East West Rail: Bedford to Cambridge

Debate between Wera Hobhouse and Richard Fuller

Tuesday 13th June 2023 Westminster Hall

[Wera Hobhouse (Bath) (LD)]

On the question of growth, East West Rail should be a real opportunity for growth, but real problems will arise if the surrounding infrastructure is not there, which will put pressure on people. Does the hon. Gentleman agree that, together with East West Rail, the Government really need to work with local communities to create additional infrastructure, such as bus services and GP services, so that people see the benefits of that growth?

[Richard Fuller]

The hon. Lady is absolutely right, and that is why I circulated a letter, which all parties have signed, calling for exactly that: a greener alternative that focuses on sustainable growth and the work-life patterns that people want, not a 19th-century solution that is supposed to unlock growth on an unproven model.

One could sense the political support ebbing away from East West Rail as the announcement was made. The truth is that it has brought no relief to those most affected. I understand that, in a rearguard action today, Beth West, the chief executive of East West Rail, has said that she will approach Government to enable the purchase of houses that are currently planned to be demolished. That would help people who are already two or three years into uncertainty. As an additional ask, will the Minister instruct East West Rail to send an advice note to people whose homes or properties are within the proposed corridor and, included in that, the expected distance from the rail route itself? That will provide clarity to more people, particularly in the villages affected.

The Minister will know that we had elections recently, and that they have brought political change. I am not sure that the election results around the country were good for the Conservative party, but in Bedford borough, the Conservatives won the directly elected mayoralty for the first time ever. That was a repudiation of the Liberal Democrat Mayor, who had strongly supported East West Rail and such an environmentally destructive route across north Bedfordshire, with its phoney economic benefits for the town. Now with Tom Wootton as the Mayor, we have someone who is clear and determined in his opposition to the proposals presented by East West Rail. Conversely, in central Bedfordshire we also have a new leader—an independent, whose ward encompasses Tempsford, the site of a station that may herald substantial housing development, measured in the tens of thousands. Does the Minister appreciate the current scale of interest in alternatives to the project, given these political changes?

I have been contacted, without solicitation, by many sources and experts decrying the performance of the East West Rail Company. One constituent with expertise wrote to me to say:

“From my experience and observations the insincerity of the process pursued by EWR has been its most glaring weakness. In equal measure, however, any such criticism must also lie at the door of the Department for Transport who appear to be an acquiescing partner in the woefully inadequate activities of EWR. Unfortunately, the Government as a whole cannot escape association with the feeling of disillusionment generated through continuous stonewalling, lack of logical business planning, flouting of the law (freedom of information) and insincerity of approach.”

The route chosen by East West Rail is so full of twists and turns, and ups and downs, that it surely competes with what is probably our country’s bendiest road, the B3081 at Cann Common in Dorset—I am not sure whether the Minister knew that—which

“twists and turns more than many an Alpine climb.”

Those words could be applied to the route chosen by East West Rail. Back in the Victorian age, when Governments and others knew how to build railways, they chose a straighter, less hilly route. I encourage the Minister to watch the video from Alison, a constituent of the hon. Member for Bedford, who clearly outlines East West Rail’s irrationality in choosing a route with such topography.

One of the principals behind the campaign, BFARe, Bedford For a Re Consultation, wrote to tell me:

“The crux of the issue stems from the fact that the NSIP process contains a ratchet mechanism whereby the narrowing down of options precludes a fundamental review/rethink of alternatives when better evidence comes to light about previously discarded options. The starting premise for growth in the Arc was flawed and the initial public consultation into the scheme in 2019 was so badly handled that it shut out a lot of people and communities who stood to be most impacted by the scheme”.

Another constituent wrote to me expressing the view of many in my constituency:

“To get to Cambridge I personally would drive to the park and ride and get on a bus to the centre of the city; not drive to Bedford station, pay to park, buy an expensive train ticket to get a train which would not take me to the centre.”

