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Good afternoon, colleagues, and welcome to this afternoon’s evidence session. This panel will finish at approximately 3 o’clock, so measure your questions accordingly. May I ask the witnesses to introduce themselves and their organisations?
One of the core arguments for the line is the capacity challenge that railways face, particularly on the west coast main line. In 2011, Network Rail undertook the west coast route utilisation strategy, and it found that a new line would be the most cost-effective way to meet that capacity demand. As an opener, it would be helpful if you explained why you disagree with that assessment.
Emma Crane: Maybe I could start and anyone else can chip in. In terms of capacity, it depends what kind of capacity you are looking at and whether the objective of High Speed 2 is to deal with long-distance capacity or short-distance, suburban commuter capacity. The original objectives of HS2 were put out as being to do with long-distance capacity on the west coast main line. The 51m optimised alternative, which looks at how to deal with long-distance capacity, provided a solution to the long-distance capacity problem on the west coast main line. The Department for Transport and Network Rail have not disputed that the 51m alternative works for long-distance capacity.
At the time the 51m proposal was produced, we did not have the figures for the loading on the west coast main line for long distance—they had not been made available—but as part of the judicial review process back in December, those figures were made available for the first time. They showed that the loading figure for long distance on the west coast main line was 52%, which appeared to indicate that there was not so pressing a problem of capacity—on long distance, that is. The 51m alternative can deal with a doubling of capacity on long-distance travel.
If you are looking at dealing with short-distance, suburban commuter capacity issues on the west coast main line, that was not specifically addressed in the 51m alternative, because it had not been tabled as one of the strategic objectives for HS2. Had that been one of the objectives, 51m would have been able to address that, because there are obviously solutions. Martin, do you want to add to that?
Martin Tett: A colleague of yours, John Bercow, once described demand forecasts as the rapid moving of goalposts. The issue is, first, about what you mean by demand forecasts. One can argue a lot about the historical accuracy of demand forecasts coming from the Department for Transport. I refer you back to High Speed 1 as a fairly classic case study of demand forecasts for travel that were never ever met or even materialised. There are also issues about when the actual demand is capped. The date of the capping has moved around randomly, apparently to meet actual business case requirements, rather than to reflect any accurate forecast of when demand would peak. If you take the forecasts anyway, the 51m option that we put forward meets all of the demand for capacity that has been forecast by the Department for Transport—all of it. It generates an increase of 217%, based on the same baseline as High Speed 2.
The question put to us when HS2 was originally tabled—I had meetings with the original Secretary of State for Transport on this—was about inter-city capacity; that was the big challenge. That was the challenge that we picked up and that our optimised alternative was targeted to meet. We put frequent freedom of information requests to the Department for Transport to understand how heavily loaded the existing west coast main line was. Those freedom of information requests were repeatedly refused. Eventually, at the High Court, as my colleague said, the Department for Transport was forced to disclose that in the peak period, on the Department for Transport’s own numbers, those trains are only 52% full. In other words, they are half empty.
The issue with capacity—it is deliberately blurred by the Department for Transport—is not inter-city capacity; the issue lies with what it calls commuter capacity, which is really in belts such as Hemel Hempstead, Milton Keynes, Northampton and so on, and what it describes as suburban capacity, which is fundamentally Watford and that inner belt just outside London. They are fundamentally different: they have different trains and they have different issues. We can address all of those issues, because our alternative for the Watford and suburban traffic, which we can easily meet the demand for, involves freeing up train tracks. We can do that quickly, very cost-effectively, far quicker than HS2 will do, and you can do it incrementally as you see demand materialise. So quite frankly, the Network Rail report was a hatchet job to try to convince you, as MPs, that our alternative does not meet demand, but it does.
Joe Rukin: The reality with capacity is that long-distance journeys make up about 10% of the total rail usage in the country, and HS2 forecasts a 2.4% increase in long-distance journeys, to go on for ever; then, apparently, when HS2 is built, there will be a 30% demand increase, simply because of the fact that HS2 has been built. The reality is that the latest figures from the Office of Rail Regulation show that in the first quarter of this year compared with last year, there was a 2.6% decrease in passenger numbers on long-distance journeys, so the figures are actually now going down. The other reality is that, as the National Audit Office reported, the real issue on the west coast main line is the short-distance suburban journeys—one of the issues, of course, being Milton Keynes.
One of the things that seems to be completely ignored is, of course, that when east-west rail gets done—at least from Oxford to Bedford—you will have opened a new path from Milton Keynes into London via the great central line, into Marylebone. That is another issue that will address the short-distance commuting problems. That is the reality—the majority of rail users are not long-distance users. They are people who make short journeys.
