2 Government transport policy
Our most ambitious project is the delivery of a new
high speed rail network that could transform the way Britain works
as profoundly as the coming of the original railways.
Strategic policy context
16. Since taking office in May 2010, the Government
has published relatively few transport policy documents.
The HS2 proposal has been criticised by a wide variety of organisations
for what they see as the lack of an adequate policy context.
The critics call for a strategy setting out overall transport
objectives (not just schemes) and a multi-modal plan for major
transport infrastructure priorities. Some also want to see a regional
development strategy to accompany the HS2 proposal.
For example, in its response to the Government's official consultation
on HS2, the Conservative Transport Group commented:
It is important to be very clear that these objectives
require a co-ordinated policy landscape and appraisal methodology,
which allows proper assessment of proposals on a network-wide,
intermodal basis. This does not yet exist and it is therefore
impossible to properly evaluate the current proposals for HS2.
17. The National Trust,
the Campaign to Protect Rural England
and other environmental bodies that are generally supportive of
investment in rail have opposed HS2 on similar grounds. The RAC
Foundation does not oppose high-speed rail per se but argues
that both this and the previous Government committed to HS2 prematurely:
This is for three reasons: the lack of a National
Policy Statement on roads and railways, adopted in Parliament;
the incomplete state of Infrastructure UK's (IUK) development
of their National Infrastructure Plan; and a failure to specify
how the funding and economic regulation of HS2 would fit with
the current arrangement for the "classic" railway.
Aviation and business interests, whilst generally
supportive of high-speed rail, are critical of what they perceive
to be a lack of long-term strategy for airport capacity in the
south east of England, which has particular implications for the
planning and funding of links between HS2 and Heathrow, the UK's
international hub airport.
The European Commission's Transport White Paper 2011 calls for
the tripling in length of the existing high-speed rail network
in Europe by 2030 with all "core" airports connected
to the rail network by 2050, preferably by high-speed services.
18. In our report, Transport and the economy,
we called on the Government to publish a White Paper on transport
strategy, setting out its objectives for major transport spending
and how funds would be prioritised.
The Government has, so far, declined to do so,
saying that its transport policy is set out in its departmental
business plan. The
business plan, however, is a schedule of proposed actions, not
a strategy. We also noted the Government's apparent support for
national policy statements and drew attention to the importance
of these for the planning and co-ordination of major transport
infrastructure. Some eight months further on, we note that the
DfT appears to have made little progress with publishing a national
policy statement for road and rail networks, the key policy statement
19. When Mr Hammond first gave evidence to us, in
July 2010, he said that the Government had three clear objectives
- to help to reduce the fiscal
end of deficit;
- to support sustainable economic growth, and
- to contribute to the Government's 2020 carbon
The DfT argues that "High-speed rail is integral
to [the Government's] aims for a transport network that is an
engine for growth but is also greener and safer and improves the
quality of life in our communities."
However, some objectors have claimed that HS2 would contribute
little to these three objectives: HS2 involves substantial public
evidence for HS2's wider impacts on economic growth is disputed;
and HS2's impact on carbon emissions is, according to the Government,
"broadly neutral" and would have no impact prior to
absence of a transport strategy makes it hard to assess how HS2
relates to other major transport infrastructure schemes, regional
planning and wider objectives, such as bridging the north-south
divide. This seems to have deterred some groups, which might otherwise
have supported HS2, from doing so. The biggest single transport
investment proposed in this Parliament should be grounded in a
well thought-through strategic framework and we are disappointed
that the Government has not developed a strategy for transport,
particularly after it rejected our earlier recommendation to publish
a White Paper on transport and the economy.
