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Examination of Witnesses

High Speed Rail (Preparation) Bill – in a Public Bill Committee at 3:40 pm on 11th July 2013.

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Simon Burns MP, Alison Munro and David Prout gave evidence.

Photo of Annette Brooke Annette Brooke Chair of the Liberal Democrat Parliamentary Party 4:13 pm, 11th July 2013

Welcome. For the record, please will the new witnesses introduce themselves to the Committee?

Mr Burns : I am Simon Burns, Minister of State for Transport.

Alison Munro: Alison Munro, chief executive of HS2 Ltd.

David Prout: David Prout, director general for High Speed 2 at the Department for Transport.

Photo of Annette Brooke Annette Brooke Chair of the Liberal Democrat Parliamentary Party

I will just say that Karen Lumley is going to be second. [ Laughter. ]

Q 262

Photo of Lilian Greenwood Lilian Greenwood Shadow Minister (Transport)

How important are the relative benefits of increased capacity, regional growth and faster journeys in the overall case for high-speed rail?

Mr Burns: I think they are absolutely crucial. Of course, by its very name, high-speed rail means faster trains, but even more important than that is the whole issue of capacity on our railways. As you have heard from a number of witnesses over the last three sessions, there is a great concern that capacity, particularly on the spine of the west coast main line, will be full by the  mid 2020s. It is crucial that we release capacity so that we can get more passengers, because of the anticipated further increases in passenger numbers year on year, and get more freight off our congested roads and on to the rail network. High Speed 2 has a key role to play in releasing that capacity to ensure that we meet that increased demand.

Alison Munro: I would certainly endorse that. The driving factor when we first started to look at the need for High Speed 2 was the capacity argument on the west coast main line, as the Minister has just described. The Department has done a lot of work to look at alternatives or other ways to increase capacity, but the work done by Network Rail showed that the only real way to provide that capacity for the longer term was with a new line.

If you are going to provide a new line, we looked at whether you would provide a conventional line or a high-speed line. You get a lot of additional benefits by providing a high-speed line, because that provides connectivity, certainly north of Birmingham. Places such as Leeds and Birmingham are not well connected by the rail system at the moment—it is about a two-hour journey between Leeds and Birmingham—so high-speed rail offers the opportunity not only to provide a real boost in capacity, but greatly to increase connectivity between those northern cities.

That obviously has a direct benefit in reducing transport costs, but to come on to your third point about regeneration, it also provides a real foundation for those cities to build their business links, build their labour markets and provide that catalyst for regeneration, particularly around stations, but also spreading out into the wider region.

Q 263

Photo of Lilian Greenwood Lilian Greenwood Shadow Minister (Transport)

Minister, can you say what fare structure you envisage for High Speed 2?

Mr Burns: No, I cannot at the moment, because it is far too premature to start to lay down exact fare structures and plans. That will come with the work that will be done over the next 13 years with regard to the first phase, and over the next 20 years with regard to the second phase. In many ways, work that might be done now would be redundant because of the time scale of building the railway, but I assure members of the Committee that very detailed and precise work will be done in due course to meet the operational functioning of the railway in 2026 and 2032-33.

Q 264

Photo of Lilian Greenwood Lilian Greenwood Shadow Minister (Transport)

HS2 Ltd has published proposed timetable changes to mainline services. Those changes—primarily reductions—seem to rest on assumptions about the proportion of passengers who will transfer from existing rail services to high-speed rail. How can that proportion be confidently predicted when you do not yet know HS2’s fares and ticketing structures?

Alison Munro: For our current work, we have essentially assumed that the fares on High Speed 2 are the same as the fares on the existing railway. With that assumption, we can predict how many people would transfer from the existing railway on to High Speed 2 services. That releases capacity on the west coast. For the purposes of the business case, and I stress that this is for the business case only, we have made some assumptions about how you could use that released capacity—an important part  of the benefits of High Speed 2 is the benefit of released capacity—but the actual service pattern will not be determined for some years.

Q 265

Photo of Lilian Greenwood Lilian Greenwood Shadow Minister (Transport)

But how robust can those assumptions be when, as we have just heard from the Minister, there is no decision on what the fares and ticketing structures might be?

