High Speed 2

Debate between William Cash and Craig Tracey

Wednesday 12th September 2018 Westminster Hall

[Sir William Cash]

As I expected, the hon. Gentleman makes another extremely sound point. The reality is that people are affected by the indirect consequences. People talk about the number of jobs being created. I will come on to that as well, because many other projects could be put in place that would create an equal or greater number of jobs.

[Craig Tracey]

I give credit to the Minister, whom I have found extremely helpful in dealing with compensation claims. However, HS2 Ltd is spending more money on consultants to squeeze people down on price than it actually saves by doing so. It is a false economy.

[Sir William Cash]

That is an extremely important point. I am sure that those listening to the debate will take note of it, as will the Minister.

Those linked to the construction of the project—the brainchild of no less a genius than the hapless Lord Adonis—seem to admit that there has never been a structured estimate of costs for phase 1 of the track. Mr Tim Smart, the chief engineer, told the High Speed Rail Bill Select Committee on 23 April that HS2 Ltd was unable to provide detailed cost estimates for parts of the project because it relied on its cost model as a guide to the entire project cost. Also, in evidence given to the High Speed Rail Bill Select Committee in the House of Lords, Lord Berkeley, the chairman of the Rail Freight Group, the representative body for rail freight in the UK, estimated that the cost of the Euston to Old Oak Common section—a mere seven miles—was more than £6 billion. We have to get real. That is based on the cost estimates and data from other projects using the rail method of measurement and commissioned by Network Rail.

I understand that that estimate was not challenged by HS2 Ltd, which appeared not to have any reliable costings. Unbelievably, that makes each mile of the planned route worth almost £1 billion. For the same price the UK could buy two new aircraft carriers, each costing about £3 billion, or 10 state-of-the-art NHS hospitals, or invest in local infrastructure in roads and so on.

The Treasury’s Infrastructure and Projects Authority has given HS2 an amber to red rating for each of the past six years, meaning that there is a high risk that it will not deliver value for money. A confidential report commissioned by the IPA and released in December 2016 also warned that the costs were likely to end up being between 20% and 60% over HS2’s £56 billion budget, which it says would be classified as “failed” by any internationally recognised definition. It also warned that HS2 was

“highly likely to significantly overspend”

by 20% to 60%, which would increase the cost to as much as £90 billion.

The Government assert that the scheme will bring benefits to the wider economy through an enlarged labour market and greater commuting capacity, but they admit that those benefits cannot be achieved by building HS2 alone, depending almost entirely on more spending not accounted for in the HS2 budget. The National Audit Office wrote a critical report in June further highlighting that the £55.7 billion funding package does not cover all the funding needed to deliver the promised growth and regeneration benefits.

The Public Accounts Committee also highlighted that issue in its September 2016 follow-up report, recommending that the Government

“seek assurances from the relevant local authorities that they have plans in place to identify sources of funding and financing”.

That means going out to other people and asking for more taxpayers’ money. Furthermore, politicians in Greater Manchester and the West Midlands combined authority have published HS2 strategies, with the West Midlands combined authority estimating that its HS2 local growth plan will cost £3.3 billion. However, it is by no means clear where that money will come from.

Aside from the fact that HS2 apparently cannot generate growth without more—unaccounted for—money being pumped into local communities, in September 2013 a report by KPMG suggested that although some communities would gain from a high-speed train line, it would result in economic losses in others, for which the Government would inevitably be asked to compensate. That remains the case.

The project has not yet left the station and the runaway costs are already out of control. If the situation was not so serious, I would congratulate the HS2 executives for their role in constructing the most amazing gravy train ever built in the UK, with one quarter of HS2 staff paid more than £100,000 in the last year, and the chief executive taking home £600,000. By way of contrast, Andrew Haines, the chief executive at Network Rail, is paid about £20,000 less than that. People can say what they like about our current network, but the fact that the HS2 boss is paid more than the head of a network that actually exists demonstrates a grotesque lack of control over finances.

Unfortunately, those are only the costs we know about. In 2018 The Sunday Times reported that a whistleblower who worked for HS2 Ltd as head of property said that staff were told to

“falsify figures, mislead parliament and cover up ‘petrifying’ overspends”

with regard to the budget for buying lands and buildings. I believe that there are already grounds under the Inquires Act 2005 for a full public inquiry into the scheme, as there were over Stafford hospital—an inquiry that I called for, and which my hon. Friend the Member for Stafford was associated with as well. That inquiry changed the whole nature of the health service. A full 2005 Act inquiry into HS2, the engineering projects that go with it and its significant impact on our public finances is well worth calling for.

Before that, I would hope for, and I am calling for, Select Committee inquiries to review HS2, particularly by the Transport Committee, which has today severely criticised the Department for Transport over the east coast rail project. By comparison with HS2, that project is a walk in the park. HS2 needs far more scrutiny than it is getting and the High Speed Rail Bill Select Committee report could have gone much further in exposing the lack of planning and spiralling costs of the failing project. However, a number of people do need to be praised for their forensic scrutiny, and I repeat my praise for my right hon. Friend the Member for Chesham and Amersham.

