5.30 pm

Clause 139: Power to modify energy supply licences: domestic supply contracts

Amendment 7

Moved by Baroness Verma

7: Clause 139, page 108, line 31, at end insert—

“(f) provision for requiring a licence holder to provide information to domestic customers about the licence holder’s costs, or profit, attributable to its domestic supply contracts, which may, in particular, include information about—

(i) particular kinds of those costs, and

(ii) the extent to which domestic customers’ costs are attributable to any of those kinds of costs, or to profit;”

Baroness Verma: My Lords, this group of amendments has the effect of giving the Secretary of State the power to require energy suppliers to provide a breakdown of costs to consumers. This includes both information about their costs in supplying domestic customers and costs passed on to domestic consumers through the Government’s environmental and social programmes. It also enables the Secretary of State to set out the categories of costs to be included and to determine the frequency with which this information must be provided. I am grateful to my noble friend Lord Forsyth, who sadly is not in his place today, and to other noble Lords who raised this matter on Report. I listened very carefully to the views expressed and the Government have brought forward this amendment in response.

The Government are in complete agreement on the importance of providing clear information on the costs that contribute to consumers’ energy bills, including the costs of government policies. Indeed, that is why the Government publish each year a detailed assessment of the impact of our policies in the Estimated Impacts of Energy and Climate Change Policies on Energy Prices and Bills. However, I recognise the strength of feeling on this issue and that is why we will now go one step further and ensure that this information is provided directly to consumers. We will be working with consumer groups, including Which? and Consumer Futures, to take this forward. Four of the largest suppliers already provide a breakdown of their costs on consumer bills. As a first step, I will be seeking a voluntary agreement with other suppliers to ensure that they also provide a breakdown of their costs to consumers.

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It is right that we should first pursue a voluntary agreement, as this is the quickest and most cost-effective route to getting this information out to consumers. In the event that the Government are unable to reach agreement to a voluntary approach, the Secretary of State will exercise this power. We need to strike a balance between providing sufficient detail on the costs associated with supplying gas and electricity, and significantly increasing suppliers’ costs, which would inevitably end up being passed on to consumers.

I will explain the types of costs about which suppliers might be required to provide information. I expect to see costs broken down into the following types of categories: wholesale energy costs, network and distribution costs, costs of complying with government environmental programmes, VAT, operating costs and profit. How suppliers display these costs should be left for them to decide, provided they include these categories. I believe the approach we are taking strikes the right balance by providing transparency to consumers on the costs incurred by suppliers without imposing significant additional burdens. I beg to move.

The Lord Bishop of Chester: My Lords, I welcome this amendment, which began its life, I think, in an interchange between the noble Baroness and me in Grand Committee. She has pretty much supplied everything that I asked for then, and I am very pleased. The only point that I will make now is that the Government rightly want to make it easy for consumers to switch suppliers. That is a good thing and it is very helpful that this information will be made available one way or another on bills. However, it needs to be made available consistently, in the same form, by different suppliers, so that if you are comparing a bill from one supplier with a bill from another, the information is supplied in the same form on each bill. The noble Baroness did not quite make that point in what she said. I hope that she can assure us that these costs will be disclosed—either voluntarily or by the exercise of the power that she is taking—not only transparently but consistently and comparably by different suppliers.

Baroness Maddock (LD): My Lords, I have one question for my noble friend. She talked about making environmental costs clear to customers on their bills. In the past few weeks, we have had lots of discussions about eco and green taxes, and it has become quite clear that the big six, in particular, have sometimes not pointed out to their customers, or admitted in their discussions, that some of those costs are social costs. Everything is in a bit of a state of flux at the moment but, depending on how things work out, it is also important that we are quite accurate on the bills about what is a social cost and what is a so-called green tax. I will also just say that I am very sorry that I was not here for the previous stage of the Bill when the noble Baroness accepted my amendment about the clarity of bills. I hope that the point that was raised by the right reverend Prelate will be covered in the amendment that was passed on Report concerning the clarity of Bills.