Alison Munro: At the moment, as I say—this is a policy that the Government have agreed we can assume—the assumption is that there would not be any difference in fares. There will obviously be opportunities for different fare structures, but we are assuming that the average level of fares would be the same. On that basis, we can predict how many people would use High Speed 2. It is a big investment, as we recognise. I am sure that the Government of the day would want to make sure that that investment is well used. It is therefore a reasonable assumption at the moment, because we want people to use High Speed 2 to release capacity on the existing network.

Mr Burns: If it helps you, Lilian, my answer was based on the existing system. I thought that you were asking for the precise detail of exact structures and pricing for the railway, which is why I said that it was far too early, which it is. In other words, I thought that you were asking about how much it would cost and what sort of different structures of fares there might be, whereas in 13 or 20 years’ time, there may be different approaches from those at present. Alison is absolutely right that the core will be based on the same structures that exist now, but we cannot necessarily anticipate what the situation will be when the trains start running. [Interruption.]

Photo of Annette Brooke Annette Brooke Chair of the Liberal Democrat Parliamentary Party

Can I ask you to check that your mobile phones are turned off, please? I think perhaps it is the panel, as this is the first time that we have had the problem all afternoon.

Q 266

Photo of Karen Lumley Karen Lumley Conservative, Redditch

We have heard an awful lot over the last two days about the lack of compensation for local businesses along the route. Can you clarify what compensation will be paid ?

Mr Burns: Yes. I am very pleased that you have asked this important question, because there is obvious concern about it, and there has also been some confusion. If you will allow me, I will give you some detail. Businesses in the safeguarded area most certainly will be compensated. It will be set out as per the national compensation code, and it will be primarily for small and medium-sized businesses up to a rateable value of £34,800. Both freehold and leasehold owners of commercial property can claim the open market value of property that is compulsorily purchased for the rail line. Similarly, and equally importantly for many businesses within the safeguard area, business occupiers of some properties can claim a number of additional items as disturbance compensation, for example reasonable costs and expense involved in relocating, temporary loss of profits, permanent loss of profits and goodwill and other trade or business losses caused by displacement or alternative premises.

That leaves the question of what will happen to those businesses not in the safeguard area. For those that might be affected by the construction of HS2, although  they will not be covered by the compensation code that I described for the safeguard area, we are currently considering a mix of policy options so that additional support might be able to be provided to help those businesses. I hope that you find that helpful and reassuring.

Q 267

Photo of Karen Lumley Karen Lumley Conservative, Redditch

How soon will those proposals come forward?

Mr Burns: The ones for those not living in the safeguard area?

Photo of Karen Lumley Karen Lumley Conservative, Redditch

The additional ones, yes.

Mr Burns: There will be ongoing consideration. We will obviously want to come to conclusions as soon as possible. We want to get it right as well, so we will continue the considerations and reach decisions as soon as we can.

Q 268

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

HS2’s expenditure has already increased from £773 million to £900 million in this Parliament. What confidence can we have that it will operate within that budget, and what checks and balances should be in place to ensure that that takes place?

Alison Munro: In terms of our current operations, we have to date lived within our budgets. We have a world-class project management company—CH2M HILL, which was responsible for delivering the Olympics on time and within budget—managing our contracts at the moment, and it is using sophisticated systems for that contract management. We have the best system of controls in place to manage our budgets going forward. In the longer term—

Q 269

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

So, very different from the systems of control that you had in place when we got the movement in cost.

Alison Munro: There is a difference between our current budgets—the money that we are spending at the moment, which is what I am talking about in terms of what we are currently managing—and the cost estimates for the whole scheme through to completion. As the Secretary of State announced a couple of weeks ago, the cost estimate for that has gone up. There has also been an increase in the allowance for contingency, but as far as the company is concerned, we have been set a much more stringent target. Within the allocated budget for phase 1, which is £21.4 billion, HS2 Ltd as a company has been set a target of £17.16 billion, with a very clear message that we are to deliver within that. We are absolutely committed to doing that, so the controls and incentives will be in place for us to manage within the overall envelope, the aim being not to use the additional contingency.

Q 270

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

The other evidence that has come through fairly strongly, particularly from the Minister, is that for this to have the transformational effect which everybody wants there would need to be additional money spent within the regions on interconnectivity. Where will that money come from?

David Prout: That money will come from various different sources. You are absolutely right that the successful economic impact of HS2 is dependent on regional connectivity. As part of the Department’s overall budget,  we not only have £16 billion for HS2 between now and 2021, but overall we have a budget of £73 billion for infrastructure projects. Some of that will be spent on rail, some of it will be spent on roads and some of it will be spent on other forms of transport. That money can be used to link in with HS2. In addition to that, within the HS2 budget there is an allowance for certain connectivity schemes, and further to that our local partners are using instruments such as the community infrastructure levy in order to raise funding for infrastructure investment.