It is very easy to make an argument on full capacity, because everyone who has been on a train has been on a busy train; however, the west coast main line is not the place that you would be looking to address first. There are five stations in London that are reporting over 100% capacity in peak hours. The rail utilisation survey again showed that, besides Heathrow Express and of course HS1 into St Pancras, Euston is the third least utilised station coming into London. It is not where you would seek to address the problem.
I know you accept that there is a capacity challenge to be tackled. Many people’s experience would be that on existing peak-time services on the west coast main line, many passengers are already unable to find a seat, so can I just press you a little further? Accepting that we are looking at capacity in the round, not at inter-city rather than shorter distances: to address capacity on our rail lines, as opposed to individual trains, are you favouring the high-cost peak-time tickets in order to manage passenger demand, or do you have other proposals about how we meet our capacity challenges, and can you be a bit clearer about what those are, other than the 51m proposals that Network Rail examined?
Martin Tett: Well, if I can try to respond to that: first, the 51m proposal put forward was not properly examined by Network Rail. What they did was judge it against criteria that had never been in the public domain, in terms of the task that we were being set. They judged it on suburban and commuter capacity, which was not the issue—in fact they never identified HS2’s performance against those, so they completely moved the goalposts. We had offered to come back and discuss any of the outstanding issues that they had, or any questions, but they never once took up that offer. If they had done so, we could have clarified exactly how we met that particular requirement.
The 51m response is a package of measures that frees up capacity on the existing west coast main line. It involves turning some of the existing—frankly, quite poorly used—carriages into standard class carriages, and lengthening the trains. There is an improvement package for some of the junctions, like Ledburn junction and Stafford—in fact, many of those are now being modernised, with the pinchpoints being taken out by an existing programme that the Government have announced. That would mean that with the 51m option, which costs around £3 billion, as opposed to what will be in most people’s mind, which is nearly £70 billion, and I can count those numbers, you could actually free up the capacity you need for suburban and commuter capacity at a fraction of the cost, you could do it incrementally so that you would know that you are spending the money in line with the forecast increase in demand, and you could implement it far more quickly than HS2 would bring any relief to the likes of Milton Keynes or Northamptonshire.
Would it involve and could it involve tariff changes? It could do. One of the issues is that you see demand peak and capacity run short when you have the change in tariff on the existing train. When you get the much cheaper Friday night tickets and students pack on to the trains, it produces a peak in demand—it is a bit like airlines. If you manage your tariff structure, you can smooth out some of that demand; that is an option. The fundamentals of our package are improvements on the existing west coast main line—not digging up the whole track, but fundamentally adding capacity.
Joe Rukin: Just look at the number of rail industry experts who are saying that capacity can be delivered quicker, cheaper and more effectively by upgrading the existing rail infrastructure. David Bayliss, the former director of planning at TfL; David Henderson, the former head of economics at the OECD; David Sawyers—a lot of Davids—the former director of economics at the DFT; and John Smith, the former director of regulation at Railtrack: they are all saying that it would be more effective to invest in the existing rail infrastructure. The best one is Adam Mills, who is the former director of Eurostar. You may have read his letter in The Times last week in which he was basically saying that it would be far wiser to spend money on traditional rail enhancements. He spent two years trying to justify the unjustifiable in the forecasts for HS1 and, of course, the forecasts of what HS1 would bring in terms of economic impact in the areas it serves.
Martin Tett: Can there be an MP around this table who does not have a key transport scheme in their area that desperately needs funding, whether it is road or rail infrastructure? If we could deliver the capacity you need at around £3 billion, rather than spending nigh-on £70 billion, the money could be invested far more effectively in the sort of schemes that each and every one of you have. It is the opportunity cost that is fundamentally the question here. Would you really want to spend that amount of money to solve a problem that basically impacts between Northampton and Watford; or would you rather spend that money in some of our great northern cities, in the north-east, in Scotland, in Wales and in the south-west, on the transport schemes that your constituents really care about?
Obviously, that is a question we asked of senior people in Manchester, Birmingham and Nottingham this morning, and they were all very supportive of High Speed 2. I want to come back to a very specific issue on the 51m proposals. Network Rail concluded that, under the 51m proposals, 1,300 passengers from Euston would be without a seat in the busiest hour of the evening by 2026, and it found that by 2035 the number would have increased to 2,200 passengers left without a seat. Is it not the case that your proposals do not fully cover the growth in passenger demand? How would you seek to address the need for extra capacity in order to improve the amount of rail freight that we are able to carry on our network?
