Written evidence from Chiltern Countryside
Group (TE 114)
We thank the Transport Select Committee for the opportunity
of submitting this evidence to their Inquiry into Transport and
the Economy.
The Chiltern Countryside Group was established at
the time of the National Air Traffic Service's Terminal Control
North Public Consultation 2008 as a natural evolution of local
groups with the same aim of preserving the character and peace
of the Chilterns and its Area of Outstanding Natural Beauty.
Our submission, which is not confined to the locality
of the Chilterns, focuses on aviation and rail transport, and
is made on behalf of the Group's supporters.
In writing this submission, we are mindful of the
criteria set out by the Chancellor of the Exchequer, the Rt. Hon.
George Osborne, in his Spending Review October, 2010. We have
considered whether the current proposals for a High Speed 2 Rail
route as outlined in the Command Paper of Lord Adonis (March 2010)
meet this criteria. Our considered view is that they do not.
We give below our supporting evidence which we hope
the Transport Select committee will accept and fully consider
when reaching their decisions.
We address the Committee's questions on the UK's
transport policy and continue with a focus on the High Speed 2
rail proposals.
KEY SUMMARY
OF POINTS
- Fundamental questions for the UK's transport
policy do not appear to have been clearly addressed.
- Since 2006, the UK and the global economy have
moved from a growth environment to a period of recession.
- While there is clear correlation between transport
spending and UK economic growth in the past, it is not clear that
spending causes growth, even though lack of spending may inhibit
growth.
- The 61B journeys people make to work annually
demands a massive energy cost and is not directly economically
productive. Policies that encourage alternatives to commuter travel
will have national benefit.
- The core policy should be to enhance regional
and national economic growth, subject to fiscal, social &
sustainability constraints.
- The balance between revenue and capital expenditure
should be in line with best commercial practices.
- Current methods for assessing proposed transport
schemes are not satisfactory.
- Are the current proposals for a High Speed 2
rail network the best way forward?
SUPPORTING EVIDENCE
Historically, the fundamental questions for the UK's
transport policy do not appear to be clearly addressed.
- What are the objectives of national transport
policy?
- What are the best ways of achieving them?
- How are specific project proposals effectively
evaluated against these objectives?
As an example of what can go wrong without this framework,
the High Speed 2 proposal appears to have reversed the order by
evaluating a specific proposal, then working out what it might
achieve, then suggesting this should be national policy. The Eddington
Transport Study explicitly warned against this approach. (ref:
vol.3. 4.171, 4.172)
The Committee poses the questions:
Q1: Have the UK's economic conditions materially
changed since the Eddington Transport Study and, if so, does this
affect the relationship between transport spending and UK economic
growth?
The country has moved from a growth environment to
a period of recession.
The Coalition Government, by definition a reflection
of the uncertainty & fragile confidence of the electorate,
urgently needs to stabilise both the economy and public confidence.
They will not achieve this, if in real terms, or in the perception
of the public, they unwisely spend what money is available.
The past four years have seen global financial crisis
& the enforced closure of many long-standing world famous
organisations & brands. The Coalition Government began its
term of office in 2010 with a huge deficit & commendably has
made restoring the UK's profitability & world standing the
main planks of its strategy.
Therefore, it has never been more important to openly
demonstrate to the public and to the business world both in the
UK & internationally that the UK Government bases its projects
of high capital long term investment on sound & up to date
financial & socio-economic advice & that sustainable funds
to complete the project will be available. It is our considered
view that in the case of High Speed 2 rail this has yet to be
achieved.
While there is clear correlation between transport
spending and UK economic growth in the past, it is not clear that
spending causes growth, even though lack of spending may
inhibit growth. Identifying the key obstacles to growth is a challenge,
but a period of reduced demand may help highlight which obstacles
are truly relevant.
The Eddington study identified congestion as a key
obstacle, and a high priority DfT policy has been to reduce congestion.
The lower demand reduces congestion, thereby allowing the effect
of congestion to be measured.
