High Speed Rail (Preparation) Bill

Lord Adonis Excerpts

Tuesday 19th November 2013 Lords Chamber

[Lord Adonis (Lab)]

My Lords, this is my first opportunity in the House to congratulate the noble Baroness, Lady Kramer, on her appointment as Transport Minister. I do so very warmly.

The previous Government started work on what became HS2 five years ago. In March 2010 we published the Command Paper that set out the case for HS2, together with the detailed route plan from London to Birmingham and the outline plan to extend the line from Birmingham to Manchester, Derby, Nottingham, Sheffield and Leeds, linking to the existing main lines to Liverpool, Newcastle, Glasgow and Edinburgh. HS2 transforms connections between London and the major cities of the Midlands and the north in the spirit of the great Victorian pioneers who built the main lines from the 1830s—starting with Robert Stephenson’s London & Birmingham Railway—upon which we still depend today.

It was always clear to me that without cross-party agreement and a fixity of national purpose to rise above short-term party politics, HS2 would never happen. HS2 through to Manchester and Leeds is a 20-year project. The golden rule of high-speed rail is that while everyone wants the stations, no one wants the line. From the outset of planning HS2, I therefore consulted with the Conservatives and the Liberal Democrats, and the Cabinet agreed to publish the Command Paper in 2010 only on the basis of their support. I am glad to say that the coalition Government have maintained this cross-party approach and very largely stuck to the 2010 plan for HS2. We may disagree on other areas of transport policy—for example, I am proud that East Coast is doing such a good job for the public as a state company and believe that it ought to be allowed to continue as such—but on HS2 I acknowledge the constructive role played by the Prime Minister, the Secretary of State and other Ministers in keeping this a national project, not a party project. This approach is fully reciprocated by my right honourable friend the Leader of the Opposition.

I also applaud the decision to appoint Sir David Higgins as chair of HS2. The biggest infrastructure project in Europe needs the best infrastructure manager available. Sir David Higgins, fresh from delivering the 2012 Olympics on time and on budget, is the very best. As with all major infrastructure projects, HS2 has experienced some teething problems. Sir David must get a firm grip on management and costs at HS2, including the recent increase in the total projected cost from £32 billion to £42 billion—an increase largely due to a sudden, and in my view hard to justify, decision by the Treasury to impose an extra £6 billion of contingency reserve on the project, taking the contingency reserve alone to £14 billion. HS2 cannot be “at any price” and this represents a 50% contingency on the costed design of £28 billion. We look to Sir David to review these costs and to stress-test the figures with some urgency. I was glad to hear what the noble Baroness said about that. I know that Sir David will also take to heart the good advice on project costs and management from the noble Lord, Lord Heseltine, in his excellent lecture on HS2 to the Royal Town Planning Institute last week.

I will say a few things about the history of HS2. There have been claims that the 2010 Command Paper was not a thorough analysis, that I and others were kidnapped by rail fanatics who bamboozled us into mortgaging the Exchequer simply to cut half an hour off the journey time from London to Birmingham, and that the whole project has had to be relaunched on the basis of capacity rather than speed. None of this is correct. Capacity is and always has been the central argument for HS2. The 2010 Command Paper could not have been clearer. It set out the previous Government’s intention to proceed with HS2 in these words:

“The Government’s assessment is that over the next 20 to 30 years the UK will require a step-change in transport capacity between its largest and most productive conurbations, both facilitating and responding to long-term economic growth … alongside such additional capacity”—

I stress those words—

“there are real benefits for the economy and for passengers from improving journey times and hence the connectivity of the UK”.

So, capacity first, with speed and connectivity significant additional benefits. That was the argument for HS2 in 2010, it is the argument in 2013 and, if we see this through, it will be the argument on its completion in 2033—and no doubt on HS2’s centenary in 2133—because capacity is the fundamental problem, solved for a generation and more by HS2. It is a problem that, if not solved, will mean that in just 10 years’ time we will have to start closing the north-south intercity railway to new business, which would be a betrayal of the future prosperity of this country, given that HS2 connects the five principal cities and conurbations of the UK.

