High Speed Rail (Preparation) Bill

Steve Barclay Excerpts

Thursday 31st October 2013 Commons Chamber

[Mrs Ellman]

I rise to support amendment 17. I am a firm supporter of High Speed 2. The case for it is essentially one of capacity. It is entirely wrong to state, as some commentators have done recently, that the argument for capacity is something new that has been brought in only at this stage. That is simply not so. The report that the Transport Select Committee produced two years ago made it clear that the need for increased capacity formed the basis of the case for HS2.

Amendment 17 deals with linking HS2 to the rest of the transport network. It specifically mentions the need for it to link to roads and airports. It is important that it should not be seen as a development that is separate from the rest of the rail network or indeed from the rest of the transport network. I therefore welcome the amendment. It is unfortunate that, because no decision has been taken on the need for increased airport capacity in the south-east, no firm proposals on Heathrow have been finalised. That matter needs urgent attention. There is also an issue about freight. In Liverpool, for example, the expansion of the port is creating a need for more freight paths and better access for freight. That, too, needs attention. I welcome the amendment in that it draws attention to networks and connectivity.

[Stephen Barclay (North East Cambridgeshire) (Con)]

In speaking to amendment 17, the hon. Lady is, in essence, setting out an early case for design changes. Can she confirm that the existing contingency in the spending envelope does not include provision for any such changes?

[Mrs Ellman]

The hon. Gentleman needs to direct such questions to HS2 itself. It is extremely important that all the financial aspects are fully considered. This specific amendment is to do with networks. The question of access to the high-speed network is critical, and that involves roads as well as other rail tracks.

The case for HS2 is also based on increased economic benefit to the areas in which the railway stations are located, as well as the surrounding areas and the regions that they serve. The issue of freed capacity on the west coast main line as a result of phase 1, and on the east coast and midland main lines following phase 2, is critical. The strategic review states that there will be a £3 billion benefit from the use of freed capacity, and Network Rail has stated that more than 100 cities and towns could benefit.

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I know from my meetings with my hon. Friend, and particularly with my hon. Friend the Member for North West Leicestershire (Andrew Bridgen) and others, that High Speed 2 Ltd, the Department for Transport and Ministers have worked overtime to consider ways of minimising the problems, where feasible and cost-effective, through the use of more tunnelling, green tunnelling or slightly adjusting the line of route to try to minimise them.

[Stephen Barclay]

Will my right hon. Friend give way?

[Mr Burns]

No, I will not.

Unfortunately, a project of this scale and size cannot meet the problems and objections of every part of the route while still keeping to the reason for and need behind the railway. It is rotten when one cannot deal with every problem, but we need to balance what is in the national interest against what can be done to minimise the impact. I believe that the Secretary of State for Transport, his Ministers, the Department for Transport and High Speed 2 Ltd have gone a considerable way—as far as they can—towards meeting and overcoming those problems without ruining the concept of high-speed rail and without it being disastrous for the taxpayer.

For those reasons, I am as confident as one can be that High Speed 2 will become High Speed 3 and go to Scotland, and that in years to come it will go to other parts of the United Kingdom as well. That can happen in an orderly way only if this Bill is passed to enable money to be spent on the preparations—not on building the railway, because the Bill does not deal with that. For those reasons, I will support the hon. Member for Nottingham South and my right hon. and hon. Friends on amendment 17; we gave a commitment to the right hon. Member for Holborn and St Pancras that we would do so. I will certainly oppose amendment 18 and those that flow from it, however, because they are superfluous and, as my hon. Friend the Minister said, contradictory.

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[Stephen Barclay]

I thank the hon. Gentleman for the generous spirit in which he is taking interventions. To support my parliamentary neighbour, my hon. Friend the Member for Peterborough (Mr Jackson), I point out to colleagues who take issue with his intervention that paragraph 15 of the National Audit Office report on HS1 concluded that

“the project is not value for money.”

Key finding 6 states that although passenger numbers grew, they were below expectations and estimates were inflated.

[Mike Thornton]

Perhaps I should limit the number of interventions I take.

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[Stephen Timms]

I am grateful to the right hon. Lady. However, I believe that an adequate connection should be part of the initial proposal.

[Stephen Barclay]

Will the right hon. Gentleman give way?

[Stephen Timms]

No, I will not give way again.