Lord Teverson: My Lords, I very much welcome this government amendment. However, I have a concern which is similar to the concern expressed by my

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noble friend Lady Maddock about how these numbers are produced. When the price increases came through from the energy companies, a bill that I saw, to family members, bullet-pointed the green energy costs as being at the top of the list, giving the impression that this was the most important thing. We all know that numbers are subjective. Numbers in company accounts are as objective as they can be but they are subject to how things are interpreted to some degree; as we know, for example, in terms of the lack of tax that is paid by some multinational companies. Do the Government have any view about how these numbers should be somehow independently audited or at least be auditable, if we feel that they fall below standard?

Lord Jenkin of Roding: I will just add one point before my noble friend replies. I was very glad to hear her say that she would rather this was done voluntarily, but a back-up power is important to encourage the right response from the industry. I apologise to the right reverend Prelate. I was moving amendments on this subject during proceedings on the last energy Bill but one. Those amendments suggested that we needed to see more detail in the Bill. As other noble Lords have said, one needs to have a very clear view as to what these figures actually mean, which is not always apparent. I get bills with pie charts and other things from British Gas. I have one in front of me, to which I have referred before, from Southern Electric. Many of them try to do their best, but such is the lack of trust now between the public and the industry that the public need to be reassured that the figures actually mean what they say. I look forward to seeing what comes from this but, along with other noble Lords, I very much welcome these amendments.

Viscount Ridley: My Lords, as someone who spoke in favour of the amendment of the noble Lord, Lord Forsyth, on Report, I, too, welcome this amendment and think that it goes in exactly the right direction. I particularly welcome the emphasis on voluntary reporting, which will result in a much more flexible and effective way of finding out exactly what these costs are, and where they are, than if we tried to micromanage it by specifying the details ourselves as hopeless legislators rather than people who know how these things are done.

Lord Grantchester: From these Benches, I am happy to endorse the spirit of the amendments in the interests of consumers and providing them with more information on their bills. These amendments seem more neutral than those proposed on Report in that they do not seek in the Bill to mandate energy suppliers to highlight certain designated costs. The amendments thereby avoid the claim that they are targeting so-called green levies on behalf of one strident viewpoint. I listened carefully to the Minister’s words in proposing these amendments and, like the noble Baroness, Lady Maddock, I am not sure that I picked up entirely how the Minister expected costs to be broken down to include the social costs. Can she clarify that in her reply? The impact of different costs, especially the so-called green or environmental costs, should be balanced and it is important how that is portrayed to consumers.

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We welcome the consultation that this will enable so that all views can be expressed prior to the introduction of regulations—if any are introduced. However, we are concerned that the transparency of the whole market needs to be enhanced, not simply transparency with respect to the costs of energy supply companies. I refer here to generating costs and transfer pricing within each of the big six power companies, which can make big margins on their generation that would not then show up as the Government may intend.

We remain concerned that these clauses do not go anywhere near far enough. From these Benches, we contend that without proper reform of the market, the data available at any later date are likely to be of severely limited use. At this stage, we are content with the amendments but regard them as highly immaterial to the overall transparency of the market.

Baroness Verma: My Lords, I am extremely grateful to all noble Lords for, by and large, their support for my amendments. I will quickly respond to the right reverend Prelate the Bishop of Chester and to my noble friend Lady Maddock about transparency. The Government and Ofgem both agree that it is important that suppliers are transparent about their costs, including the costs of complying with government environmental and social programmes. One part of the list to which I referred earlier was about complying with greater transparency on those costs. The suppliers would be expected to be able to comply on the cost of delivering government environmental and social programmes. Just to reassure noble Lords, the power enables the Secretary of State to specify the particular kinds of costs that suppliers must refer to, so if we need to get further detail, there is scope to enable that to happen.

I have tried to provide a balance between not overcomplicating the Bill and enabling consumers to be able to look at a bill, see how much their energy is costing them and see whether they are able to get a cheaper deal elsewhere. Providing that information in a way that is clear and easy to understand is what my amendment proposes to do.

Amendment 7 agreed

Amendments 8 to 10

Moved by Baroness Verma

8: Clause 139, page 108, line 47, at end insert—

“(4A) Provision that may be included in a licence by virtue of subsection (2)(d) or (f) may in particular—”

9: Clause 139, page 108, line 49, at end insert—

“( ) make provision about the times at which information is to be provided;”

10: Clause 139, page 109, line 46, after “make” insert “incidental, supplementary or”

Amendments 8 to 10 agreed.

.

