Oral Answers to Questions

Debate between Stephen Hammond and David Mowat

Thursday 10th July 2014 Commons Chamber

[Mr Speaker]

I call Jack Dromey. Not here.

[David Mowat (Warrington South) (Con)]

8. What the estimated cost-benefit ratio is for the High Speed 2 Wigan spur.

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

The Department has not estimated the case for the western leg of the Y-shaped route for High Speed 2 without the Wigan spur. However, preliminary analysis undertaken by HS2 Ltd suggested that this section of the line is likely to provide benefits in the order of £1.2 billion, revenue of about £600 million, and is likely to offer very high value for money.

[David Mowat]

I have been, and remain, a strong supporter of HS2 because I believe in the transformational benefits that will occur. However, none of these transformational benefits occurs because of the line north of Manchester—it is not in the published business or in the published economic case—and the cost of this line is the better part of £1 billion, including allocated contingencies. Will the Minister confirm that he will look hard at this issue during the current consultation?

[Stephen Hammond]

I welcome my hon. Friend’s support for High Speed 2, and I welcome the opportunity to lay on the line yet again that the mischievous remarks of the hon. Member for Huddersfield (Mr Sheerman), suggesting a figure of £80 billion, are completely false. I will, of course, look through the consultation, but I am sure my hon. Friend will recognise that having the Wigan spur will ensure that we can deliver some of the benefits to the west coast main line, which is why the Government believe at this stage that it offers high value for money.

Oral Answers to Questions

Debate between Stephen Hammond and David Mowat

Thursday 17th January 2013 Commons Chamber

[David Mowat (Warrington South) (Con)]

T4. The new Mersey Gateway bridge will be tolled, with the risk of significant extra traffic through Warrington. The inspector at the planning inquiry stated the toll should be set no higher than that of the nearby Birkenhead tunnel. Will the Secretary of State confirm that in any evaluation of a change to the tunnel toll, he will also look at the situation of the bridge and of Warrington?

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

The Government have no plans to fund the reduction or abolition of tolls on the Mersey tunnels. Tolls on the new Mersey gateway bridge will be set by the Mersey gateway crossings board, an independent subsidiary of Halton borough council set up to manage the scheme. My hon. Friend knows that the indicative and maximum toll levels were agreed as part of the public inquiry, and were set out under the Transport and Works Act 1992.

Transport and the Economy

Debate between Stephen Hammond and David Mowat

Tuesday 28th February 2012 Commons Chamber

[Stephen Hammond]

Indeed, but the previous solution was a template solution, a one-size-fits-all solution, a “this is the way we must do it” solution, which did not necessarily reflect the economic realities. As the hon. Member for Penistone and Stocksbridge (Angela Smith) pointed out, in the north of England it was not one regional development agency, but a collaboration of three. As I observed earlier, in certain parts of the country structures well below the regional level developed and delivered more efficient transport solutions.

I hope that in reading the report the Minister will not be deflected from the idea that solutions of differing sizes will fit different parts of the country, and that LEPs have been in place for a relatively short time. Just as regional development agencies were able to collaborate and co-operate, there is little doubt that LEPs will be able to do the same. It is also true that in certain parts of the country integrated transport authorities and passenger transport authorities will provide the lead in regional structures. The clear message must be that there are differing appropriate sizes and structures.

[David Mowat]

I agree that the jury is out on LEPs and that the RDAs were not a panacea in this area, but the real point is that neither the RDAs nor the LEPs can compete with the velocity of spending which is so skewed away from the regions and towards London and the south-east. For example, when the Chancellor announces £30 billion of spend, of which 80% was in London, that dwarfs the amount available to the RDAs or the LEPs. The real issue is how we fix that problem, rather than tinkering with the LEPs, which I hope, as I am sure does my hon. Friend, will work in time.

[Stephen Hammond]

I certainly agree with the latter point. It is beyond the scope of my comments this afternoon to go into the differing amounts of regional money. I accept that there clearly is some imbalance in subsidy between varying regions of the country. It is important to analyse what that can deliver and its efficacy. It is interesting to speculate what Crossrail might bring to London in future, as opposed to what the northern hub might bring to the north. I suspect that the benefits of the northern hub might be greater than those of Crossrail. We will wait and see. I am sure the Minister and the DFT will continue to reflect on that.

As a practitioner of the dark art of economics, I know that different economists will always have differing views on everything. Reading the report, I was struck by the comments of the former chief economist at the DFT. Although those may have been made only in response to the question that he was asked, it seemed to me to miss out quite a lot when he said that if one looks at the history of the British economy, it is clear

“how little the underlying rate of economic growth has varied.”

He went on to add that transport had done very little to affect the overall growth rate of the British economy. That seemed to miss out the fact that we have had wildly varying periods across history.

The witness's analysis went back almost 200 years. Over that time, we have had wildly differing levels of infrastructure investment, and there have been periods when the growth rate of the UK economy has been well in excess of the 2% that he mentioned. His analysis also failed to consider the impact of under-investment, which is a well known phenomenon, how that would have dragged down the underlying potential growth rate of the economy even in a period when investment had resumed, and the potential growth rate had there been consistent investment. Although the analysis that Mr Riley presented to the Committee may or may not be valid, it seems to me that it falls foul of the law of averages. I think that the analysis should look at the potential for economic growth with a consistent approach to investment.