I welcome amendment 17 and the Government’s support for it. I have raised this matter with Ministers before, but I ask the new Minister for the first time to pay particular attention to the connectivity problem between High Speed 1 and High Speed 2, which was highlighted by the right hon. Member for Chesham and Amersham.

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[Mark Lazarowicz]

I am grateful for that update, which has been circulating over the last hour or so as the information has reached the public domain. I presume that Baroness Kramer will not announce that high-speed is coming to Scotland, but I am looking forward to some positive announcements tomorrow. There is an opportunity here for the Scottish Government—of whatever colour, as we are obviously talking about a long-term process—to work with the UK Government. It is recognised that it will be possible to do some work on high-speed rail in Scotland, perhaps to link Edinburgh and Glasgow but also to provide the basis for a route further south. Although we cannot immediately have a high-speed route all the way from Edinburgh and Glasgow to London, other sections of high-speed rail would certainly benefit the Scottish economy. Just as the business case for high-speed rail further south is strengthened by bringing into it business from Scotland, any high-speed rail in Scotland that would bring passengers into the GB-wide high-speed system would be beneficial for the rest of the country.

I understand why those communities that will not be served directly by the line, especially those that currently have a good rail service, will be concerned that they could lose out as a result of HS2 being constructed. The answer for those communities is to engage as actively as they can with central Government and neighbouring local authorities to try to ensure that they put the case to get the best benefits. It is also important that connectivity is examined, the point of the amendment tabled by my hon. Friends on the Opposition Front Bench.

It is important for the Government, and for Front Benchers of all colours, to use the opportunity of developing HS2 to rebuild the vision for rail in the country as a whole. HS2 is not just a question of trains running on the high-speed line and then going no further; they can serve other destinations in the way they will serve Edinburgh and Glasgow. On the continent, high-speed trains do not just run on high-speed lines; they serve other communities too. That is something we should aim for in Britain.

The case for high-speed developments beyond HS2 is powerful. I understand why a Government would not want to start putting down lines on a map to other parts of Britain, because that would set off scare stories about costs, but the points made by the right hon. Member for Chelmsford (Mr Burns) on possible development should not be lost or forgotten—the lines to Scotland and routes to the north-east of England in particular. There are clear capacity problems between Yorkshire and the north-east of England and they will need to be on the agenda at some stage.

I started my comments by referring to the amendments on Scotland. The amendments tabled by the right hon. Member for Chesham and Amersham (Mrs Gillan) and the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) are superfluous. The Scottish Government have accepted the Bill in its current form. The Scottish Parliament has passed the relevant Sewel motion endorsing the proposals in the Bill. I do not always agree with the current Scottish Government and Scottish Parliament, but on this occasion if it is good enough for them, it should be good enough for this House. I will not support the amendments, as they do not take the debate any further. We have good proposals that have achieved broad consensus across the House. I hope we can continue to proceed in that fashion.

[Stephen Barclay]

I shall speak to amendment 17 and, in particular, to the costs associated with connectivity.

On Sunday, it was my daughter’s third birthday. As the list of presents she was hoping to receive grew ever longer, I had to remind her that we did not have a magic money tree in the garden. Her response, quick as a flash, was to say, “Why don’t you plant one?” When we look at amendment 17 and consider the remarks at the beginning of the debate from the Chair of the Transport Committee, the hon. Member for Liverpool, Riverside (Mrs Ellman), we need to reflect on the reality of a budget set at £42.6 billion—this seems to be used interchangeably with the spending envelope, albeit that it appears to have now grown to a £50 billion cap—that does not include the changes in design referred to in the powerful speech from the right hon. Member for East Ham (Stephen Timms).

I want to draw hon. Members’ attention to the remarks that David Prout made to the Public Accounts Committee. One might have expected the contingency to have anticipated changes in design costs. Of the £50 billion cap, £21 billion is currently unspecified. More than £14 billion includes dealing with optimism bias and risk inflation—the initial 10% on that £15 billion figure—and then on top of that there is a further contingency of more than £4 billion for phase 1. Nowhere do the figures address changes to design, yet many of hon. Members’ remarks have been based on exactly that premise. I predict there will be public campaigns in Camden where people will say, “If we are going to have High Speed 2, let us connect it to High Speed 1 in a far better way.” Dare I say it, but there may be one or two well-connected opinion-formers in north London who will help that campaign. Yet David Prout said:

“The contingency would not include major changes in scope, for example, that the Select Committee might require. If the Select Committee requires an additional station”—

as some in Sheffield are hoping for—

“that is not included in the contingency. If it required 20 more miles of tunnelling”—

as the people of east Cheshire are hoping to secure—

“that is not included in the contingency. What we would expect to include in the contingency are the more minor adjustments in Select Committee to mitigate environmental impact.”