Clause 145: Fuel poverty

Amendment 11

Moved by Lord Whitty

11: Clause 145, page 113, line 12, leave out “addressing the situation” and insert “reducing the number”

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Lord Whitty (Lab): My Lords, in moving this amendment I shall also speak to Amendment 12. I had better declare an interest on this: I am the chair of a small fuel poverty strategy. I do so because the Minister was, I am glad to say, present at the opening of our conference today, which I am very grateful for.

We come now to fuel poverty. I am not quite sure how many “lemmas” we now have in energy policy, whether it is a tetralemma or a quadlemma, but clearly one of the objectives of energy policy must be to rectify the detrimental effects that arise from fuel poverty on some of the poorest in our land. The House will be well aware of how important it is to regard tackling fuel poverty as one of the priority aims of energy policy. There will still be millions of households in severe distress this winter because they cannot heat their homes properly. As a result, there will be millions of pounds of expenditure by the NHS in treatment of cold-related diseases, and sadly there will be some thousands of premature deaths.

Because of this background and because of the inexorable rise in consumer energy prices since about 2004-05—whatever programmes existed then were struggling against a rising trend of prices—the original intentions to eliminate fuel poverty, set down as far back as 2000, were no longer achievable. It was therefore of some concern to many of us that when the first version of this Bill appeared in another place, there was no mention whatever of fuel poverty.

In Committee, the Minister herself produced the provision that attempts to rectify that situation. It was commendable of her to persuade her colleagues that this was necessary, and the Government’s commitment in Clause 145 to producing a new strategy for fuel poverty in a maximum of six months’ time was broadly welcome—and I still welcome it. However, many of us also considered that more detail was required to make clear the nature of this strategy. As colleagues will remember, a number of more detailed proposals for inclusion in this part of the Bill were considered both in Committee and on Report. The Government rejected all of those, unfortunately, but at least the strategy is there.

5.45 pm

The amendments before us today are much simpler in nature. They simply attempt to clarify what the strategy is about. I would have thought that the Government could simply accept Amendment 11. Clause 145 refers to the intention of the strategy as,

“addressing the situation of persons ... in fuel poverty”.

That is pretty neutral. Surely, at a minimum, the proposed strategy should be about either the elimination of fuel poverty or at least the reduction of the numbers of people in fuel poverty. That needs to be reflected in this clause.

I regret having to say this but the reason why it is so important that a reference to a reduction in numbers is included is that there is considerable scepticism out there about the Government's good intentions in this area. The Government started by closing down the only taxpayer scheme designed to improve the energy efficiencies of the dwellings of the fuel poor and, in effect, abandoned targets and sought to redefine the problem. Extreme cynics, some of whom I have met,

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would say that the main thing that the Government have so far done to “address” fuel poverty in the terms of this clause has been to change the definitions—to statistically manipulate 2 million people out of the figures without anything actually having changed.

There were problems with the old definition, and in my view there are even greater problems with the new one. But whatever the merits of the change in definition, the combination of that with the Government’s abolition of previous schemes, the slow and somewhat expensive start of the ECO—which is supposed to address the problem of fuel poverty—plus the lack of a mention in the original version of this Bill, has led to some scepticism about the Government’s intentions. I am moving this amendment so that the Government can make their aim clear. This relatively modest amendment is as much in the Government's interest as it is anybody else’s. I hope that they will simply accept it and make clear what the intentions of this strategy will be in a few months.

Amendment 12 is also intended to provide clarification. It has always been the case, and is still the case under this Government, that multiple measures are needed to address the problem of fuel poverty. The tariff structures, which were addressed at an earlier stage of the Bill, and income enhancements such as winter fuel payments for pensioners, are also important. Most important of all, however, is the need to improve the energy efficiency of the homes of the fuel poor. That is also important for carbon reduction purposes. However, the need to address energy efficiency in buildings is not mentioned in Clause 145 or anywhere else in the Bill.

When the Government express the strategy in terms of targets in a few months’ time, I hope it will be clear that the targets are about energy efficiency improvements as well as the number of fuel poor. If that is the intention then it would be useful to have a reference to energy efficiency in dwellings inserted in Clause 145 to clarify that intention. That is what the second amendment does.

It is in the Government’s interest to clarify this, and it will certainly be in the interest of the consultation which they intend to hold on the fuel poverty strategy in a few months’ time. I therefore hope that the Government will consider these amendments positively. I beg to move.