The DfT has admitted that it has concentrated on
demand measurement, rather than demand management.
This has an implied national objective that all demand should
be met, which is unlikely to be the most cost-effective policy,
especially in a recession. (ref: HS2Ltd. Seminar on Modelling
12.11.10) This approach leads to provision of sufficient capacity
to handle peak-time commuter travel, implying significant under-utilisation
outside these peaks.
Options for better utilisation of resources by demand
management have not been seriously considered by the DfT, not
least because they might be considered to be outside their remit
(e.g. improved telecommuting, flexible working hours, car sharing
schemes). These schemes have great potential to reduce the cost
to the country, so should be factored into transport spending
appraisals.
Q2: What type of transport spending should be
prioritised, in the context of an overall spending reduction,
in order best to support regional and national economic growth?
The core policy should be to enhance regional and
national economic growth, subject to the constraints that it is
affordable, sustainable (e.g. carbon emissions) and not detrimental
to the environment or individuals. The economic appraisals should
include measures of national benefit and national cost to permit
proper evaluation for national growth.
For the country as a whole, transporting people to
their place of work (the greatest use for transport today - 61B
journeys pa) (ref: Eddington p5pt7) demands a massive energy
cost, and is not directly economically productive - it is an expense
that doesn't increase national value. So ways of reducing the
need for transport will directly benefit the country. Therefore
policies that encourage alternatives to commuter travel will have
national benefit. Within the sphere of transport, this includes
creative ticket pricing so occasional telecommuters do not lose
season ticket benefits (working one day a week at home reduces
transport energy and carbon emissions by 20%).
How many passengers travel into Heathrow or other
London airports because London is their destination? Would they
use a regional airport if the service was available? Regional
airports potentially could save time and additional journeys but
this should only be considered if it met the Government's commitment
to overall reductions in carbon emissions and did not disadvantage
the local population with increased aural & air pollution.
(ref. Future of Air Transport White Paper 2003)
The taxpayer and the fare-payer justifiably both
seek optimum value for money. The fare-payer rightly expects
to travel comfortably, promptly and reliably between his destinations.
A ticket is bought which should guarantee a seat for the journey.
The taxpayer has the right to see that the revenue to which he
contributes indirectly is spent on infrastructure schemes which
provide benefits to the communities through which they pass.
This is not true for a high speed rail network, as apart from
the cities which it is intended to serve, it will be a disbenefit
to all other communities, with negative environmental, commercial
and transport impact.
Q3: How should the balance between revenue and
capital expenditure be altered?
This should be kept in line with commercial practices.
Normal business capital investment would expect a return of 5-10%,
so planned revenue from a project should be of this magnitude.
Q4: Are the current methods for assessing proposed
transport schemes satisfactory?
There are major problems:
The assumed objectives are to satisfy anticipated
demand (which may be contrary to well-managed national objectives
as stated earlier) with a sufficiently great BCR.
However the DfT and HS2 claim to have good models
for predicting demand, given input parameters such as population
and fare levels. But they have not considered how other parameters
may be varied, or whether active adjustment of parameters may
be more beneficial. Some of the assumptions seem over-optimistic
(growth figures), not based on the latest research, or using the
most recent economic data that includes the recent period of recession.
At least as important is that few alternatives are
considered, especially more radical ones such as encouraging telecommuting,
greatly improving rail capacity by active signalling methods to
replace the 150-year old block signalling, enhanced rail timetabling
combined with track improvements permitting more overtaking by
faster trains.
There has been little work showing multi-modal transport
planning; for example, modelling whether the impact of faster
travel with improved luggage transfer services linking airports
throughout the West Midlands and South-East - such planning might
result in significant passenger benefits and reduction in congestion
in London. But it is little considered under current sets of transport
responsibilities.
Integrated multi-modal transport models that include
true national benefits and costs, combined with an approach to
explore completely different approaches, would allow optimisation
of the result on a national basis. The current approaches instead
favour incremental improvements to single transport modes - whilst
these projects may be worthwhile, they miss opportunities for
better joined-up schemes.
