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HS2: Cost

Volume 737: debated on Tuesday 5 September 2023

1. What discussions he has had with the Secretary of State for Transport on the cost of HS2. [R] (906193)

The Chancellor launched the efficiency and savings review in the autumn statement to focus on the Government’s priorities and identify ways in which to work more efficiently and help to manage budgetary pressures from higher inflation. The Secretary of State for Transport and I discussed the costs of HS2 during the review, which helped to inform the decision to rephase certain parts of the project as part of balancing the nation’s books.

The travel between north and south is the bit of transport infrastructure that works; it is the travel across the north that does not work. What would the cost of HS2 have to reach for the Government to conclude that it no longer represents value for money for the taxpayer, or are the Government pursuing the essentially socialist policy that they will keep paying for this ridiculous white elephant irrespective of the final bill?

I took the precaution of researching my hon. Friend’s interest in this subject, and I note that he was issuing challenges on it 14 years ago. The Government remain—as they were then—fully committed to delivering HS2 and the integrated rail plan. This is a long-term investment that will bring our biggest cities closer to each other. It will boost productivity, and will provide a low-carbon alternative to cars and planes for many decades to come. As my hon. Friend knows, we are also working, through the IRP, on a £96 billion package to improve inter-regional rail connections, which obviously affects his constituents.

Does the Minister agree that this country’s performance on productivity has been pitiful over the last 10 years? There has been virtually no improvement in productivity, and one reason for that is our lack of investment in national infrastructure. Slowing down HS2 is a bad move when it comes to improving our infrastructure, and it is years since we agreed to a third runway at Heathrow. Does the Minister agree that if we are to improve our productivity, we have to invest in infrastructure?

I can agree with the hon. Gentleman that the investment of £600 billion in infrastructure in all parts of the country to which the Government are committed is critical to easing the productivity challenge that has faced successive Governments, and the Chancellor will introduce measures in the autumn statement to address it further.

HS2’s costs have ballooned since it was first conceived under the last Labour Government. As my right hon. Friend has said, owing to pressure from the Treasury the project has had to be rephased, and trains will now go from west London—not central London—to a station not in central Birmingham, which negates the benefits that the scheme’s proponents said it would bring. With costs ballooning still further, we just cannot afford it, can we?

I am sorry, but I do not agree with my hon. Friend. I certainly recognise that infrastructure investments of this scale and with this level of ambition are never easy to deliver. I have set out the changes to the profile of the investment, but all the key elements are still on track, and we will continue to work with the Department for Transport to ensure that that remains the case.

Is the Minister not also concerned about cost-benefit analysis? Have not assumptions behind the pattern of business travel demand been changed dramatically by the pandemic, working from home and video conferencing? Is the Minister satisfied that the Department for Transport has properly re-evaluated HS2 to take account of such changes?

Yes, I am content with that. I recognise those changes in patterns of behaviour when it comes to the use of public transport, but we also face cost of living challenges. That is why we are working so closely with the Department for Transport to, for example, continue investment in buses over the next two years, and continue to spend £200 million on capping fares to £2 outside London. We must bear in mind, however, that continued investment in transport infrastructure is key to greater connectivity across the United Kingdom and dealing with the economic growth imperative.

It has been reported over the last couple of days that accommodating HS2 will mean fewer trains between the north and London. One station affected is Wilmslow in my constituency. Does the Minister agree that were that to happen, HS2 would no longer be value for money or good for the north? It would certainly take longer and cost my constituents more.

HS2 is going to happen. The question is what additional investments across other parts of the rail infrastructure might benefit my right hon. Friend’s constituents additionally and more directly. I set out with the integrated rail plan the £96 billion package to improve rail connections, and many elements of that will have a direct impact on her constituents in Cheshire.

As the Minister is well aware, North West Leicestershire has suffered under the blight of HS2 for more than a decade, and the whole project has recently been declared to be undeliverable. It has been unaffordable for some considerable time. Will he urge his colleagues in Government to cancel the remainder of the eastern leg and reallocate just a small portion of that budget so that we can reopen the Ivanhoe line?

I recognise that the hon. Gentleman has strong views on this, and I know that he has been personally affected by it in the past. The project, although it has been rephased, will continue. There are a number of issues involved in ensuring tight management of that budget, and I am working closely with the Department for Transport to see that that happens.