Baroness Verma: My Lords, I thank the noble Lord, Lord Whitty, for his amendment. Rightly, he has again highlighted the seriousness of fuel poverty, as he has throughout the debates on this Bill, and I know that on all sides of the House there is a real determination to ensure that the interests of the fuel poor are represented properly. Indeed, earlier today I attended an event with fuel poverty experts to gain a better understanding of how to tackle the problem, at the invitation of the noble Lord, Lord Whitty, for which I am extremely grateful.

The Government are determined to act to ensure that consumers get a good deal and affordable energy bills. Indeed, our analysis suggests that as a result of the electricity market reform measures in this Bill, household electricity bills will be, on average, around 9% lower per year over the period 2016 to 2030 relative

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to what they would be if decarbonisation were achieved through existing policy instruments. As such, the impact of EMR will be to reduce fuel poverty compared to what it would have been without these policies in place.

The noble Lord’s amendments would set an objective to reduce the number of persons living in fuel poverty and improve the energy efficiency of their dwellings. The Government are intent on tackling fuel poverty at its heart, with improving energy efficiency for fuel-poor households a real priority. We agree that improving the energy efficiency of fuel-poor homes can make a sustained improvement to the situation of households struggling to keep warm and it is therefore the right type of target to aim for. However, the right balance must be struck between what is set out in primary legislation and what is subsequently laid out in regulations, in order to maintain an appropriate use of parliamentary time and the level of government accountability.

Therefore, we have proposed setting out the detail of this objective through secondary legislation because we believe that this strikes the right balance between the certainty of a legislative target and the need for flexibility in the future. We know from Professor Hills’s independent review that the way in which we understand the problem can change over time, as well as the best ways of tackling it. Primary legislation is not the appropriate vehicle to set out the detail of the target, given the importance of a nuanced, flexible approach to tackling fuel poverty.

The issue with the current legislation is that there is a very specific target which does not make sense in the context of how we have come to understand the problem of fuel poverty. That is why we have framed the new provisions in the way that we have, to ensure that there is an objective to address fuel poverty but with the detail of that objective set out in secondary legislation. Our proposals ensure that the setting of the target, and any changes to it, will be subject to full parliamentary debate, and the importance of that debate is why we have suggested from the outset that these provisions will be subject to affirmative resolution by both Houses.

Furthermore, from a practical perspective, it would not be sensible to make specific reference to improving the energy efficiency of dwellings, as this could mean that every time the methodology for measuring energy efficiency is updated, the primary legislation would need amending. As this could occur every couple of years, it would not represent a proportionate use of parliamentary time for what would be very technical amendments.

To reflect on what the noble Lord, Lord Whitty, said about the measures we are currently using under ECO, thus far 311,250 energy-efficiency measures have been installed in around 273,000 properties through ECO and the Green Deal, to the end of September. The vast majority have been installed through ECO so we believe that ECO is working. It is reaching out to the very families that I know the noble Lord and I both believe need the greatest assistance.

In summary, I agree with the spirit of the noble Lord’s amendments but do not believe that it would be sensible to put this detail in the primary legislation

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However, since we are agreed on the intention, I hope that my response has reassured the noble Lord and he will withdraw his amendment.

This is the last group to which I will speak, so before I sit down I would like to put on record my thanks to everyone who has played a role in the passage of the Energy Bill through this House. I start by thanking the Lord Speaker and all Deputy Speakers and Deputy Chairmen who have facilitated our proceedings. I also thank all those who have worked behind the scenes: the clerks, Hansard, the doorkeepers and the officials from the Ministry of Defence, the Department for Communities and Local Government and the Department for Environment, Food and Rural Affairs who have supported the Government. I add my particular thanks to my officials from DECC, who have worked tirelessly—even to the point of giving up annual leave during the Summer Recess—to be able to provide the information that your Lordships required, which was made possible by the way they performed so heroically during the passage of this Bill.

I also thank all noble Lords who have taken part in our debates for their constructive contributions to the Bill. We have scrutinised it in full and I have no doubt it is leaving us in a better state than it arrived in, thanks to the expertise of this House. We have added new provisions on fuel poverty, access to markets and enabling the level of the small-scale feed-in tariffs threshold to be raised. Thanks to my noble friend Lord Roper and the Delegated Powers and Regulatory Reform Committee, we have also improved the level of scrutiny afforded to the delegated powers in the Bill.