Martin Tett: There is a whole series of tiered questions there, with great respect. As I said, the Network Rail report fundamentally blurs the distinction, and I have to keep coming back to this because they are fundamentally different markets. You have suburban capacity, which is basically around Watford; you have commuter capacity, which is the sort of Milton Keynes-Northampton area; and then you have inter-city rail. We do not dispute that there is an issue with the current demand around Watford up to the Milton Keynes-Northampton area, and our proposal would meet that by taking away some of the pinchpoints on those lines so you can run better, quicker and more effective suburban and commuter capacity. Our proposal also meets all of the forecast demand, the 217% increase in capacity, which is in line with the organic growth forecast by the Department for Transport.
Do I think there is an issue that we fail to address? No. Do I think the alternative has been deliberately misrepresented and that the differences in those markets have been blurred in the way that Network Rail has reported? Yes, I do.
Emma Crane: To pick up on the freight point, which I think that you also mentioned, it has been discussed that HS2 is needed so that freight capacity can be freed up on the existing routes. However, a service pattern was published in January 2013 for HS2, and because of the way in which that service pattern works, HS2 would not free up capacity for freight. In fact it is replacing services to existing stations which are not going to be directly served by HS2. Therefore that service pattern takes away the capacity for freight.
If we are looking to increase freight capacity, surely we would need to look at improving and electrifying the lines around the major ports, which is where most of the freight will be coming into before it goes to the rest of the country. As I say, the service pattern published in January 2013 established that capacity is not available for freight.
As somebody who frequently stands up until Doncaster before I can get a seat on the train, I think that the problem might be a little more severe, and extend beyond Watford and Northampton. We heard interesting contributions this morning from the voices of Greater Manchester and the body that brings together all the mets in the country. They were very enthusiastic and supportive of HS2; they clearly believe that the economy of the north of England would grow as a consequence of it. In fact, one of them said that they believed that the economy in the north would decline if it did not happen.
There appears to be quite a disparity—I hope that the Scottish representative will excuse me for a minute—between the south and the north of England in relation to the potential of HS2. I am wondering what the cause of that disparity is. Why are Buckinghamshire and its authorities less enthusiastic than the good people of Yorkshire and Lancashire?
Martin Tett: If you talk, as I think you did this morning, to someone like Professor John Tomaney, who is probably one of the best experts on high-speed rail and its impact on regional economies, you find that most of the evidence, when you look at it around Europe, is that high-speed rail benefits the major capital cities.
There is also a tendency to agglomerate around where the stations are, so if you are in the centre of Manchester it is very likely that you will see a property boom, because lots of people will want to agglomerate around that rail line, which is absolutely understandable; but if you live in Rochdale, Oldham, Burnley, or some of the other cities, you are most likely to see the business that would have gone to your towns go to those particular major stations. It is great if you are the leader of the city councils of Manchester or Leeds; there is lots of prestige in having a brand new, spanking station built at taxpayer’s expense there. However, if you happen to live along the route to some of our many great cities in the Midlands that surround Manchester and Leeds, you are likely to see business that would have been there move to the centre of those cities and the likely loss of existing business to those centres.
Overall, most of the evidence suggests that HS2 will in fact suck business away from those northern towns into London. I refer you to the National Audit Office report, with which I am sure you are familiar, which says that there is no evidence whatsoever for all the exaggerated claims that are made about the north-south divide, regional regeneration and so on. It is great spin to justify an enormous price tag for a project.
May I clarify something? We heard this morning from witnesses who are hardly spin doctors. Sir Richard Leese, who is quite a substantial individual in local government and is entirely respected, said that every single authority in the north-west has supported HS2, and I know that every single authority in Yorkshire, with the exception of Bradfield and Wakefield, has too. We had a conversation this morning about business being sucked out of Oldham, but the witnesses were still absolutely sure that this was boosting business in the north of England and that business would decline if it did not happen. You have explained why Oldham or Birmingham might suffer,, but we did not get to the point of why Buckinghamshire and those authorities are opposed to it when there is near-unanimous support across the north of England.
Martin Tett: Again, there is a whole series of different questions. On why some northern authorities support it, I think there has been a terrific public relations exercise to convince people that this will magically solve the north-south divide. If you look at all the evidence—the National Audit Office report, the extensive work of people like Professor John Tomaney, and the example of what has actually happened to surrounding places such as Lille in France and Seville in Spain—it is not the case that it delivers what is promised in advance. These are great spins to try to get you to approve massive amounts of taxpayers’ money.