I will spend some time on the cost-benefit analysis, because I think it is an open secret that nobody thinks that East West Rail is financially viable. Less than a year ago, the former Secretary of State for Transport, my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps), when on the LBC radio show of Mr Iain Dale, had the following interaction. Mr Dale: “What would you cut from your Transport budget?” The former Secretary of State: “I would take East West Rail and I would remove.” Iain Dale: “Why haven’t you done it already?” The former Secretary of State: “Well, I haven’t had the opportunity.” Iain Dale: “You are the Transport Secretary. You could easily have done it already. You could have gone to the Chancellor and said, ‘I know you want to cut spending; here is one way you could do that.’” The former Secretary of State: “I have done that in other ways, but you have just asked what I would do as Prime Minister, and I am telling you I would cut East West Rail on what is called two and three, so there’s the second and third tranches of it, and save £3 billion to £5 billion straight away.” I therefore ask the Minister what he would do if he was Prime Minister?

A constituent wrote to me on the cost-benefit analysis and said:

“As someone who has had the ‘we intend to drive a railway line through your property’ notice recently I'd really like to get two questions answered, as this document failed entirely to do so. Where is an up to date business case? No-one has seen one, no-one affected believes a valid business case now exists…When will EWR engage directly with home owners on the route to purchase land?”

I have mentioned that second point already. East West Rail states in its documents:

“While the Business Case is still in development and won’t be completed until we’ve obtained the required consent for the Project...In the final weeks before publication, the proposals are subject to a cross-Government approval process.”

So it will get consent and then tell us what the business case is.

Appendix 5 to the economic and technical report discusses the “economic appraisal”. The report states that it will:

“compare benefits against costs over the life of a project or for a defined period of time. As is typical for infrastructure projects, the monetised impacts of EWR are projected to a point 60 years from entry into service. Both the benefits and costs are discounted and presented in 2010 prices and values in line with TAG guidance”—

transport analysis guidance. The report continues:

“The 60-year value is known as the Present Value (PV).”

It concludes:

“Standard approach to modelling and forecasting results showed us that, in conventional appraisal terms, the BCRs were ‘poor’ across all options”.

What does “poor” mean? It means benefit-cost ratios of 0.26 to 0.42—and that is based on the high-growth option. The high-growth option means that the best benefit-to-cost ratio is less than half the amount taxpayers will be asked to put into the railway. What does that mean in terms of cost to the taxpayer? It means £1.5 billion to £2.4 billion thrown away on a railway.

East West Rail seeks an escape route from such a common-sense economic appraisal. It states:

“These early estimates of costs were a key driver of the BCRs, which did not account for the transformational and strategic benefits considered later as part of the application of our Theory of Change.”

Over two chapters, East West Rail attempts to draw in every possible justification for its project. It talks about east-west connectivity, but it does not mention the cancellation of the expressway. It talks about housing costs, but it does not notice that the highest costs are where railways exist. Thus its proposals are as likely to increase house prices in areas where they are lower than in Cambridge than they are to lower house prices in Cambridge itself. It ignores the power of the market, with private companies already making decisions about where to locate if Cambridgeshire is too expensive. For example, Marshall Aerospace is very sensibly relocating to Cranfield Airport.

Before I entered Parliament, I was a partner in a strategy consulting firm, advising large businesses and utilities on investment decisions. I was also a partner in a venture capital fund, investing in the high-growth businesses of tomorrow. I am also a graduate of Havard Business School, and I can use all that life experience and those qualifications to assess the theory of change exercise by East West Rail as complete nonsense. What is the Department for Transport metaphorically smoking if it continues to go along with this economic illiteracy? I may have missed the financial conclusion of the theory of change exercise, but perhaps the Minister can advise us whether he will release the full financial case, together with all the assumptions and sources. Today, I issue a challenge to the chief executive of East West Rail to attend a public debate with me to argue the economic case for and against this project—openly, transparently and honestly.

