My Lords, with leave, I will make a Statement on high-speed rail between London and the major cities of the Midlands, the north and Scotland.

Travel and trade between Britain’s major population and economic centres are the lifeblood of our economy and our society. They require transport networks which are high-capacity, efficient and sustainable. As we grow wealthier as a nation, so we travel more and move more freight. Nineteenth-century Britain led the world in the development of railways. Serious planning for a national motorway network was begun by the War Cabinet in 1943. The major motorways were all opened over a 32-year period between 1959 and the completion of the M40 in 1991.

Since the 1990s, increases in demand have been largely accommodated by improving existing roads and rail networks, including motorway widening and the £9 billion upgrade of the west coast main line. The £6 billion roads programme includes investment for the five years to 2014 on widening a large part of the M25 and the extension of hard-shoulder running across the most heavily used stretches of motorway. We are also progressing with plans to electrify the Great Western main line from London to Bristol and south Wales, and a £250 million investment in the strategic freight network.

Our preliminary assessment, published last January, was that substantial additional transport capacity would be needed from the 2020s between our major cities, starting with London to the West Midlands, Britain’s two largest conurbations. By then, the west coast main line will be full. By 2033 the average long-distance west coast main line train is projected to be 80 per cent full, with routine very severe overcrowding for much of the time; and there will also be a significant increase in traffic and congestion on the motorways between and around London, Birmingham and Manchester.

The Government’s view is that high-speed rail could be the most efficient and sustainable way to provide more capacity between these conurbations. So, last January, we set up a company, High Speed 2 Ltd, to analyse the business case for a high-speed line, initially between London and the West Midlands; to make detailed route proposals for this first stretch of line, should the Government decide to proceed; and to outline options for extension to cities further north and to Scotland. HS2 Ltd reported to me in December. I am grateful for the immense amount of expert work done by its staff. HS2 Ltd has shared much of its work and analysis with the local authorities potentially affected, and with Transport for London, the Scottish Executive and statutory environmental bodies. I am grateful to them all for their constructive engagement.

I am today publishing HS2 Ltd’s report, together with the Government’s proposed high-speed rail strategy, which is based on HS2 Ltd’s analysis. In summary, this strategy is for the development of an initial core high-speed network which would link London to Birmingham, Manchester, the east Midlands, Sheffield and Leeds, with high-speed trains running from the outset through to Liverpool, Newcastle, Glasgow and Edinburgh. This Y-shaped network of about 335 miles in total, with branches north of Birmingham running either side of the Pennines, would be capable of carrying trains at up to 250 miles per hour and could be extended to other cities and to Scotland.

There are six principal reasons why the Government are proposing this strategy. The first is transport capacity. The extra capacity provided by a high-speed line would more than treble existing rail capacity on the west coast main line corridor. This is not only because of the new track, but also because of the far greater length of train which high-speed lines and stations make possible, and the segregation of high-speed trains from other passenger and freight services.

By contrast, the most ambitious conceivable upgrade of existing rail lines to Birmingham would yield less than half this extra capacity, at greater cost in terms of both money and disruption than a high-speed line, and without most of the journey time savings. This analysis is critical to the argument as to whether investment in high-speed rail unjustifiably diverts investment from the existing railway. The most likely alternative over time is to spend more achieving less. This accords with the experience of the recent £9 billion upgrade of the west coast main line, whose benefits, though considerable, were essentially incremental and came after years of chronic disruption to passengers and businesses. Furthermore, by transferring long-distance services to the high-speed line, large amounts of capacity would also be released on the existing west coast main line for commuter and freight services, including services to key areas of housing growth around Milton Keynes and Northampton.

Secondly, the journey time savings from such a line would be significant. The journey time from London to the West Midlands would be reduced to between 30 and 50 minutes, depending on stations used, with Manchester, Leeds and Sheffield all brought to within 75 minutes of London—down from almost two hours and 10 minutes now—and through services from Glasgow and Edinburgh to London down to just three and a half hours.

Thirdly, however, the connectivity gains of high-speed rail come not only from the faster trains but also from the new route alignments which comprise the proposed “Y” network of lines from London to Birmingham, and then north to Manchester, and north-east to the east Midlands, Sheffield and Leeds. This new network would provide a once in a lifetime opportunity to overcome the acute connectivity limitations of the Victorian rail network, with its three separate and poorly integrated main lines from London to the north, each with its own separate London terminus.