Let me answer the other half of your question: why is Buckinghamshire against it? It is clearly being posed as one against the other. As local councils, we are used to having to take very unpopular decisions. Sometimes they are bitterly opposed by local residents. I am in the middle of trying to get an incinerator in the north of my county. It is very unpopular, but we are always mindful of the fact that we are spending taxpayers’ money, so we must ensure that it is good value and that there is a really robust business case. I am absolutely convinced that my project in Buckinghamshire has that.
We are also supporting a railway line through Buckinghamshire. The east-west railway line will run from Oxford to Cambridge eventually. It carves through Buckinghamshire, but it has a phenomenally good benefit-cost ratio in excess of 10:1. The problem when you look at High Speed 2 is that it has an absolutely abysmal business case—not poor; abysmal. If you strip away most of the inaccuracies that the National Audit Office report referred to, and look at the fact that HS2 used out-of-date modelling and tried to include the outdated myth that people do not work on trains, you find that the first stage will lose taxpayers’ money. It has a BCR of less than 1:1. That is an appallingly bad use of taxpayers’ money. As a local councillor, I am very mindful that I am held to account for that money. As MPs, you also need to be mindful of that.
Emma Crane: May I add to what Martin said, picking up on the jobs issue? He said that there is a lack of hard evidence. If you look at HS2’s own figures about job creation, they predict 40,800 jobs for phase 1, but if you look at the detail, only just over 10,000 are permanent jobs because it reckons that 30,000 will come from moving existing retail jobs. That is the concept of premises moving to around where a station will be. It will create very few concrete jobs, and that is based on HS2’s own figures. The other thing to bear in mind is that 70% of those jobs are in London, and again that is HS2’s own figure. The wild claims that HS2 will create jobs in the north are unfounded; to date, we have not seen any hard evidence to prove it. In fact, all the hard evidence available says the exact opposite.
On the opportunity cost of what could be done with that money, if you say to northern cities you are offering them HS2 and that it is the only thing on offer, you can see why they would say yes. They would rather have HS2 than nothing, but will it really bring the jobs and regeneration that are promised? Those northern councils will be asked to contribute towards the cost of HS2 but we do not yet know the amounts. Will they be so comfortable with it when faced with the additional costs?
There is a limited amount of time, and a number of people wish to ask questions, so they should be brief and, more importantly, answers should be briefer.
I notice that Emma Crane is the Scottish parliamentary liaison officer for HS2 Action Alliance. Obviously, you are addressing a UK parliamentary Committee and the prime responsibility for the project is with the UK Parliament and the UK Government. I was wondering what your role is in relation to the Scottish Parliament.
Emma Crane: I think it is just about making Scotland aware of the issues around HS2. I would say this to Scottish MPs and the Scottish Parliament: proceed with caution where HS2 is concerned. We have done a report on HS2 in Scotland. If you look at rail in Scotland, Network Rail’s figures show that 92% of all rail journeys in Scotland begin and end in Scotland. I am happy to write to you with those figures. That highlights that there is not a huge demand for high-speed rail in Scotland, because most of the journeys are within Scotland.
You have to then look at the huge capital cost, because transport is devolved. The annual capital budget for transport is around £300 million and the cost to take HS2 north to Scotland is around £9 billion to £12 billion. That is a huge cost. There is also the opportunity cost of what else you could do with that money in Scotland. There are huge amounts of electrification that could be done in Scotland that are not being done. If you look at the far north of Scotland, speeds are slower than they were 100 years ago. Glasgow has the biggest problem with commuter overcrowding outside of London. My advice to Scottish MPs would be to proceed with caution around HS2. Is it necessarily going to achieve all that you think it might? What else could you do with that money?
I will certainly accept that the minority of journeys that commence in Scotland end in England. Maybe part of the problem is the length of time it takes to get from Edinburgh to London. From Edinburgh Waverley to London King’s Cross takes four hours 20 minutes. I do that journey weekly. Obviously the project, if it is eventually agreed to extend high-speed rail from Manchester and Leeds northwards to Glasgow and Edinburgh, is about reducing the journey times. Would you not see an economic benefit to Scotland as a result of that?
Emma Crane: Again, you have to look at the huge cost of it and the other things that you can do to achieve journey time savings. There are various upgrading works that can be done to the east coast main line to significantly reduce the journey time, and those are not proceeding at the moment. Proceed with caution. Is the £70 billion going into HS2—who knows how much it will end up being—diverting funds away from doing things such as upgrading the east coast main line, which could achieve journey time savings in a relatively short time?