We all know the real reason behind all of this: it is about housing. A constituent wrote to me saying:

“From the economic and technical report, it is clear that Bedford is viewed as simply a cheaper housing estate separate from where all the jobs are expected to be—in and around Cambridge. So what’s in this for Bedford?”

The real reason for East West Rail is the concreting over of north Bedfordshire. We have the issue of the Tempsford interchange section, with reports of up to 40,000 new homes in a village that currently has 400 residents. There is also Stewartby, in the Mid Bedfordshire constituency, where pages 92 and 93 of the economic and technical report suggest the railway will open up 70,000 jobs to households. In my estimation, that amounts to about 35,000 houses.

I am not a nimby on housing—we should all do our fair share—but as the MP for North East Bedfordshire I have to point out that there is considerable pressure on GPs, dentists and school places. Without investment in that soft infrastructure, it is very unwise to support additional housing growth.

[Wera Hobhouse]

Does the hon. Member agree that it is unfair to call people such as those in Mid Bedfordshire who are raising these absolutely real concerns nimbys? People need those services to go with the growth and the increased railway line.

[Richard Fuller]

I do, but I would not do what I understand the Liberal Democrats are doing in Mid Bedfordshire, which is to ask people which housing estate they do not like so that they can oppose it—that is not the right way to do it. However, as regards very large-scale developments, the hon. Lady is absolutely right, and we should have that consideration. In 2019 I stood on a manifesto calling for infrastructure first on these large-scale developments. I do not know whether the Minister can give me an update on that—it is not his remit, so I do not expect him to, but it is important, and he stood on the same manifesto as I did.

We should all do our fair share. I looked at the census data on the growth in households between the 2011 and 2021 censuses. The national average increase in households over that period was 6%, and I think we all feel that rapid growth in our constituencies. Perhaps unwisely, I then decided to look at specific constituencies. I looked at the Chancellor’s constituency, and he is doing his bit, with 6% growth. I looked at the Secretary of State for Transport’s constituency, and there was a 9% increase in households over that period, which is a substantial amount above the national average. The Minister, who is responsible for rail, had only 5% growth, but we will forgive him that 1%. In North East Bedfordshire from 2011 to 2021, there was 21% growth, which is already three and a half times the national average of growth in households. That is already putting pressure on GP services, dentists and school places. How on earth can I, as the MP for North East Bedfordshire, allow further pressure through an increase in housing growth until those problems are dealt with?

I want to turn to the environmental impact. I had an interaction today with Councillor Tracey Wye, who represents the ward that includes Potton. She wrote to me to say she would like to see a commitment that this project would be in harmony with the environment—something so future-proof, leading-edge and creative that we would be at the leading edge of sustainability and climate resilience. I could not agree more; she is absolutely right.

We have been a bit misled, I would say—perhaps that is unfair—about the electrification of this line. Originally, in the Railways Act 2005, it was going to be electrified as part of the electric spine. In the high-level output specification of July 2012, the line was listed as a new electric railway line. It was then dropped by East West Rail Company, but the company’s latest document now says that it may come back. Minister, which is it? Are we electrified or are we not? Is it battery powered or not? The announcement was supposed to clarify the form of traction, but it has done nothing of the sort.

I believe that Ministers know that the original plans by Lord Adonis in the 2017 “Partnership for Prosperity” report were bogus, and they have not kept pace with changes in working patterns and our greater focus on environmental issues. A previous Secretary of State cancelled the Oxford-to-Cambridge expressway in 2021, stating that

“analysis shows that the benefits the road would deliver are outweighed by the costs”.

Precisely that charge can be laid today against East West Rail, so why is the current Secretary of State not taking the same action?

A constituent wrote to tell me:

“From a net-zero perspective, how could they possibly introduce a new transport link, with the intention of running diesel trains on it until 2040 at the earliest? Hardly what you’d describe as inspirational or forward thinking.”