I particularly thank my noble friend Lord Gardiner, who has so ably assisted me at the Dispatch Box, as well as my noble friends Lord Courtown and Lord Teverson, who have assisted from the government Benches.

I am also extremely grateful to all members of the House of Lords informal scrutiny group on the Energy Bill, which first convened for pre-legislative scrutiny and has continued its most helpful and appropriately challenging scrutiny in parallel to the Bill’s passage. I particularly thank the noble Lord, Lord Oxburgh, who I do not see in his place, for his long-standing chairmanship of this group.

We have not agreed on everything but I am grateful for the broad support there has been for the intentions of this Bill. As I am sure noble Lords will agree, it is now important that the Bill proceeds to Royal Assent as swiftly as possible in order to secure the investment that is vital for growth, jobs and the decarbonisation of our economy.

Lord Whitty: My Lords, I echo the noble Baroness’s sentiments in relation to the passage of this Bill. Although, apart from the Minister herself, we are now discouraged from making lengthy speeches at Third Reading, I would like to underline her thanks to her staff, because they have been extraordinarily helpful to other Members of this House. The meetings we have had under the auspices of the noble Lord, Lord Oxburgh, and the noble Baroness have been extremely helpful.

As the noble Baroness says, we have not always agreed. We do not entirely agree on this clause. Some of what she addressed in her reply related to earlier

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discussions we had on Report. I am not trying to specify targets in any detail; I am saying simply that the fuel poverty strategy should be about reducing the number of fuel poor, including by improving the energy efficiency of their homes. I would have thought that was pretty incontestable and really should have been reflected in this Bill.

I will not pursue this tonight but I will just say to the noble Baroness that because of when this was introduced, the other place has not actually considered the fuel poverty dimensions of this Bill. I rather suspect that her colleagues in the House of Commons will have some lengthy discussions on this and, in the light of that prospect, I will withdraw my amendment tonight. I reiterate my thanks to the Minister and her staff for the conduct of the whole passage of this Bill.

Amendment 11 withdrawn.

Amendment 12 not moved.


Amendment 13

Moved by Baroness Stowell of Beeston

13: After Clause 149, insert the following new Clause—

“Smoke and carbon monoxide alarms

(1) The Secretary of State may by regulations make provision imposing duties on a relevant landlord of residential premises in England for the purposes of ensuring that, during any period when the premises are occupied under a tenancy—

(a) the premises are equipped with a required alarm (or required alarms), and

(b) checks are made by or on behalf of the landlord in accordance with the regulations to ensure that any such alarm remains in proper working order.

(2) “Required alarm” means—

(a) a smoke alarm, or

(b) a carbon monoxide alarm,

that meets the appropriate standard.

(3) Regulations may include provision about—

(a) the interpretation of terms used in subsections (1) and (2);

(b) the enforcement of any duty imposed by regulations.

(4) Provision made by virtue of subsection (3)(b) may in particular—

(a) confer functions on local housing authorities in England;

(b) require a landlord who contravenes any such duty to pay a financial penalty.

(5) Provision about penalties made by virtue of subsection (4)(b) includes provision—

(a) about the procedure to be followed in imposing penalties;

(b) about the amount of penalties;

(c) conferring rights of appeal against penalties;

(d) for the enforcement of penalties;

(e) about the application of sums paid by way of penalties (and such provision may permit or require the payment of sums into the Consolidated Fund).

(6) Regulations may—

(a) include incidental, supplementary and consequential provision;

(b) make transitory or transitional provision or savings;

(c) make different provision for different cases or circumstances or for different purposes;

(d) make provision subject to exceptions.

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(7) Consequential provision made by virtue of subsection (6)(a) may amend, repeal or revoke any provision made by or under an Act.

(8) Regulations are to be made by statutory instrument.

(9) An instrument containing regulations may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.

(10) Subject to provision contained in regulations, in this section—

“the appropriate standard”, in relation to a smoke alarm or a carbon monoxide alarm, means the standard (if any) that is specified in, or determined under, regulations;

“local housing authority” has the meaning given in section 261(2) of the Housing Act 2004;

“premises” includes land, buildings, moveable structures, vehicles and vessels;

“regulations” means regulations under this section;

“relevant landlord” means a landlord in respect of a tenancy of residential premises in England who is of a description specified in regulations;

“residential premises” means premises all or part of which comprise a dwelling;

“tenancy” includes any lease, licence, sub-lease or sub-tenancy (and “landlord” is to be read accordingly).”