I would like to return to the issue of freight capacity. Taken as a whole, do the 51m upgrades change the number of freight paths on the east and west coast main lines? If so, by how much?
Martin Tett: That is a very technical question, and I could not give you the answer here, but I am happy to give you one by correspondence. The other point that I would make on freight—Ms Crane made this point—is about opportunity cost. Our proposals will cost something around £3 billion, but the total cost of HS2 is £42 billion or £43 billion, plus the cost of the rolling stock and the operating costs. That figure is heading towards £70 billion. With that sort of expenditure, you could make massive changes to the road infrastructure that freight also runs on. I understand that that is not the green aspect, but the reality in the UK is that the vast majority of freight runs on the road. A package that involves upgrading both rail and road would do more on freight than the deployment of extra capacity on HS2. I can write to you with a detailed answer on the freight paths, which I openly confess I am not enough of a geek on.
I would be interested to see that, because for me one of the key arguments is on how we have capacity on our rail system for rail freight. If we consider how international shipping movements are changing, for the UK, that is likely to mean Southampton, London and Felixstowe increasing their share of the freight movements coming in out of the country. Those then have to be transported up the west coast main line and the east coast main line to distribution centres in the midlands and the north-west. That is likely to see a significant increase in freight demand on these key trunk lines. I would be grateful to see how your analysis—your package—would address that problem.
Joe Rukin: I would not trust them to guard a lamp post. HS2 Ltd—there is poor governance, no transparency, and no accountability. We ask questions of HS2 Ltd and we very hardly get answers. What has passed? The community forums that have been taking place recently have basically been for no other reason than an attempt to comply with the Aarhus convention. They have been window-dressing, purely and simply. Very little has happened by them. The favourite quote that we get from HS2 Ltd is, “We’ll get back to you on that one,” and we get very little in the way of answers. There are grossly overpaid staff in HS2 Ltd. For example, the number of people in the media department—we simply do not understand what exactly it is that they do all day, because we see no output from them whatsoever. That is just one straightforward example. HS2 Ltd seem completely out of control.
The worst issue with HS2 Ltd is that they seem to have no concept whatsoever of budgetary control, because the consultants that have been employed by HS2 Ltd have just been effectively given a blank cheque. There is one great example of a contract that was meant to last 18 months, worth £13.3 million. They had spent £14 million in nine months, and it continues to go on. The Euston debacle, which I am sure Sarah Hayward mentioned this morning, is another great example of the fact that there is absolutely no cost control from HS2 Ltd whatsoever, as far as we can see. Costs will continue to escalate, which is our major concern about the Bill, because we see it as a Bill for a blank cheque to go forward in developing HS2, paying that money to the consultants. There are some—I could go on at length, but I am sure that my colleagues want to come in.
Martin Tett: I will give you my view, and I feel like saying I come to bury HS2 Ltd, not to praise them. In fairness, they have a very tough job. Let us be frank about this. They have been given a real challenge to deliver this, given, quite frankly, as I said just now, the abysmal business case, the environmental damage it will cause, the degree of opposition, and the fact that virtually every economist in the country now opposes it. This is a real uphill challenge for them. They have done a number of things over the past couple of years. I think you have interviewed their chief executive, Alison Munro—or she was at the Public Accounts Committee last week. You can form a judgment on her.
In my experience, I think the quality of people—a lot of this comes down to quality of people and competence—is mixed. There are a few reasonable and some pretty good people in HS2 Ltd. I think there are a lot of pretty mediocre people in HS2 Ltd, and I would question the general competence and ability of some of the middle and more junior managers. I say that, trying to be as objective as possible, because they have a very difficult job to do. It is not going to be easy for them, but if you look at the way they have managed their budgets, they have—I think it was last year they came in over budget and needed a supplementary estimate to get them through. They have some incredibly highly paid people. If you look at Alison—it is public domain, so I can say this—her total package last year was £203,000. Compare that with the salary of a nurse or a teacher in your constituencies; do you feel that that is an adequate balance of reward and delivery? Each of you can make that judgment call, but we are spending an awful lot of money. The chairman gets £125,000 for two days a week. Again, is that good stewardship of public money? That is in the published report of accounts so it is in the public domain; I would not mention it otherwise.
Quite frankly, I question whether they are well enough targeted in terms of outcomes. Do we know what they are meant to deliver? Do we know what their key milestones are? Have they met those milestones? Have they always remained within budget? Do you have proper scrutiny, as Members of Parliament, of the budget and expenditure that HS2 is incurring? They are spending something like £360 million as of this year; how many times has Parliament scrutinised that expenditure? Is it good value for money? Are they delivering what they have committed to deliver, and if so how did they get the estimates for the cost so dramatically wrong?