Mr Burns: The important thing to remember is that although this is a significant investment in something that the country badly needs, significant sums of money are also being invested in the existing rail network as part of an ongoing programme, which is not affected by the funding for High Speed 2. As you will be familiar with, in control period 5, which is next year through to 2019, Network Rail will spend just under £37.5 billion on the railways, of which £9.4 billion is the high-level output specification programme announced by Justine Greening a year ago. So work continues on the existing network, on improvements and enhancements, as well as on this programme.

Q 271

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

Can you be confident that the hybrid Bill will be passed by May 2015?

Mr Burns: Well, it is a challenging deadline, as you are aware, Nic. Private Bills and hybrid Bills, are a time-consuming process within the House of Commons and the House of Lords. We have to go through certain procedures, and we will obviously have to wait to see how many petitions there are for the hybrid Committee stage. We obviously want it to go through as quickly as possible, but we cannot short-circuit that process, and that process will proceed. I hope that we can meet that deadline, but if we cannot we would be able to carry it forward to the next Parliament. Hopefully it would then complete its parliamentary processes fairly shortly into the next Parliament in 2015. At the moment it is difficult to say, because part of the processes are out of our hands.

Q 272

Photo of Iain Stewart Iain Stewart Conservative, Milton Keynes South

Over the last two days we have heard from various witnesses some specific concerns about the detail of the route, for example, the link to High Speed 1 by the North London line and the potential remodelling of Euston. To what extent are these alternative options still on the table, and is the extra contingency fund that has been announced there to cover these potential changes in design?

Alison Munro: Today is actually the final day of a consultation on various design changes, which includes the couple that you mentioned. We have included in that a revised proposal for the High Speed 1-High Speed 2 link, and also the new Euston proposal. The costs that I mentioned are based on those proposals. Because that is a consultation, obviously the outcome has not been determined yet. Those responses will now be considered, and then Ministers will take a decision in the light of the responses to the consultation.

Q 273

Photo of Iain Stewart Iain Stewart Conservative, Milton Keynes South

There has been a lot of confusion about this additional sum of money, the contingency fund, which is quite a sizeable chunk of money. But is that not a standard level for major infrastructure projects of this size?

Alison Munro: The cost estimate we had last year was produced for the purpose of looking at the business case for High Speed 2. For that it is fairly standard practice to look at what is called a P50. It is the most likely level of cost. That was for the cost estimate we had at the time. The costs that have now been announced are P95s; those give a 95% degree of confidence that we can live within. That is a high degree of confidence, so a significant amount of that cost increase reflects not a real cost increase, but a more prudent approach that ensures that the indicative budget can accommodate possible outcomes. That gives certainty to the industry and the supply chain that the funding will be there for the project to be able to proceed.

David Prout: From the point of view of the Government finances, we have to ensure that adequate contingency is provided for. The fact that it is there certainly does not mean that we intend to use it, and as the Secretary of State made clear on Second Reading, the target set for phase 1 of HS2 is £3 billion less than the allowance we have available.

Q 274

Photo of Graeme Morrice Graeme Morrice Labour, Livingston

Minister, in my questioning of witnesses over the last few days you will have noticed that I raised the issue of Scotland. We are, however, both aware that there is no mention in the Bill of extending high-speed rail beyond Leeds and Manchester. I suspect that in your reply you may make reference to “including but not limited to”, which makes it a possibility, but that is not quite the same as saying that it will definitely happen. I would therefore be grateful for your comments on that.

Mr Burns: I will be consistent, Graeme, in what I have said throughout—usually through questions to witnesses, but now, as a witness, I will give you an answer.

Mr Burns: Thank you. Clause 1(2) of the Bill lists all the areas with regard to expenditure for high-speed rail, and it names eight areas. The reason why those are named specifically is because that is where the railway line will be going under phase 1 and phase 2.

To answer your specific question about Scotland, we see the high-speed line as a spine up the country. In the future, at some point, if there is a business case and a need, there could be spurs off that. In that context, I am talking within England. There may be a spur that goes all the way into Liverpool, or one down to south Wales or the south-west. It all depends on what happens in years to come. At the moment, we are concerned about building the spine that is covered by the Bill specifically. Phase 1 will be covered by the hybrid Bill later this year and phase 2 will be covered by a hybrid Bill in three or four years’ time.

