On Wednesday, the House of Lords held a three and a half hour debate on the Report of the Economic Affairs Committee on The Economic Case for HS2, published earlier this year. Many of the peers speaking backed the report, which was highly critical of the economic case, and were scathing about the inadequacy of the Government’s response. These are some of the highlights: there were a lot more points raised and speakers (including Lord Adonis and Baroness Kramer). The full debate can be read in Hansard, here and here.
Lord Hollick (Lab): My Lords, it is a privilege to introduce the report of the Economic Affairs Committee entitled The Economics of HighSpeed 2. ….
On HS2 costs:
When he appeared before our committee last week, the … Chancellor’s enthusiasm could not be faulted, but in the absence of a rigorous, independent and transparent appraisal of the costs and benefits of this huge undertaking, HS2 has become a project of faith, all too often supported only by overblown rhetoric….
It was unclear from the evidence whether all the necessary infrastructure improvements to complement HS2 were included, and this could push the overall cost much higher. The cost of construction is, surprisingly, up to nine times higher than the cost of constructing high-speed lines in France. Sir David Higgins said that the UK cannot hide behind the idea that the UK is more densely populated than France…..
On DfT’s lack of evidence about long distance passenger numbers:
The Government’s principal justification for building HS2 is to provide capacity to meet long-term rail demand and for long-distance travel. From the limited information on rail usage in the public domain, the capacity problem on the west coast main line is caused mainly by commuter traffic, particularly travelling into London. The Government have failed to make a convincing case that there is a capacity problem on long-distance services. The Secretary of State for Transport told us that long-distance services arriving in London in the morning peak hour,“are already at full capacity”, but that is not borne out by the statistics that we received. Long-distance services arriving in London between 7 am and 10 am have 57% seats taken on average. Virgin Trains, the operator of long-distance services on the west coast main line told us that its busiest train is the first off-peak train leaving London on a Friday evening. That is hardly surprising when the ticket cost of the last peak train to Manchester is six times more than the cost of the first off-peak—one would wait another 10 minutes or so. This cries out for the introduction of variable pricing to manage capacity bottlenecks, which is often routine in the airline industry….
On ways to help the northern economy:
We heard widespread support for improving the regional links between cities in the north to stimulate growth. We agree with the noble Lord, Lord O’Neill, now the Commercial Secretary to the Treasury, who told us in January when he was chairman of the City Growth Commission, that connecting cities in the north is,“‘way more important’ than making it faster to travel to London from those cities”.
The 2006 Eddington study came to a similar conclusion. As east/west links are poor and north/south links are already good, there is a strong case for prioritising the former over the latter, but following the recently announced pause to work on the electrification of the TransPennine railway, the Government are doing precisely the opposite. This pause seems to be an excuse straight out of “Yes Minister”, dreamt up by Sir Humphrey himself. Can the Minister please decipher its meaning for us?
On the relevance of time savings:
The cost-benefit analysis of HS2 published by the Government in 2013 relies on evidence that is out of date and unconvincing… Virgin told us that it plans to introduce free superfast internet connectivity on board for all passengers. Following a review by the Institute for Transport Studies which concluded that there is no consensus on how business travel time should be valued, the Department for Transport admitted that fresh evidence of businesses’ willingness to pay was required due, in their words,“to the uncertainties and inconsistencies in the existing evidence”.
A further 33% of net transport benefits worth some £19.3 billion are derived from the value placed on non-work travel time; that is, people either commuting or travelling for leisure. These values are based on a survey of motorists that was carried out in 1994. This cannot be the best basis on which to assume almost £20 billion-worth of benefit for a major rail project. Again, the department concluded that the data are old and that fresh evidence is required. We simply do not understand why this work did not take place before the project was launched.
On lack of independent review:
Much of the evidence presented to justify HS2 is either defective, unconvincing or out of date, and the process of oversight falls short of what is required for a major infrastructure project relying on substantial taxpayer money. The Department for Transport and HS2 have both carried out significant analyses of the benefits and costs of HS2, but as the sponsoring body and the implementation body respectively, neither can claim independent objectivity. That, and the failure to put into the public domain the information on capacity that is essential to evaluating the case for additional capacity for HS2, means that we have a £56 billion project requiring £36 billion of public subsidy on which no return is expected and which has failed to be independently and objectively assessed….
