Before I call the Chair of the Transport Committee to make the Select Committee statement, it might be helpful to the House if I explain, again, briefly the new procedure, to which it agreed recently and first used last week. In essence, the pattern is the same as for a ministerial statement. Mrs Louise Ellman will speak to her subject for up to 10 minutes—there is no obligation to take all that time—during which no interventions may be taken. At the conclusion of her statement, I will call Members who rise to put questions to Mrs Ellman on the subject of her statement and call Mrs Ellman to respond to those in turn. Members can expect to be called only once. These interventions should be questions and should be brief. Front Benchers may take part in the questioning, although it would be seemly for them to hold their horses, as I am keen first to hear the contributions of Back-Bench Members.
(Select Committee Statement): I am pleased to have this opportunity to make a statement about the Transport Committee’s recent report on high-speed rail. The crowded west coast main line currently combines long-distance inter-city, inter-regional and commuter passenger services, together with freight. Network Rail predicts that by the middle of the next decade the line will be unable to meet demand for new train paths and there will be increasing levels of overcrowding. In 2011, we looked in detail at the Government’s proposals for a new high-speed rail line from London to Birmingham and onwards to Manchester and Leeds. Phase 1 is due to be completed by 2025, and phase 2 by 2032-33. This proposed new line is a major piece of national rail infrastructure and must be seen as part of the wider rail network. We commissioned our own research into HS2, and considered the capacity the alternatives could provide. We concluded that only HS2 could deliver the step change in capacity needed to accommodate forecast long-term demand on the line.
Our new report looked again at HS2, in the light of the revised strategic case published by the Department for Transport in October and the research by KPMG on the line’s regional economic impact. The Department’s case rests on a prediction of 2.2% per annum growth to 2036. Demand is assumed to stop growing after that, only three years after completion of the line. Capacity remains the key issue and no new information has emerged to challenge the conclusion we reached on this question two years ago. Alternatives to HS2, based on upgrading the existing line and changes to train configurations, would not provide a long-term answer to the capacity challenge. These alternatives would themselves be costly and cause considerable disruption over a long period.
In addition to addressing capacity issues, the line will increase connectivity between our major cities. It can help to promote growth in the UK’s city regions and contribute to a rebalancing of the economy. This, however, is not automatic. Local authorities and local enterprise partnerships must develop economic development strategies to ensure that this takes place, and the Government must back these. The Department must become more proactive in ensuring that HS2, as part of the nation’s infrastructure, brings maximum benefit.
UK firms and workers must have the opportunity to secure employment from this major investment, starting with its construction. This requires specific initiatives to make businesses across the country aware of the possibilities. Action must be taken to enable all regions to benefit from improved services and a more successful economy. KPMG’s assessment of the regional economic impacts has generated considerable controversy. This is useful work, but there are limitations to its findings and the research should be developed further.
The report highlights the varying effects HS2 can have on different areas. This research reinforces the importance of taking steps to ensure that the benefits are spread as widely as possible. Work should now be prioritised to widen access to the high-speed network, improving journey times on the classic railway and promoting additional local and regional services on capacity freed up by the new line. This means that the Department, HS2 Ltd and Network Rail must work together.
Control of costs is essential. The estimated cost of HS2 over a 20-year period is £28 billion, plus £14 billion contingency and £7.5 billion for rolling stock. These are major amounts of money—
It is vital that the costs are actively managed.
Consideration should be given to speeding up delivery, including looking at options from building north to south, as well as northwards from London. Sir David Higgins, the incoming chairman of HS2 Ltd, should address this. Indeed, Sir David has already told the Committee that he will be looking at these issues, and we will be pursuing this further with him.
Concerns have been expressed that funding for the new line will squeeze other transport budgets. This is a serious issue. There is, however, no evidence that this is happening, looking at projected funding allocations, and we would not accept this situation if it arose. Vigilance is required.
Any major investment of this nature taking place over many years inevitably involves risks, but the risks of not going ahead with HS2 outweigh the risks of doing so. Without this investment, the west coast main line will become increasingly overloaded. Commuters will suffer overcrowding and delayed journeys. It would not be possible to provide new services, and the growth of rail freight will be stifled. Governments will be tempted to raise fares to control demand. The opportunity to reshape the economy and boost growth in the north and the midlands will have been lost. As our continuing debates about airport capacity show, once the opportunity to make a bold investment decision for the future has been missed, it may have gone for decades.