The Secretary of State said publicly at the beginning of October in Birmingham that we want to look now at the case for extending phase 2 from Leeds and Manchester up to Scotland—in the Leeds case, possibly up to Newcastle and, on the Manchester side, up to Glasgow and across to Edinburgh. Evidence given in some of our earlier sessions, particularly from Transport Scotland, shows that work is beginning on looking at the feasibility and need for that. If that works out, I am sure that there may well be a decision to extend, but it is premature at the moment to say that will definitely happen, because  the work needs to be done on the business case and the need. It would certainly not be wise for me to give a categorical commitment at the moment, because it would be premature while the work is being done.

David Prout: The Secretary of State’s letter to HS2 Ltd includes a remit to look at options for serving Scotland and the north-east. That work is being undertaken by HS2 Ltd and by officials in my Department.

We are in discussion with officials in Scotland, and HS2 will deliver its advice on the issue to the Secretary of State in due course. Work is being undertaken, but as the Minister says, our detailed proposals at this stage are limited to phase 1 and phase 2.

Mr Burns: But what is important about the Bill is that if a decision is taken at some future point to extend high-speed rail to Scotland or to anywhere else in England and Wales, because of those two critical words “at least” in clause 1(2)(a), the Bill will apply equally to those projects if and when they go ahead. No future Secretary of State in 10, 20, 30 or 40 years need come back to the House of Commons or Parliament to seek those powers, because they will be contained in the Bill through those two crucial words.

Q 275

Photo of Martin Vickers Martin Vickers Conservative, Cleethorpes

I have a couple of questions. First, to Ms Munro, I think it is probably a fair summary of the evidence that we have heard to date that those organisations and individuals in favour of the scheme are very satisfied with their relationship with HS2, whereas those who are opposed to the scheme are very unhappy with their relationship in terms of communication and gaining information and so on. Is that a fair summary? Can you assure us that in future you will fully engage with opponents?

Alison Munro: It is a fair summary in terms of describing the views that you have heard. I do not think that it is surprising that where people oppose the scheme, engagement and communication is very challenging. That said, we have engaged far more and had far more consultation on this project than any other project at this stage. Since 2011, we have had 79 consultation events and we have held well over 100 community forums. We have had 400-plus bilateral discussions. Most of those have been with the people along the route. We have engaged fully. We are always seeking to learn from our engagement and to improve as we go along. Those relationships take time to develop, but I believe that we are seeing an improvement.

We recently completed our consultation on the draft environmental statement, and we have had some positive feedback. That has given us an opportunity to get more information out to local people—that is what they want—but it has also given them the opportunity to talk to our experts, to understand more fully and for us to hear what their concerns are. If you look at the work that we have done, it demonstrates that we are listening to what people have said and we have managed to incorporate quite a few changes that reflect local concerns. As you say, it is a more difficult thing to achieve with the people who oppose the route.

Q 276

Photo of Martin Vickers Martin Vickers Conservative, Cleethorpes

A question for the Minister, if I may. We have heard a lot of concern about Euston and the links between HS1, HS2 and the North London line and so on. Have you heard anything in the evidence so far to give you second thoughts on any of those issues?  

Mr Burns: I have certainly listened to the dialogue on the link between HS1 and HS2, and I am glad that it has been established that there is a link, because at one point there was a thought from some that there was no link. I have to say that I think the suggestion from one organisation, which was that you could walk from Euston to St Pancras, was pie in the sky, frankly. There will be a link and there has been criticism of the proposed link. We have been consulting on it and the consultation finished today. We will reflect on that.

David Prout: With the link, it is important to think about what we are trying to achieve. The objective set for HS2 Ltd is to provide a link in a cost-effective way that provides a service of three trains per hour in each direction. Some of the evidence presented says that what is proposed is crazy, but if three trains per hour in each direction is your objective—that exceeds the predicted traffic—the HS1-HS2 link meets that prescription.

Q 277

Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras

How much is the current estimate of the cost of the link, and is it included in the £17 billion for HS2?

Mr Burns: The answer to your second question is yes. In answer to your first question, I can kill two birds with one stone, because I am replying today to a parliamentary written question from you on this.

Mr Burns: May I put it in context, because it also came up in evidence where people were confused about how a slimmed-down version that was meant to be more cost-effective actually was going to cost £400 million?