Lord Vinson (Con): My Lords, I think the House may be interested that I saw Professor Richard Wellings of the Institute of Economic Affairs this morning to get the latest figures. He has done a great deal of research on this, and is mentioned in the publication today. Allowing for all the enormous add-ons that are bound to happen and the linkages necessary to link the new system with the old system, which is an apparent weakness, he considers that the overall cost will be at least £80 billion.
Baroness Blackstone (Lab): My Lords, as a member of the Select Committee that produced the report on the economics of High Speed 2, I stress that we wereunanimous on the need for infrastructure investment in the UK….
These questions are particularly pertinent in the context of austerity policies in which the Government are cutting public expenditure in many areas. Nearly all government departments are struggling to produce illustrative cuts of 40% and 25% for the spending review. Apparently, there will be little money for capital development. In such circumstances, many will ask whether allocating £50 billion for this project is justified. Moreover, as has just been suggested, it will be an underestimate when the extra work needed to mitigate environmental effects and the extra compensation that is likely to be demanded are taken into account….
The second question of context about which I raise concerns is the Government’s projections of demand. I readily concur that the demand for rail travel has gone up greatly over the last 20 years. It does, however, seem dangerous to assume that demand from business travellers will go on rising exponentially. High-speed broadband, video conferencing and further technological developments seem likely to reduce the need for inter-city rail travel by business men and women. Will the Minister tell the House why there has not been more explicit consideration of these factors, which are likely to affect demand?….
The Lord Bishop of Chester: My Lords, HS2 will pass through my diocese from south of Crewe until it reaches Manchester Airport. I read the committee’s report with great interest and was struck, above all, by the levels of uncertainty which evidently still exist around the project….
On the Impact of the proposed speed:
There is also the impact on the design of the railway if you want to go at 250 miles per hour: lots of tunnels, cuttings and embankments to make sure that the line is as straight and level as possible. You need that for very high speeds. A slower railway—quite fast, but slower—would have much more flexibility in its possible route. In relation to speed—I have not heard this commented on—my reflections from a previous incarnation as a scientist tell me that the kinetic energy of the moving object is proportional to the square of its speed. That means that if you double the speed of something you quadruple the energy required to get it to that speed. So going from 125 miles per hour to 250 miles per hour does not require twice the energy to get it that fast: it is four times, unless my A-level physics was just too long ago to get that right. I would, however, like to know what assessment has been done of the energy consumption relating to different speeds. As we look to a more energy-conscious world we ought to ask these questions rather carefully.
Finally, I ask the Minister about the impact of HS2 on Chester and north Wales. Table 18 in the EAC report—reproduced from the Government’s own strategic case—claims that there will be faster journeys to Chester and north Wales. However, no actual savings are listed. I assume that there would need to be a change of train at Crewe, from electric on HS2 to diesel, since the Chester line is not electrified beyond Crewe or into north Wales. At present Chester and north Wales are well served by 125-miles-per-hour diesel units in a direct service which runs hourly to and from Chester. What assurance can the Minister give me and the people of my diocese, and beyond in north Wales, that journey times from London will be much faster than now? Do the Government have any figures for what will become an indirect, rather than a direct, service, if I have understood correctly? I would be grateful if the Minister elucidated and illuminated that for me….
On the Government’s response:
The Earl of Caithness (Con): My Lords, I have no interest to declare, except that I once was an Under-Secretary of State for Transport, but that was many years ago…..
The reason I decided to speak in this debate was that I was appalled by the response from the Government; it is not satisfactory. In the other place, the day after a big, detailed House of Lords report was published, the Under-Secretary of State, my honourable friend Robert Goodwill, said, “I most heartily disagree with their report”.—[Official Report, Commons, 25/3/15; col. WH533.]
He must have had it on his desk for less than 12 hours. To make a comment like that demeans the enormous hard work of the committee, on which I congratulate it. The written response is not much better. We have heard that it has not answered the specific points of the committee, and that is what prompted me to speak today….
Lord Prescott (Lab): My Lords, I have been actively involved in the development of high-speed trains from when I first entered government in 1997, when I was given the first bill within two weeks for a further £2 billion from a collapsed private HS1 project, which had made difficult statements about the cost and the people travelling on it. These estimates, which are shown and exposed in the committee’s report, which I fully support, are therefore not new to me: they show the great uncertainties involved in making an analysis on a huge amount of money, a third of which will be paid by the taxpayer. We are talking about almost a public-private operation here, so I very much support that evidence.