You were rather dismissive of your colleagues from the northern authorities, describing some of what of they had to say as a bit of a PR exercise—they have been sold HS2 and been told, “Take it or leave it; you are not getting the money for other things.” I think that is unfair to them, because I am quite certain that they have thoroughly examined other possibilities. There are advocates, as you will know, who oppose HS2 and have said, “Share the money out among the local authorities in the north—they’d go for that,” but clearly that is not the case.
The previous Government and this one have accepted the city region concept—that a thriving city has a trickle-down effect into the regional economy. You mentioned Professor Tomaney, who did indeed talk this morning about some cities being a magnet; I thought some of his evidence was contradictory, but that is by the way. Do you accept that, in order to have those thriving city regions, you have to have connectivity? The argument was mentioned that it sucks jobs in from neighbouring towns—Manchester was given as an example of that in relation to Oldham and Rochdale. However, do you accept that a resident of Rochdale would rather have a job in Manchester than an offer of one in London, and that in order to get the investment in Manchester and elsewhere, you have to have connectivity with other major cities?
Martin Tett: I will give a very short answer. It is a very similar question to one we have already answered. First, let me be really clear that I am not dismissive of people such as Richard Leese. I have a very high regard for him: he is an excellent council leader, and I would not want it anywhere on record that I was dismissive of him. That goes for many of the other major leaders of councils around the country. I just wanted to be clear on that.
Do I believe that if you were offered a high-speed rail link to London, and were not given a package of options—it was take it or leave it, which is what Ms Crane said—you would go for it? Of course you would. Human nature says that. However, what if you were given the opportunity to look at the opportunity cost, and you could have a large number of high value schemes with really good benefit-cost ratios around your region, right the way through the northern cities? Take Manchester, for example: I spent all last week in Manchester, and there is a great tram system there, which actually begins to pull the city together. You could extend the tram systems and you could link up the northern cities, but they have never been offered those options in terms of that capital expenditure. That is the key point: give those leaders the package of options and see whether they pick High Speed 2, as opposed to offering them that or nothing.
Joe Rukin: The reality is that HS2 is effectively being touted as an excuse for not having regional policy. You made the point about whether someone from Oldham would rather have a job in Manchester or in London: actually, they would rather have a job in Oldham. That is the problem: we are not looking at investing in our depressed areas. Instead, we are just looking at chucking everything at some city centres that are reasonably prosperous when compared with the outlying regions.
The other thing is that you talk about connectivity, but HS2 does not provide connectivity. The only place it really connects to is Euston. With everywhere else, when you look at the stations, with Leeds, the station is on the other side of the river from where Central is now; with Birmingham Curzon Street, the other station for Birmingham is on the other side of the M42 from the airport. You lose the advantage of the time saved because of the distance in the interconnecting journey. HS2 is not providing connectivity. Providing connectivity is looking at the stations that are already in place and expanding capacity from them.
I would not accept that the scheme is not providing connectivity. I am also thinking about existing announcements as regards investment in connecting Liverpool, Manchester, Leeds—the northern hub. Do you not accept that as a package, the whole thing will contribute to the revival of the northern economy?
Joe Rukin: I think the northern hub is a great point. It is not the full northern hub that is being rolled out, and that would increase the prosperity of the north far more. If you want to increase the prosperity of the north or the midlands, the last thing you want to do is make it easier to get to London.
We heard this morning from the northern authorities’ leaders about how destructive the £10 billion west coast main line was to the local economy. Network Rail’s assessment of the optimised alternative, which you have already talked about, concluded that the suggested enhancements are
“significant infrastructure interventions that would almost certainly require total blockades of the line” similar to that undertaken 10 years ago by the west coast upgrade. Have you calculated, as part of the alternative, what the wider economic costs of that disruption would be to those economies?
Martin Tett: Let me try to answer that easily. The answer is that I do not accept its judgment on that whatever. We are proposing an option that fundamentally provides all of the capacity that is forecast by increasing the length of the trains and reconfiguring those trains. It meets the commuter and suburban capacity requirements by taking out two pinch points. Those pinchpoints are now on the Government’s own infrastructure programme, so they will be done anyway, which means that our alternative now requires no public subsidy whatever, unlike £33 billion for HS2. By comparing it with the previous upgrade of the west coast main line, you are comparing apples with pears, because they were changing an upgrade in the track. We have no intention of doing that. By contrast, HS2 effectively proposes to rebuild Euston station, as I am sure that Mr Dobson knows. The cost and disruption of doing that is phenomenal, particularly to commuters coming in and out of Euston station who will be subject, in HS2’s own judgment, to virtually a weekend off-peak service during that work. I do not accept the judgment. It is a fundamental misunderstanding of our proposal, which we would happily have clarified had they contacted us at any point during that evaluation.