By contrast, the high-speed line, routed via the West Midlands, would not only slash the journey time to London from Manchester, Leeds and Sheffield; it also nearly halves journey times from these cities to Birmingham. So the east Midlands, the north-west and the north-east gain dramatically improved connections within the Midlands and the north, as well as to London. These connections would be further enhanced by the northern hub proposals to upgrade the trans-Pennine route from Manchester to Leeds.

Fourthly, this high-speed network would enable key local, national and international networks to be better integrated. In particular, by including on the approach of the high-speed line to central London an interchange station with the new Crossrail line just west of Paddington, the benefits of both Crossrail and the high-speed line are greatly enhanced. Such a Crossrail interchange station would deliver a fast and frequent service to London’s West End, the City and Docklands, giving a total journey time, for example, from central Birmingham to Canary Wharf of just 70 minutes, and from Leeds to Canary Wharf of just one hour 40 minutes. This Crossrail interchange station would also provide a fast, one-stop Heathrow express service to Heathrow in place of the long and tortuous journey to the airport currently experienced by passengers arriving at Euston, Kings Cross and St Pancras. Similarly, an interchange station close to Birmingham Airport would provide an efficient link to the M6 and the M42, the west coast main line, the wider West Midlands and the airport itself.

Fifthly, high-speed rail would be a sustainable way forward. High-speed trains emit far less carbon than cars or planes per passenger mile, and the local impact of high-speed lines is far less than that of entirely new motorway alignments in terms of land-take and air quality. For these reasons the Government take the view that high-speed rail is preferable both to new intercity motorways and to major expansion of domestic aviation, even if these were able to deliver equivalent intercity capacity and connectivity benefits.

Finally, HS2 Ltd assesses that all these benefits far outweigh the estimated costs. With the project yielding more than £2 of benefit for every £1 of cost, HS2 Ltd estimates the capital cost of the first 120 miles of the line from London to the West Midlands at between £15.8 billion and £17.4 billion. This is broadly similar to the cost of Crossrail, which is being built over the next seven years.

The cost per mile beyond Birmingham is then estimated to halve, taking the overall cost of the 335-mile Y-shaped network to about £30 billion. This cost would be phased over more than a decade after the start of construction, which would not begin until after the completion of Crossrail in 2017. Indeed, the high-speed line would be the transport infrastructure successor project to Crossrail, deploying its skills base and project management expertise, and with a similar annual rate of spend.

I turn now to the specifics of the recommended route. As with any major infrastructure project, there will need to be extensive and detailed consultation, particularly with local communities affected. Significant time will be needed to ensure that consultation is properly conducted and considered before the finalisation of government policy and the introduction of a hybrid Bill.

Subject to this consultation, the London terminus for the high-speed line would be Euston; the Birmingham city centre station would be at Curzon Street; and there would be interchange stations with Crossrail west of Paddington and near Birmingham Airport. HS2 Ltd’s recommended line of route between London and Birmingham is also published today. The Government endorse this route, subject to further work which I have commissioned on mitigation and to subsequent public consultation. HS2 Ltd’s recommended route would pass in tunnel from Euston to the Crossrail interchange west of Paddington. It would leave London via the Ruislip area, making use of an existing rail corridor. It would then pass by Amersham in a tunnel towards Aylesbury before following the route of the A413 past Wendover.

North of the Chilterns, the recommended route would follow in part the disused Great Central rail alignment before passing Brackley and entering Warwickshire. It would then skirt to the east of Birmingham, to enter the city via a short link alongside an existing rail line, beginning in the Water Orton area, with the main line extending north to the west coast main line near Lichfield.

In developing its route, High Speed 2 Ltd has been very conscious of the need to minimise the local impacts while achieving the wider objectives of the high-speed line. The company will be publishing a full appraisal of sustainability, including noise and landscape impacts, before formal consultation begins, and I am today publishing details of a proposed exceptional hardship scheme for those whose properties may be directly affected. I should like to assure the House that only once full public consultation on the Government’s proposed strategy and recommended route is complete, and its results fully appraised, will the Government make firm decisions.

I turn now to the issue of Heathrow. It is important that Heathrow is connected to any high-speed line. A prime purpose of the proposed Crossrail interchange is to provide such a connection, via an 11-minute direct service to Heathrow. However, the overwhelming majority of passengers on a high-speed line south of Birmingham would be going to or from London. This is the other reason why the Crossrail interchange station is so important. Crossrail, a very high-capacity line, will provide fast services direct to the West End, the City and Docklands, catering for an estimated one-third of all the passengers travelling on the high-speed line. Without this interchange to Crossrail, congestion on the Tube from Euston would be exacerbated, and passengers would be severely disadvantaged in getting in and through central London.