Those are the very environmental issues on which we still do not have a report.

[Damian Collins]

Does my hon. Friend agree that local government could also consider some of these issues? Kent county council is thinking of using money from the regional growth fund to upgrade the railway connection from the high-speed rail point in Ashford through Canterbury to Manston airport. Contributions could come from other pots of public money besides those found centrally by the Department for Transport.

[Stephen Barclay]

Indeed. That brings me to the distorting effect at the heart of the remarks made by my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw) and the paradox that the scheme will divert more funding to London.

[Mr Simon Burns]

Will my hon. Friend give way?

[Stephen Barclay]

I will, but before doing so, may I thank my right hon. Friend, who, throughout his time as Minister, was most courteous and responsive? I take his intervention with pleasure.

[Mr Burns]

I am grateful to my hon. Friend and I hope my intervention does not spoil that record. Is he taking into account the fact that some of the changes, particularly to phase 1, will actually save money? For example, the decision to tunnel around Hanger lane in west London will be cheaper than the original overground proposal, leaving us with money for swings and roundabouts.

[Stephen Barclay]

Of course, there will be some give and take. My hon. Friend the Member for Warrington South (David Mowat) highlighted the issues involved, but let us consider, for example, the Heathrow spur, on which we have had interventions. If Howard Davies decides to go with a hub airport at Heathrow—and one would think it logical for HS2 to connect to it—the cost of that is not in this budget, and neither is the cost of the connection in Camden, so the cost of tunnelling and the additional work that is likely to flow are not in these figures either. I wish, then, to draw the House’s attention to the pressure that is likely to follow from what Donald Rumsfeld would probably refer to as the “known unknowns”, which we know are going to be huge.

[Mrs Gillan]

My hon. Friend is listing all the items that are not included but which will add to the price of this project. The Government have now indicated their intention to accept the official Opposition’s amendment. I have been looking at some paperwork, and I believe that the cycling lanes in Birmingham, Manchester and Leeds will add up to another £750,000; the light rail construction, if it goes ahead, in Liverpool and Birmingham will cost about £1.6 billion; and if there is a walking programme for the seven cities, that will cost about £750,000. Those projects are all in the infrastructure pipeline, so we are looking at adding between £3 billion and £4 billion just to provide the connectivity to which the Government have agreed.

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[Stephen Barclay]

My right hon. Friend makes a valid point. Inevitably, when large sums are being spent, there will be pressure to leverage it, and already the Government have signalled some tipping towards schemes linked to HS2. For example, they have referred to making cities “HS2 ready”, so it is in the very lexicon they are using.

[Mrs Spelman]

On a point of clarification about connectivity, local authorities have to take some responsibility as part of their transport plans. The Greater Birmingham and Solihull local enterprise partnership’s top priority is to make a bid to the single regeneration pot for light rail connections to Birmingham airport and the interchange station. When Lord Adonis was promoting high-speed rail, and we were not sure about it in the west midlands, the deal was basically that we would find the funds to build the station. There is a balance between local authority spend and other pots; it should not all come from a single resource.

[Stephen Barclay]

My right hon. Friend makes a fair point, but it is not the point that I am seeking to make. The £35 billion that has been allocated for control period 5, between 2014 and 2019, referred to in paragraph 18 of the Department’s case, does not cover many of the items on the wish-lists that Members are compiling today.

[Andrew Bridgen]

I totally agree with my hon. Friend’s analysis: there will be increased pressure on the HS2 mitigation budget for the route, which will put costs up. I put it to him that the only way in which any Government will be able to keep a cap on the cost of HS2 will be drastically to cut back on the compensation scheme for householders who are unduly affected by the project. That would be devastating for my constituents.

[Stephen Barclay]

I will come to the direct costs in a moment, but my hon. Friend makes a valid point. The Royal Institution of Chartered Surveyors has told me that land prices have gone up threefold in the past decade. Not many households have been compensated so far, but the House of Commons Library informs me that 32 homes have been compensated to date—a very modest sample—and that the average cost per home has been £500,000. I do not know what the cost will be in north London, but I suspect that London house prices are going up quite quickly.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

I would not wish to compete with my hon. Friend’s clear expertise in this matter, but has he considered reducing the budget for HS2 by using Old Oak Common as a terminus, thereby avoiding any of the activity in the Camden area that appears to be causing concern financially? That would fit with many European models, in which the terminus is situated outside the city centre and connected to the high-speed and cross-borough links. Has my hon. Friend considered that possibility as part of his investigation?