Of course, I was faced with the difficulty of finding £2 billion. I immediately had to bring it into public ownership, because, after all, the Government are the lender of last resort in these situations. My flatmate Dennis Skinner thought it was marvellous: he thought that the revolution was already starting. In reality, however, they are costly and there are difficult decisions to be made about them, but they are important.
The committee does not recommend—despite its criticisms—that it does not want to see a high-speed train. It might want a different one; it might want to change it, as the recommendations suggest. I am like that: I am not against it, but when I was arguing with my noble friend Lord Adonis, in the early stages when he brought this project forward, I did not like the idea justified on 30 minutes to Birmingham. I did not think that it justified that kind of money. What I did argue was, why not connect it to the northern investment in the railway transport system? That is underfunded and being left at a disadvantage compared to the billions poured into the London system. I thought the northern part, if you linked it with what they then called HS3—though it will not be at 250 miles an hour, I suppose—which is the east-west connection, is an important part of connectivity for the cities in the north, as well as for the cities in the south.
To my mind, the northern extension is the important part. I remind the House of all the argument about the north over HS1, where northern towns were told, “Don’t worry, we’ll get you trains”. They even built the sleeper trains, then found they could not run on the southern electrification, so I had to sell them to Canada….
Lord Truscott (Ind Lab):…The real overcrowding on the rail network, as any commuter knows, is on the lines into London from the Home Counties, the west and East Anglia. The lines into Waterloo, Victoria and Liverpool Street in particular are now full. None of HS2’s supporters today acknowledge this inconvenient fact, including the noble Lord, Lord Adonis, who has been a long-term supporter of the project. London’s stations are also creaking with Paddington, Moorgate, St Pancras and Blackfriars having the highest proportion of passengers in excess of capacity. As the Evening Standard recently reported, the Department for Transport admits that services from Reading, Heathrow, Brighton and Caterham in Surrey were among the most packed nationwide. In the morning peak, 139,000 passengers are now standing compared to 120,000 a year ago. HS2 will do nothing for these hard-pressed commuters, as conditions continue to deteriorate year by year.
The current HS2 plan for Euston, to which several noble Members have referred, looks like a dog’s breakfast. Reducing the existing 18 platforms to just 11 with an estimated completion date of 2033, it will bring chaos to the area. Nationally, only 2% of rail passengers will benefit from HS2, while the rest of us taxpayers pay for it. I do not know about other noble Lords, but I already want my money back.
This debate and report are not about the environmental impact of HS2, but I remain concerned that this vanity project—I share the idea of the right reverend Prelate the Bishop of Chester, who referred to the word “vanity”—will have a devastating effect on our irreplaceable environment, including unique habitats, ancient woodland and sites of special scientific interest, and on the people who live along the route. I cannot quite share the feeling of the noble Lord, Lord Desai, that this is only a matter of concern for MPs whose constituencies lie along the route. Many people will be affected by this and it will have an impact on many irreplaceable areas of outstanding natural beauty including that of the Chilterns, which appears greatly at risk. Will the Minister update the House on the environmental devastation that HS2 will inflict upon this small island nation?
Finally, I cannot fail to note that Jeremy Corbyn MP has been overwhelmingly elected leader of the Labour Party. He has my best wishes for a difficult job ahead. Mr Corbyn is on record as opposing HS2. I hope that he continues to resist the vested interestspushing this pointless and costly project, whether they be the construction companies, foreign contractors or northern councils that believe that HS2 will benefit them. The national interest and the interest of rail users and environmentalists dictate that it should be rejected once and for all….
Baroness Mallalieu (Lab): My Lords, like others, I congratulate my noble friend Lord Hollick, his colleagues and officials who have produced a truly outstanding report. The 16 questions posed by them in chapter 9 are those that must receive satisfactory answers before this project goes ahead. I wish I could say that the Government’s written response either answers those questions or shows that the concerns raised have been carefully considered and addressed—but, sadly, I cannot do so. Indeed, I have to express considerable sympathy for the Minister, the noble Lord, Lord Ahmad, who has been provided with very threadbare defence against the valid criticisms of the committee in a slight, 30-page response from the Government. It is very long, not on information or answers, but with the usual clichés: “clear and robust”, “step change in capacity”, “convincing” and “compelling”. But it does not answer the questions that were raised about the problems….