21. The Government
is due to publish several important policy documents soon, including
a White Paper on its proposals for controlling costs in the rail
industry; a 'sustainable framework' for aviation; a National Policy
Statement for road and rail networks; and a revised National Policy
Statement for Ports. The development of what could emerge as separate
strategies for rail and aviation again highlights the absence
of an overall transport strategy: this is a lacuna which must
be filled. We recommend that if the Government decides to proceed
with HS2 it should, in announcing that decision, set out in more
detail than is available in the DfT's business plan not only why
HS2 is desirable but also how it fits within an overall transport
strategy. We also recommend that the forthcoming White Paper on
rail and the sustainable framework for aviation fully reflect
the impact on both modes of the creation of a high-speed rail
network in the UK. This country has often failed to invest in
transport infrastructure because all party agreement could not
be reached. We have one of the lowest motorway densities in Western
Europe, insufficient airport capacity in the south east with inadequate
road and rail connections and our rail network is mainly a legacy
of Victorian investment. Having all-party support should be seen
as an advantage for this scheme.
22. The absence of a comprehensive policy context
and the scale of the HS2 spending proposal caused some witnesses
to raise concerns about the opportunity costthe other projects
that may be forgoneshould HS2 go ahead. Christian Wolmar
argued that other rail projects would inevitably suffer, not only
in terms of capital investment but also due to what he claimed
would be a need for operating subsidy in the early years of HS2.
The Association of Train Operating Companies (ATOC), West Coast
Rail 250 and other organisations made it clear that, in their
view, the need for investment in other rail projects remained
undiminished and might even increase as a result of HS2. Their
support for HS2 depended upon the current level of investment
being maintained and ATOC said that it was reassured by the recent
spending review in which rail investment received a favourable
23. Some witnesses contended that HS2 was not necessarily
the highest priority among rail investments. Mark Barry, representing
the Cardiff Business Partnership, pointed out that services into
London Paddington, not Euston, showed the highest levels of overcrowding
and argued that those were more deserving of investment than HS2.
HS2 Ltd's forecasts show crowding increasing in the long term
on WCML, particularly on the southern section into Euston.
Currently, however, as shown by a recent survey
by the Office of Rail Regulation, peak period services into and
out of Euston are less crowded than those at several other London
terminals, notably Paddington.
24. Other witnesses were concerned that the opportunity
costs of HS2 might extend beyond rail to other transport investments.
David Bayliss, representing the RAC Foundation, argued that:
At the moment we have this proposition to spend £30
billion or so of money on rail. National rail carries 7% of the
passenger market in this country and 9% of the freight market.
Of that 7%, only about a third is long distance rail. Here we
are, at a time when we have barely sufficient funds to keep the
existing system going, committing huge amounts of money to try
and solve the problems on a tiny part of the travel market. It
seems to me that in the absence of a proper thought-through national
transport strategy that is foolhardy.
The Chief Executive of Next, Lord Wolfson of Aspley
Guise, argued that HS2 was "a very low-return project"
and that roadsmany of which were "already at full
capacity"should be a higher investment priority.
25. Mr Hammond responded that HS2 was affordable
and would not impact on other transport investment, provided that
it was phased over the 17-year timescale he proposed. He pointed
out that the construction of HS2 amounted to an average of £2bn
per annumvery similar to the current expenditure on Crossrail.
He added that the current Government had prioritised long-term
investment in transport infrastructure and that it had maintained
support for rail schemes in the 2010 spending review, despite
the cutbacks in other budget areas.
He also said that the Government would be looking more favourably
on investment in road schemes once a low carbon-emissions future
for motoring had become "unstoppable".
26. It is clearly a potential concern that, with
the current economic difficulties, a long-term spending commitment
to HS2 might impact adversely on investment in other valuable
transport infrastructure projects.
We have already highlighted the importance we attach to schemes
such as the Northern Hub; others, such as improvement to the Great
Western Main Line and the strategic freight network, would also
seem to be of high priority. However, the signs so far are encouraging
and levels of rail investment have been maintained despite the
concurrent spending on major projects such as Crossrail. Maintaining
those levels in the future is likely to depend more on improving
the efficiency and value for money of today's railway (as discussed
in the industry's initial plan for the next control period) than
on whether or not HS2 goes ahead. In fact, this and previous governments
have separated funding for very large capital projects from "routine"
investment. In our view it is extremely unlikely that the £32bn
proposed for HS2 would be available for other transport schemes
and, if not spent on HS2, this money would probably be lost to
would be unacceptable and counterproductive if investment in HS2
led to a diminution of investment in other parts of the rail network.
