My Lords, with the leave of the House I will now repeat a Statement made by my right honourable friend the Secretary of State for Transport in another place.
“With permission, Mr Speaker, I would like to make a Statement about our railways. Investing in transport infrastructure is not a choice. To create jobs and to rebalance our economy we need better roads, better airports and better trains. High Speed 2 is a central part of that investment: an engine for growth throughout our country. That is why, today, I am announcing our initial preferred route north from Birmingham and on to Leeds and Manchester. These new services will reach eight out of 10 of our largest cities: places such as Birmingham, Liverpool and Manchester, as well as Leeds, Sheffield, Newcastle, Glasgow and Edinburgh.
In all, 18 cities—and many more towns, too—will be served by HS2 services. HS2 will be completely integrated with the existing rail network, it will bring people and businesses together, it will create an estimated 100,000 jobs and it has the backing of businesses and cities across Britain. We will introduce legislation for the first phase in this Parliament and legislate for the second in the next one. Construction is set to begin in 2017. The first trains will run in 2026 and the second phase will open fully by 2033.
I would like to make three further points. The first is about the need for the line. HS2 will be the first main line to be built north of London for almost 120 years. Some say we do not need another, but the truth is that we are already good at squeezing the most out of our Victorian railway network and, yes, we will get even more out of it in the coming years with massive investment. We are electrifying 800 miles of track and building Crossrail and the northern hub upgrade. These will help to keep us going for the next decade or two, but what then?
Rail passenger numbers have doubled over the past 15 years and demand will keep growing. The west coast main line is filling up. There is not enough space for all the commuters, freight trains and intercity trains that need to use it. That is why I am publishing, after very careful consideration, my initial preferences for phase two of HS2. The case for going ahead rests on the capacity it will provide and on the new connections it will create. It is not just about faster trains to London, but also about changing the way our great cities work with each other. There will be easy links on journeys that are difficult today. It will give muscle to the economies of cities beyond London, producing an estimated £2 in economic benefit for every £1 that is spent.
I frequently hear calls from colleagues in this House for better services to their local stations. They are right to ask for them; High Speed 2 is part of the solution. By creating free space on existing routes, it will allow better services to places such as Milton Keynes and more trains for commuters in areas such as Staffordshire, Leeds and Manchester. I am determined to make sure the benefits of HS2 run much wider than the places directly served by the new line.
Let me turn to my second point: the detail of the route I am announcing today. This follows the Government’s announcement last year about phase one between London and Birmingham. On the western leg from Birmingham to Manchester, I propose two new high-speed stations. The first is in the heart of Manchester, right alongside the existing station at Manchester Piccadilly, allowing easy connections to places such as Salford, Stockport and Bolton and a journey time to London of just one hour and eight minutes, down from more than two hours today. The second station will be at Manchester Airport, giving direct access to the wider Cheshire area. HS2 also will serve Crewe via a dedicated link and high-speed trains will continue on the existing railway to Liverpool, Warrington and Runcorn. They will also benefit from greatly reduced journey times. Further north, near Wigan, HS2 will connect with the west coast main line. High-speed trains can then continue at regular speeds to places such as Preston, Carlisle, Glasgow and Edinburgh. I am working with our counterparts in Scotland on their aspirations for high-speed rail and I have already set out a long-term ambition to get journeys to Scotland below three hours.
Turning to the eastern leg, we will construct three new stations to bring people and businesses in the East Midlands and Yorkshire closer to Birmingham, the north-east and London. The East Midlands station will be located between Nottingham and Derby at Toton. Links will be upgraded to provide fast access to both. The second station will be at Sheffield Meadowhall. It already has good connections and these can be improved further, allowing it to serve all of Sheffield and South Yorkshire. The third station will be located in the centre of Leeds, alongside the South Bank area. As with the western leg, there will be a connection from HS2 on to the existing rail network. A connection to the east coast main line, just nine miles from York, will allow the north-east to benefit, too—London to York in just one hour and 23 minutes, and Newcastle in just two hours and 18.
Lastly, a decision on how best to serve Heathrow will be taken after the outcome of the Airports Commission has been considered by the Government. From day one, though, HS2 will provide far faster journeys than now via a major new interchange at Old Oak Common, linking to the Great Western main line, Crossrail and the Heathrow Express.
The third point that I want to make today is about design and help for those most affected. I know that this is an issue that many honourable Members want the Government to take extremely seriously, and we are. I know that although the line will benefit the country as a whole, it will also create great anxiety among those close to the proposed route, so we will consult properly, design carefully and compensate fairly.