Lord Rodgers of Quarry Bank (LD): My Lords, I was unaware of the Government’s response to the Economic Affairs Committee report of 25 March until this debate appeared on the Lords’ daily business paper. As an outsider and not a member of the committee, I find the response disappointing and dismissive. I have said on a previous occasion in the House that I am agnostic about the merits of HS2, as currently planned, and many agnostics want to believe. Alas, the response does not help towards the necessary faith in what seemed a glamorous but—as it has turned out to be—an inadequately considered project.
The report and the response should be seen in the context of the wider discussion about the railways. I am confused by the Government’s intentions….
….I have a further anxiety about the railways. A letter dated 6 August from the Office of Rail Regulation was copied to the Secretary of State for Transport covering a period of six months to 31 March. It identifies and lists areas of weakness, including inadequate governance of projects, inconsistent consideration of safety issues and low productivity. It also states that in some areas, the quality of data that Network Rail relies on to plan and manage its works on Britain’s railways is not acceptable. In summary, the letter states, “We consider that the wide range of identified weaknesses indicate that NR’s project development and delivery weaknesses are systematic rather than the result of individual projects failing or adverse circumstances”. While this letter refers to Network Rail, how can we be confident about the prospect of it handling HS2?…
Lord Mitchell (Lab): …When Eurostar opened in 1994, I was on my way to Paris within weeks. When HS1 opened in 2007, I hotfooted it to the stunning new St Pancras station, happy at last not to endure the embarrassment of trundling through south-east London and Kent prior to whizzing through France. I marvelled at the French TGVs and am totally in awe of the high-speed train from Madrid to Seville. I love high-speed trains. Therefore, noble Lords would have thought that I would be full of anticipation and jumping up and down waiting for HS2 to arrive. Well, 20 years from now I will be 92. God willing, I shall be on that train and, God willing, I shall be able to find Euston station….
I see 20th-century technology for a 21st-century world. I see a project that is based on the assumption that the world will stand still, when the only thing that we know for certain is that disruptive technologies will continue to change the way we work, socialise and play. I live in the world of technology. I see constant miniaturisation, processing speeds that double every two years, industries being destroyed and new ones being created. The music industry, movies, taxis, books, manufacturing processes, medicine and television have all been subject to massive disruption. So why not rail travel?…
If it were my decision I would instead commit to another form of communication that is much more appropriate to the 21st century: blisteringly fast broadband connection throughout the country, in both rural and urban areas, offices and homes. It would be just like electricity: everyone connected, and connected fast. If we had that, we would be able to communicate with each other in an entirely different way: not over railway lines, but over fibre-optic lines, not at 250 miles per hour but at 180,000 miles per second….
I make one final point. HS2’s supporters portray it as a magical solution that will bring London and the north together: an accelerator of the northern powerhouse. As my noble friend Lord Prescott said, let us get on with HS3: that is where fast rail speeds really could count. Manchester to London in half the time? I will avoid cheap shots about waiting for taxis at Euston or Piccadilly, or traffic jams on the Euston Road. But I will say this: instead of selling the virtues of Manchester being better connected with London, how about getting Manchester better connected digitally with Shanghai or Rio—or indeed even Blackburn?…
Summing up:
Lord Hollick: My Lords, I thank all the speakers in today’s debate. My noble friend Lord Desai wanted us to conjure up some animal spirits. I think that we have certainly had some very spirited contributions, and I am grateful for that. The Minister will have noted that many speakers, including those who are very much in favour of HS2, are concerned that many of the questions we have raised have not been answered, and time has not permitted him to respond to them in detail today. So for the third time of asking, because I have already written twice to the Secretary of State, I urge the Minister to seek to get us detailed answers to these questions. He has a good case to make, so why are the Government failing to make it in a persuasive way? I hope that the appointment of my noble friend Lord Adonis to the board of HS2 will encourage them to enter into the spirit of debate and answer the questions. None of the speakers in the debate is reluctant to see us invest in the future of this country, but we want to know that this is the best investment and that it has been prioritised and handled in the best way.
We have selected a few of the points made by some of the speakers: the entire debate is on Hansard.
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