HS2 Funding Referendum Bill — House of Commons, 2015-01-23
Topic: Transportation
Cheryl Elise Kendall Gillan (Conservative, Centre-right): The right hon. Gentleman is right. A constituent of mine who owns a business in the Birmingham area will be adversely affected by the project. He will have to re-site a profitable factory, which will involve losses and a great deal of interruption to the business It is five years since the announcement of the project. Its genesis has been well documented by other hon. Members, including in this debate. We are five years in and we do not know what the costs are. Inevitably, those costs are rising. In 2009, the costs for HS2 were identified as £16 billion. A year later, they went up to £29 billion. By 2010, they were £32 billion. As everybody knows, the costs now stand at £50 billion, particularly if we want the luxury of a few trains running up and down the lines What worries me is that I do not believe the costs will stop there. First, there is the unknown quantity of Euston and the implications, which could run into millions, nay billions, of pounds if the right hon. Member for Holborn and St Pancras is to be believed—and he is to be believed There are unforeseen costs after that. For example, I am not convinced that the countries that make up the United Kingdom will not press for Barnett consequentials on that spend, not least because, as I know, there was a dispute with Wales on whether Barnett consequentials would be applied on the transport elements of the Olympics and the Olympics project. It was decided that the transport spend elements would be Barnettised, and therefore extra funds had to be found to pass to Wales and Scotland and so on. The first phase of HS2 is Birmingham to London. There is a powerful argument to make, and there is no reason to think that more funds will not have to be found to deliver those Barnett consequentials to the other countries that make up the United Kingdom Naturally, the costs have risen. As I mentioned, the costs quoted are at 2011 prices. I sit on the Select Committee on Public Administration. Last week, the Treasury permanent secretary was before us. During the course of our investigation, I asked him about the costs of HS2 and pointed out that we were dealing in 2011 prices. I have asked him for an up-to-date costing of the project, which I believe he has agreed to provide by means of a letter to the Committee. I hope that, very shortly, the House will be better informed as to the real costs—the costs as of today’s date. It is hard for people to understand the full implications of the costs of the project if we do not keep pace with current prices The assumptions that have been made about the benefits of the project are grossly overestimated. The benefit-cost ratio for phase 1 of HS2 has dropped to 1.4 from 2.4, as it was when the first business case was issued. For phase 2, the ratio stands at 2.3, which is down from 4. One thing is not highlighted: the business case includes an £8.3 billion cut to existing inter-city services. When HS2 was first announced, my colleague the Foreign Secretary, who was Secretary of State for Transport, said it would be necessary to "seriously review the viability" if the BCR dropped below 1.5. That has happened, but as far as I know there has been no review. The reliability of the assumptions are widely questioned, but in a project of that size that will cost the taxpayer so much, we need to be certain before we press ahead If we strip out from the assumptions the questionable elements—for example, the overvalued benefits of the reduction in journey times, which are questionable because people do valuable work on trains—we calculate that the more realistic BCR is 0.5. If that is the case, the project will be one of the poorest value for money projects that this country has ever seen. It compares unfavourably with many other infrastructure projects. Many road improvements have BCRs of as much as 10. The optimised alternative to HS2 originally proposed by "51m", the group of councils that have lobbied against HS2, had a BCR of 5 Basically, by anybody’s reckoning, the project is based on dodgy assumptions. We do not know the real costs. It is five years in, but we do not have the final route and the final plans. We do not know what the risks entail. It bears repeating that the Major Projects Authority was set up to identify the risks of such projects. As far as I was aware, it was supposed to be transparent. As I understood it, we were going to be one of the most transparent Governments ever. Those reports, which we know are classified as amber/red, have not been released. I repeat that it is not right or proper that the House can be said to have scrutinised the project properly on behalf of our constituents and the taxpayers if the Committee that considers the project Bill in detail does not have access to the clearly identified risks laid out by the Major Projects Authority. If Members of the House are not allowed to have them, members of the Committee at least should have them. If the project is to be done, it needs to be done properly. People need to see that each of those risks has been addressed by the Government, and by HS2 Ltd or whatever organisation delivers the project.