The transport modelling for HS2 was not fit for purpose.
It was incapable of estimating the benefits needed to support
the BCR and because of this, the wrong scheme may be being built.
For example their model showed that connection to HS1 and Heathrow
were not important whereas with a proper model they may well be.
It concluded with their Y shape instead if say a T shape because
their model did not have the full choice hierarchy.
DfT guidelines require the model to be composed of
a full hierarchy of choices: choice of trip frequency, mode choice,
submode choice, time period choice and destination choice. The
model they used only had submode choice. It should have sufficient
spatial detail to be capable of modelling the infrastructure in
question. This model has about 250 zones whereas for infrastructure
of such scale it should have several thousand zones. The model
should capture all the demand mechanisms which are likely to be
affected within the overall hierarchy whereas it omitted air and
connection to HS1. The demand data upon which the model was
built was ticketing data and without the full choice hierarchy
the model would have a build-in a bias towards servicing
the current origin-destination trip pattern whereas what this
scheme is likely to do is to generate different travel patterns
- indeed the whole purpose is to encourage new travel and promote
economic development.
HS2 should build a proper transport model of the
country with a full choice hierarchy to sufficient spatial detail
so as to do the job properly to DfT standards. They would then
have the right tool to be able to design the right scheme on a
sound scientific evidence base with a properly supported BCR.
Only then can they select a route and only then can they be
in a position to be able to persuade people that it is necessary
(if indeed it is).
Q5: How will schemes be planned in the absence
of regional bodies and following the revocation and abolition
of regional spatial strategies?
National requirements can only reasonably be met
at national planning level. But without regional bodies, there
is a serious risk of lack of local oversight to best cater for
local requirements. Greater regional consultation processes will
be required to involve those with best local knowledge.
FOCUS ON
THE PROPOSALS
FOR A
HIGH SPEED
RAIL ROUTE
AS OUTLINED
IN THE
COMMAND DOCUMENT
MARCH 2010
We have considered the following points:
- The UK and global economy.
- The changing patterns of work and leisure and
their effect on forecasting.
- Risks in accurate forecasting and can we learn
from the past?
- Can High Speed rail aid regeneration & fulfil
sustainability requirements?
UK AND GLOBAL
ECONOMY
Internationally, all countries are operating under
challenging financial conditions. The world economy remains fragile
& leading nations differ in their approach to creating stability.
In response to the USA's decision in early November to put a
further $500 billion into their Quantitative Easing Programme,
Germany's finance minister said "It could create extra problems
for the world" (ref. Sunday Times 7.11.10).
Investment values of both the "man in the street"
and institutions have fallen, particularly those providing pension
funds. Redundancies & job losses are now common place and
in the UK, the 2010 Spending Review brought wide sweeping financial
cuts and reforms which will impact on the public and individual
purse early in 2011.
In 2011 higher costs for food, fuel, clothing, VAT
rate, coupled with higher taxes and the weakness of the pound
are likely to keep inflation higher than previously thought -
currently above 3% throughout 2010 with the Consumer Price Index
(CPI) more than 1% above the Bank's target rate. (ref. Sunday
Times 7.11.10) Thus potential High Speed rail customers,
will have less disposable income, more of which will be spent
on essential needs, rather than joining the ranks of leisure travellers
forecast.
Many existing commuters question the wisdom of billion
pound commitments to a new service when existing ones require
investment. The Eddington Transport Study (ref p7pt15.1-4,Command
Document 1.19) recommends "that the first priority should
be the performance of existing networks, before considering new
links....a sophisticated policy mix ….careful assessment
of the full range of policy options, including pricing, better
management and infrastructure improvements" and that there
should be "a full range of modal options using appraisal
techniques that include full environmental and social costs and
benefits". These have yet to be demonstrated in the High
Speed 2 rail proposals.