[Stephen Barclay]

My hon. Friend is a fellow Lancastrian, and he is a great champion for his constituents. Surely one of the difficulties with opting for out-of-town stations is that it would take people longer to get to where they needed to be. The clue is in the name: high-speed rail. If they travelled to an out-of-town station, they would still need to get into the city centre to complete their door-to-door journey.

[Paul Maynard]

This is a good opportunity to remind Members that the point of HS2 is to allow people to get to the areas of greatest economic activity, and those are not necessarily within five minutes of Euston station. The benefit of a terminus at Old Oak Common would be an ability to transfer quickly to the City, where the bulk of the economic activity takes place. This is the clear message from all high-speed rail networks around the world.

[Stephen Barclay]

Of course there is a debate around Old Oak Common, but I must point out the lack of clarity. Clearing a similar site for the Olympics cost £1 billion. Where is the figure for clearing and regenerating the site around Old Oak Common? Transport for London is putting in requests, stating that it is possible to leverage HS2 with better connectivity using Old Oak Common, and I think it is right to do so, but where is that proposal reflected in the figures?

The Chief Secretary to the Treasury made a clear statement on “The Andrew Marr Show” on Sunday. He did not say that the project would be delivered for £42 billion; he said that it would be delivered for less. That was the promise he made. Now we are talking about a cap of £50 billion, so an extra £7 billion has appeared in the space of a few days. In today’s debate, Members are adding their own wish-lists, which will add further to the costs.

[Mr Simon Burns]

The cost of HS2 is £42.6 billion, within which there is a contingency fund of £14.4 billion. The figure of £50 billion that my hon. Friend has referred to reflects the addition on top of that of £7.1 billion for rolling stock, of which £1.7 billion is the contingency fund. It is not for the building of the railway.

[Stephen Barclay]

The size and quantum of the contingency points to a lack of detail and of financial discipline in the cost estimates. That is why so much of it is vague.

I started my remarks believing that my time was unlimited, but having been made aware by one of my colleagues that my time is more finite than I originally expected, I shall dramatically shorten my speech and finish with reference to two issues.

First, on direct costs, reading the business case put forward this week, it is difficult to get a sense of the impact of energy prices on construction. We justified the high cost of our nuclear deal last week on the basis of rising energy prices, yet we seem to be quoting the same HS1 energy costs for steel construction for this project. Land prices seem vague. Network Rail still has a 23% efficiency gap. Is it to be a subcontractor? Are we going to fix the governance of Network Rail, which is still out of the scope of shareholders, of the National Audit Office and of freedom of information requests?

Secondly, there seem to be a number of contradictions with this project. If economic growth is as good as the passenger forecasts suggest, will it not put pressure on supplier costs for construction, particularly on a project that will deliver at its peak 40% of construction market work? We need far more transparency on costs.

[Frank Dobson]

It may interest the hon. Gentleman to know that about 220 households in my constituency will need to be re-housed at the expense of HS2. The authorities were rather shocked to discover that a one-bedroom flat in a block recently built in the locality is currently going for £482,000. Most of the people who need to be re-housed need a family-sized flat.

[Stephen Barclay]

The right hon. Gentleman brings great expertise to these issues. That takes me back to the reference to a blank cheque: my concern is that the House is being asked to exercise blind faith, which will have a hugely distorting effect on transport schemes elsewhere in the country—as pressure grows, for example, for Crossrail 2 to connect not at Tottenham Court Road, but at Euston. Other schemes in the system, such as the one in my area of Cambridgeshire, will be asset-stripped of what they rightly deserve.

Let me leave the House with the image that we look like someone coming down the platform with five business cases, while the train has already left the station and we are waiting for the announcement of whether we will hit our destination, which will be given next year not by the Government, but by the shadow Chancellor. I do not think that is the right way to proceed. We need to be far more careful with controlling the costs.

[Andrew Bridgen]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Question put, That the amendment be made.

Question accordingly negatived.