Q 278

Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras

Sorry, I am talking about the link at the moment, not Euston.

Mr Burns: Oh, sorry.

David Prout: The link is just over £600 million.

Q 279

Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras

And it is still £600 million?

David Prout: Just over £600 million.

Q 280

Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras

Can I go on to what I think the Minister was answering? It is that the original estimate for a very large scheme at Euston was £1.2 billion. In the light of a revised estimate of what that scheme would cost, it was decided to have a much smaller scheme, which is going to cost £1.6 billion. What was the revised estimate of the cost of the large scheme that caused it to be abandoned?

Mr Burns: Just over £2 billion, as you will find out later today.

Q 281

Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras

So it turned out that Arup’s estimate ended up being half what it should have been. Is Arup being paid for its original estimate?

Alison Munro: The estimate was based on a number of different assumptions, which reflected the level of design at the time. Once the Government had decided to go ahead with HS2, we were able to commission more consultancy, more detailed work, someone to take  surveys and to have more detailed discussions with Network Rail about how the station would operate. As a result of that more thorough examination of the proposals, we discovered that the scope had originally been underestimated. Also, keeping the station open during construction was going to prove more challenging. We had to phase the construction of the works to allow the existing station to operate. Otherwise, it would have led to a significant extension of the construction period, adding two years to the construction period, and adding to time adds to costs as well. There were a variety of factors that led to the cost increasing.

However, the current proposal for Euston, which you referred to, delivers all of the transport benefits that the original scheme did. It also provides opportunities for over-site development, regeneration, additional housing and so on. I would not like the Committee to have the impression that it is a very slimmed-down scheme. It delivers all the transport requirements of the previous scheme, but it allows us to achieve the opening date and it will deliver less disruption during construction, which is good for passengers and for the local community.

Q 282

Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras

May I ask about one final factor? What are the estimated costs of the changes to the TfL tube system that will be required to cope with the additional number of passengers coming into Euston?

David Prout: The initial estimates are £175 million. It is important to emphasise that although the scheme is different from the previous scheme, as Alison says, it achieves all the objectives that we set for HS2 Ltd. There will be 11 new platforms at Euston; there will be a unified concourse, bringing the classic lines together with the new high-speed lines; there will be extensive links to the underground network; and there will be a new ticket hall at Euston. It is expensive, but it is an extremely extensive piece of work.

Q 283

Photo of Caroline Spelman Caroline Spelman Conservative, Meriden

May I come back to the business compensation? The information from the Minister is helpful but I would like to seek a little clarification on what he has just said.

Am I right in thinking that there has been no compensation available to business until the safeguarded area was declared—that businesses were not eligible for the hardship scheme? If that is correct, there have been three years when businesses have not been able to obtain any compensation. Therefore, would temporary loss of profits be retrospective to the moment when these businesses were blighted by the announcement in March 2010?

Also, if there is a dispute regarding the level of compensation for a business, where could the business appeal? How could we ensure fairness in settling any dispute about the business compensation that might well be debated, especially when it comes to temporary loss of earnings? What happens if a farm straddles the 120-metre safeguarded zone—fields are often considerably longer than 120 metres—and it was rendered unviable by part of the land being compulsorily purchased? Would only the land purchased be compensated, or would the farmer be compensated for the consequential unviability of his business?

David Prout: I am not sure that I can answer all those questions, but there are several key principles. The first question, are businesses eligible for the exceptional hardship scheme? They are not eligible for the exceptional hardship scheme.

Alison Munro: Only very small businesses that are below the threshold—it is very low. Under the exceptional hardship scheme, there is a low threshold that small businesses might be eligible for.

David Prout: As far as safeguarding is concerned, small businesses within the safeguarded area, as the Minister said, with a rateable value below roughly £35,000—very small, yes—can serve a blight notice on the Government once the safeguarding has been laid. They can do that on phase 1 now, and they can require us to purchase their businesses now, if they want.

When businesses are purchased, there are well established rules as to the compensation they are eligible for, including loss of business; if it is a total extinguishment, they will be paid the value of the business. Larger businesses are not eligible to serve a blight notice under safeguarded rules. What happens with them is that either they are compulsorily purchased later on or, more normally, an agreement is reached with the Government to purchase the property before getting to the stage of compulsory purchase. When the price is agreed, the kind of issues that you were raising are taken into account, according to a long-established set of rules and procedures, which are well understood by the property profession. As for the precise answers to the questions you asked, I cannot be definitive on each of them today.

