High Speed Rail

Written evidence from Greater Manchester Combined Authority (HSR 114)

INTRODUCTION

Greater Manchester welcomes the opportunity to contribute to the Committee inquiry into the strategic case for a proposed high speed rail network. Transport is recognised as a priority by the GMCA and LEP which have identified the need to "significantly improve connectivity into and within the city region" as a strategic objective. It was in recognition of this that the Greater Manchester Transport Fund (GMTF) was developed, an innovative £1.5bn package of schemes developed and prioritised on the basis of their contribution to regional productivity through a measure of increase in GVA per £ of whole life cost whilst also demonstrating positive benefits in terms of environmental and social outcomes. Funded by a combination of local, regional and national funding streams, the prioritised list of schemes alone is forecast to increase employment in the city region by 20,000 and lead to a GVA increase of £1.3bn per annum by 2021. We express our strong support in favour of the principles of developing a high speed network, which will increase both capacity and inter-urban connectivity between Manchester and the other cities on the line as well as releasing capacity on the existing Greater Manchester rail network.

1. WHAT ARE THE MAIN ARGUMENTS EITHER FOR OR AGAINST HSR?

From our perspective, the primary arguments in favour of the HSR programme centre on the increases in inter-urban connectivity and the knock-on capacity improvements to the ‘classic’ network.

Capacity

Despite £9bn of upgrades, the West Coast Mainline is set to again exceed capacity by mid-2020. The West Coast is the only direct link between Manchester and London, and is set to see passenger demand grow by as much as 61% by 2025 according to the West Coast RUS. Further incremental upgrades to the line would be short sighted when set against the opportunity to develop a new dedicated high-speed inter-urban network.

Increasing capacity will not just benefit long distance passengers, it will free up capacity on the existing network. At present 13% of trains arriving in Manchester during the 3hour morning peak are overcrowded. This figure is set to rise to over 25% by 2025.The extra capacity HSR will create would allow increased frequencies to local destinations and new services to more locations benefiting local commuters, leisure travellers and freight services.

Inter-urban connectivity

Cities like Manchester are the drivers of our nation’s economy, with an economic base centred on new knowledge-intensive and high-tech industries which serve local, regional and international markets. The continued successful expansion of these industries is dependent on high quality intercity links, allowing firms to gain agglomeration benefits by accessing new and more diversified markets throughout the UK and Europe. With journey times at over two hours to London and over one and a half hours to Birmingham (which are unimpressive when compared to our European competitors) current inter-urban connectivity is constraining Manchester’s economic growth. The Manchester Independent Economic Review suggests that Greater Manchester, given its scale and range of assets, is the best placed city in the UK to increase its productivity and long term growth and to act as a complementary growth pole to London and the South East, supporting the objective of the Coalition Agreement to rebalance the economy geographically.

2. HOW DOES HSR FIT WITH THE GOVERNMENT’S TRANSPORT POLICY OBJECTIVES?

2.1 HSR is designed to improve inter-urban connectivity. How does that objective compare in importance to other transport policy objectives and spending programmes, including those for the strategic road network?

The HSR programme matches the Government’s vision for sustainable, balanced growth across the whole of the United Kingdom, by addressing the economic North-South imbalance which costs the UK economy £38bn p.a in GDP. HSR will improve inter-city connectivity, which, when combined with proposals for the Northern Hub, will generate economic benefits across the 10 million Northern conurbation.

HSR also meets the Government’s transport policy objectives for an integrated transport network by encouraging a modal shift to more carbon efficient, environmentally sustainable modes. Existing road capacity cannot meet the forecast increases in demand, and building new road space is expensive, environmentally unsustainable and politically contentious. Previous Government plans to increase capacity on the M6 by developing a new parallel running motorway between junctions 11-19 were abandoned less than 2 years after their proposal. HSR, coupled with investment in the existing rail network in Greater Manchester via the Northern Hub, progressive electrification and potential Tram-Train schemes will complement the development of a low carbon sustainable transport system in Manchester.

The HSR programme matches Government spending policy in achieving value for money in transport investment. The alternatives to HS2 generate much lower cost benefits and crucially don’t provide the long term capacity increases needed. Rail Package 2a (RP2a), which is by far the best performing of the alternative schemes to HS2 has a comparable BCR but only increases capacity by 54% as compared to the 200% rise in capacity HS2 would create. (High Speed Rail Command Paper, DfT, March 2010)

2.2 Focusing on rail, what would be the implications of expenditure on HSR on funding for the ‘classic’ network, for example in relation to investment to increase track and rolling stock capacity in and around major cities?