The question is whether there is a case for an additional station at the site of Heathrow itself. High Speed 2 Ltd, after thorough analysis, advises that the business case for such an additional station appears weak, given the estimated cost of at least £2 billion for the additional tunnelling required to serve the site. Furthermore, Heathrow is not a single place; it is an airport with three widely dispersed terminal centres.

However, I am conscious that, as foreshadowed in the Government’s January 2009 decision on adding capacity at Heathrow, there may be a strategic case for a high-speed station at Heathrow, particularly in the light of that planned expansion. I have therefore appointed the noble Lord, Lord Mawhinney, a former Transport Secretary, to advise on the best way forward, having fully engaged with all interested parties. A complex decision of this nature should not be taken in a knee-jerk fashion but after a full analysis of the facts and options.

There are many other benefits of a high-speed project. An estimated 10,000 jobs would be created, with benefits, too, for UK companies competing abroad. Regional economic growth and regeneration would also be boosted, with released capacity on the west coast main line supporting housing growth. All this is set out in the Command Paper that I am publishing today and laying in the Libraries of both Houses.

High-speed rail is a long-term strategic project to equip Britain with the transport infrastructure that it needs to flourish in the 21st century. Now, as we emerge from recession, is the right time to be planning. The Government’s view is that high-speed rail could play a crucial role not only in meeting reasonable future transport capacity requirements but also in transforming the connectivity between our major cities, regions and economic centres. It could help to boost the economies of the Midlands and the north, in particular; help to overcome the historic north-south divide; strengthen the ties that bind Scotland and England; and, connecting to the Channel Tunnel and High Speed 1, reinforce our links with the European mainland where high-speed rail networks already extend from the north of France to the south of Spain and Italy and to the east of Germany.

High-speed rail is a policy of huge strategic significance for the country. The time has come to create a credible plan and for this to be a national cause. This is the spirit in which I set out today’s proposals, and I commend them to the House.

My Lords, I thank the Secretary of State for making this Statement today, and I am grateful that I was allowed 20 minutes to see it before having to respond. I half congratulate him on at last embracing the long-held and long-articulated Conservative view that the development of high-speed rail is essential to the future of transport in this country. We welcome the emerging political consensus on the principle of this policy. The Statement concentrated on the benefits of high-speed rail in general. We were convinced of these years ago. However, we welcome the report from HS2 Ltd, and we will be studying it in detail as soon as we get it.

I only half congratulate the Secretary of State because his predecessors, and indeed the Government’s 30-year strategy for the railways, dismissed the idea that high-speed rail would bring great benefits. Two years ago, the then Secretary of State, Ruth Kelly, said in a Labour Party release that high-speed rail was,

“opportunistic, economically illiterate and hugely damaging to Britain’s national interests”.

Perhaps that is why the noble Lord, who is much admired for his enthusiasm for rail, is now the Secretary of State. However, the Command Paper looks at the detail of the plans of the HS2 route, so the argument in general about HS2 has clearly been won.

The Statement is full of general principles but lacks detail on cost analysis, funding sources and the expertise necessary to deliver any part of the project in the reasonably near future. When one looks at the proposed spurs to Manchester and Leeds, all we have are lines drawn on a map. There are no viable route options, no projected timetable and no indication of when detailed planning will begin. All of this may be in the HS2 document, which we have not seen yet—so perhaps the Minister would like to respond on those details when he replies. Also, can he give us any more information on when Parliament will be able to see proposals for the spurs beyond Birmingham? The Government’s own analysis shows that the full benefit of high-speed rail will not be felt until those aspects are up and running.

It has always been the Conservative Party’s intention that high-speed rail should penetrate into Scotland, but the Government’s Command Paper shows that this is, at best, only an aspiration in Labour’s plans. If this is to happen, planning works need to begin very soon. Can the Secretary of State say whether there are any plans for this, and when they are likely to be implemented?

The Command Paper notes the importance of public engagement and formal consultation on all parts of the network, and the Secretary of State has spelt that out in his Statement. This is in marked contrast to Labour briefing against the Conservative Party over the last month for our refusal to be bullied into stitching up those who live near the proposed routes before they had been formally consulted. We look forward to seeing how the consultation will go forward, and what options are being offered to those who live near the initial London to Birmingham leg. Can the Secretary of State tell us whether there will be full consultation, that best practice will be followed for the further legs beyond Birmingham, and when that is likely to happen?