Q 284

Photo of Kris Hopkins Kris Hopkins Conservative, Keighley

Minister, the comments made about businesses earlier on will be welcomed by many businesses out there. I was wondering how you were disseminating that message. How are you communicating with those businesses?

Mr Burns: About how they will be eligible for compensation in the safeguarded area?

Mr Burns: Given that for phase 1 the safeguarded area has now been announced, we would expect to ensure through HS2 Ltd, publicity up and down phase 1, local media, business groups, etc., that the information is available, so that people are able to seek and get the help to which they are entitled. Obviously, HS2 Ltd has a key role to play as part of that ongoing dialogue with the route.

David Prout: We are writing individually to the property owners in the safeguarded area. There are 510 homes in the phase 1 safeguarded area and 340 businesses.

Q 285

Photo of Kris Hopkins Kris Hopkins Conservative, Keighley

On my second question, we have heard that Coventry city council had a rethink about its engagement—the lack of support, actually, for the process. In west Yorkshire, there are two authorities that have indicated their lack of enthusiasm, and I was wondering what opportunities for engagement there are for those councils and for chambers of commerce in particular, because Yorkshire chamber of commerce has also said that it has concerns. You can give some reassurance, you can listen to them and possibly get to a Coventry moment with those two authorities.

Mr Burns: I will let Alison explain in a minute, but we are anxious to engage with anyone or any organisation along the whole of both the preferred routes. As you know, Kris, once we have a preferred route, community forums and other forms of engagement can happen at several stages. In addition to that, we are anxious that anyone who believes their home may be adversely affected, or who has concerns about the way HS2 will affect their local community, should be in dialogue and contact with HS2 Ltd.

I drove north from the M25 along most of the phase 1 route last autumn, and I was shown where fine tuning and improvements have been made to the proposed phase 1 route. I was impressed that HS2 Ltd entered into dialogue with organisations such as the Royal Society for the Protection of Birds, the Woodland Trust, the Campaign to Protect Rural England and also with local communities. Where HS2 Ltd could, it was prepared to make changes and improvements to minimise the environmental, noise or visual impacts. HS2 is not a situation where a proposal has been made and those who supported and worked on preparing the proposal took the blinkered view, “This is what is going to happen. We are right, and anyone who has any alternatives or who wants any fine tuning or improvements is wrong and is criticising us and our judgment.” It was a much more productive relationship in which HS2 Ltd was prepared to see differences.

The same has happened with businesses. For example, on phase 2, which is at a much earlier stage, tremendous efforts have been made to listen to the concerns of local businesses up near Meadowhall and in the east midlands. The whole process of phase 2 is at a very early stage, which encourages me to believe that HS2 Ltd is prepared to listen. My advice to people who have concerns or serious worries about their community or property has always been that they should engage in dialogue with HS2 Ltd to see whether there is a way around the problem or a way to minimise the problem.

David Prout: The experience in Coventry shows the strength that can be gained by local authorities coming together with local enterprise partnerships. Solihull council, working with the LEP, has made proposals for the development of the area around the Birmingham station. Arup is the master planner for that proposal. Our estimate for jobs around that station is, I think, 9,800. The Solihull proposals are for 100,000 new jobs, and Coventry city council, working with its neighbours, realises that this is a fantastic employment opportunity for the people of Coventry. If you plan ahead well and get the connectivity, you can do brilliantly well. That is what Solihull, Coventry and Birmingham are doing by coming together. We would like to see the same kind of work in Leeds and Sheffield.

Photo of Annette Brooke Annette Brooke Chair of the Liberal Democrat Parliamentary Party

Order. Provided that the panel is willing to stay, I will extend the sitting by a final 15 minutes under Standing Order No. 88.

Q 286

Photo of Graeme Morrice Graeme Morrice Labour, Livingston

Earlier today, we heard evidence from the Scottish Government executive agency, Transport Scotland. The witness indicated that Transport Scotland is content that there is no mention of Scotland in the Bill. Upon further questioning from me, the witness suggested that that is also the case for the Scottish Government, who are content that there is no mention  of Edinburgh and Glasgow in the Bill. Minister, can you confirm that you have not been approached by the Scottish Government—Ministers or civil servants—to ask you to include Scotland in the Bill?

