High Speed 2

Before I call the right hon. Member for South Northamptonshire (Andrea Leadsom) to move her motion, eight Members have notified me that they intend to speak, and I suspect many more may wish to intervene. We only have an hour. I do not want to limit the key points that anyone wishes to make, but if we can have a little brevity, it would be greatly appreciated.

I beg to move,

That this House has considered the business case for High Speed 2.

It is a pleasure to serve under your chairmanship, Mr Hosie, in my first debate as a Back Bencher in more than five years. I am delighted to have this opportunity to discuss one of the biggest concerns for many of my constituents, and to outline why I believe that the business case for High Speed 2 must be urgently reviewed by the Government.

I first became aware of HS2 when it was proposed in 2009 by the then Labour Government. Investment in infrastructure, creating jobs and growth, improving travel times between our major cities, and closing the north-south divide were all put forward as reasons in favour of the UK’s second high-speed train line. However, those supposed benefits unravelled one by one, and it quickly became apparent that HS2 is not the right infrastructure project, will not improve point-to-point travel times, and will not close the north-south divide. It will create jobs, yes, but at an eye-wateringly expensive rate, far beyond what we might expect from a similar project.

Those of us who expressed concerns about HS2 even while it was still in consultation were dismissed by others as nimbys and told that we were flat wrong about the wider benefits that HS2 would bring to the north. I was then and continue to be willing to be proved wrong, but with the delay to the notice to proceed, growing concerns about the project’s spiralling costs, ongoing engineering and design difficulties and, even now, the rumours that the line past Birmingham might never be built, it is high time for the project to be thoroughly reviewed to ensure that it will actually deliver for taxpayers.

It is a pleasure to hear the right hon. Lady speaking in a debate, rather than her listening to me asking for one. Does she recall the number of times that I have said in the Chamber of the House of Commons that HS2 will cost much more? Every time I said it, £10 billion more, and going past that. Now, it is accepted that it will cost £100 billion. Does she agree with that figure?

The hon. Gentleman has raised the issue a number of times, and it is true to say that many think the costs will overrun. I will come back to that.

For me, both as a concerned constituency MP and as someone with 25 years of experience in finance, including project finance, I am alarmed at just how much the business case for HS2 has changed since the project was initially proposed. The business case that HS2 relies on now bears little resemblance to what Parliament was told at the start of the process—if I cast my mind back to when I first became an MP in 2010—nor to what we voted on when the enabling legislation was passed, which I voted against, or when the subsequent main legislation was enacted.

First, we were told that HS2 was about reducing journey times and improving the economy by bringing businesses and workers from the south to the north to spread economic prosperity around the country. Then we were told it was about capacity constraints on the west coast main line, and managing the continual growth in annual passenger numbers. Both arguments no longer stack up.

On improved journey times and associated productivity gains, the underlying assumption built into the business case for HS2 was that any time spent travelling for business purposes was wasted time, and that business travellers undertake no productive work while travelling. In the 21st century, technological advances such as mobile devices and improved wireless internet connections clearly mean that work and leisure activities are increasingly mobile, and increasingly affordable and accessible for rail passengers. Such advances are expected to continue.

I have great respect for the right hon. Lady, but she is fundamentally wrong on this issue, although she is right to criticise the way in which the Department for Transport uses travel times. In the assessment of all transport infrastructure, the Department fails to take into account the economic investment that always follows investment in transport. The case is the opposite of what she is saying: it underestimates the benefits from HS2.

The hon. Gentleman makes my point for me: the business case needs to be reassessed with accurate underlying factors taken into account. It is the case that the more productivity on trains increases, in particular as faster fifth generation—5G—mobile internet is rolled out across the country, the less valuable the journey time savings are, and therefore the smaller the estimated benefits of HS2 become on those measures.

My right hon. Friend is talking about journey times, and I completely agree with her that this is not about journey times. She also mentioned capacity, and it is about that, but it is also about one more thing—connectivity. We have not had a new railway line north of London for 150 years. Surely now is the time to improve our infrastructure and to make our trains and lives fit for the 21st century.

My hon. Friend is absolutely right—we certainly need to invest in our rail infrastructure—but my question is whether HS2 is the right piece of infrastructure.

The argument for the business case around journey times and productivity quickly collapsed, and HS2 Ltd turned to arguing for capacity instead. That capacity argument has been questioned almost since it was first made, and most recently by the Lords Economic Affairs Committee in its report of May this year, “Rethinking High Speed 2”.

The original business case for HS2 was put forward at a time of strong and continued growth in passenger numbers in the preceding years, and the expectation was always that this growth would continue unabated. That is not the case. I made that point in 2011, when I led an HS2 debate on the Floor of the House. As I said then, HS2’s forecasts were “heroic” when compared with Network Rail’s numbers over the same period. According to the Commons Library, across the entire rail network, annual passenger growth peaked in 2011 at about 8%, and growth has been on a downward trend since then. Passenger growth between London and the west midlands has now fallen to 2% growth per annum, against a decadal average of 6%.