The HSR programme should not be viewed as an alternate approach to investment on the existing network, but as an addition. The effectiveness of the HSR programme is reliant upon the efficient running of the conventional network to aid onward connectivity. It is critical that HSR stations and infrastructure are well integrated into existing local rail and tram networks, as the immediate area surrounding the HSR station is unlikely to be the ultimate origin or destination of any journey. Investment must be made where necessary to existing facilities or new connections created to allow passengers to quickly transfer to and from their ultimate origin and destination.

The success of HSR in Manchester and the wider Northern region will be reliant upon investment in the Northern Hub scheme, which will enhance inter-urban connectivity in the North, complimenting the HSR proposal. Money must be made available for Network Rail to commit to this programme (which generates a BCR of 4:1) in control period 5 in order for the full social and economic benefits of HS2 to be realised in the North West.

Current investment commitments allocate in excess of £1bn p.a to Crossrail, a scheme which will be complete by 2017; the same time that investment in high speed rail will need to commence. This funding should be allocated to the HSR project to reduce additional funding requirements and protect funding for the conventional rail network, and other general transport spending.

2.3 What are the implications for domestic aviation?

A combination of reduced journey times, improved quality and increased service frequency has been proven to induce modal shift from competitor modes to rail. The 2008 introduction of the Virgin Pendolino service between Manchester and London, which reduced journey times from 2hours 30 to 2hours 8 minutes, resulted in rail’s market share on the Manchester-London corridor increasing from 38% in 2003 to 80% in 2010.

Figures published by The Association of Train Operating Companies (ATOC) show that rail’s market share on the 10 most popular domestic air routes in 2010 grew to 44% - up from 29% in 2006. Whilst this growth is impressive, it shows that the majority of trips on these routes is still undertaken by air and demonstrates the potential for future modal shift to rail if further reductions in journey time are brought about by HSR. In Europe, the introduction of a HSR line between Madrid and Barcelona saw the market share for air travel fall from 84%-52%, and is expected to drop to just 30% in the future. We would expect similar model shift from domestic aviation to occur in the UK with the introduction of a full HSR network.

We welcome the Government’s interest in linking Airports to the HSR network and HS2 Ltd’s examination of Manchester Airport as a potential parkway station serving Greater Manchester and the North West. We are keen that this option is developed further in order that the maximum number of people possible is able to access the network without the need to enter the centre of Manchester.

3. BUSINESS CASE

3.1 How robust are the assumptions and methodology – for example, on passenger forecasts, modal shifts, fare levels, scheme costs, economic assumptions (eg about the value of time) and the impact of lost revenue on the ‘classic’ network?

The Government has been comprehensive in its methodology of the costs and benefits of a HSR network, which has been developed on an understandably cautious basis. The Government has gone to great lengths to revise their BCR assumptions in line with updated passenger demand figures, based on lower growth levels as a result of the projected lower rate of growth of GDP.

Cost estimates are based on the project being solely Government funded, yet the Secretary of State has expressed his expectation that major beneficiaries of HSR in the private sector will make financial contribution. Private sector investment, which isn’t taken into account in the business case would both make the scheme more attractive and reduce costs to Government. Precedent for public private partnership funding is evident from the Crossrail Bill which included the use of a supplementary business rate to levy funds from the private sector totalling £150 million.

3.2 What would be the pros and cons of resolving capacity issues in other ways, for example by upgrading the West Coast Main Line or building a new conventional line? 

Britain cannot continue to rely on incremental improvements to our existing rail infrastructure. The West Coast Mainline is a Victorian railway that has served us well in the 19th and 20th centuries, but is not able to cope with the demands of the current century. The main alternative to HSR; Rail Package 2a; is an upgrade of existing lines and the experience of the earlier version of this approach (the West Coast Route Modernisation project) is relevant. Its costs were estimated at £2.1bn. The final cost was £9bn and it entailed a decade of on-line works, which was hugely disruptive to rail users. There is much greater risk and uncertainty around cost estimates to upgrades of existing lines than those made for new-build. Upgrades typically take longer than originally programmed too (note HS1 was constructed on time, and to budget, unlike the West Coast Route Modernisation).

Proponents of the alternatives must also take into account as best they can what will have been achieved upon completion. In the case of RP2a, a situation will have been created in which any further similar developments designed essentially to create additional capacity will have increasingly poor benefit cost performance and the Government of the day will find themselves belatedly needed to construct a high speed line after all.