One of the most salient problems which will affect this policy is the current lack of skills available to the rail industry to implement the works required. There is huge demand now both for the high-speed rail and for Crossrail. The Government’s Command Paper suggests that a new national skills academy for rail engineering will be the answer to this problem. However, given that the matter is only under consideration by the Learning and Skills Council and the Government accepted that there was a problem in higher-level skills only in 2009, does the Secretary of State believe that sufficient numbers of people can be educated to a sufficient level to fill the enormous skills gap in time for this project to begin, and for those skills to be relevant and helpful to our own young people?

We are disappointed but not entirely surprised to see that the Command Paper rejected the opportunity for a direct air-rail interchange at Heathrow. If we are serious about reducing pollution, which is rife in and around the airport, and encouraging passengers to limit the amount of flying they do, then an easy interchange between rail and air is essential. The Government's present proposals for using Crossrail will only mean that passengers are discouraged from using rail by having to traipse round stations lugging their baggage. Having read the Command Paper this morning, I was somewhat taken aback to hear the noble Lord say in his Statement that further consideration is now being given to a Heathrow spur. I congratulate him on that decision. We look forward to hearing how the noble Lord, Lord Mawhinney, gets on with it. I am sure that we will be pleasantly surprised at the outcome.

Although we remain totally committed to high-speed rail, it is clear that the Government, in the dying stages of their life, are stumbling to put out a policy for consultation which they are not likely to implement.

My Lords, I do not wish to follow the speech we have just heard, which was almost insulting to the Secretary of State. I should like to thank him not only for the announcement in the Statement, but for the drive which he has personally put into this project. I am quite convinced that Britain needs a high-speed line because in many ways it would embrace what I will call the forgotten north, the big cities of the north which do not have good railway services. Many noble Lords and many civil servants use the railway services around London, but the services around Manchester, Leeds, and Sheffield are disgraceful, with old, overcrowded trains. What has been said today will give some hope to the north that it is not forgotten and that it will be included in the future which has been outlined.

I want to express my confidence in the fact that engineers can design a railway which is far less intrusive than any motorway network. They can work on aerodynamics, regenerative braking, noise suppression and I am quite certain that the railway we will receive will be far better than anything we have now. If you live anywhere near a motorway, you will know the awful noise which you have to put up with continuously.

I should like a number of assurances, the first of which the Secretary of State has given. I should like an assurance that the money for high-speed rail will not be extracted from the rest of the network; otherwise we will have the French situation: a superb TGV network and an awful secondary network.

I suggest to the Secretary of State, as part of the programme, that there is space for the continuous upgrading of the east coast main line north of Leeds. If that is intended to be used for the high-speed train, any engineering work done on that line now should take account of the fact that that line may be used for high-speed trains in the future.

I make a plea to the Secretary of State that the whole project does not become a meal ticket for consultants and the various hangers-on who seem to pervade many projects in this country. I also ask him to consider not applying NATA—the new approach to transport appraisal methodology—to this project. We need real goals; not goals which economists look at round their feet so forgetting the big picture. We need to have some real objectives in view and to measure our way going towards them.

The western end of Crossrail still worries me greatly. A lot of thought needs to be given to where those trains are going to go once they leave Paddington. It is quite inconceivable that metro trains stopping at every station west of Paddington will be in any way suitable for the distribution of people who will arrive at the new station near Wormwood Scrubs. Will the Secretary of State also consider the relationship with Network Rail and the rail regulator? The costs that Network Rail incurs are far too high in anybody’s judgment and I want to see a better arrangement than there is for HS1, where Network Rail has apparently taken over the maintenance without any real check on its efficiency. Whoever is maintaining something needs those checks on efficiency.

I had written on my notes that at this point I would make some comments on the Conservative view, but quite honestly, there is just nothing to talk about.

The Secretary of State and I disagree about many things, but I am happy, in this case, to promise the full support of those on these Benches. In the pantheon of railway greats, which might include Brunel, Stephenson, Brassey and Sam Fay, I believe that the Secretary of State has at least got his foot on the lowest step.

My Lords, I am so bowled over by that compliment, I hardly know how to begin. The idea that I might be on a par with those great railway luminaries is such a breathtaking thought that I need to let it sink in. Perhaps I should respond before it goes to my head, because it might have a dangerous effect on my equilibrium.

I should like to express my gratitude to the noble Lord, Lord Bradshaw, for his warm words and say that I am half grateful to the noble Baroness for the half congratulations she offered me. She asked a number of questions which are covered in the report itself. She asked about cost analysis, funding sources, time-lines, work on the proposed spurs to Manchester and Leeds and planning for Scotland—all of that is covered in the Command Paper. There has been a thorough cost analysis, which is set out in great detail in the report.