Another constituent wrote:

“As someone with long standing involvement in the biotech industry and academic community, I would question the whole rationale for the railway in the first place. Of course we all want to consolidate Cambridge’s position as a technology hub, but if science and industry in Oxford and Cambridge want to collaborate they’d do it remotely. East West Rail is a 19th century response to a problem for which we in the 21st century have solutions that are cheaper, better and less environmentally destructive.”

I call on the Minister to consider those solutions.

International Trade and Geopolitics

Debate between Wera Hobhouse and Richard Fuller

Thursday 20th April 2023 Commons Chamber

[Richard Fuller]

Actually, the hon. Gentleman is exactly right. He and I share a concern for the defence of taxpayers’ money: if it is going to be spent, it should be spent wisely. If a strategy is not working, that is fine, but the point that I raised at the start of my speech was that we hold different points of view on whether industrial strategy per se will be an answer to the problems. My general position is that leaving the market and businesses to themselves and allowing the free allocation of capital in open and competitive markets has proven time, time and time again to be the best way to achieve progress, with better living standards for households in this country and around the free world. That is why the developed nations are the developed nations: because we have supported that approach.

[Wera Hobhouse (Bath) (LD)]

rose—

[Richard Fuller]

I know you are being very lenient today, Madam Deputy Speaker, so I give way.

[Wera Hobhouse]

Nobody—certainly no Liberal Democrat —would pretend that wealth is created by the state. It is created by businesses, but what business leaders have said time and again is that the Government need to set a direction. Is it not true that this Government are currently giving no purposeful direction to business, particularly when it comes to the green economy and the transition to net zero?

[Richard Fuller]

The hon. Lady is right that businesses like certainty—that is absolutely true. Setting a direction, inasmuch as it creates certainty, is useful; more than that, it is a strong part of the foundations. If we go on to talk about climate change in this debate, it may be that questions about national and international strategies and about what our response should be to issues among British businesses, businesses in other countries and multinationals will drive us apart again.

--- Later in debate ---

[Richard Fuller]

I am grateful to the right hon. Gentleman for taking part in the debate. I do not think I agreed with anything else in the Labour party’s 2017 manifesto, but the point that he has just made is a point for the ages for whoever is in the Treasury.

In addition to my concern about taxpayers’ money, behind the big funding race between the EU and the US to put amounts of money at risk in a casino of green discovery is an open question about the trajectory of unit costs for the materials that will be required by those sectors that will assist us to achieve net zero. When others are rushing to do something, it is a natural human urge to rush to do it too. We can all remember the shortages of toilet paper at the start of covid, which was a shortage for no apparent reason. Because everyone else was buying loo paper, we all thought we should buy it. As we know, that created a surge in unit cost, which abated and—although I have not checked recently—the cost is now back down to a normal market price. As goes toilet paper—perhaps I should not use that phrase—so goes the unit cost for other items. A significant cost will be experienced by early adopters. My question is whether we would be better off participating in that surge in unit costs in an era of technological discovery, or keeping our money in our pocket until the unit costs come down once the successful discoveries have been made.

We should remember that there will always be opportunities for economic gain and financial success, even if the initial discoveries and the bulk of investment are elsewhere. There will always be international flows of trade. For example, in the 1940s and 1950s, most of the motor industry was in the United States, but in the 1970s the UK benefited because it needed to reshore to the UK. That will be the same in other sectors. Look at value-added: iPhones are made in developing countries, historically mostly in China, but most of the value added is in Apple’s design, and the UK has advantages in that area. We can be thoughtful about such areas, but I wanted to put on the record some questions for the Chair of the Select Committee who introduced this welcome debate.

I know that I have tested everyone’s patience with my opening remarks, so I will address another couple of points before allowing time for others. This issue tilts to the Indo-Pacific region, both through the trade arrangements and the infrastructure. The global review that the Government have done is welcome. Much like the hon. Member for Liverpool, Walton, who talked about the issues in Latin America, before getting involved in politics I spent a lot of time in the Philippines, Korea and Australia. It was clear that in those areas of the world, there is not only great opportunity for the United Kingdom, but a great recognition of the talents that we have and a great need for the various skills that we can provide in economics, defence and other areas.