The Chinese Government are to review their High Speed
rail proposals after their state-backed experts recommended "a
rethink on the emphasis on massive infrastructure investment,
particularly the bullet train expansion programme". (ref.
FT.com Beijing 7.11.10) China is widely regarded as an increasingly
important influence upon the world's, and the UK, economy (hence
the Prime Minister's visit November 2011).
The DfT estimates that £21 million will
be required in the financial year 2010-11 for the development
of the high speed rail proposals. A further £50 million
minimum will be needed to fund the purchase of properties under
the HS2 Exceptional Hardship Scheme between August 2010-December
2011. (ref. Reply from Mr. Hammond to Caroline Lucas MP Hansard
14.10.10). Is this the best use of taxpayers' money?
The Spending Review stated (p5-7) that the Government's
priorities were... "getting the best possible value for taxpayers'
money". It is extremely difficult to see how this can be
achieved when the HS route currently proposed will start in London,
serve only selected cities and possibly Heathrow & will be
inaccessible to much of the country's population. The current
HS2 proposals would seem to contradict the objectives of the Coalition
Government and the Spending Review in the allocation of public
resources, which prioritise: "spending that promotes long
term economic growth, introducing structural reforms to enable
a private sector led recovery and building a low carbon economy;
fairness and social mobility, providing sustained routes out of
poverty for the poorest". (ref. Spending Review 1.20).
The Transport Secretary stated in response to the
findings of the Public Accounts Committee on Increasing Passenger
Capacity (2010) "This situation is not sustainable. We have
to reduce the costs of our railways, so that both taxpayers and
fare-payers get a better deal". We remain unclear how this
will be achieved by spending £33 billion of taxpayers'
money on a service provision for a limited market which will not
be available for many years.
CHANGING PATTERNS
OF WORK
AND LEISURE
&THEIR EFFECT
ON FORECASTING
The way in which people work & socialise has
been transformed over the past decade in methodology & at
speeds unimaginable. Increasingly, work time is spent using electronic
forms of communication - these have transformed the way in which
we work & communicate - a trend which no-one could now seriously
believe has either reached its peak or will slow down.
The Government recognises the national economic significance
of this, investing £530 million over the next five years
to support the UK's broadband network. (ref. Spending Review
1.39) Digital means will be used as a default option for
more Government services (ref. Spending Review 1.104).
The speed at which technology is changing challenges demand models
for existing transport options. HS2 Ltd has made a serious misjudgement
in minimising the potential impact which electronic communication
will have on work & leisure patterns. (ref. Command Document
pts. 1.10, 1.29).
Prudent and cost-saving budgets by organisations
and employers will encourage trends for home-based working as
overheads are reduced by cutting office space & moving out
of high cost locations. Travel for business, potentially a core
proportion of aviation & HS rail markets is being cut to the
essential only. When both time & money can be saved by telephone
& video-conferencing, email, Skype etc. actually making a
journey with all its related add-on costs becomes a second-choice
option.
Budget & Spending Review cuts have already started
to actually impact upon people's disposable income & will
continue, constraining leisure budgets. Demand by leisure travellers,
a high percentage of potential HS2 customers, who will also face
increased fares, is therefore likely to fall.
For families or groups who need to buy individual
seats, ticket prices for aviation & rail will be a crucially
important deciding factor in their choice of transport mode.
Aviation is the only viable option for some overseas journeys
but for some key internal journeys, eg London to Birmingham, there
are no flights, so no modal shift from aviation to rail is possible.
If rail tickets remain high & indeed rise (ref. Spending
Review 1.72), car is likely to continue as their preferred
choice & the modal shift on which HS2's viability and projected
eventual profitability depends, is unlikely. Anyone who researches
current prices & availability of rail or plane between eg
the South and Wales, or the North East, will soon find there
is no choice of practical route and prices are unrealistically
high.
RISKS IN
ACCURATE FORECASTING
AND CAN
WE LEARN
FROM THE
PAST?