I congratulate the hon. Lady on taking part in this procedure, which is new and must be a little daunting. Perhaps she will forgive me for thinking that I was listening to another Government Minister presenting a report. I find it surprising, after two years, that the Transport Committee, whose role it is to scrutinise the Department for Transport, has produced a 27-page report—eight pages of which list contents, so it is probably a 19-page report—on what is, in effect, the largest infrastructure project in the western world. I hope her Committee will be returning to the subject again and again and asking the right questions.
Why did the Committee take oral evidence only from the supporters of HS2 or paid Government consultants, when there were 29 others who responded, including many of those who expressed criticisms of HS2? If the hon. Lady is so concerned about the control of costs, why is she advising the Government on how to spin their lines on cost by suggesting that they refer to a £28 billion sum, rather than the £50 billion that has been budgeted? If she is aware of the risks, as she said in her statement, can she tell me whether she has read all the Major Projects Authority reports on this project, and if so, can she tell us more about what she plans to do to identify those risks that are still being concealed by the Government?
Lastly, if Sir David Higgins has been asked to find ways of reducing the cost of HS2, and if the hon. Lady’s Committee has asked him to consider building phase 1 and phase 2 concurrently, and incorporating the Heathrow link in phase 1, what examination has she made of the effect of that on the bottom line of this project which—forgive me if I say so—may be pushing the price tag up even further?
The right hon. Lady raises a large number of questions. I will attempt to answer some of them, but I am mindful that other hon. Members wish to make a contribution and ask their questions in the limited time available to us.
I am aware that the right hon. Lady has a long-standing opposition to the project and that she is assiduously putting forward the concerns of her constituents. However, this is a national issue and I remind her that this report is a follow-up to a major inquiry conducted two years ago, where independent consultants were appointed to conduct new research into the specific alternatives put forward as possible replacements for the HS2 proposals. The recent inquiry considered 33 pieces of written evidence, in addition to the evidence we heard, and the issues raised in those written pieces of evidence were used as a basis for questions to the witnesses we had in front of us. We also questioned Sir David Higgins before his appointment to HS2 Ltd and we will continue to do so.
Costs are important, and it is important that those costs are broken down, so that people can see the individual components. Yes, I have read the reports, and ultimately those reports must be analysed against the need to provide continued capacity for the increasing demand on the line from passengers and for freight. This is a continuing process and the Committee will consider what further work it intends to do on this, together with the very detailed work that will take place on the hybrid Bill, should approval be given for that to go forward.
It would be idle of me to pretend that I am in favour of this project. In view of the fact that the report pays very little attention to compensation and mitigation measures, will my hon. Friend agree to the Committee looking into the proposition that the measures for compensation and mitigation that apply in my constituency are not even half as good as those measures outside London? For example, it would cost an extra £170 million to put the HS2/HS1 link in a tunnel that goes under Camden Town—that, apparently, has been ruled out on grounds of cost—when £2.759 billion is being spent on tunnelling elsewhere, with £812 million being spent in the Chilterns alone?
My right hon. Friend is right to draw attention to the serious issues relating to compensation, which might well affect his constituents, and I take seriously the points he raises. The Committee concentrated its inquiry on the project’s strategic impact. However, I accept that the points he raises are extremely serious. Our remit is to consider the strategic impact of the proposed investment. There are other avenues by which the issue he raises can be addressed, but I will report his comments to the Committee for its consideration.
I congratulate the hon. Lady on introducing the report. In another life I served very happily alongside her on the Transport Committee. She stated that the Committee’s support for HS2 is not unqualified, particularly with regard to the Heathrow connection. Has the Committee considered what impact the expansion of aviation in the south-east, whether through further capacity at Heathrow or elsewhere, would have on the project? Does she think that it would have been better to wait until we have the Davies report?