Let me stress that today I am announcing an initial preferred route. This is the start of the process, not the end. We are ready to listen, ready to improve. I want this line to create jobs and prosperity, not harm them, so, where businesses may be affected, we will work with them to find a solution. We will now begin a period of informal consultation on phase two. This will inform the official public consultation, originally planned for 2014 but which I can announce will be brought forward to this year. The aim is to reach a firm decision on the route of phase two in 2014.
I understand how proposals such as these can affect property markets. So compensation will be as generous as on the first phase, and more generous than when we built the motorways. Today I am launching a public consultation on the exceptional hardship scheme for those who must sell but cannot because of HS2. Under this scheme we will pay the full price, valued as if there were no HS2. This will be followed by the next stage of our property compensation scheme, once the final route is confirmed.
There are not many issues on which all the political parties in this House agree; it often feels like there are none at all. This, however, is one because, regardless of the nature of the Government when the first trains run in 13 years’ time, what matters are the jobs, the rebalancing of the economy and our country’s future prosperity. I commend this Statement to the House”.
That concludes the Statement.
My Lords, I thank the Minister for repeating the Statement made earlier in the Commons. I welcome the Statement, of course. The Minister made the presumption that there was agreement between the major parties on this project and indeed there is. He will know that I endorse the main strategy that is proposed in the paper, and I welcome the fact that this announcement is being made today.
Inevitably, however, there are differences between us, and I will seek to identify some of them for the good of the Government in the time in which they have to make judgments on this important project. I emphasise to the House that in the long run this project will bring strength to the British economy and relieve the pressure on rail lines, particularly the west coast main line, which the Minister rightly identified as running at very close to capacity, but it has nothing at all to do with the rhetoric that he brought into the Statement about jobs and improving our economy at the present time. The idea that the proposals contained in the Statement, which, after all, refer to a project that will not be completed for over a decade from now, will bring an enormous stimulus to the economy and create jobs at present is quite erroneous. I rather regret that the noble Earl has rightly emphasised that we welcome this. Of course we will do our best in opposition and in government to see the fulfilment of the project.
There are inflections in this speech which seem to be addressed to our contemporary economic troubles. This project is too far away to actually deliver a great deal of improvement prior to the next general election or even several years after that. However we welcome the project for the reasons put forward by the noble Earl, not least in terms of the pressure upon existing rail provision in the United Kingdom. He makes the important point that no railway line has been created north of London for more than 120 years.
The Government are still not committing themselves to aspects which we would have thought would give a real sense of urgency to this timetable. Why does this Statement make no attempt to bring the legislation necessary for phase 2 into the timetable for phase 1? Surely one Bill—which might necessitate a carryover facility—dealing with the whole project is bound to be a better prospect than the Government going through all their travails over London to Birmingham, and then starting all over again with a fresh Bill for the lines north of Birmingham.
We also regret that the Statement makes no real approach towards another area of future transport on which we have sought to establish consensus, namely the future of aviation in the south-east. Why do the Government not address their mind to the possibility of a direct link to Heathrow? Surely that would improve connections as far as airports are concerned? It would certainly help with short-haul flights bringing people into Heathrow if they could then travel speedily by train. That would reduce the pressure on Heathrow for short-range flights and the slots which they occupy, giving the airport, with its present colossal problem, a chance to breathe. As the public know very well, every time we have two or three inches of snow, as we have had recently, there is a crisis at Heathrow because it is right up against the margins of capacity with no flexibility for dealing with such a situation. I regret that there is no suggestion of looking at a link to Heathrow.
Where northern cities beyond Birmingham are concerned, we welcome the fact that Manchester and Leeds are to be served. It should be recognised that we need to look at the rail infrastructure for link-up with other major cities apart from those two. High-speed trains will of course bring immediate and direct benefits to those, but we also need assurances from the Government that issues will be addressed so that those cities which are not directly on the line—only two are—will benefit significantly.
We are concerned about another dimension of the high-speed rail proposals. The lines from the north will connect with High Speed 1, the link to the continent. The intensity of interest in this possibility goes back decades. Since High Speed 1 has been in place, served by the magnificent station at St Pancras, there has also been great interest. However, what will happen to these trains from the north? When they get to London, they are meant to clank around the back part of the rail service which Transport for London regards as critical to all its services around London. That line, of course, has speed limitations, to put it at its mildest. The Government are still looking at a situation in which those from the north will have a slow perambulation around London if they are bent upon getting to the continent.
Nevertheless, there is a great deal in this Statement that we welcome. We welcome the fact that it is being made; at least that is an indication that the penny has dropped for the Government, and that there is some urgency about these matters. However we still feel that the Statement could have been much more clearly expressed in terms of urgency for getting this line constructed, to both Birmingham and the cities of the north.