Joe Rukin: The other thing that has to be taken into account is, yes, look at the disruption that the 51m alternative might cause, but where is the assessment of the disruption that HS2 itself will cause? There may be minor—actually, what is happening at Euston is not exactly minor. There may be some impacts on the rail network, but where is the assessment of what is happening to the road network? HS2 Ltd is proposing to move the M1 in two places, to move the A42 where it becomes the M42. Where the Birmingham interchange station is, it has to cross the A45, four lanes, the A452, four lanes, the M6, and the M42, and you are building a station with all the things that go with that—all in the space of two miles. There is an expression for that—traffic chaos. Where is the assessment of that in the HS2 plans? The answer is it is nowhere. It has paid no attention whatever to the disruption it will cause or the disruption on jobs as well.
The things you are saying about HS2 and all the other things are fair, and obviously they are the things that we are properly interrogating. I am not picking up that there has been any alternative assessment of the economic impact of your proposals other than the one we have from Network Rail. Am I getting that right?
Martin Tett: I am not sure that I understand the question. Has there been an assessment of the economic impact? What we propose to do by making the changes in the west coast main line that I have already outlined is to provide the capacity that the Department for Transport forecasts. Therefore, we would actually generate all the capacity requirements that are proposed with very little disruption, because, quite frankly, all we would need to do, in addition to what is already planned, is reconfigure the trains and, in a few places, lengthen the platforms. It would not entail the enormous work that is proposed for HS2, for example at Euston.
I want to come back on my colleagues’ points. I am from a midlands seat. We would see economic benefits from HS2. One of them would be that HS2 would be 35 minutes to Birmingham airport. We have already seen huge problems in London airports with their capacity. HS2 would free up massive capacity in Birmingham airport, which would enable jobs—real jobs and not the jobs you have been talking about—to come to the midlands. My constituents will be sitting here today, listening to you and thinking, “All you care about is the south of England, and what about the midlands and the north? We want some of these jobs as well. We want to rebalance the economy and we think it would be a good thing for us.”
Martin Tett: I am sorry; with great respect, I do not understand how your constituents could take that from what we have said, because everything we have said here is actually, “We can deliver the capacity that’s required.” There is no evidence for the jobs and growth. However, we believe that by putting in very substantial additional incremental infrastructure investment in our great northern cities, in our midlands cities and around the UK, we can generate a real integrated regional economic development strategy, which is what this country desperately needs. I do not see any evidence that supports the idea that saving 20 minutes on the journey time to Birmingham, at a cost of something in excess of £50 billion, is a regional strategy. I do not think it is.
To get to Birmingham International airport from London Euston takes a lot longer than 35 minutes, I am afraid—it is over an hour. I travel up and down quite often and the trains are full; they are full now to capacity. So, this business you have talked about between Watford and Northampton does not ring true to those of us who are using the trains on a regular basis.
I am probably getting a feeling of how Mr Stephenson felt when he came to the House for the first Bill for the line from Manchester to Liverpool. I bet that he had critics like yourselves—the witnesses here today—and he had to put up with that.
I know that anything up past Watford, we are a bit simple and we get very easily taken in by the public relations people and everybody else, and do not really realise what we are talking about in most instances. We do not know that we can spend that money much better on the local transport projects that we have, and local accountability. And we are not very good at all of that stuff so thank you very much, Mr Tett, for pointing that out to us.
There are issues, we believe, and we had leaders of our councils and local authorities this morning speaking to us. I speak to my constituents, to my local authority and to the local enterprise board, which is hugely supportive of HS2. I think that some of the issues that you talk about—of draining resources in from the boroughs surrounding Birmingham, Manchester and all that—that is exactly how Manchester was created, when the original line was built. It was by bringing people in straight off the fields. I disagree with you. People would be much better having jobs in the centre of Birmingham than having no jobs at all, or having to come down to London for those jobs.
The real issue here—and I know that time is constrained, and I did want to go a bit further than that—is this: is it because it is in my back yard that you are concerned about this, and nothing else?
