Oral answer (Lords) on HS2 - Dec 13

To ask Her Majesty’s Government whether they have revised their estimates of (1) the cost of, and (2) the timetable for completing, HS2 following delays and increased costs in relation to Crossrail.

My Lords, HS2 Ltd regularly reviews project plans and is currently working with its contracted suppliers to update and agree its latest cost and schedule confidence assessments for phase 1. HS2 Ltd is always examining lessons learned from major infrastructure projects, including Crossrail, to improve its understanding of the risks to delivering on time and to budget. We will publish updated cost and schedule estimates for phase 1 as part of the full business case in 2019.

I thank the Minister for his Answer. A huge amount of money is involved. There is not much money around and things have changed. Does the Minister think that increasing capacity on the west coast main line is more important than, for example, sorting out the shambles in the civil nuclear industry and thereby safeguarding our future energy supplies for the nation? Does he think that it is more important than getting a secure GPS system to replace Galileo, from which we were so disgracefully excluded by the EU? Does he think that it is more important than resolving the funding crisis in our Armed Forces, when Russia is confronting and destabilising our nation? If so, does he not think that this is the time to pause and reconsider where this money should be spent?

The noble Lord will know that the question of allocation of resources between a range of government departments is one taken collectively by the Cabinet and announced by the Chancellor of the Exchequer at the appropriate time. It is not for a junior Minister to comment on the allocation of public expenditure between the Ministry of Defence and a whole range of departments, including those for transport and energy. On the last part of the noble Lord’s question, I think that it is right to go ahead with this project. It is expensive, but the phase 1 funding has not increased since the spending review settlement in 2015. Phase 1 is scheduled to cost £27.18 billion in 2015 prices and we are determined to keep it within that cost estimate.

My Lords, will the noble Lord—a much-respected and much-liked former Secretary of State, as well as a junior Minister in your Lordships’ House—comment at least on the prioritisation of railway needs and demands? He will have noted, following the resignation of Sir Terry Morgan, that the Mayor of Liverpool resigned last week from the board of the Northern Powerhouse Partnership citing as his reason for doing so the lack of rail investment to service the £1 billion renaissance of Liverpool dockside. Can he say where HS3 and the proposed linkage of northern cities now stands? Should not the revitalisation of the north be a much higher priority than HS2, which by comparison will contribute far less to northern regeneration?

The noble Lord makes a powerful case for more resources for transport in addition to the money that we have already committed to HS2, in both phase 1 and phase 2. He wants additional resources to improve connectivity with Liverpool. A spending review is just starting in which I am sure the Department for Transport and those departments that have an interest in the northern powerhouse will make bids. I note his strong representations that improved connectivity for Liverpool should be a high priority.

Has the Minister had the opportunity to read the reports from the Economic Affairs Committee of this House on HS2, and can he confirm how many billions could be saved by a marginal reduction in the speed of this train?

Can I write to my noble friend with the answer to that question? At the moment, as I indicated in my first reply, there is a dialogue between HS2 and the suppliers to ensure that the bids come in within the overall envelope that the Government have allocated. This may involve looking at some of the specifications that my noble friend has referred to. We are determined to stick within that envelope and all options will be looked at to make sure that we maintain the costs of this project.

My Lords, Sir John Armitt from the National Infrastructure Commission thinks that HS2 could cost an additional £43 billion. Is it not time that the Government gave us an up-to-date estimate of the true cost of this plan? Do the Government accept that the north of England needs better east-west rail connections as much as it needs HS2 going all the way to the north and not stopping at Birmingham?

To answer the first part of the noble Baroness’s question: as I said in my original reply, we will publish updated cost estimates as part of the full business case in 2019. In the second part, she reinforced the bid for more resources to go into public transport in the north; that has been noted and will be taken up in the spending review.

My Lords, on behalf of the whole House, I am sure, I say that we would welcome the Minister’s appointment as Secretary of State for Transport so that he can take some responsibility for these issues. He might be a great improvement on the current regime. In respect of HS2 and HS3, it is vital that we improve intercity connectivity between London, the Midlands and the north. It is also vital that we improve connectivity between the northern cities. We should not have to choose between them. Does the Minister agree that the right thing to do is to proceed with HS2 and HS3, and that if we were not having to spend £39 billion on Brexit we could do both very comfortably?

My Lords, you do not see one Transport Secretary for a long time and then two come along at once. The noble Lord is right: HS2 will directly connect eight of the 10 largest cities in the country; it is about connectivity and capacity as much as about speed. He has reinforced the strong bid I have already heard for more resources to HS3 and other connectivity within the cities of the north. That bid will be taken forward as part of the spending review. The added weight that he has just given to it will, I am sure, cut a lot of ice in the Treasury.