We also give a clear view on funding sources. There would be a requirement that this would be a state-led project: there is no way it would be possible to fund the project in any other way. However, we will look for significant third party contributions, particularly in respect of the stations, because each part of this route requires a new high-speed station and there is a good deal of experience in generating very significant third party contributions and development gain in respect of stations. We also see public/private partnerships having a role to play, including in the potential for securitising some of the fares income that will be generated by this project. This is all set out in the report.

On time-lines, I was very surprised to hear the noble Baroness say that she thought it would be possible to start construction in 2015. That point has been made by her party over the past day. Many noble Lords have experience of taking hybrid Bills through this House. It is, quite rightly, an extremely thorough process because of the nature of the private and public interests which are at stake. The last private hybrid Bill to take the Crossrail project through took about three years to be enacted, and that was after the elaborate process of consultation, which needs to take place, led by the Government, before a hybrid Bill can even be prepared, let alone introduced. It is not, in our judgment, conceivable that you could start construction before 2017 if proper parliamentary and consultation procedures are to be followed. If they are not to be followed and we are to axe consultation, then it might be possible to move sooner, but I assume that that is not the position of the party opposite.

Normally, we conduct things in an extremely genteel fashion in the House. But I do, if the noble Baroness will forgive me, want to pick up on one or two points that she raised. She said that she did not have sufficient time to engage with the Statement. Let me make it clear that we offered the Conservative Party the chance to read the whole report weeks ago and it declined the opportunity. The Liberal Democrats accepted the opportunity to read the report and we had very productive exchanges.

The noble Baroness also said—I was puzzled by this remark—that we had sought to bully—I think that “bully” was the word she used—the party opposite into “stitching up” a proposed route behind closed doors. I resent that allegation. There was no attempt whatever to stitch up any agreement on a proposed route behind closed doors. There will be full public consultation on any routes. It is right and proper that that should take place, and it is required. All I was doing was offering the Conservative Party the chance to read the report. It rejected that chance, which is a great pity because the response would have been a great deal better informed if it had read that report some time ago.

The noble Baroness also asked me about the development work on the branches to Manchester and Leeds. The detailed route planning to Manchester and Leeds will start immediately. It will take between one year and 18 months to be completed, and the Government’s intention is then, subject to them being satisfied that the route is robust and value for money, to consult on that route thereafter in the same way as we are proposing from this autumn to start consulting on the detailed route from London to Birmingham.

We would not be setting in train that process of detailed route planning and consultation unless we were absolutely confident that it was possible to take forward this project. As that work takes place, we will also be inviting responses from those who wish to offer comments on how one could develop the network beyond Manchester and Leeds. I have given a commitment in the Command Paper that we would intend to offer through-high-speed services to Scotland from the outset of the high-speed line by following the French practice of enabling high-speed trains to run on both the high-speed track and the conventional track. A majority of the route mileage of TGVs in France is on conventional tracks taking trains through to their final destination, which makes the cost-benefit much better than having to build tracks to all destinations.

By adopting this policy, it would be possible to get a three and a half hour journey time from Edinburgh and Glasgow to London once the Y network of 335 miles was completed, were that to be built. That three and a half hours is extremely important because international evidence is that you get significant traffic movement from the plane to the train once journey times between cities can be got down to under three and a half hours by high-speed train. Not only is that then a competitive time, but time spent on trains is so much more productive than that spent having to pass through airports, with all the inconvenience that that implies.

The noble Baroness asked me about the new national skills academy for rail engineering. I am glad to be able to tell her that we have agreed to set up that academy. That will now take place. But it is vital to see the high-speed line as the successor project to Crossrail. All the depth of engineering and project management expertise that we have in Crossrail will transfer across to the high-speed line, provided we plan these projects in an integrated way.

As to Heathrow, to be frank, a lot of bold statements are being made, which need to be tested rather more than they have been so far. The noble Baroness said that we were not committed to an at-site station at Heathrow. In fact, we are not close minded on an at-site station at Heathrow. The Command Paper, which she said rejects it, does not reject it. It says, because it reflects the work that has been done by High Speed 2 (HS2) Ltd, that the business case does not appear strong. That is precisely why we have asked the noble Lord, Lord Mawhinney, to review the business case and to look at this vexed issue of where a high-speed station at Heathrow would be placed, given that this is a dispersed site with three big terminal centres. He will report in three months on his findings.