My Lords, I am grateful for the positive endorsement from the noble Lord, Lord Davies. He thought that he had identified some differences between us; I do not think that he has succeeded. First, he said that he did not believe that this announcement has any current effect on the economy, and the effect would be all in the future, after the completion of the Crossrail project. However, HS2 Ltd has spent £188 million on this project over either the past financial year or the past 12 months; I am not sure which.
The noble Lord suggested that we should have one hybrid Bill. Noble Lords must understand that the hybrid Bill for phase 1 alone will create extensive and detailed powers. The work required to prepare the Bill is proportionate to the length of the line. It is much better to get phase 1 under way and, once it is, to seek approval for phase 2. There are several very large infrastructure projects under way, but they need to be consecutive, not concurrent. Therefore, Thameslink is nearing completion, Crossrail is starting, and we will then work on phase 1 of HS2 and, finally, start on phase 2. There is an interesting question of whether the phase 1 hybrid Bill should refer to phase 2.
The noble Lord talked about connecting services between HS2 and other cities. Of course, he is quite right. We are clear that the HS2 project must not interfere with and divert resources away from the rest of the railway network. Noble Lords will know that we are doing an awful lot of work elsewhere.
Finally, the noble Lord, Lord Davies, talked about the spur to Heathrow. The Government believe that the HS2 network should link to Heathrow, and our preferred route is for this to be built as part of phase 2. However, since January’s announcement, the Government have also established an independent commission chaired by Sir Howard Davies to recommend options for maintaining status as an international aviation hub. We have therefore taken the decision to pause work on the spur to Heathrow until after 2015. The proposals for the spur and station are not planned to be part of the phase 2 consultation in 2013. However, there will still be an opportunity to consult separately at a later time and include the spur in legislation for phase 2 if that fits in with the recommendations of the commission.
My Lords, first, we thoroughly support the recommendations. They are about capacity. However, you cannot talk about capacity and ignore the freight dimension, and the freight dimension has been totally ignored by the opponents of HS1.
Secondly, I want to talk about railway fares. We must be careful that we are not building what will be described in the media as a “rich man’s toy”. Is the Minister aware of recently published research which says that British railway fares are in fact lower than those in France, Germany and elsewhere on the near continent? Only fares at the highest peak here are more expensive than in Europe. Will the Minister contact the Rail Regulator and ATOC to see if we can stop these very large increases, often in commuter fares, which are so far above RPI plus one? Fares at RPI plus nine are not uncommon. The next time fares are revised we should attend to the fares basket, on which the fares are calculated, so that people are hit less. Commuters in places such as Manchester and Leeds have seen very little improvement to their services. They have rotten rolling stock that should have been got rid of years ago, and yet they are being called on to shoulder the burden of the investment when it will be a long time before they see any benefits.
Lastly, and briefly, outside the railway industry is where the benefits lie. If you look at Crossrail you will see already that the land and property values are rising very fast, but the railway gets no benefit in terms of the attribution of these in any economic forum.
My Lords, first, my noble friend touched on the needs of freight. He is absolutely right, because one problem that we face if we do nothing is running out of capacity on the west coast main line for both passengers and freight. So it is a major driver that we absolutely have to do this project to provide sufficient capacity for freight, because there simply are not the train paths for people to put on the services that they would like to run.
I am looking forward to answering an Oral Question on Thursday regarding railway fares, and my noble friend has been asking me numerous Written Questions about how the fares basket is calculated. One question that it is important to answer is: will it be more expensive to travel by HS2? The issue of fares will be considered in more detail as the project develops. However, our assumptions on the viability of HS2 and the expected fares income do not factor in or depend on a premium for high-speed services.
My Lords, the most cautious approach for me would be to rely on the Airports Commission, but I am sure that it will take that very much into consideration. In the noble Lord’s submission to the Airports Commission, no doubt he will have mentioned that very point.
My Lords, I thank the Minister for repeating the Statement. Will he pay particular attention to the cross-Pennine route between Yorkshire, Lancashire and northern Cheshire? We will get the real benefits for the north only if, in addition to HS2, we improve the links between the east and the west of our country in the north.
My Lords, my noble friend is right in general terms. HS2 is predominantly a north-south route and will link eight out of 10 cities, but to get the full benefit we need a complete network. We are doing everything we can to bring to fruition schemes that have a good business case.
My Lords, first, do I assume correctly that the £34 billion cost is estimated in terms of today’s money? If so, what is the cost likely to be by the time the scheme is finished in 2033? Secondly, how can the Government be so certain that the construction of HS2 will result in a better balance between the north and the south? Is it not possible that more people than ever would be attracted from the Midlands and the north to London and the south?