The planned route cuts right through my constituency. Baldwin’s Gate, Bar Hill, Whitmore and Madeley are in a rural area of outstanding natural beauty. The proposed scheme slices it in two, with two viaducts at the River Lea valley and Meece brook valley, and two tunnels along the way, meaning that there will be an enormous amount of construction work in a delicate area. The environmental damage is not limited to Stone; the scheme cuts right through the country. The Woodland Trust has called it

“the biggest single threat from development to ancient woodland”

in the UK, with 98 ancient woods threatened with loss or damage from phases 1 and 2 of the project.

The National Infrastructure Commission has suggested that, in addition to the £56 billion that HS2 is projected to cost, £43 billion in additional funding will be needed to improve local transport links in cities outside London to allow people to make full use of the service. That is a combined total of £99 billion, yet in today’s poll 85% of people say they want the Government to spend that £99 billion on improving the capacity of existing railways instead of building HS2. The population in the west midlands will go up by more than a third, and improvements in local infrastructure are needed.

One of the questions in the poll revealed the London-centric nature of the proposal. Some 58% of Londoners support the construction of HS2, whereas only 20% of those in the north-east back it. Why are we continuing to back a failing scheme, supposedly planned for the benefit of those outside of London, if they do not even want it?

The case against HS2 has been well and thoroughly made. Perhaps less obvious have been the alternative policies we could pursue if the Government were to begin to roll back.

[Craig Tracey]

Has my hon. Friend found, as I have, that getting north to south is not what our constituents want? What they want is to be able to get from villages into towns, and from towns into cities.

[Sir William Cash]

My hon. Friend is absolutely right. The whole concept is completely flawed. In addition, if we travel down from our constituencies in Staffordshire—from Stoke-on-Trent, Wolverhampton or wherever—it takes around one hour 20 minutes or less. We do not need to travel at any greater speed than that. As I have already pointed out, HS2 is not even going to connect with Birmingham New Street. It is a completely crazy project.

On the basis of rail passenger growth on the west coast main line, it is accepted that there is a need to add capacity to meet future demand. The Government have dismissed upgrades to the current rail network and claim that HS2 is

“the best way of getting ahead of current demand on our core transport network.”

That might be true—if the demand were for poor management and a shoddy business case. In reality, capacity could be increased in far more cost-effective ways.

The length of trains could be increased from eight carriages to 12 on the existing main line network. That could be achieved by lengthening station platforms. The speed of existing trains could be increased, which would reduce the time benefit of HS2 compared with traditional rail. That would probably involve engineering solutions to remove bottlenecks on the existing line. The height of trains could be doubled, as has been successfully done on the continent and elsewhere in the world, which would increase capacity. All those solutions and many more would be immeasurably cheaper than HS2, but those small gains together would create a step change in the capacity and efficiency of the network.

If the Government really are bent on spending such a large sum, it is far from clear why it has to be on HS2. Shuttling along at 250 mph is quick compared with the west coast main line, but painfully slow when one considers the trains in development today. By contrast, Richard Branson’s 750 mph Hyperloop One is aiming to operate at nearly three times the speed of HS2. There are those who believe that the country should be focusing on new innovation rather than rebuilding yesterday’s technology. There may be some suggestion that the Hyperloop is a fantasy for the future, but that is what they said about aircraft, and it is the kind of innovative thinking that has to be examined in its own right. The HS2 project is out of time and increasingly obsolete. We need to be more innovative and to spread the improvements in rail infrastructure across the country as a whole.

I want to highlight the Great British Transport Competition from the TaxPayers Alliance—mentioned by my hon. Friend the Member for North Warwickshire (Craig Tracey)—which seeks to identify alternatives. It was launched last week with the support of my hon. Friend and is seeking bids from across the country for transport projects that might be more deserving of the colossal sums being funnelled into HS2. There have already been around 50 bids for alternative schemes, which will be judged on their benefit to the local and wider economies, their ability to deliver value for money, the level of public support and the impact on the environment—in short, all the categories on which HS2 fails miserably. I encourage colleagues from all sides to enter the competition and to suggest better destinations for taxpayers’ money than this enormous white elephant.

It is clear that more money needs to be spent on infrastructure, but that needs to be on worthwhile projects—for example, the capacity of existing railways and the repair and maintenance of roads other than motorways. That includes, of course, dealing with potholes, which might seem far removed from HS2, but anyone who travels anywhere around the country in rural areas will know that potholes are the biggest issue of all. In my constituency and where I live, potholes are a massive issue and there is no money available at the moment.

When I had a word with a very senior member of the defence establishment yesterday, he was quite emphatic that he would much rather have the money spent on defence. Members of the Defence Committee and many other Members have also made that clear. Furthermore, we could help to reduce our debt and spend more on the national health service and other public services.

When the public do not support HS2, when environmental groups are up in arms and when it now appears that half the Cabinet want to chuck it, it is time to call it a day. The Chancellor needs to stop throwing money down a black hole and to put the brakes on this vanity project before it leaves the station. I and others have said on many occasions that this is a white elephant, but it is perfectly clear that it is not only a white elephant; it is a dying white elephant—or it certainly should be. I now believe there are grounds for a full review by the Transport Committee and others, as appropriate, and for a full inquiry under the 2005 Act into this disastrous project.