The facts on capacity are compelling. Long-distance rail demand has doubled in the past 16 years alone; the trend growth rate is 5% a year, consistently ahead of economic growth, as other modes of intercity transport such as motorways and domestic aviation become saturated or simply unavailable, and as railway services steadily improve.

Furthermore, HS2 does not just meet rising demand for intercity travel; by freeing up substantial capacity on the existing lines, it also provides a huge capacity boost for freight trains and for commuter and regional passenger services. Rail freight volumes have increased by more than 50% in the past 20 years and continue to grow fast. Moving freight from road to rail is a national imperative, placing a special pressure on the west coast main line, which gets most of the relief from the additional capacity of HS2 since 43% of all rail freight movements in the country use it to get from the ports to the nation’s major goods distribution centres in the Midlands.

As for commuter rail, demand has also increased sharply over the past 20 years, particularly into the biggest cities served by HS2—London, Birmingham, Manchester, Sheffield and Leeds—because the big cities are the national dynamos of population and employment growth, and they will continue to be so as the UK’s population increases by a projected 11 million people in the next two decades. Here, again, HS2 is an essential congestion-buster, to the benefit of dozens of towns and cities in and around the major corporations. Coventry, Wakefield, Bradford, Stockport, Leicester, Peterborough, Stevenage, Bedford, St Albans, Cambridge, Milton Keynes—the list of beneficiaries goes on.

The question before Parliament and the country is this: if not HS2, what? Given that we are not going to be building new intercity motorways or encouraging more domestic aviation—nor should we—the only alternative to HS2 for dealing with the capacity crunch is massive further upgrades of the existing Victorian main lines. This would be very expensive and destructive and yield only a fraction of the capacity and other benefits of HS2. You do not need a crystal ball to appreciate this reality. It is only five years since the most recent upgrade of the west coast main line was completed; it cost £9 billion and entailed a decade of constant chronic disruption, at weekends and often on weekdays too, without services or with severe delays and diversions. Upgrading a busy main-line railway is like conducting open-heart surgery on a moving patient—horrendous for all concerned.

The 2010 Command Paper estimated that to achieve two-thirds of the capacity of HS2 by conventional line upgrades, just for London to Birmingham, would cost more in cash terms than HS2. In practice, though, many of those proposed upgrades, like four-tracking the Chiltern line, are simply unattainable. If I was in any doubt about that, I have been seriously disabused by the large number of your Lordships who live in the Chilterns and rightly treasure it, and who have given me freely the benefit of their advice on these matters.

The present Government have since identified a more credible upgrade alternative from London to Birmingham, Manchester and Leeds, which is set out in chapter 6 of the strategic case document that was published last month. The key points about the upgrade alternative are these. First, the upgrade is projected to cost £19 billion. That is nearly half the cost of HS2 but the capacity increase would be less than one-quarter—so half the cost for one-quarter of the capacity.

Secondly, that increase in capacity would be insufficient by the late 2020s even to keep pace with the lower of the growth projections for intercity traffic set out in the Government’s strategic assessments. So in all likelihood we would complete the upgrades of the existing lines, spending £19 billion, only to be faced with the prospect of either carrying out yet more expensive upgrades to the existing main lines or, at that stage in the 2020s, of embarking on HS2. That would be an even more expensive repeat of the situation that we now face in taking forward HS2, having already spent £9 billion on the most recent upgrade of the west coast main line when we might have done better to have started HS2 15 years ago.

Thirdly, the £19 billion price tag for the upgrade alternative does not take into account the chronic disruption of the upgrades in question—the open-heart surgery on the moving patient that I just described. Look at the description of these upgrades and you will see that to undertake them would require, as the Minister said, the equivalent of 14 years of continuous line closures every weekend. Furthermore, the list of projects involved in the £19 billion upgrade alternative, with its 14 years of disruption, is colossal, to say the least: a new 30-mile stretch of tunnel and surface line to get the east coast main line out of King’s Cross, avoiding a series of acute existing bottlenecks including the Welwyn viaduct; the rebuilding of most of the major stations on all three of the main lines going north from Euston, St Pancras and King’s Cross, including those three termini, to accommodate more platforms and longer trains; and four-tracking a lot of two-track sections of line, including in urban areas. The idea that this would be an easy alternative to HS2, let alone a cheap one, is wishful thinking, to put it mildly.