Mr Burns: The answer, to the best of my knowledge, is, no, they have not contacted us. There is a very good reason why they have not contacted us, and that is because they understand clause 1(2)(a) and the words “at least”. The Bill is about what is going to happen for phase 1 and phase 2 of HS2, but it also makes sure that it can be used at a later stage, if there are to be additions to phase 1 and phase 2 of HS2, by using the words “at least”. The only places that have been named in the clause are those where the railway line and the railway will go on phases 1 and 2, so Scotland would not appear in the Bill at this stage. Do you understand that?

Q 287

Photo of Graeme Morrice Graeme Morrice Labour, Livingston

Thank you, Minister. I hear the words and they compute. Whether I agree with the position is another matter, but that is a debate for next week.

Mr Burns: Okay, but I do not understand what the big deal is. We are dealing with a Bill in the first phase about building high-speed rail—phases 1 and 2—from London to Leeds and Manchester.

Photo of Graeme Morrice Graeme Morrice Labour, Livingston

Well, the big deal is—

Photo of Annette Brooke Annette Brooke Chair of the Liberal Democrat Parliamentary Party

The Minister stated his position, so rather than have a debate, we will take a further question from the panel rather than the witnesses.

Q 288

Photo of Graeme Morrice Graeme Morrice Labour, Livingston

Thank you, Chair; I look forward to the debate next week.

Mr Burns: So do I.

Q 289

Photo of Graeme Morrice Graeme Morrice Labour, Livingston

Can I ask Mr Prout to confirm what the Minister said in terms of any civil servant from the Scottish Government having approached the Department for Transport on the issue I just raised with the Minister?

David Prout: Like the Minister, I am not aware of any approach to us from a Scottish civil servant asking for Scotland to be introduced into the Bill.

Q 290

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

Alison, Crossrail committed to linking the number of apprentices to spending. What is HS2 Ltd’s policy on apprenticeships?

Alison Munro: We will certainly follow on from Crossrail in that tradition. In fact, we already have four apprentices in HS2 Ltd. We certainly want to draw on the best experience of projects such as Crossrail. We regard HS2 as a fantastic opportunity for apprentices and the industry as a whole. We want to ensure that the opportunities that it offers are maximised, so we will certainly be talking to Crossrail and drawing on that experience. We are developing a skills and jobs strategy to ensure that we maximise the benefits and opportunities that come with the project.

Q 291

Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras

I have just two points. One is that it is true that HS2 Ltd has met representatives of the small businesses in Drummond street in my constituency. They are faced with a giant wall blocking their trade  with Euston station, which supplies between 40% and 70% of their customers. They got every assistance, short of actual help.

Alison Munro: We have talked to people in the local community. It is very challenging in the Euston area. We fully understand the impacts that the construction will have in the Euston area. Talking to local people has certainly improved our understanding of that. We are trying to respond, but we are still developing the precise plans for how the construction will work. We want to continue that discussion with those local businesses, so that we can try to manage the construction in a way that will minimise the impact on them.

Q 292

Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras

Is there any way of ending the blight, which has already prevailed for three years and may be there for another three years before any work actually starts, let alone during the construction period? Are they just to be left?

David Prout: Business continues in Drummond street. There’s no reason why business should not continue as it has done over the past years, up until the point of construction. At that point, the nature of the area will change. That happens with all construction projects. When Middlesex hospital closed down, the businesses around there were affected by the closure. This is what happens with major developments. Their business will develop. We hope that businesses in Drummond street will benefit from the construction workers on the HS2 site.

Q 293

Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras

Is Mr Prout actually saying that the businesses in Drummond street, faced with this fence, will actually be better off than they were before the fence was put there?

David Prout: No, I am not saying that. What I am saying is that all major construction projects, be they Crossrail, or HS2, or a hospital rebuilding or any other major construction project, have an impact on the local area. The ways of dealing with those are well established in property law. We shall do what we can in terms of the way we carry out the building processes to minimise the impact on the businesses. What I would hope is that Drummond street will benefit from the construction workers on the HS2 site, but we recognise that they will be impacted.

Photo of Annette Brooke Annette Brooke Chair of the Liberal Democrat Parliamentary Party

We have got one more questioner. Is the panel prepared to stay one or two more minutes so that all the questions are exhausted?

Q 294

Photo of Lilian Greenwood Lilian Greenwood Shadow Minister (Transport)

I do not think it would be unfair to say that the high-speed rail project has suffered a period of bad publicity. It is poorly understood by the general public, and has certainly been the subject of critical reports by the National Audit Office and the Major Projects Authority. This is a question for the Minister and for HS2 Ltd. Are you doing enough to make the case for HS2?