Amendment made: 17, page 1, line 12, at end insert

‘as well as with such other parts of the transport network (including roads, footpaths, cycleways, airports and light railways) as the Secretary of State considers appropriate.’.— (Mr Goodwill.)

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[Mrs Gillan]

I do not think there is anything wrong with this amendment at all. It was a probing amendment, and just as the Government managed to slip their name under the official Opposition’s leading name on one amendment, I hoped that the Opposition might slip their name under mine as it contains the cap they wanted. Also, if we had had some adjustments to this Bill, it would have encompassed the spend. If we are going to have a money Bill, it should not just cover the open-ended preparatory work—now my right hon. Friend is wanting to have his cake and eat it—but should cover the money that is going to be spent on the project. After all, he has been arguing for—[Interruption.] Well, we know the hybrid Bill is coming. It will be a gargantuan monster of a Bill that will take up more time in this House than any other Bill has ever done.

Amendment 15 seeks to restrict the preparatory expenditure. I am sure my Front-Bench colleagues will say that these amendments are contradictory, but they are probing amendments. I did not serve on the Bill Committee so this is the opportunity for me to get these matters discussed. I think we need to restrict the expenditure to those items that are on the face of the Bill. Currently, the word “includes” in clause 1(3) means that the Bill is the blank cheque to which I referred earlier. I think that, in the Bill’s current form, there is no restriction. I am sure the Government will not accept any restriction, but they would have been in a much better place if they had done so.

I shall move on now, as I know many other Members want to speak. There are colleagues who are not in the House today but whom I have consulted in Buckinghamshire. The Attorney-General, my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve), knows his residents at Denham are wholly opposed to this proposal, and I know that the Minister for Europe, my right hon. Friend the Member for Aylesbury (Mr Lidington), is continuing to work tirelessly within Government to put to the most senior Ministers the arguments and interests of his constituency. He has asked me to point out today that there are serious mitigation issues both in Wendover and Aylesbury that are still not resolved, yet the Department’s current plans make no adequate provision either for the measures to reduce noise or for fair compensation. I am also concerned for Mr Speaker, whose constituents in Buckingham continue to express overwhelming opposition.

This money Bill writes a blank cheque for the Government, or it purports to write a blank cheque and give the Government a fig leaf to cover their embarrassment about the hundreds of millions they have already spent and the £1 billion they will spend by the time we reach the next election. I was, however, hoping that we could regularise some of the terms and conditions of the people working on this project, which is the aim of amendments 21 and 22.

Amendment 21 deals with payments made through service companies. I do not know how many people in this House pay close attention to this matter, but there has certainly been a lot of fuss about service companies, particularly in connection with the BBC and others. When I asked a fairly innocuous parliamentary question, I was surprised to find out that in the past 12 months HS2 Ltd has engaged 48 people paid through personal service companies. Apparently, eight of those people have either left the company or transferred to the payroll, and a further 12 will have left or transferred by 31 December. That means that there will still be many people who are paid through personal service companies. Apparently, the Department was carrying out an assurance process at the time to ensure that all those people were compliant with their tax and national insurance obligations, and the good news is that the response was that they were—none was not compliant. But on a Government project of this sort, being paid for from the public purse, people should be paid as civil servants and they should not be in receipt of bonuses.

Much has been made about bonuses in and around this House in connection with many other professions. MPs do not get a bonus, and neither would I be asking for one as an MP, but I was shocked to find that between 2011 and 2013 people in the Department for Transport, including people working on HS2 Ltd, have been paid bonuses of more than £3 million between them. I admit that many of those bonuses will be small, but we should still put our money where our mouth is and the practice should cease. I also understand that HS2 Ltd, which was operating bonus schemes, is no longer doing so for its employees. I am pleased about that, because I do not think we can say one thing in one area of government and practise a different set of procedures in another.

[Stephen Barclay]

When my right hon. Friend tabled that parliamentary question, did she get clarification of whether any of those on personal service contracts were ex-staff of the Department for Transport and whether they had received any pay-off from the Department?

[Mrs Gillan]

No, I did not, but that is the sort of fine detail of the finance that we will need to look at, as it should be examined. One thing I have been trying to have a look at is Mr Higgins’s new employment contract, which I understand does not start until January. I have been denied sight of that, but I wanted to see what performance bonuses, or any other inducement or performance-related measure, it contained.

Amendment 27, tabled by the—[Interruption.] Forgive me, a year is a long time, and I cannot recall the constituency.