3.3 What would be the pros and cons of alternative means of managing demand for rail travel, for example by price?

Managing demand by way of pricing rail out of passengers’ economic means contradicts Government policy on creating a sustainable and integrated transport network. Long distance domestic travellers will be forced into using air travel, which is unsustainable on carbon grounds and given that HSR is the Government’s alternative to building a new runway at Heathrow. Similarly forcing medium distance travellers onto the already saturated motorway network will stifle economic growth, whilst also generating significant negative environmental impacts.

3.4 What lessons should the Government learn from other major transport projects to ensure that any new high speed lines are built on time and to budget?

From Manchester’s perspective, we urge the Government to ensure that there is no repeat of the lack of long term strategic planning that resulted in the ‘White Elephant’ £135m Waterloo International Station only being operational for 13 years. It is for this reason that we believe it is necessary to develop proposals for the whole of the "Y" network now, rather than to break it down into two phases. It is noted that whilst HS2 Ltd’s work on the Birmingham –Manchester line began only seven months after their work on the London – Birmingham line concluded, it is predicted to open seven years after the first phase. It is Greater Manchester’s strong belief that the maximum economic benefits will only be captured if the full network is promoted as a single whole and that Parliament should scrutinise the proposal for the full "Y" network rather than as two parts.

4. THE STRATEGIC ROUTE

4.1 The proposed route to the West Midlands has stations at Euston, Old Oak Common, Birmingham International and Birmingham Curzon Street. Are these the best possible locations? What criteria should be used to assess the case for more (or fewer) intermediate stations?

We have no view on the proposed line of route from London to the West Midlands but support the proposed stations at Euston, and Old Oak Common which will provide access to a greater proportion of London and the South East than is accessible from Euston alone, as well as providing access to Heathrow.

Intermediate towns and cities between London and Manchester will benefit significantly from the extra capacity released by HSR on the ‘classic network’. If intermediate stations were to be built, they should be built in such a way that the principle journey times and capacity available for services to Greater Manchester is not diminished.

4.2 Which cities should be served by an eventual high speed network? Is the proposed Y configuration the right choice?

GMCA supports the Government’s proposal for an initial ‘Y’ shaped high speed network serving Birmingham, Manchester (and Manchester Airport) and Leeds as these cities will provide the greatest economic benefits in terms of agglomeration; though we believe that more analysis needs to be carried out on the how high speed trains will be integrated onto the current network to run North of Lichfield and accommodated at stations including Piccadilly and in Liverpool.

GMCA firmly believe that the proposed ‘Y’ network should be seen as the first step of a longer term strategy in developing a comprehensive national HSR network, increasing inter-urban connections between currently poorly connected cities in order to address the nation’s economic divide, Manchester needs better more frequent and quicker services to the Northern cities of Liverpool, Leeds, Newcastle, Edinburgh, Glasgow and Sheffield. It would also be beneficial to improve links to the cities of Nottingham, Bristol and Cardiff.

4.3 Is the Government correct to build the network in stages, moving from London northwards?

We agree with the Government’s view that the HSR programme should be constructed in stages from London upwards. However, as we make clear in our answer to question 3.4 we believe the scheme should be planned as a single project and considered through Parliament on the basis of a single hybrid bill. Although it would add time and complexity, it would still take significantly less parliamentary time than two hybrid bills in different parliamentary sessions. In the intervening period before the high-speed line opens in Manchester it is clear that some work may be required between Lichfield and Manchester to accommodate the new High Speed Rail services from day one.

4.4 The Government proposes a link to HS1 as part of Phase 1 but a direct link to Heathrow only as part of Phase 2. Are those the right decisions?

We strongly support the proposals for a link to HS1 as part of phase 1 of the construction of the HS2 network. Direct access to the Channel Tunnel and Europe will allow firms in Manchester and the North West to access new and more diversified markets, increasing economic productivity.

We agree that a future HSR link to Heathrow may be required, but this must not disadvantage passengers wishing to access central London.

5. ECONOMIC REBALANCING AND EQUITY

5.1 What evidence is there that HSR will promote economic regeneration and help bridge the North-South economic divide?

European evidence from case studies highlighting the agglomeration benefits created by bringing major urban areas closer together is clear. It was feared the introduction of a HSR line between Lyon and Paris would damage Lyon’s regional economy, and widen the economic divide between Paris and the French regions. Instead since the introduction of HSR, Lyon has seen unprecedented economic growth and regeneration, with a second central business district forming around the new HSR station, creating 20,000 new jobs. There are strong parallels therefore between Manchester and Lyon.

Early local studies conducted by us predict almost 10,000 jobs would be generated across the region covered by the Northern Way partnership, boosting productivity and growing the economic output across the area by £967 million per year.

5.2 To what extent should the shape of the network be influenced by the desirability of supporting local and regional regeneration?