However, let us be clear, the Conservatives do not have a proposal for an at-airport station at Heathrow either. I have just read the statement on high-speed policy, which the shadow transport spokesperson issued yesterday afternoon. She must be more clairvoyant than almost anyone since the Old Testament prophets. She managed to issue a paper yesterday afternoon commenting on a Command Paper that had not even been published and with which she had not been able to engage. She criticises us for not putting forward proposals for an at-airport station but says herself that they will support a new integrated Heathrow rail hub,

“along the lines of the plan put forward by engineering firm, Arup”.

It is vital to understand that the proposal put forward by Arup is not for a station at Heathrow but at Iver, well outside the boundaries of Heathrow, some two and a half miles away on green belt and in a flood plain. If they do not even understand that their own proposal for what they call an at-airport station is not at Heathrow but two and a half miles away involving a transit journey for every passenger to get to any terminal, and on green belt in a flood plain, then they have not even begun to engage with the reality of the issues. I am not even sure that the noble Baroness understands that that is the policy of her own party.

We need a mature, sensible and fact-based debate on how we serve Heathrow, not cheap sound bites trying to create false dividing lines which will just put back the cause of high-speed rail by many years.

My Lords, it is essential that Heathrow should become more efficient and ought to be tied up with high-speed rail. What about another aspect of Heathrow, without which it cannot be rendered more efficient? I refer to improvements to the road network. Is that not important as well?

My Lords, there is good road access to Heathrow at the moment. The proposals for widening the M25 and the additional hard shoulder running schemes proposed for other motorways approaching Heathrow will enlarge capacity and make improved access possible.

My Lords, I declare an interest as my group’s member of the Railway Industry Association. I am horrified by what has been said by the party opposite about lack of expertise in the railway engineering industry. The lack of expertise is obviously from the Benches opposite. I ask them to go down to the Railway Industry Association and find out what British companies are doing, or go abroad to see it as the Minister has done. See what we do abroad.

If the Opposition are going to criticise what is being said, where are their report and suggestions? This fine report is well thought-out. The whole future of the country may depend on it. It is depressing if this is going to be a political battle: that will set this country back by miles. It is absolutely essential that there is a cross-party interest in this with knowledge and expertise to understand what the Minister has said. It is quite clear that they do not understand what is going on. This must be rectified. What will happen to our rail system if there is any change of Government after the general election? I am depressed by what has been said here.

Getting away from that, there is another thought about payment. It is possible to consider a railway bond on this issue. I know the Minister does not agree but that should be looked at fully before it is abandoned. In my own experience, recently I travelled on a bullet train in Japan that has been running for 20 years without a single accident. It runs every 10 minutes at 330 kilometres an hour. If and when the high-speed link is built, will it be built before the London-Beijing high-speed rail? I doubt it. The other question is whether we should still be using wheels. If it is going to be so far ahead, should not a magnetic levitation system be considered as well? I think it is too late to do that now but our high-speed rail will be of a much lower speed than most other railway systems in the world. The Government should be supported.

My Lords, I remind the noble Lord, Lord Tanlaw, that it must be brief comments or questions to allow the maximum number of people to take part in the 20 minutes.

My Lords, I pay tribute to the noble Lord, because when I was in China a few months ago looking at the high-speed line it is building between Beijing and Shanghai—which will be completed within two years and will be a remarkable construct—I visited the company in which he has a stake. It is a joint venture company with the Chinese which is building pantographs for the high-speed trains. It does excellent work and is a great example of British engineering expertise being exported. We want to see many more companies like his flourishing in export markets. We already have a good number that do, and that number will be substantially enhanced by the programmes we have in place for Crossrail and electrification.

If companies can see a supply of work coming over the next 20 years—there will be if we proceed with high-speed rail—there will be still bigger incentives to invest and our opportunities to export will be greater still. This applies not only to China, where the noble Lord has great experience; the United States is about to embark on a high-speed rail revolution. President Obama has made significant funds available for development work on a number of high-speed rail projects. In Florida and California, in particular, schemes are being developed which would bring about connectivity and capacity benefits similar to the ones I have described in respect of links between British cities. I expect to see a significant market in the US open within the next few years, and our excellent rail manufacturing, engineering and consultancy sectors are well poised to take advantage of those markets, particularly if we are ourselves committed to developing a north-south high-speed rail project.

My Lords, can the Secretary of State clarify, first, whether in the early stages after completion the trains from north Wales, the north of England and Scotland will run on to the new HS2 line from Birmingham to London? Will the trains from these destinations be, for example, the 140 miles-an-hour Pendolinos or will there have to be a totally new fleet of high-speed trains? Will only new trains be allowed on the high-speed line? Secondly, is there any possibility of services running from, for example, Birmingham to Brussels?