A leading economist highlights the dangers of projecting
benefits over a long period of time by asking how accurate a prediction
in 1950 would be for today. HS2 Ltd. are forecasting over 60 years,
(ref. Command Document pt. 3.11) well beyond any reputable economic
forecasting horizon. (ref. Prof. Mike Geddes, HS2 Parliamentary
Lobby Day 25.10.10).
The West Coast Route Modernisation project also illustrates
the precarious nature of predicting benefits. In the HS2 Command
Paper, HS2 Ltd state "it (WCML) cost £8.9 billion
...delivered fewer benefits than originally envisaged and caused
serious disruption to travellers and business, at a significant
economic and social price in addition to the project itself".
(ref. Command Paper p12)
The lease of HS1 has just been sold for c.£2.1 billion
thus delivering economic disbenefits. HS2 will cost a projected
£9 million now in planning and some £33 billion
to construct; what guarantee can the Government give that it will
be more successful in its benefits than HS1? We would suggest
that the socio-economic and environmental price which HS2 Ltd
has not taken into account in the Command Document is likely to
be considerably higher than for HS1.
Existing rail travellers face increased fares by
3% above the Retail Price Index (RPI) for three years from 2012
(Spending Review 2.25). Reports (Evening Standard 3.11.10)
indicate that London commuters who are not top earners are already
forced to reduce their travel costs & journey times by driving
to nearer stations with better services & lower fares. A
Surrey Rail Users Group predicts a major shift to cars once the
A3 Hindhead Tunnel is completed in 2012. This could be replicated
elsewhere.
In increasing passenger rail capacity, the DfT has
been advised by Amyas Morse, head of the National Audit Office
to "implement.. plans [developed in a stronger economic climate]
flexibly in the light of current conditions, in order to protect
value for money, and to be continually looking to drive down the
costs of rail improvement works". (ref. National Audit
Office 4.6.10) The proposed plans for a High Speed Rail route
are not flexible and will cost each of the 26 million Great
Britain households c £1,300.
The premise by HS2 Ltd for its High Speed 2 rail
line proposals is based on continued UK economic growth and rising
prosperity generating significant increase in demand for travel
between the UK's largest cities. (Command Document p11).
This premise is thus invalidated by prevailing economic conditions.
Therefore to form an accurate assessment of future demand, modelling
should be based upon current & professionally recognised predictable
future economic trends.
Passenger forecasting is currently, it would appear,
an inexact science. A key finding of the Public Accounts Committee's
work on Increasing Passenger Rail Capacity (2011) was that the
DfT's "knowledge of how many people use which parts of the
rail network and when, is inadequate, sketchy and so gives a poor
basis for decision-making". (Conclusions and recommendations
pt.3) If the DfT is unable to provide accurate figures for
present use, it becomes implausible that projected figures for
future projects such as High Speed rail can be believed to hold
any degree of credibility. The suggestions recommended by that
Committee should be adopted, together with "the smart ticketing
and other demand management techniques to reduce the inefficiencies
of overcrowding in peak hours and underused rolling stock at other
times". (pt 2)
Capacity on the West Coast Main Line (WCML) has been
identified as a key mover in the promotion of a High Speed rail
network. This could be addressed relatively inexpensively and
without great disruption to existing traffic with signalling improvements
so that more trains can run in the section between Birmingham
and London, both at inter-urban and local level. There are frequently
gaps of up to 20 minutes between local trains. Work should be
undertaken to investigate how signalling & other measures
could increase the number of trains using the WCML, without compromising
safety. Not all peak trains have eight or 12 carriages.
If extra capacity at Euston is the restriction on
increasing the number of trains, this can be overcome by using
some, or all, of the land currently designated for the High Speed
rail terminal.
Will High Speed rail aid regeneration & fulfil
sustainability requirements?
The proposed High Speed trains are as yet technically
unproven, especially on noise impact. Their ability whilst travelling
at c 250mph, stopping at a limited number of access points,
requiring feeder transport, to help build a low carbon economy
is highly questionable. Reduction in carbon emissions is a Government
target. Environmental sustainability is too important nationally
to be ignored.