It is paramount that the shape of the HSR network is led by the desire to support regional economic development and where possible local regeneration. Urban regional centres will benefit the most from HSR through job creation and increased economic output, and we feel the proposed ‘Y’ shape network linking London, Birmingham, Manchester and Leeds; and potentially onwards to Liverpool, Newcastle, Edinburgh and Glasgow will be critical in achieving the objective. However, high speed rail is not a panacea for regional regeneration but is one of a number of interventions, including capacity improvements on the existing rail network, which will better link a wide range of towns and cities in order to maximise the ability of people to reach employment, training and education opportunities.

5.3 Which locations and socio-economic groups will benefit from HSR?

HSR will primarily benefit major urban areas through agglomeration opening up new markets. HSR will increase the number of workplace jobs accessible from Manchester within 90 minutes by rail by 90%. A city centre station site is essential as all previous studies have concluded. Only rail can provide unrivalled city centre to city centre transport capacity.

A second HSR station located at Manchester Airport would also generate large benefits. Growth impacts concentrated on Manchester Airport and surrounding area will see an estimated productivity rise of £290 per job per annum. Benefits of HSR however are not limited to the immediate urban areas surrounding HSR stations. In the North West HS2 will create economic benefits that spread far beyond the immediate Greater Manchester area, with productivity per job estimated to rise by £201 per job p.a as far away as Preston.

Although HSR’s primary markets will be business and leisure travel, the capacity released on the conventional network will support access to jobs and other opportunities at all levels and to all socio-economic groups.

5.4 How should the Government ensure that all major beneficiaries of HSR (including local authorities and business interests) make an appropriate financial contribution and bear risks appropriately? Should the Government seek support from the EU’s TEN-T programme?

Government needs to explore all appropriate areas of funding, especially those that reduce the cost to the tax payer. Greater Manchester through its Transport Fund is making substantial investments into local transport infrastructure. In the main we see HSR as infrastructure of strategic national importance – and would expect therefore that much of the necessary funds would therefore come from central government.

6. IMPACT

6.1 What will be the overall impact of HSR on UK carbon emissions? How much modal shift from aviation and roads would be needed for HSR to reduce carbon?

The introduction of a HSR network has the potential to significantly reduce carbon emission levels in the UK as it will induce a modal shift from the carbon-intensive modes of car and air travel. According to the Department for Transport, in 2008 domestic transport accounted for 21% of the UK’s domestic emissions of carbon dioxide. ATOC research demonstrates that HSR travel produces only one-third of the carbon emissions of car travel and one-quarter the emissions of an equivalent trip by air, taking into account the average loadings typically achieved on each mode. A national HSR network incorporating Scotland is forecast to reduce CO2 emissions by one million tonnes each year by 2055.

HSR’s carbon output will fall further in the future due to the progressive de-carbonisation of the UK’s electricity generation facilities.

6.2 Are environmental costs and benefits (including in relation to noise) correctly accounted for in the business case?

GMCA feel that the Government has gone to great lengths to account for environmental costs and benefits within the business case. Assessments of environmental costs and benefits attributed to both the lines construction and eventual usage have been derived from detailed assessments and future levels of demand and carbon emissions are based on conservative estimates. Comparisons have also made with the environmental impacts of HS1 and other rail schemes.

6.3 What would be the impact on freight services on the ‘classic’ network?

Introduction of a HSR network would have positive impacts on freight services, as they will benefit from the reduced demand for inter-urban services on the existing rail network freeing capacity on the ‘classic’ network. The freed capacity HS2 would create for freight services on the ‘classic’ network is extremely important, as according to Network Rail’s ‘The Network Route Utilisation Freight Strategy’, volumes are set to increase by as much as 140% between 2006/07 and 2030/31.

6.4 How much disruption will be there to services on the ‘classic’ network during construction, particularly during the rebuilding of Euston?

Whilst we accept their will be disruption to services during the rebuilding of Euston station, the disturbances caused will be far less than those which would be created by incremental improvements to the West Coast Mainline. Lessons need to be learnt from the 1998-2008 West Coast Mainline modernisation. Disruption caused by live incremental improvements increased journey times between Manchester and London to almost 3 hours and had a significant negative impact on punctuality and reliability. The resultant impact saw passengers move away from rail travel to more environmentally unsustainable modes, and it took a long time for the rail industry to recover patronage.

No work has been published to date around plans that may need to be developed at Manchester Piccadilly to accommodate HSR trains from the outset. It is essential (i) that such plans are developed expeditiously and (ii) that when implemented these plans do not lead to significant disruptions during construction.

16 May 2011

Prepared 31st May 2011