequate, as something major has emerged for the first time about the HS2 project which could and should have come to light much earlier.

My noble friend Lord Tunnicliffe has indicated the issues that we will be pursuing: accountability and transparency, connectivity and the quality of links between HS2 and other relevant parts of the existing network, and compensation for tenants. I do not intend to repeat them in any detail.

It was a Labour Government who were the driving force behind HS2 and it was my noble friend Lord Adonis who, as Secretary of State for Transport, got it off the ground. This Government appear to have failed to exercise proper control over the progress of the project in all its aspects and thus failed to deliver proper accountability to Parliament. Now they look as though they could be getting cold feet and are looking to the recently appointed review panel to bail them out. What we do not know is whether, for the Government and the Prime Minister, bailing out means providing a justification to proceed, a justification to emasculate, a justification to abandon or simply a case for kicking the whole matter of the future of HS2 into the long grass during the run-up to a general election.

We continue to support the HS2 project because of the extensive and wide-ranging economic and other benefits it will deliver for the nation as a whole, in addition to addressing major capacity problems on the west coast main line, which would only get worse if HS2 is abandoned. We thus support this Bill giving the statutory go-ahead to enable phase 2a to proceed. The question is whether the Government still fully support their own Bill and the project, after more than nine years of actively supporting and progressing with the construction of HS2. Or, incredibly, will today be the last we will see of this Bill or any further Bills providing for the completion of the construction and development of HS2? I hope the Government can clearly and emphatically indicate now that they intend to proceed with this project.

[Baroness Vere of Norbiton]

I thank all noble Lords who have taken part in this wide-ranging debate. I am heartened by the amount of support that this project still has across the Chamber. I recognise that I will never be able to make my noble friend Lord Framlingham happy on this one. I will work on the noble Baroness, Lady Jones, and might get there in the end—we are going to keep trying, because it is a very important project.

The noble Baroness, Lady Kramer, made some particularly important points about these large critical infrastructure projects and the difficulties this country faces in the way that we are set up and do our budgeting, scheduling and timetabling. Certainly, over the longer term some changes will probably happen in those areas. It is the same in rail as in roads, as mentioned by the noble Lord, Lord Birt, who spoke about roads being vital. As Roads Minister I completely agree with him. The Government are committing vast sums of money to improvements in both roads and rail, which are absolutely essential. The next RIS2 will have £25.3 billion to spend. On rail, we are spending £48 billion in the next control period, which is significantly more than we have spent on our railways for a very long time.

I agree with the noble Lord, Lord Adonis, that this has pretty much always been about capacity—it just happens to be called High Speed 2. If I could have one wish in my life, it would be to change the name of this project. Calling it High Speed 2 has caused so many problems. It is a high-speed railway, I completely get that, but it is about capacity. Although it might be possible to slow down the railway, as the noble Baroness, Lady Young of Old Scone, suggested, that would cut capacity. However, that is one of things that the Oakervee review will look at.

The noble Lord, Lord Rosser, stated that this project was transformative and mentioned many other times when Members both in the other place and in this House, from the Government and beyond, talked about its transformative nature. It is very difficult to disagree, but “transformative” can mean many different things. We must be absolutely clear—this is what Oakervee will do—that the benefits and costs are appropriate for this project. That is the reason for the review.

[Lord Rosser]

Can I take it then, in the light of that comment, that the Government are not prepared to rule out this project being cancelled?

[Baroness Vere of Norbiton]

The Prime Minister has been very clear that nothing has been taken off the table. Imagine if the numbers came out as £100 billion to build it with benefits of only £50 billion. The noble Lord might have a slight problem with saying yes to a project with numbers like that. We know that things are under review, but we have also seen the report from Allan Cook—

[Lord Rosser]

I would agree, if we were faced with figures such as those which appeared to completely change the situation, but I imagine that if we reached that stage there would be an immediate inquiry into how the original figures were ever produced.

[Baroness Vere of Norbiton]

That may well be the case, but we are now talking about hypotheticals, so I suggest that we wait until the review has finished and look at its conclusions in the context of the report from Allan Cook. The Government will make a decision at that time.

I turn to the comment of the noble Lord, Lord Birt, about why we do not have a long-term railway strategy. That is exactly what we are doing at the moment with the Williams rail review, which is looking at the status of the rail network and the service operators to see whether and how we can improve the system for the future.

I turn to some of the more specific points raised by noble Lords. There was a bit of discussion around investment in the north and how important it is; that was brought up by the noble Lord, Lord Wallace of Saltaire, and the noble Baroness, Lady Randerson. It is of course absolutely critical, as the Government recognise. Northern Powerhouse Rail could be transformative for the north, but probably not in isolation. It needs to be part of a larger project, which is why the Government are supporting Transport for the North to develop the options for Northern Powerhouse Rail. We committed £60 million at the spending review in 2015 and £37 million in 2018, which is on top of the £300 million we have committed to make sure that HS2 infrastructure accommodates a future Northern Powerhouse Rail and Midlands services. Therefore it is part of a bigger project, and other developments are certainly being included.

On the Oakervee review and accountability, I have already mentioned that costs, timescales and benefits will all be tied up in the review. The noble Lord, Lord Tunnicliffe, spoke about accountability and HS2. I refer him to a comment made by my colleague the Transport Secretary, who was very clear that he wanted us to be as transparent as possible. That includes on costs and schedule, which is why we published the Cook report. The noble Baroness, Lady Kramer, raised that as well. Therefore, there will be more transparency and accountability. We are not minded to introduce quarterly reporting on HS2 at the moment, as it already provides reports to Parliament, as required by the framework document, and we believe that that level is proportionate and sufficient. Of course, noble Lords may request debates on HS2 at any time.

The noble Lord, Lord Adonis, claimed that it was a bit left hand/right hand, given my opening remarks and the fact that we are having a review. However, I do not see it like that. The process for HS2 is positive, and the review we are having is a sensible reconsideration of the facts. A sensible reconsideration should never be confused for a lack of support.

A number of noble Lords mentioned whether work should continue during the Oakervee review. Certainly, the Prime Minister was very clear that the fact that we are having a review should not unnecessarily delay the progress of HS2. That would be wrong, and it would mean that costs would rise. That is why limited enabling works are being undertaken by HS2, and why your Lordships are being asked to consider phase—