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con): My Lords, in moving Amendment 13 I will speak also to Amendments 14 and 15. Before I get to that, though, I will start by paying tribute to the noble Baroness, Lady Finlay of Llandaff, and indeed your Lordships’ House, for raising and debating the important matter of carbon monoxide poisoning during the passage of this Bill.

As noble Lords will recall, in Committee the noble Baroness, Lady Finlay, explained the effects of carbon monoxide poisoning and highlighted, as indeed did other noble Lords, some of the recent tragic cases. The noble Baroness tabled an amendment that would have introduced regulations for carbon monoxide detectors in the Bill. We could not accept that amendment but it provoked a debate within government which led me to announce on Report a couple of weeks ago that we would extend our review of private rented accommodation to examine whether landlords should be required to install carbon monoxide detectors.

6 pm

Noble Lords will recall that on Report the noble Baroness tabled an amendment that would have introduced order-making powers on the Secretary of State. During our debate then I was clear that the Government could not commit to regulate in advance of the completion of the review I had announced that day. However, as I could see the merits of having the power in place should the Government decide that regulations are the correct course of action, I agreed to discuss this further with my ministerial colleagues. Having done that, I am pleased to put forward government amendments today and am also pleased that the noble Baroness, Lady Finlay, and others have added their names.

The amendments before us now differ from the one tabled by the noble Baroness, Lady Finlay, on Report in two important respects. First, the government amendments also cover smoke alarms. We decided that it would be sensible to do so given that the arguments around carbon monoxide alarms are very

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similar for smoke alarms. Secondly, the amendments apply only to rented housing, whereas the amendment tabled by the noble Baroness, Lady Finlay, would have applied to all properties, including owner-occupied ones. We have restricted the scope of the amendment in this way because tenants in rented homes do not generally have the same degree of control over their homes compared with home owners and may therefore need greater protection. In addition, there is some evidence that privately rented homes represent a greater risk to the safety of occupiers than any other sector.

In tabling these amendments, I make it clear again that the Government remain to be convinced of the need to regulate in this area at this time. However, as I have said, we have decided that it would be prudent to take the necessary powers now. We will now take forward a wide-ranging and fundamental review into property conditions in the private rented sector. The review will consider very carefully the case for requiring landlords to install carbon monoxide alarms and/or smoke alarms in their properties. The review is scheduled to last approximately six months and to conclude in June 2014. As soon as possible following this, the Government will publish a report which will summarise the key findings of the review, set out government conclusions and detail the Government’s intended actions following those conclusions.

The first stage of the review will be the publication next month of a discussion document setting out the terms of reference and inviting views on a range of issues. We will also engage widely with interested organisations including landlord associations, housing charities, tenant groups and professional bodies. In addition to considering whether smoke and carbon monoxide alarms should be required in privately rented housing, the review will also look at the minimum standards tenants should expect when renting a property. This will include considering the requirements of the Landlord and Tenant Act 1985, the current licensing system for privately rented housing, current requirements around regular checks of electrical installations in the home and whether there is a need to introduce a compulsory system requiring that such installations are checked regularly. We will also give careful consideration to the possibility of requiring landlords to repay all or part of any rent they have received where they rent out a property that contains serious health hazards or has other major defects.

It is important that we do not prejudge the outcome of the review. The Government are seeking to take these powers now to enable us to move quickly if the review concludes that such alarms should be mandated in this sector. I hope, therefore, that noble Lords feel reassured by what I have said today and are reassured that the Government take this issue very seriously. I am very grateful to noble Lords for their intervention on this important issue which has had a significant impact in raising its profile. I beg to move.