Emma Crane: If you are going to do something that creates such a huge environmental impact on people’s homes and livelihoods as this does––the environmental impact of this has not been recognised at all—the Government have to be able to show that it is in the national interest. And to date, the hard evidence does not show that. It keeps coming back to that. The business case is extremely flawed, the cost keeps going up and up, and I would just say to anyone who supports HS2—that is probably most people in this room—at what point do you say, “We’ve got to look at the cost,” and that cost becomes unsustainable?
Does the environmental issue not change when you get the people flying from Edinburgh, Glasgow and Manchester down to London, and all the people who drive down, off the road and on to rail? Does that not change the environmental issue?
Emma Crane: HS2’s own figures about transference from other modes of transport show that only 3% of passengers using HS2 will be transferring from air, that only 8% will be transferring from cars and that 24% of those journeys will be new journeys. They are HS2 Ltd’s own figures. We have yet to see the concrete evidence that will change the objectives that it is supposed to be setting out to achieve. When the evidence is there to show that they have been achieved, perhaps then we can think differently. But, at the moment, that hard evidence is not there, as picked up by the National Audit Office, the Public Accounts Committee and countless other groups. It is not groups that are opposed to HS2.
The contrast between this morning’s witnesses and your evidence is that, this morning, we saw people who get the pain and the gain. It is very clear that the problem for the leader of the council is that you get all the pain but none of the gain. I sympathise. I want to ask you briefly about compensation because the blight is now. I would like to know your views on a property bond and whether that might mitigate some of the pain that your constituents, and mine, are suffering right now.
Martin Tett: In three minutes, the answer is yes and yes. Work is going to go ahead and, clearly, in this particular audience, we are a very small minority at this end of the table. I understand entirely that the majority of Members of Parliament will not mind if this goes ahead. Residents in my constituency are terribly, terribly blighted. I have people who have not been able to sell their houses for two years because they live just near the track, but not near enough to qualify for immediate compensation. Something like a property bond would be a major step forward by the Government to show that they really do care about those people whose lives and whose businesses are terribly blighted by this at the moment.
This morning, we heard evidence from Sir Richard Leese that he felt that HS2 would create 30,000 jobs around Manchester Piccadilly. Geoff Inskip from Centro, the West Midlands transport authority, talked about 22,000 jobs in the west midlands. Are you saying, Mr Tett, that your proposal would deliver those jobs, too?
Martin Tett: Let me try to answer that question. I respect both those two individuals. I come back to the report of the National Audit Office, which said that there is no evidence to show that that job growth will take place. Multitudes of studies show that it is highly unlikely to do so. If you are asking, “Will we produce the capacity?” which is the fundamental reason now being given by the Department for Transport for HS2, yes we will. Will we do it at a far lower cost? Yes, we will. Will we do it far more quickly? Yes, we will. Does that leave a large amount of potential capital investment that could go into those same cities and other cities to generate real jobs? Yes, I believe it would.
So, basically, Mr Tett, you are saying that, despite the fact that you respect the two leaders, you disagree with them on their jobs calculations and that your proposal is to deliver capacity but not regeneration. Is that correct?
Joe Rukin: Those job figures that have been quoted are not job-creation figures. The KPMG report that Geoff Inskip and Birmingham chamber of commerce keep quoting also miss off the next bit, which is that there are 22,000 jobs for the west midlands area as a result of relocation of jobs from other parts of the country. The very same report says that this will cost Wales 21,000 jobs. But it will cost the west country 47,000 jobs. It is unbelievable spin. They keep missing this off. It is not job creation. It is moving jobs about. That is what HS2 does. It doesn’t create jobs. It just shifts them around the country.
Mr Tett, earlier you referred to BCR and what potential BCR there might be. The Jubilee line extension to Canary Wharf was originally approved with a benefit-cost ratio of 0.95, but that project is probably widely accepted to have brought many benefits. Do you accept that benefit-cost ratios often underestimate the benefit of transport schemes?
Martin Tett: You have to come back to what your criteria are for deciding to go ahead with the project. If you believe that BCR, quite frankly, does not matter and that is just about vision and a political statement—people have referred to political statements recently—then that is fine and you can go ahead with a low BCR.
I refer you back to what the then Secretary of State, Mr Hammond, said before the Transport Committee just over a year ago: if BCR fell below 1.5, the project would require serious scrutiny. I would respectfully suggest that the BCR for this, when corrected for many of the out-of-date assumptions such as the fact that business people do not work on trains, will probably be below 1. You then need to make a judgment on whether that is a good investment.
Many thanks to our witnesses for coming along. If you feel that you have not had the opportunity to answer the questions asked, please feel free to write to the clerk.