Photo of Simon Burns Simon Burns The Minister of State, Department for Transport

I think that, in the early days, too much emphasis was placed simply on this being a project that would make it quicker to go from A to B, wherever that  was within the proposed routes. We should have concentrated more on the critical issue of capacity, because of the problems that we discussed earlier of running out of it on the west coast main line. We should have concentrated more on connectivity and linking eight of the 10 largest cities in England, and the benefits that will bring.

We should have also concentrated more on the regeneration that will flow from it, particularly round the new stations, whether it be at Birmingham, Toton, Sheffield or Manchester. We should concentrate more on showing areas the job creation that will flow: job creation during the actual physical building of the railway but also regeneration as a result of businesses around stations, depots and so on; the skills people will learn through working on the project and the apprenticeships created, which was also raised in an earlier question. That is the challenge.

There is criticism from some people. From some people, I fully understand the criticism, because if they are near the line of route, they will be concerned, and obviously their MPs will, quite rightly, be representing their concerns in the best way possible through Parliament and elsewhere. One sees criticisms in some newspapers and from some public figures, which slightly surprises me—I suppose Lord Mandelson comes to mind in that respect—but we must not take the short-term view. This is in the national interest. We have got to explain and get the message across, and also put the cost of the project in context.

We are talking about a project that will be paid for over the 20 years of its construction. It represents 0.15% of GDP, but we will get many benefits from improved connectivity, improved journeys, more capacity, job creation and regeneration—particularly, but not exclusively, the further north you get. Contrary to what some people say, it is not bringing all its benefits to London: 70% of the job creation benefits will be for areas outside London. If one listened to Sir Richard Leese and some of the chambers of commerce and the LEPs that have given evidence, they are excited: they can see the benefits for their communities. That is what is important, and that is the message; we have to work harder to explain that so that people can understand.

If we have any doubts about that, we have an example to look at, which is High Speed 1 from the channel to London. I was elected to this House in 1987, when High Speed 1 was at more or less the same place in the scheme of things. I remember that the first debate I ever listened to, a few days after coming here, was an Adjournment debate in which Kent MPs were raising  the issue of High Speed 1 and how it would turn the garden of England into the garbage can of England. That has not happened. When you go to Kent now, you can see the benefits around Ashford; around Ebbsfleet, you can see the benefits that are already there and will develop further in the next few years. House prices have not collapsed along the route, and Kent county council, which spearheaded the campaign against High Speed 1 along with Members of Parliament, is now so committed to the project that it has offered to talk to communities and to local authorities along the route of High Speed 2, to explain that their fears have not been realised in Kent.

The greatest irony, for me, is that there was one town in Kent that was successful in not having a station on its doorstep when it was meant to. That was Maidstone. The campaign not to have a station was successful and the station was put at Ebbsfleet. However, because Maidstone can now see how it is losing out, as a community, on the benefits of High Speed 1, it is begging for a station. That is the message that we have to get across.

I understand people being frightened of the uncertain, but if you are open-minded enough to look at it, it is not that uncertain, because you can look at Kent.

Q 295

Photo of Lilian Greenwood Lilian Greenwood Shadow Minister (Transport)

May I ask a quick follow-up question, before HS2 Limited answers the same question? You said, Minister—and were very honest in saying—that we should have done more on a number of issues. Who do you hold responsible for the failure to do those things adequately?

Mr Burns: I am afraid, Lilian, we were going along quite nicely till then and I am not going to fall into that trap. I think we have all been at fault in that respect. There is no point in seeking to apportion blame. We were all at fault. I do not think we fully understood that people would not understand the benefits of the project and why it is in the national interest. Those people who are against it, for a variety of laudable reasons, managed to make the running.

Photo of Annette Brooke Annette Brooke Chair of the Liberal Democrat Parliamentary Party

I feel that we should bring our proceedings to an end. I thank the last witnesses for their evidence and for agreeing to that slight extension.

Proceedings interrupted (Programme Order, 9 July and this day, and Standing Order No. 83C(11)).

Adjourned till Tuesday 16 July at five minutes to Nine o’clock.

 Written evidence to be reported to the House

HSR 10 Campaign to Protect Rural England

HSR 11 John Withington

HSR 12 Institution of Civil Engineers