What plans he is making for high-speed rail connections between London and the north of England.

As I announced to the House on 15 January, a new company, High Speed 2, has been formed to develop the case for high-speed services between London and Scotland. Yesterday, my noble Friend the Minister responsible for rail wrote to Sir David Rowlands at HS2, setting out what the Government expect of the new company. As a first stage, it will report by the end of the year with a proposed route from London to the west midlands, setting out any necessary options, including for stations. It will also consider the potential for new lines to serve the north of England and Scotland.

Does the Secretary of State not agree that

"the time is right now for us to start thinking about high-speed rail as an alternative to air transportation", to quote the new US President, Barack Obama?

Not only are we thinking about high-speed rail, but we have put our plans into action. We have formed a new company, whose job is to advise the Government on how—not whether—high-speed rail will be done. I have asked it to produce by the end of the year practical proposals for bringing forward high-speed rail lines in the United Kingdom.

Following the decision on the inter-city high-speed trains, does my right hon. Friend agree that the award of the contract to Hitachi/Agility Trains means that if the manufacture of the trains does not involve many UK parts, there could be a sharp decline among companies in the supply chain for the rail industry in the United Kingdom?

My hon. Friend rightly represents effectively the interests of his constituents. He has put his case firmly to me, both on the Floor of the House and in private conversations, and he has been understandably vigorous in arguing for the people he represents. However, I emphasise to him that, as the House will be aware, decisions of this kind are governed by clear rules. We have followed those rules scrupulously in reaching the decision that I recently announced to the House.

It has taken 11 years for the Government to get to the stage of talking about a high-speed rail link—one that would go all the way up to Birmingham. That is where we are, but will the Secretary of State ensure that the interests of the north-east are considered? Given that the joint economies of Leeds and Sheffield alone, the two drivers of their region, total more than £30 billion—never mind the two city regions—will he ensure that at the next stage, the high-speed plans are brought to Yorkshire, and not only to Manchester? Frankly, we are sick of people seeing Leeds as a suburb of Manchester, as the Conservative party seems to believe it is.

I encourage the hon. Gentleman to go along to St. Pancras station and see the existing high-speed line that provides services to the channel tunnel and that will very soon provide high-speed services to the commuters of Kent and the south coast. We have built a high-speed link on time and on budget. He is right that it is important that the benefits of that link should be extended across the country; that is precisely why we set up High Speed 2 as the company to advise us on the practical steps that we need to take next in order to deliver that.

Will my right hon. Friend address the possibility of the electrification of the midland main line? As he will know from his experience of commuting to London, we are somewhat the poor relation. We were pleased to see that identified as a possibility in recent Government soundings. Can he give us more information on when we might know more about the timetable for that?

I share my hon. Friend's view. It is important, as I set out on 15 January, that we look at capacity questions on our network, including a consideration of electrifying the Great Western main line as well as the midland main line, which serves his constituency. I anticipate that I will receive further reports about that later this year and will make an appropriate statement to the House.

We have heard the Secretary of State confirm this afternoon that the Government will make an announcement on a high-speed rail proposal next year. Will he pledge to the House that that proposal will match the Conservative commitment to building a high-speed rail line connecting London, Manchester and Leeds?

I made it clear that that announcement would happen this year. The difference between the two proposals is that ours will be a thought-through, well-considered, carefully costed proposal by experts in the railways, in contrast to the large envelope on which the hon. Lady scribbled a few lines to produce the Conservative plans. I challenge her on this; she can write to me or put out a press release. The shadow Chancellor has indicated that his priorities for spending for a potential Conservative Government include handing out large amounts of money in the form of reduced inheritance tax to a handful of multi-millionaires ahead of any efforts that she has been able to make to encourage a Conservative Government to spend money on transport.

I think we can take it that the answer is no. The Minister of State yesterday and the Secretary of State today confirmed that, even if the Government decide to go ahead, the only routes that they are asking HS2 to consider for the proposal that it is publishing, whether this year or next year, are between London and the west midlands. In February, the Secretary of State told the Lancashire Evening Post that the proposal that is being put together is for a line that gets only as far as Rugby—a mere 80 miles from London. Why does not he just admit that Labour is struggling to catch up with the agenda that the Conservatives have set on high-speed rail and that it is manifestly failing to match our vision and commitment to a high-speed rail future for the north of England?

I am sorry, but nothing that the hon. Lady says about transport can be taken seriously when she proposes to cut £840 million from the transport budget. If she cannot persuade her own shadow Cabinet colleagues of the importance of transport, how does she expect to persuade the House or the country of anything that she says on the subject of transport?