When I hear politicians pooh-pooh the impact of CPTPP as a small percentage of GDP, I worry that they are missing the deeper point that it is a bigger connection. It is part of a globalisation of what the United Kingdom does. It is a recognition not that the UK is a big global superpower, but that it is seen by people around the world as having its place and having things to offer. We should look at this trade agreement as just the start of us pushing further into that part of the world in all the ways that we can.

I yearn for the day when we can do a similar deal across Africa. Trading with countries in Africa and opening up our markets to goods and services from Nigeria, Ghana, South Africa, Kenya and other growing economies is surely not only in our economic interests but in the interests of humanity. The greatest benefit to humanity in economic terms over my lifetime was made by Nixon’s visit to China and its redirection from Russia towards the west, and the consequent movement of hundreds of millions of people in China and surrounding areas into the global trading system. It has been a great sadness to me that the countries in the continent of Africa have not been part of that. For this generation of politicians over the next 10 or 20 years, I hope that we can look to play our small part in achieving that.

[Wera Hobhouse]

As we have a little time and we are debating seriously, does the hon. Gentleman not recognise that cutting ourselves off from the biggest trading partner in the world directly on our shore was the complete opposite of his vision of a global Britain? Of course the European Union also seeks to be open to other trading blocs, other countries and other big nations, and Britain is losing out by having left it.

[Richard Fuller]

The hon. Lady has made her point clearly. She asks if I agree, and the straight answer is, “Absolutely not.” Ahead of the referendum in 2016, one of the most important reasons I felt we should look for a different arrangement from our EU colleagues was that I wanted us to focus on trade and economic interests with the laser-like focus of the UK. People can differ on this, but for me being part of the EU was a compromise too far in the pooling of those interests in an ever more competitive world. That is one of the reasons I felt it was right for us to leave.

Beyond that, we just need to look at the subsequent reactions—and I am critical of the UK in some ways, but I am certainly critical of the EU—in the artificial period that we have now thankfully mostly got past, when everyone was trying to be difficult with everyone else. We are all pleased that the Prime Minister has not only achieved in the Windsor framework the resolution, in large part, of many of the concerns in that frictionful period, but indicated his desire that the EU and the UK should do precisely what the hon. Lady seeks—to work together where we can. In our current position, we do that primarily because we are looking to promote our own focused interests.

It has been a pleasure to contribute to this debate. I have been very complimentary about the Chair of the Select Committee, despite the fact that he is a Labour Member. By leading the debate as he has, he has demonstrated that we can agree in substantial areas even if fundamentally our philosophies start from a different place.

Cost of Living: Support for Young People

Debate between Wera Hobhouse and Richard Fuller

Tuesday 18th October 2022 Westminster Hall

[The Economic Secretary to the Treasury (Richard Fuller)]

What a great pleasure it is, Ms Ali, to serve under your chairmanship. I thank the hon. Member for Leeds North East (Fabian Hamilton) for securing the debate, and I thank the hon. Members who have contributed, including the hon. Members for Bath (Wera Hobhouse) and for East Dunbartonshire (Amy Callaghan). I thank my friend, the hon. Member for Sheffield Central (Paul Blomfield), for a number of very useful interventions, and the SNP spokesperson, the hon. Member for Glasgow Central (Alison Thewliss), and my colleague on the Front Bench opposite, the hon. Member for Ealing North (James Murray), for their contributions.

It was good that the hon. Member for Leeds North East started by referring to the YMCA publication entitled “Inside the cost of living crisis: The experiences of young people living at YMCA”, which was published earlier today, along with some other reports. I would like to draw colleagues’ attention to the statement with which that report starts, with which I am sure we can all agree:

“Everyone should have a fair chance to discover who they are and what they can become.”

The YMCA does great things across the country to enable people to achieve that objective.