I appreciate the right hon. Gentleman’s comments. He draws attention to the importance of having an integrated transport policy so that rail, road, aviation and maritime issues can be considered together, and the Committee made remarks of that nature in our initial report two years ago. However, decisions have to be made. The Committee repeats its concern that no decision has yet been taken on the serious question of a direct link to Heathrow. However, we do not have the remit to look at aviation policy at the moment. Indeed, our recommendation is that we think there should be a third runway at Heathrow, but we do not have the authority to take a decision on that. Currently the timetable set out by the Government means that the Davies commission will not report until the summer of 2015. No guarantee has been given on when a decision on airport capacity will be made after that, although I hope that it is soon. Given the timetable for High Speed 2, it seems impractical to say that no decision could be taken on that until well after 2015. However, the point he makes is important and well taken.
I welcome the report and place on the record my support for the High Speed 2 programme. I particularly endorse what my hon. Friend has said about the importance of connecting the strategy for HS2 with local and regional economic strategies. She will be aware of the fear that HS2 might serve to draw investment and business activity from north to south, rather than in the opposite direction, so it is important that proper economic planning takes place to address that. Does the Committee have plans to consider local transport strategies, which are important in ensuring a match between strategic plans for HS2 and the development of local economies, and for investment not only in local rail networks but in local bus networks, light rail and other forms of local transport?
My hon. Friend draws attention to the great importance of local, and indeed regional, work being conducted to ensure that the potential benefits of High Speed 2 are enjoyed in all parts of the country. Initially, the responsibility for doing that is being taken up in some local areas—I know that a lot of work is being done in the west midlands and in the Manchester area—but it is not good enough to leave that entirely to those local and regional authorities. In the Committee’s future questioning of Ministers and High Speed 2 itself, and specifically Sir David Higgins, I intend to pursue that issue so that, as well as individual authorities taking their own initiatives, there is some kind of national oversight of what is being done. After all, this is one of the biggest national investment decisions to be taken for a very long time. There has to be some responsibility from the Government as well as from localities to ensure that its benefits are felt and that the work to ensure that that happens is carried out.
On a day when the newspapers are full of reports of the Chief of the Defence Staff’s concern that the armed forces are being hollowed out, does the hon. Lady understand why some of us feel that such a costly project betrays a warped sense of priorities? In particular, has her Committee devoted any attention to the fact that even in the short time that the project has been in the public domain the estimated cost has increased from about £30 billion to about £50 billion? What concept does she have of our being able to stick even to that higher figure?
The report emphasises that costs must be controlled and that the whole programme must be actively managed to ensure that there is good value for money. In looking at value for money, we must consider the impact that the investment can have and the consequences of not making it. The consequences for the nation would be that our national network would not be able to deliver the results that are required for a prosperous economy that can benefit all parts of the country.
I warmly welcome the Committee’s unanimous conclusion that there is a political, economic and transport case for building southwards, from Leeds and Manchester, at the same time as building northwards from London. I want to ask a specific question about the Committee’s support for building additional links between the conventional and the high-speed networks. It is already proposed that there should be a spur from the Yorkshire arm of HS2 to link with the conventional track at York, with high-speed trains running as far as Church Fenton, which is five miles from York. Would it be possible to upgrade that last five miles so that people in York, which is a major rail hub, could use high-speed services directly—an example of the sort of improvement in connectivity that the Committee is considering?
My hon. Friend draws attention to the importance of connectivity and ensuring that all parts of the country benefit. He indicates a specific proposal that would improve connectivity to his constituency and the areas around it. I hope that he will put that proposal forward, perhaps developed by the local authority and the local transport authority, during the consultation so that it can be considered as part of the wider benefits of HS2. It is exactly the kind of thing that the Transport Committee advocates should be taken forward.
It would be great if all the jobs were British, but does the hon. Lady agree that, under EU rules, it is highly unlikely that we will be able to keep all the work within the United Kingdom, and that we will have to have companies coming in from outside to build the track?
I thank the hon. Gentleman for his question. The issue of jobs is extremely important. It is absolutely essential that opportunities are given to UK companies and workers to take advantage of the employment opportunities that will be provided by this major scheme. The Committee has already raised this issue and been told that there will be a road show conducted by HS2 Ltd that will go across the country promoting job opportunities—similar to the way in which action was taken in relation to Crossrail. Following the road show, it is absolutely essential that Ministers become involved and ensure that the promotion of job opportunities is a major part of the scheme.