Baroness Finlay of Llandaff (CB): My Lords, I am delighted to add my name to this amendment. This is Carbon Monoxide Awareness Week so the amendment is extremely timely and I am glad the Government have been prudent, and prudent enough to extend it to smoke alarms as well. I am most grateful to the

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Minister for the time that she has spent with me on this issue and also to the noble Baroness, Lady Verma, in her role as Minister taking this Bill forward. I hope that the Public Health England warning that went out yesterday over fossil fuel and wood-burning stoves for Carbon Monoxide Awareness Week will become a thing of the past. It is important that the cost of a working smoke alarm at European Standard EN 50291, guaranteed for seven years, is put in context. One year’s protection costs less than a large cup of coffee at a motorway service area. Some 40 people a year on average lose their lives through carbon monoxide poisoning and about 4,000 people end up in A&E. This is a really important step. I wish that we did not have to take it but I am sure that we will end up needing to have regulations made. I will continue to question the Government as it goes through and I will be watching the review very carefully. In the mean time, I am most grateful and I am sure that the victims’ families are also grateful that the Government have listened carefully and acted at a point where they could.

Baroness Maddock: My Lords, I, too, added my name to this amendment and I am very grateful to both Ministers for bringing this forward. Like most people who have campaigned on this issue over the years, it began with a personal experience. My first experience was in a private home where a room had been made in a roof and there were fumes as the builder had not properly sealed the chimney. I hope that at some point we can look also at homes other than rented ones.

My experience was 20 years ago and over those 20 years a number of groups and individuals have campaigned on this. During the passage of this Bill, we got the old familiar answer that, “It is not our department”. I am very grateful to the Minister because she did not stop it there and the noble Baroness, Lady Finlay, and I had a very productive meeting with her and her officials—she took on board that we really ought to sort this out. It must be somebody’s responsibility somewhere. I had hoped that there might be some regulations somewhere that we could add this on to but that is not exactly what has happened. I also raised it with my right honourable friend Ed Davey, the Secretary of State at DECC, and he took this seriously as well, so I know that a lot of work has gone on to bring this forward.

I, too, thank the Minister for the amazing access we have had and the information that we have all been party to through the passage of the Bill through this House. As other noble Lords have said, we always make legislation better when it comes here. We have certainly done that and I thank the Minister for bringing forward the fuel poverty strategy. We know that it is not perfect but we are really grateful as it was not there before. As the noble Baroness, Lady Finlay, said, on behalf of all those who have campaigned about the unnecessary deaths from this silent killer, carbon monoxide, we thank everybody who has brought forward these amendments today. However, like the noble Baroness, Lady Finlay, I shall be watching what happens in future because the dreaded word “may” is in the Bill; it is not “must”.

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6.15 pm

Lord Grantchester: My Lords, we, too, thank the Minister for joining with the energy department to bring forward this sensible amendment which, if implemented, will undoubtedly save lives. We also thank the noble Baroness, Lady Finlay, and other noble Lords, including my noble friend Lord Harrison who cannot be in his place today, who have campaigned strongly on the issue. Deaths from carbon monoxide and from fire are avoidable. These alarms are cheap to buy and fix and must be among the most efficient life-saving devices ever on the market. It must also be stressed that there can be no substitute for regular maintenance. I am glad to see that element also included in the amendment.

While welcoming the consultation to capture views on how the measure may be taken forward as part of a wider review, our only concern is that the Government may not bring forward the necessary regulations despite the undoubted value of these devices, which could save hundreds of lives a year. Will the Minister tell the House when the review announced on 16 October will report? We see no reason to hold up this welcome measure unnecessarily while the review looks at a number of other, quite unrelated issues. We therefore urge the Government to move with some haste on this measure, so saving tenants across the country from the risk of death either from fire or from carbon monoxide poisoning.

Baroness Stowell of Beeston: I am grateful to all noble Lords who have spoken and for their support for these government amendments. I share the views expressed by my noble friend Lady Maddock and the noble Baroness, Lady Finlay, on the work that my noble friend Lady Verma has done in this area. It was she who responded to the debates in Committee and ensured that there was the greater collaboration across government departments that led to the announcement that I made on Report. We have worked together on this, but the amendment was triggered by her response to the debates that took place in Committee.

I do not think that there is a great deal more for me to add to the points that I made when moving the amendment. I am grateful to the noble Lord, Lord Grantchester, for his support for the amendment. As I said in my opening remarks, the review that the measure forms part of will conclude next June. We will be as swift as possible in making public our conclusions in response to that review. As I have said and as I have demonstrated today, if the outcome of that review is a decision that we should regulate, we now have in place the order-making powers that would make that possible. The noble Lord urged us to go further, but as I said when we discussed this matter at the previous stage, his own Government conducted a comprehensive review of this area only in 2009 and concluded that they should limit regulations to just the installation of solid-fuel appliances. I accept his challenge and the pressure he puts on me to make sure that we go further, but we are doing this by way of review because we think that it is the right thing to do. I am quite confident that, by conducting a comprehensive review, we will be able clearly to demonstrate that our conclusions are evidence-based and well informed.