For the unemployed & those trapped in poverty,
finding and keeping a job which is easily & affordably accessible
is vital. Long-distance, expensive travel will not make this
happen. Better local transport is likely to be of more help.
Developments of designated Business Parks particularly
for high-technology & "start-up" businesses are
commonly sited at out of town locations, typically not served
by either aviation or rail. For example, the cutting-edge Diamond
Synchrotron Facility at Harwell, Oxford which, appropriately,
is to receive £69 million of public funding (ref.
Spending Review 2.48) is six miles from the nearest rail station
& public transport requires convoluted & time wasteful
journeys. Expansion of these and "brown field" sites
is likely to continue & will only add to the demand for local
bus services and good road connectivity. Surely it would be more
beneficial to consider increasing local rail networks to meet
these potential needs, rather than a High Speed train which passes
through without stopping?
UK cities are already well connected by rail unlike
many in Europe. The French TGV has been developed at the expense
of local services. Without subsidies, it is difficult to see
how the UK could avoid the same pitfall.
We are unconvinced that the London-centred HS2 proposals
will produce the "agglomeration effects" benefits (ref.
Command Document ch3) in the areas of the UK most in need
of regeneration. London salaries are generally higher and offers
more job opportunities; surely this is more likely to attract
people to London, rather than away? If this happens, local businesses
will lose out on trade & skills and money will move out of
the area rather than into it.
HS2 Ltd acknowledge that construction costs for major
UK projects are higher than for comparable projects elsewhere
in Europe (ref. Command Document p9pt18). To ensure that
the construction costs & workforce salaries feed back into
the UK economy, UK construction companies will need to put in
highly competitive tenders, or they will need to "work with
the DfT to consider whether & how civil engineering costs
can be reduced" (p10). It is difficult to see how
designing, building and commissioning a railway using largely
untested technology, as envisaged in HS2 Ltd's plans, can be achieved
if cutting costs is already on the agenda. Or to be successful,
might this cost the UK taxpayer even more money?
There are statutory targets to reduce carbon emissions
& mitigate impact of transport on local landscapes and communities.
These must not be disproportionate to eco-socio benefits (ref.
Climate Change Act 2008) & the Command Document says these
must be "absolute" (ref.2.35). Improved carbon
emissions with rail over other transport forms are only achieved
with high load factor & if local environmental impacts are
appropriately mitigated (ref.2.31). However, HS2 Ltd's
modelling shows long distance services on new lines would have
a daily load factor of around 60% (ref.5.41), so there
will be spare capacity; how therefore do they expect to fulfil
the requirement to reduce carbon emissions? No costing has been
taken of the huge environmental impact of High Speed rail, which
could be reduced considerably by well-designed improvements to
existing rail transport corridors.
Funds could be more gainfully employed in providing
better transport links between those areas which need regeneration,
rather than sacrificing areas which are currently economically
viable for a vision of questionable success. There is a risk of
environmental and financial degeneration for all areas through
which HS2 passes, but does not stop, even if currently they are
economically viable and are vital environmental assets for the
nation. As one example, the Chilterns Area of Outstanding Natural
Beauty is a valuable "green lung" for London and a popular
leisure destination for some 52 million UK and overseas visitors
annually who bring revenue into the area. The unique character
and tranquility of the area will be permanently destroyed by the
current High Speed rail proposals. The effect on the Chilterns
AONB is likely to be degeneration, rather than regeneration.
CONCLUSION
Our considered view is that the current High Speed
2 rail proposals are at the wrong time & in the wrong place.
We therefore respectfully suggest that, having gathered
evidence, the Transport Select Committee might use their powers
in this key Inquiry into Transport and the Economy to commission
a further independent review of the objectives, assumptions and
alternatives for the business case for HS2 in the light of recent
and ongoing economic events.
November 2010
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