My Lords, I cannot answer the noble Lord’s first question because I do not know what inflation is going to do. As to his second question regarding whether HS2 will benefit only London: no, HS2 will play an important role in rebalancing our economy, thereby enabling British cities to work together as an economic powerhouse. I have already said that eight of the 10 top cities will be linked together. London will have Crossrail; it is now the turn of Manchester, Leeds, Liverpool, Sheffield and the east Midlands, with further benefits to Scotland and a whole host of cities in the north. We are not simply building a railway—a way to get between two points more quickly—we are connecting people and markets, and providing a platform for development and regeneration around station sites.
My Lords, I offer my wholehearted support for the Statement and the Government’s strategy on High Speed 2. It is 50 years this year since the Beeching report and 30 years since the Serpell report, which noble Lords may have forgotten had as one of its options a national network of just 1,400 miles. The transformation in the popularity of rail travel and the recognition of the role that rail can play in our transportation has been little short of astonishing. The fact that we can talk credibly about new high-speed railways to the north of England and Scotland demonstrates the fact that demand for conventional rail travel is almost at bursting point, as the Minister said.
Perhaps I may ask the Minister one question and make a further point. Today is very much an endorsement of the approach of my noble friend Lord Adonis, who introduced the very first White Paper on High Speed 2 and set this whole process underway. It would be right for the House to pay tribute to him and his foresight in paving the way for the announcement that the Government have been able to make today.
With reference to what the Minister said about high-speed trains running north on conventional railways, particularly on the west coast main line, can he give an assurance that signalling and other infrastructure on the west coast main line will be sufficiently upgraded to allow these trains to run—obviously not at 300 kilometres an hour but certainly closer to a line speed of perhaps 140 or 150 miles an hour? That will require improvements to the signalling. In that way, it might be possible to achieve the target of reaching Scotland within three hours, which I agree is a very desirable aim.
My Lords, I am grateful for the support of the noble Lord, Lord Faulkner of Worcester. I have no difficulty at all in paying tribute to the work of the noble Lord, Lord Adonis. This project is going to cover the life of certainly several Parliaments and maybe even several Governments.
The noble Lord talked about speed on the conventional system. One of the problems if we do not do HS2 is that we will have to do upgrade projects on the west coast main line that might look attractive in terms of a business case but, actually, one will eventually run out of capacity on that line, having spent billions of pounds on those projects. The noble Lord is right. I am not sure of the technical points on how we will reduce the journey times from Scotland to London to three hours, but I will happily write to him on that.
My Lords, I welcome the announcement very strongly. I have two questions for the Minister. The first relates to the date on which the second phase of the high-speed track north of Manchester and Leeds will join the east and west coast main lines near York and at Wigan respectively. Will the Minister assure the House that this will be done at the very same time as the link to Manchester and Leeds is opened? Otherwise, there might be a flight of investment capital from developers who wonder whether points north of Manchester and Leeds will actually be brought within the high-speed framework. The solution to that problem is for a guarantee to be given that it will be done in 2033, when Manchester and Leeds open. Secondly, I simply ask for confirmation that there will be no reduction in the plans for upgrading the east coast main line in the next 20 years, pending completion of the second phase of HS2.
My Lords, my noble friend asked me some important questions about opening events occurring at the same time. Unfortunately, I cannot give the assurance that the noble Lord wants; the date is too far away. However, I will take the point on board. My noble friend also asked me about the upgrading of the east coast main line. It is important to keep that line working properly, but of course we are talking about something quite a long way ahead. I therefore cannot give my noble friend any specific assurances, other than the key one that the HS2 project will not divert resources from the conventional railway system.
Like other speakers, I warmly welcome the Minister’s Statement. After all, in this country we built the very first railways and exported the technology to build railways across the world, although sadly in recent decades we have fallen behind. This is a very positive—and for me, exciting—development. I have two points to make from our history. The Minister might find the first reassuring; the second is a question.
The first, reassuring point was made by a railway historian working at the Ironbridge Gorge Museum in my former constituency. He helpfully reminded me that many cartoons and sketches of the 1830s and 1840s speak of cattle not producing milk, hunting and agricultural land destroyed, and the picturesque nature of the English countryside lost forever. I am sure that this is familiar to the House. We all understand the objections that will inevitably come from people along the line and I welcome the assurances that the Minister has given about full consultation. However, in a relatively short period of time, these railways became a treasured part of the landscape.