It is true to say that the west coast main line is the busiest mixed-use rail corridor in Europe, with 15 fast trains coming into Euston in most peak hours of the week and little to no availability in that period for additional train paths. However, capacity on the trains themselves is a different matter. As anyone who travels at rush hour between Euston and Milton Keynes—as I do frequently—will know that there is always high capacity pressure on any of the trains during that peak period: about 95% of all available seats on morning peak arrivals into Euston are occupied, with many trains cramped and uncomfortable. Again according to the House of Commons Library, across the entire day only about 60% of all available seats into Euston are in use. For the other major cities on the line of route—Birmingham, Leeds, Liverpool, Manchester and Sheffield—across the entire day, all of those stations operate at less than half their passenger capacity in terms of seat availability.

Will the right hon. Lady give way?

Very briefly.

As the right hon. Lady knows, I am a very experienced traveller between Wakefield and London, and know the routes well. May I ask her to pay attention to my hon. Friend the Member for Blackley and Broughton (Graham Stringer), from Manchester, because he is wrong? All the research in France and other places shows that having super-speed or high-speed trains sucks power away from the regions. What has happened in France? More power to Paris, and less to the provincial cities.

I fear that I am very much aware of what the hon. Gentleman says, and I agree with him.

Clearly, therefore, much of the capacity constraint on the west coast main line is spatially and temporally specific, being focused on the peak rush hours, and only in Euston and Birmingham. The biggest issue is crowding on individual trains at those times, rather than crowding throughout the day.

Does the right hon. Lady agree that HS2 will free up the main line so that freight will be able to operate more freely, which will help with congestion on our roads and be far more beneficial to the environment?

The hon. Lady is right that building a train line frees up capacity for freight lines and all sorts of other things; the question is the business case for this particular project. The question must be asked: is it worth spending £55.7 billion of public money, as allocated by the Department for Transport, to alleviate crowding issues in the morning and evening peaks? The main alternative considered by the Government, known as the strategic alternative, could have achieved the same result at a much lower cost, through a combination of infrastructure and rolling stock upgrades, at a cost of around £4.9 billion in 2011 prices. Additional capacity and more fast-line services could be delivered via Euston to relieve the specific pressure points during the peak-hour rushes, rather than building a whole new line that would create unneeded capacity throughout the day.

The Lords Economic Affairs Committee report concluded that the Government have

“yet to make a convincing case for proceeding with the project”

and it has

“not seen convincing evidence that the nature of the capacity problem warrants building HS2.”

On the point about finance, is the right hon. Lady aware that HS2 has entered into an astonishing 270 or more non-disclosure agreements with third parties? Does she agree that the Government should make public the number of non-disclosure agreements, settled agreements, compromise agreements and any other arrangements that include non-disclosure provisions with former staff members?

Does the right hon Lady share my concern that funding from an unauthorised redundancy payment scheme operated by HS2 was used to fund some or all settlement or compromise agreements with former senior staff? In some cases, those staff were regarded as having made serious protected disclosures about their concerns over HS2’s financial statements. Transparency is essential in the funding of this project. Does the right hon. Lady agree?

The hon. Gentleman mentioned that to me yesterday, and I am gravely concerned. As all right hon. and hon. Members will know, I am extremely unhappy at the prospect of non-disclosure agreements preventing whistleblowers from coming forward with information that is vital to the public interest or their own personal interest. People should not be gagged under any circumstances.

I congratulate my right hon. Friend on securing this debate on a topic we have discussed many times. I voted against HS2 at every opportunity in the House of Commons. In 2013, I predicted that it would cost in excess of £100 billion. The then Secretary of State laughed, and I think he was quite right to—it is clear that the project will be far in excess of £100 billion.

Does my right hon. Friend recall the report by Sir John Armitt in August 2018? His committee stated that, given that hubs are no longer in the centre of cities but on the outskirts, an extra £43 billion of infrastructure spending would be required to make use of the current hub sites that have been chosen. That has not been programmed into the budget at all.

My hon. Friend makes an important point about the lack of point-to-point movement in HS2. Passengers do not end up at the Bullring in Birmingham, or in the west end of London; they just end up somewhere on the outskirts wondering how on earth they will get to where they want to.

The business case for HS2 is seemingly not based on improved journey or improving capacity on journeys between the cities along the line of route. That was alarmingly confirmed by the chief executive of HS2 Ltd, Mark Thurston, in November last year, when he appeared before the all-party parliamentary rail group. At that meeting, Mr Thurston remarked that to remain on time and on budget, HS2 Ltd was considering fundamental changes to the project, including, but not limited to, reductions in the speed that HS2 trains will operate at and reductions in the total number of trains per hour.

With fewer and slower trains, it is hard to understand how the business case can be maintained, given the growing lack of incentive for passengers to choose to take a more expensive HS2 train over a classic service. I have asked HS2 Ltd to confirm whether it is modelling the impact of such changes, but so far I have been unable to obtain a definitive response.

As the former chairman of HS2 Ltd, Sir Terry Morgan, said when he appeared before the Economic Affairs Committee on the 22 January, nobody, not even he as a former chairman of the project, can say with any certainty what the final cost of HS2 will be. That cost has gone up and up over the years. In February 2011, we were told that HS2 would cost £37.5 billion. By January 2012, that figure had crept up to £40.8 billion. In June 2013, we were told the total cost had risen to £50.1 billion. Today, based on the funding envelope set out in November 2015 —not an estimate of the cost but rather the money available from DFT for the project—we are told that HS2 will cost the British taxpayer £55.7 billion. That is £55.7 billion for a single train line.