My Lords, there is certainly a possibility of services running from Birmingham to Brussels. The report sets out a number of options for how High Speed 2 and High Speed 1 can be linked, including the possibility of developing a fixed rail link which will enable the trains to run through. There is also a possibility—the two are not mutually exclusive—of a rapid transit system between Euston and St Pancras. By rapid transit, I mean that Euston and St Pancras would be only two minutes away from each other. At the moment they are very difficult to travel between, yet they are much closer than the terminals of most airports. If we could link the two then, given the frequent Eurostar trains from St Pancras, this would greatly enhance the capacity of people coming from the high-speed line to travel on to the continent, whether or not there was also a fixed link between the High Speed 2 and High Speed 1 lines.

Eurostar is also important in the context of services going off the high-speed line. The report envisages that the high-speed fleet would include trains that, like the Eurostars, were capable of running on both high-speed and conventional tracks. You would get the maximum benefits of the high-speed line while the trains were travelling on it but they could serve destinations beyond. This gets very technical. We have the big issue that in Britain we have a much narrower loading gauge than applies on the continent. That is why the Eurostar trains had to be specially designed so that they are capable of travelling on the British tracks; standard continental trains cannot travel on the British tracks because they are too wide. Special trains would need to be designed. This took place with Eurostar and we envisage it taking place for at least a portion of the trains that are to travel on the high-speed line in order that they can serve destinations beyond the line itself.

My Lords, I congratulate the Secretary of State on his visionary approach. However, the experience of past large infrastructure projects is that invariably the outturn costs are more than estimated costs. He is talking about a £30 billion project; this Government are already borrowing one pound in every four spent. Can he say a bit more about how it is to be funded? Apparently, he has rejected the idea of rail bonds. He has touched on the idea of finding ways of securitising some of the income. Given the position with banking and the availability of finance, it would be helpful to hear more about how this will be funded and how the project is to be brought to fruition.

My Lords, as I said in answer to an earlier question, we believe there is room for substantial third-party funding in stations through public/private partnerships, which would deliver discrete parts of the project. There will be big income streams and huge development opportunities in respect of the stations, so we think those sources of funding will be considerable.

However, I am not ducking the fact that this high-speed line will only come to fruition if there is significant state investment. The noble Lord says that there is a history of cost overruns on projects of this kind. I see the noble Lord, Lord Lawson, sitting in front of him. As a former Chancellor, he is only too well aware of having to deal with these issues in the past. It is precisely because of the history of cost overruns that the Treasury—it may have been under the noble Lord’s guidance—insists on large risk additions to the preliminary costing of projects, typically in excess of 50 per cent of the cost. The figure of £30 billion that I referred to includes a substantial risk premium.

We have set up a review into rail costs, because the work of HS2 seems to indicate that the cost of delivering rail projects in this country is twice or more the cost of delivering new rail projects on the continent. We want to get to the root of why that is the case. It may be, as the noble Lord, Lord Bradshaw, says, that it is because we have armies of consultants and advisers who boost costs. It may also be that putting risk premiums into the costings encourages people to bid up costs because they see that in the cost profile; that argument has been put to me. We need to get into these figures because it is a fact that our continental counterparts are able to build high-speed rail lines significantly more cheaply than we appear to be able to, on the experience of High Speed 1. We need to understand why that is the case long before we start constructing this project.

On the point about whether it is affordable, if this becomes the successor project to Crossrail, construction would not start until 2017 when Crossrail is due to be completed. There is, I am glad to say, a near cross-party consensus on taking Crossrail forward. I say “near” because the Conservatives have not absolutely guaranteed that it will proceed, but there is a Conservative Mayor of London who, as he puts it all the time, is joined at the hip with me in delivering Crossrail. The work is proceeding well and I believe this will be a flagship of London’s public transport system when it opens in 2017. The rate of spending on Crossrail now is about the rate of spend you would need to deliver the high-speed line after 2017. So I simply put it to the noble Lord that if it is possible for us to fund a Crossrail line for London, and if this is the big national transport infrastructure project we want to take forward as a country, it is possible in principle to fund this line going north of London after 2017.

I do not believe we necessarily get everything right when we do things differently from our colleagues on the continent. If almost every major European country and most leading Asian countries have found it affordable to build high-speed lines and see huge benefits—such that when they have built their first high-speed line, they almost invariably build other lines thereafter—it may just be that we should follow suit.

My Lords, on the environment issues that will undoubtedly occur when this line gets built, it would be helpful if those who are protesting about the noise on the route or other factors were able to visit HS1 and see the protection that has been put in there and the lack of noise. I declare an interest, having worked on the consultation on that and the Channel Tunnel. It makes an incredible difference. My noble friend has chosen an extremely good route, based on good transport corridors. It is an excellent project and I congratulate him.