The previous Secretary of State for Transport has told us that,
assuming the costs are spread over some 17 years, HS2 is affordable
and that current levels of investment in the "classic"
network can be maintained into the future. We expect the Government
to uphold this statement. The Government has the opportunity to
secure future levels of rail spending in the next spending review
period by means of the commitments it makes in the forthcoming
High Level Output Specification and Statement of Funds Available
for Control Period 5 (2014-19). These are due by July 2012 and
will be an acid test of the Government's commitment to investment
in today's railway as well as in high-speed rail.
27. We recommend that, if the Government
decides to go ahead with HS2, it should, in announcing that decision,
publish a summary of the financial case including the assumptions
which persuade Ministers that the scheme will be affordable alongside
sustained investment in the classic network. We consider that
this could usefully include details of the projected capital and
revenue expenditure profiles; how these compare with assumed DfT
spend profiles for the rest of the rail network and for the rest
of transport; and any underlying assumptions about financial contributions
to HS2 from non-DfT sources. We further recommend that alongside
the summary financial case the Government should announce its
priorities for funding in Control Period 5 (2014-19) as part of
its High Level Output Specification and Statement of Funds Available
in order to meet anticipated passenger and freight capacity constraints
on the classic network up to the projected start of HS2 in 2026.
40 DfT, Business Plan 2010-11, November 2010,
(updated May 2011) http://transparency.number10.gov.uk/transparency/srp/view-srp/39 Back
DfT, Creating Growth, Cutting Carbon: Making Sustainable Local
Transport Happen, 2011, which introduced the Local
Sustainable Transport Fund, is the only transport White Paper
to date. Back
For example, ATOC, Q 28. Back
Q 202 Back
Conservative Transport Group, Response to the Government's
Consultation on High Speed Rail, July 2011 Back
Ev 117 Back
Ev 191 Back
Ev 151 Back
Ev 167 Back
European Commission, Transport White Paper - Road map to a
single European transport area. Towards a competitive and resource
efficient system, 2 June 2011 Back
Transport Committee, Transport and the economy, Third Report
of Session 2010-11, HC 473, 2 March 2011, p 18 Back
Transport Committee, Transport and the economy: Government
response to the Committee's Third Report of Session 2010-12,
Fourth Special Report of Session 2010-12, HC 962, 6 May 2011 Back
Ev 262 Back
The DfT has said that it will not publish a NPS for airports,
which the previous Government had planned to do. See Transport
and the economy, pp 17-18. The Government has recently published
the revised NPS for Ports (October 2011) and, in its response
to the Committee's earlier report, stated that it will not undertake
consultation on a draft NPS for National Networks until after
the consultation on HS2 is complete, "towards the end of
this year [2011[ atearliest". See Transport Committee Tenth
Special Report of Session 2010-12, HC 1598, 27 October 2011, p
Transport Committee, The Secretary of State's priorities for
transport, Oral evidence, 26 July 2010, Q 3 Back
Ev 249 Back
£750m is included in the current spending review period for
the planning and consultation on HS2, most of which is classified
as "resource" rather than "capital" expenditure.
If HS2 proceeds, most expenditure will be capital and incurred
in future spending review periods. Back
Q 9 Back
Ev 243 Back
Q 431 Back
Ev 267 Back
Office of Rail Regulation, National Rail Trends 2010-2011 Yearbook,
August 2011 - http://www.rail-reg.gov.uk/server/show/ConWebDoc.10512 Back
Q 202 Back
Q 197 Back
Qq 541-542 Back
Q 523 Back
Our predecessor Committee considered this issue in its report
Priorities for investment in the railways, Third Report
of Session 2009-2010, HC 38, 15 February 2010. Back
HS2 and Crossrail were the only transport infrastructure schemes
specifically listed in the Coalition Agreement 2010. Back