I welcome the Committee’s continued support for HS2, as I welcome the investment in my constituency in the interchange at Old Oak Common. Would that support not be consolidated if we had certainty on matters, particular the Heathrow link, which the right hon. Member for Uxbridge and South Ruislip (Sir John Randall) mentioned? The Government seem as intent on delaying that decision as they are on pushing the project forward. At the very least, will my hon. Friend endeavour to ensure that the moribund proposal for an estuary airport is withdrawn? We might not agree on the number of runways we want at Heathrow, but if we had certainty that Heathrow would continue to thrive, we could resolve that issue, which would mean certainty on the route of HS2.
My hon. Friend raises an important point. I agree about the importance of securing the Heathrow link. I repeat what I have said previously in relation to the possibilities of an estuary airport: the problems in relation to cost, environmental impacts and the need to close Heathrow airport and London City airport are likely to be insuperable barriers to its being pursued further.
My constituents are understandably worried, as I am, that the KPMG report indicated that there could be a net economic disbenefit to Kettering of £50 million. Will the Transport Committee encourage the Government and HS2 Ltd to commission further research from KPMG or another independent body to try to assuage some of the genuine concerns in constituencies such as mine? If High Speed 2 does come, surely all of us would want it not to have a negative impact on large parts of our country.
The hon. Gentleman raises very important issues. The KPMG report is a very useful piece of research that identifies areas that are due to benefit from High Speed 2 but also areas that would not benefit. When the Committee questioned KPMG about its findings, it became clear that some considerations had not been taken into account, including the latest information on rail improvements being planned for the areas concerned, the possibilities of rents being increased, and the impact of freight developments. Those are just some examples of aspects that had been missed out. Our report says that further reports should be commissioned, and I am sure that the Committee will take a continued interest in that. More research in this very important area should be pursued. It is vital not just that areas that are seen to benefit are made aware of that, but that areas that are worried that they would not benefit are able to get maximum support so that they could share in the positive aspects of HS2.
Order. The fact that the hon. Gentleman sought to intervene on the Chair of the Transport Committee when I had indicated at the outset that the procedure was analogous to that of a ministerial statement, in which hon. Members should not intervene but rather wait their turn, suggests to me that he was not present at the outset to hear my wise words. Moreover, I have since been advised that he did indeed beetle into the Chamber a couple of minutes into the hon. Lady’s statement. The concepts of the hon. Gentleman, on the one hand, and brass neck, on the other, are by no means unrelated. In a spirit of Christmas generosity, on this one occasion I shall allow him to put his question, which I think he wants to hear and which he imagines that perhaps the House might also wish to hear.
My office is a long way from here, Mr Speaker, and I ran as fast as I could. I apologise to you and to my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman). She knows that I am a great admirer of hers and of the work of her Select Committee, and of Select Committees in general.
My hon. Friend also knows that I started off as a passionate supporter of HS2 until I started reading the international research that suggests that rather than empowering regional cities and making them more affluent and wealthy, such projects have the opposite effect and would drain even more power and influence away from the regions towards London and the south. The Secretary of State for Business, Innovation and Skills came out with a very similar view this morning. Did my hon. Friend take evidence about that research, and did she take evidence from the former Chancellor of the Exchequer? Why did she put so much emphasis on KPMG? Those of us who live in Yorkshire and saw what it did—or failed to do—in the banking sector do not trust KPMG further than we can throw it.
I thank my hon. Friend for his question and thank the Speaker for permitting these important issues to be raised. The Committee questioned KPMG because it had conducted the most recent research on this very specific area. However, the Committee’s reports are based on contributors additional to KPMG.
When we conducted our original major inquiry two years ago, we visited France and Germany to see for ourselves the impact of high-speed rail. It became clear that there are major potential benefits to high-speed rail provided that the local and, in the case of France and Germany, regional authorities take advantage of them and provide the necessary economic development support to make them a reality. That is what I would like to happen here in the UK, and that is what the Select Committee report advocates.
A very happy Christmas to you, Mr Speaker, and to the hon. Member for Liverpool, Riverside (Mrs Ellman), who has dealt with the questions with charm and a great deal of skill. This is merely a point of clarification. In response to my earlier series of questions, the hon. Lady said that she had read the MPA reports on HS2. Can she confirm that that is the case?