Secondly, I put the following less reassuring point to the Minister. This is an exciting prospect of about 300 miles of railway—I have not added it all up. The Victorians managed to construct thousands of miles of railway. They did it with picks and shovels, and they managed to do it pretty quickly. Is 2033 the earliest date we can talk about? I have always wanted to live until I am 93, and this would give me an added incentive, but surely it should be possible with JCBs and whatever else modern technology offers to slightly improve on that timescale?
My Lords, it is an exciting project. However, we need to be doing it for the right reasons, and I believe—as I think most noble Lords do—that we are. I am sure all noble Lords will agree that it is important that we have an effective and fair system of planning for these large infrastructure projects. However, as the noble Lord will know from his experience as a former government Chief Whip, the process for getting a hybrid Bill through Parliament is quite protracted; it is not an easy thing to do. However, we will do it.
My Lords, will my noble friend listen carefully to the point that has just been made about speed? I, too, hope to travel on that first train. I would like it to come earlier because that makes it more certain that I will be in a position to do so. Secondly, will he congratulate his right honourable friend in the other House on producing a Statement that was as non-party political as possible, because we need consensus? It did not refer to the fact that since privatisation the use of the railway has increased enormously, and that all the fears that people had have been entirely reversed. It was right to leave that out of the Statement.
Thirdly, does my noble friend not agree that the grandchildren of the people who objected to the railways being built in the first place became those who were most determined to defend them after they had been built? We have to be very firm with those people who, for understandable reasons, do not understand that this country has been held back by its failure over many years to invest in infrastructure. Recent years have seen great change, with the growing of Crossrail and the rest of it. We are a very much more advanced country as a result. Frankly, nimbyism must not be allowed to stand in the way of Britain growing. Will my noble friend be tough about this? It will be easier to be tough if we do this more quickly. The longer we push it out, the more it will be possible for these people to gain support.
My Lords, first, of course I always listen very carefully to what noble Lords say. I am grateful that my noble friend thought that it was a non-party political Statement. However, it did say that passenger activity had doubled. In the past, when I had to repeat a Statement that had rather more political content, the noble Lord, Lord Davies of Oldham, did not resist the opportunity to give me a good and well deserved teasing.
We have failed to invest in infrastructure in the past. However, over recent years we have rather turned the tide and recognised the benefits of railways. I will be as tough as I can, but in my current position my capacity is limited.
My Lords, in my experience, when I hear a Statement delivered by a Secretary of State in the other place claiming that the leaders of all the main parties are agreed on a major matter, it invariably turns out to be wrong. In this case, I am reluctant to spoil the celebration. However, in his first point, the Secretary of State in the other place made no financial and economic case at all for the scheme. While I do not expect to be around in 22 years when the scheme is meant to be finished, I am willing to bet that it will never be completed, because the expenditure that is now stated for the cost of the scheme will be inflated year on year, and ultimately a Government, either on this side of the House or the other, will put a stop to it. I am afraid that that has always been the case with the type of vast public expenditure that the Secretary of State effectively announced today without making any case in its defence.
My Lords, HS2 has a good business case. If local areas seize the opportunity it presents, we can expect the benefits to be even greater. We are continuing to work with stakeholders to realise these benefits. The latest available estimates suggest that HS2 will return around £2-worth of benefits for every £1 spent. HS2 has the potential to generate transport-user benefits with a net present value of up to £48 billion, and revenues with a net present value of up to £33 billion. The construction costs of HS2 are broadly similar to the sort of money we are spending on Crossrail, so the incidence of expenditure on the project will be affordable.
My Lords, there was one slightly opaque sentence in the Statement, which otherwise I welcomed. It referred to consultations with the Scottish Government. Might I persuade the Minister to enlarge a little on that? The last thing we want is a good, high-speed service as far as the north of England and then second-rate ones thereafter.
My Lords, I can assure my noble friend that there are ongoing discussions on that particular issue between my right honourable friend the Secretary of State and the Scottish Government. The southern portion of the HS2 system has the better business case and therefore it makes sense to start that first, safe in the knowledge that Scotland will still benefit from the reduced journey times to London.
My Lords, this is a visionary and exciting day, but is it not ironic that most of the existing railway network in this country outside London was built in about 20 years in the Victorian period, whereas it is going to take 20 years to build one and a half new lines now? Is it not time that people started to look at a long-term vision of high-speed rail in this country, extending from the north-east of Scotland to the south-west of England as well as routes to London?
My Lords, the first point is that our democracy is a little bit more developed than when we started the railway system in the United Kingdom; it was easier to secure parliamentary approval in those days. I recognise that HS2 does not do anything for the West Country in itself, however noble Lords will know that the Great Western is a very fine line.