What the current budget is for High Speed 2.

What the current budget is for High Speed 2.

The spending round of 2013 set a long-term budget for the delivery of HS2 of £42.6 billion. That is made up of £21.4 billion for phase 1 and £21.2 billion for phase 2. The budget includes significant contingency provision of £14.4 billion. That budget is being tightly monitored by the Government and we are confident that the railway will be delivered for less than that figure. I have set HS2 Ltd a “target price” for phase 1 of £17.1 billion.

France, Germany, Japan and many other countries have benefited hugely from their high-speed rail links, and many of us are fed up with a largely London-based commentariat that is seeking to stop a north-south high-speed rail link for this country, but does the Secretary of State agree that, if we are to build a better consensus, it is extremely important that the budget figures he referred to will be both monitored and met?

I completely agree with the hon. Lady. We have a good record of delivering big projects on time. The Crossrail scheme, which is being built at the moment, involves more than £14 billion and is the largest construction project in Europe. It will greatly enhance transport in London; it is essential, but HS2 is essential for the rest of the country.

The Secretary of State has outlined the significant budget of the HS2 project, but what assurances can the Government give me and the people of Swansea East that they will give full consideration to the proposals of the Howard Davies commission and the benefits of a future high-speed rail link between Cardiff and Heathrow airport?

I do not want to anticipate or prejudge what the Davies commission report will say. The commission is very important and its interim report is due by the end of the year. The hon. Lady makes a point about infrastructure and the rest of the railway network. It is essential that we carry on investing in rail services in other parts of the country and, over the next spending review, Network Rail plans to spend some £37.5 billion on the current railway network.

The Secretary of State was forced this week to launch a so-called fightback with a piece of expensive and self-justifying research from KPMG on HS2, because he has lost control of the budget and of the arguments, including the need to travel at speeds in excess of 250 mph. It is about time that we replaced HS2 with a thoroughly researched and prepared integrated transport strategy for all regions, including Wales, and covering air, road, rail and communications links. When will he cancel that project and produce a decent overall strategy?

I am not sure I was forced to do anything, but I was asked by the Public Accounts Committee to do proper research and to back up the case for HS2. I dare say that if yesterday’s report had come out negative, all those people who are against HS2 would have been shouting it from the rooftops. Because it came out positive, they are opposed to it.

The KPMG report showed that every region of Britain will benefit from plans for HS2 to go as far as Leeds and Manchester, but Scotland and the north of England would benefit even more if the lines extended to Glasgow, Edinburgh and Newcastle. How are the Secretary of State’s discussions with the Scottish Government progressing in that regard?

I am prepared to have the meetings with the Scottish Government. I announced last October that we would be looking to take the line to Scotland. That work is ongoing.

The Secretary of State referred to funds to be invested by Network Rail in the classic lines. Will he give an assurance that, in addition, there will be sufficient funds to invest in new passenger and freight services on lines freed by the development of HS2?

Indeed. The hon. Lady who chairs the Transport Committee embarks on an important point. One key problem that any future Government will face is that of capacity on the network, as well as speed, and this line is also very much about capacity. If we made the improvement that some people suggest on the present line, it would lead to capacity increases of about 53% between London and Birmingham. HS2 will lead to a capacity increase of 143%. That is why it is so important to meet the objectives that we both have.

My right hon. Friend says that HS2 is about capacity rather than just speed, so will he instruct HS2 to cut the speed so that the route can be more flexible and do less damage to dozens of communities along the route, including five in my Constituency?

I have tried to say that the case for HS2 is not just about speed and that capacity is one of the main reasons for it. Although the reduction in journey time between London and Birmingham is not huge—it will be in the region of 30 minutes—for great cities in the north such as Manchester and Leeds the reduction will be very beneficial. There is not just one reason; there are many reasons for doing this project. Even if we took the line down to a lower speed limit, it would not reduce the cost by much—we would be talking about 90% of the present cost, rather than 100%.

I agree with Mrs Gillan. Has the Secretary of State looked at an alternative integrated rail system, as opposed to high-speed rail? Is there a Treasury limit on spending for that project?

I have set out carefully the spending limit, and we have a put in place a reasonable contingency, based on internationally recognised figures. It is a big contingency and I hope, as the chief executive of Network Rail said a few weeks ago, that the project could come in under the budget that the Government have allowed.

The KPMG report this week revealed £15 billion of economic growth, mainly in the main conurbations of the north. Will my right hon. Friend confirm that not just those main conurbations but smaller towns and cities such as Chester will benefit from new and increased services because of increased capacity on the west coast main line?

My hon. Friend is absolutely right: this does add to the capacity and more services. Since I have been Secretary of State for Transport, I have noticed that my colleagues on both the Opposition and Government Benches always press for more and better services. If we are to adapt that and celebrate the success of railway travel, which in this country has gone from 750 million passenger journeys a year to 1.5 billion, with an increase doubling on inter-city lines, we must find that extra capacity.

There is strong, cross-party agreement that a new north-south line is vital to tackle the serious and growing capacity constraints on our existing rail network. Will the Secretary of State confirm that this investment will not draw funding away from essential upgrades to the existing rail network such as the northern hub, electrification, and new inter-city trains? Does he agree it is imperative that the new north-south line remains on budget and on track?

I entirely agree with the hon. Lady, and she has pointed out three important projects that will take place between 2014 and 2019: 880 miles of electrification; the new purchase of intercity express programme trains for the east coast and great western lines; and the northern hub. Those important projects are planned for between 2014 and 2019, and refer to the £37 billion that I mentioned Network Rail is going to invest in the current railway system.