I am grateful to my noble friend for his comments. He has huge experience of the rail industry, including the construction of High Speed 1. I take great comfort from his remarks. I make a broader point: there are a lot of fatalists in Britain who think that we cannot accomplish big projects of this kind. We built the Channel Tunnel Rail Link and the Channel Tunnel. The Channel Tunnel Rail Link went through Kent, which is one of the most difficult areas in the country in which to construct a railway line. Just over two years ago we opened St Pancras station, which is one of the rail icons of the modern world. If we can do that, we should certainly be up to building a high-speed line north of London, connecting our great cities and through to Scotland.

My Lords, as chairman of the Environment Agency, I say to the Secretary of State that this Statement is ambitious, far-sighted and enormously welcome. There will of course be a lot of difficult issues to be tackled and decided during the next few years, not least of which will be some of the local environmental impacts of the route of the line, the need for an enhanced pool of engineering skills and the source of the state funding that will be required. However, the overall economic, social and environmental benefits that will come from the development of a serious high-speed rail network in this country will make it well worth it. May I, however, gently suggest to the Secretary of State that now perhaps is a golden opportunity to reconsider his predecessor’s decision on the third runway at Heathrow?

My Lords, I have huge admiration for my noble friend and any advice that he gives I take immensely seriously, but I fear that I cannot promise any immediate change of government policy on that front.

My noble friend speaks from a position of great experience in dealing with environmental projects and I welcome his response to the Statement. It is possible to reconcile our environmental objectives with the provision of this new infrastructure, but I accept that it will require a process of prolonged consultation and engagement, including on how we can best mitigate the impact that the construction of a high-speed line will inevitably have.

Set out in the Command Paper are the comparative figures for different modes of transport in terms of carbon emissions per kilometre. They are very striking. A car with average occupancy has average emissions per passenger kilometre of 128 grams of CO_2. For a Eurostar train, the range is between 8.1 grams and 17.6 grams. For domestic flights, the average is 171 grams. The carbon advantage that we gain by carrying large numbers of passengers between our cities by high-speed rail is therefore very great, which is a good part of the environmental case for a high-speed rail line.

My Lords, I, too, disassociate myself from the curmudgeonly Conservative attitude to the Government’s far-seeing Statement, but ask the Minister whether he is prepared at this stage not to rule out the possibility of further extension northwards of the high-speed line, in view of the fact that more than half of Scotland’s landmass lies outside the central belt. The most rapidly growing city in the British Isles is Inverness, and access to North Sea oil and other important renewable energy alternatives lies in that part of the British Isles. Would he at least not rule that out and give it consideration?

My Lords, I am glad to be able to tell the noble Lord, for whose kind personal remarks I am very grateful, that, far from ruling it out, we are going to consult on the strategy for developing high-speed rail beyond the immediate proposals set out in the paper. I believe that, over time, if we develop the 335-mile network that I described in my Statement, there will be very great pressure to extend it. That has been the experience of other European and Asian countries once they have started the process of building high-speed rail networks. I fully accept the noble Lord’s points about the great economic importance of many Scottish cities and the great benefits that they could gain from high-speed rail.

My Lords, I declare an interest as the chairman of the Thames Gateway London Partnership, comprising the 11 East End boroughs of London and the higher education authorities there. I congratulate my noble friend on his Statement; I entirely support his proposition in favour of high-speed rail. It will never happen without leadership, which my noble friend Lord Adonis and the Department for Transport are showing. I have one issue to raise with him. There is a station ready for high-speed trains north of Euston and King’s Cross at Stratford. It is right beside Canary Wharf; it is right in the middle of the area where London will develop in the coming years. Has consideration been given to High Speed 2 stopping at Stratford?

My Lords, I am very grateful for my noble and learned friend’s remarks. Perhaps it is just about in order for me to say to the House that my noble and learned friend’s son is one of my officials in the Department for Transport, so the praise that he is showering on my officials is praise that should be widely distributed within his own family as well. His son does a great job in the department.

On the serving of Stratford by high-speed trains, the Javelin trains, which are providing an excellent new high-speed service to destinations in the Medway towns and east Kent, stop at Stratford and are hugely boosting the regeneration taking place there. There is an ongoing debate about Eurostar serving Stratford, but were there to be through high-speed trains from the High Speed 2 line to the High Speed 1 line, there would be a strong case for some of them stopping at Stratford.

My Lords—

My Lords, I am afraid that time is up.

What a pity.