There are real challenges facing our economy after two decades of low inflation. The world is now confronted with a high bout of fast-growing prices and the United Kingdom is not immune. While that takes place, we should all remember that our friends in Ukraine are at war, and the United Kingdom will continue to support them in a number of ways. We recognise that Putin is using energy as a weapon of war, pushing up prices and piling pain on citizens across the free world and particularly in Europe.

We should also recognise that young people can be in a particularly precarious position, because they are still in education or just starting out in their careers. They may not have had time to build a financial safety net. Many are at a critical stage of identifying and then seeking to accelerate their potential. I want to be clear: this Government are responding to help the most vulnerable to get through these tough economic times.

I want to answer some of the questions that have been raised. Very directly, on the uprating of welfare benefits in line with inflation, I will be honest: there are difficult decisions to be made. I want to reassure people that helping the most vulnerable will continue to be central to our decisions, just as it was when we announced support of £1,200 for millions of the most vulnerable households. The Government are required to review the rates of benefits annually to determine whether they have kept pace with price inflation. The Work and Pensions Secretary is yet to conduct her annual review of benefits and more will be said in the medium-term fiscal plan.

I think I heard the hon. Member for Glasgow Central ask why the universal credit standard allowance is lower for people under 25. That is to reflect that those claimants are more likely to live in someone else’s household and to have lower living costs. However, it is acknowledged that some claimants under 25 do live independently, which is why universal credit includes separate elements to provide support to claimants for those additional costs.

I want briefly to talk about the trend of poverty since 2009-10. Between 2009-10 and 2021, 2 million fewer people were in absolute poverty after housing costs—a figure that includes 500,000 children. In 2021, 536,000 fewer children were in workless households than in 2010. The youth unemployment rate fell by 1.3 percentage points in the quarter to August 2022 and is at a record low of 9%, which is around a quarter below its pre-pandemic level.

That progress requires us to talk about economic stability, which is vital for everyone and particularly for young people who may be looking for their first jobs or next steps. Instability affects the prices of things in shops, the cost of mortgages and the value of pensions, meaning that bringing stability to the economy will ease the cost of living for everyone. As the Chancellor has said, the United Kingdom will always pay its way and we remain committed to fiscal discipline. There will be more difficult decisions to take on both tax and spending as we deliver our commitment to get debt falling as a share of the economy over the medium term. We will publish a medium-term fiscal plan to set out our responsible fiscal approach more fully at the end of the month.

The only real way to create better jobs, deliver higher wages and spread opportunity is growth. Growth is what frees us to invest in the services that ordinary people need and to give people the financial security to live their lives as they want. Stability is a prerequisite for growth.

[Wera Hobhouse]

I do not think anybody could disagree that we all want growth, but the question is, how do we make that growth happen? My point was that we need to invest in people, particularly young people, to make that growth happen.

[Richard Fuller]

Yes of course, but the hon. Lady did not answer her question. The question is, how do we tap that potential? It is important to design policies that tap that potential. I was struck by a point made by the hon. Member for Glasgow Central about migrant families coming to this country and how they start their life. It is a fact around the world that first-generation migrant families, more often than not, contribute a greater proportion to the growth of the country that they go to than the population that they join. That seems to be a fact. I have not forgotten previous discussions with her before I took this role. The hon. Member for Bath said that we have to focus on people’s potential, but we have to find that strategy to achieve growth.

I remind hon. Members that while tackling these economic challenges, the fundamentals of the UK economy remain resilient. Unemployment is at its lowest in nearly 50 years. Our growth rate since 2010 has been higher than that of Germany, France, Italy and Japan, and it is forecast to be higher than that of any G7 country this year. The Labour spokesperson, the hon. Member for Ealing North, is shaking his hands, but these are the facts.

Our need for competence and stability is not at odds with the help that we are providing to those struggling with the cost of living. That is why the Government are focused first and foremost on helping everyone with the cost of living, most notably the cost of energy. The energy price guarantee and the energy bill relief scheme are supporting millions of households and businesses with rising energy costs. The Chancellor has already made clear that they will continue to do so—