It is true that putting the £19 billion upgrade option through the Treasury’s benefit/cost ratio methodology produces a somewhat, but not much, higher ratio figure than comes out for HS2, but from my experience of major transport projects I would always be cautious about the value of benefit/cost ratios because they involve so many artificial assumptions. The M25, the Victoria line and the Jubilee line extension all had low benefit/cost ratios and faced a deeply hostile Treasury, but which of those do we now think it would be a good idea to close? All three of them have recently been upgraded to deal with congestion.

Much has been made by the critics of HS2 of the value given in the benefit/cost ratio to the benefit of time saved by business travellers, as if they were not able to work on trains. Equally artificial, though, and far more significant in its impact on the BCR for HS2, is the fact that the benefit/cost methodology caps traffic growth projections in 2036, only three years after the opening of HS2, on the grounds that further growth thereafter is too speculative. Do any of your Lordships seriously think that traffic will stop growing in 2036? Brunel did not build the Great Western Railway on the assumption that there would be no traffic growth after 1870—thank goodness, otherwise the GWR would have been built single-track. He might even have been told by a Treasury economist that upgrading the canals offered better value for money. Nor did we build the M25 thinking that traffic would stop growing in 1995, which would have been an equivalent assumption. What is needed here is a dose of common sense plus a grasp of history, which shows that in Britain, with our historic aversion to major infrastructure investment, we have consistently under- estimated the value of better transport links serving our major population and economic centres.

I have a few other points to make. Faster journey times, although not a principal reason for HS2, are a considerable benefit that cannot but be advantageous to the unity of Britain and the strength of its economy. As HS2 proceeds further north, the time savings become steadily greater: an hour off every journey between London and Manchester, Sheffield and Leeds. Journeys will be further shortened by the proposed interchange between HS2 and the new Crossrail line at Old Oak Common, just west of Paddington. This will give an 11-minute connection direct to Heathrow and fast underground trains direct to the West End, the City and Docklands without going via Euston and its congested Victoria and Northern lines. This could be a rare British example of joining up two major traffic infrastructure projects at the point of conception.

The second point is that the notion peddled even by some reputable commentators that bringing northern and Midland cities closer to London will suck the lifeblood out of them is utterly farcical. If it were true that modern transport connections between great economic centres were a negative factor, we should close existing motorways and intercity rail lines because Manchester, Birmingham, Sheffield and Leeds would be better off without them, prospering in splendid isolation.

The third point is that HS2 not only dramatically improves connections between these cities and London but between the cities themselves, as the noble Baroness said. This is a crucial part of the connectivity improvement brought about by HS2. The Victorian railway companies built mostly separate main lines from provincial cities to London, which is why rail links between most of our provincial cities remain terrible. Birmingham and Manchester are only 67 miles apart, yet the rail journey takes one and a half hours. It is 40 minutes by HS2.

Fourthly, while I do not think that just because most other developed countries do things we should follow suit, I believe that when a technology has proved successful elsewhere we should take note. Almost every developed country with an economic geography similar to ours has over the past generation built high-speed rail to link their major cities. Japan started in 1964 with Tokyo to Osaka, about the distance from London to Glasgow. Since then, France, Italy, Germany, Spain, the Netherlands, Belgium, South Korea and Taiwan have all followed suit. China is constructing more high-speed rail than the rest of the world combined, and the United States is building its first line from LA to San Francisco—two major cities also about the same distance apart as London and Glasgow.

In conclusion, I am not aware of a single country that has introduced high-speed rail between its major cities and now thinks it was a mistake. They know that high-speed rail is integral to building a modern economy and a modern society. I believe it will be the same here in Britain, so we should get on with HS2.