Amendment 13 agreed.

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Clause 154: Extent

Amendment 14

Moved by Baroness Stowell of Beeston

14: Clause 154, page 122, line 6, leave out “Section 145 extends” and insert “Sections 145 and (Smoke and carbon monoxide alarms) extend”

Amendment 14 agreed.

In the Title

Amendment 15

Moved by Baroness Stowell of Beeston

15:In the Title, line 12, after “State;” insert “about smoke and carbon monoxide alarms;”

Amendment 15 agreed.

Bill passed and returned to the Commons with amendments.

High Speed Rail (Preparation) Bill

Second Reading (and remaining stages)

6.14 pm

Moved by Baroness Kramer

That the Bill be read a second time.

The Minister of State, Department for Transport (Baroness Kramer) (LD): My Lords, I open this Second Reading by reminding this House why so many of your Lordships across the political divide have given their support to a high-speed rail network. The noble Lord, Lord Faulkner, has said:

“There you have the essential case for building High Speed 2 —not as a separate line, physically and operationally away from the current railway, but as a crucial part of a reshaped and improved national network”.—[Official Report, 24/10/13; col. 1226.]

The noble Lord, Lord Greaves, from the Liberal Democrat Benches, who is not in his place but was involved in the previous debate, said:

“It will herald a new era for railways in Britain, and it will form a vital part of bringing together the different parts of England and closing the regional divide”.—[Official Report, 24/10/13; col. 1221.]

The noble Lord, Lord Heseltine, who sends his apologies because he is committed to a speech tonight, said:

“HS2 is about our country’s competitiveness for half a century or more. It is about so many more people sharing growth that has, for too long, been concentrated on London and the south-east. It’s all about drawing together our economy as a whole as well as improving our access to the enlarged, and enlarging, home market of Europe”.

Of course, there are opponents of high-speed rail and specifically of HS2. I respect them; they raise real challenges; and I shall address those challenges today.

The Bill before your Lordships is a paving Bill. Mercifully, it is simple and clear. It grants the Secretary of State authority to incur expenditure, which must be also approved by the Treasury. It describes the route as publicly committed, but allows for future extensions as well as connections to the wider network. It requires an annual report to be made to Parliament for all expenditure incurred, including any variation from

19 Nov 2013 : Column 907

budget. It requires reporting on those receiving vocational qualifications as a consequence of the project, and, of course, it is a money Bill. Each phase of HS2 and any future extensions will require a separate hybrid Bill without which construction cannot begin. That will be the opportunity to debate and scrutinise the route in detail and the manner in which the project will be delivered.

There are three key arguments for HS2 and the high-speed rail network that this Bill presages: capacity, connectivity and growth. In Britain, we are running out of capacity on our most important north-south routes. Demand for intercity rail travel has doubled in the past 15 years. By the mid-2020s, the west coast main line, our main rail line connecting London, the Midlands and the north, will be full. That is calculated on very modest figures for passenger growth: 2.2% a year. I should note that for the past decade demand has grown at 4.4% a year or more. Already in 2011, during the morning peak, 4,000 people were standing on arrival into Euston and 5,000 people were standing on arrival into Birmingham. It is close to impossible to get train paths for new services on the west coast main line.

We need a high-capacity answer, and that is HS2. It gives us 18 trains an hour in each direction when complete, each carrying up to 1,100 passengers. By taking long-distance travellers off the existing lines, it releases space on the west coast, east coast and midland main lines to be used for much needed regional and commuter services. Network Rail estimates that more than 100 cities and towns could benefit from the released capacity. It also releases essential capacity for freight: demand for rail freight is forecast to double by 2043, and there is not the capacity to carry it.

I am, of course, aware that many have proposed alternatives: upgrades to our existing lines to provide that capacity. Many of the ideas are interesting—in fact, some will probably be implemented—but they leave us with two problems. The first is scale. Including every reasonable alternative, we can achieve a 24% increase in capacity. HS2 gives us a 105% increase. It is a complete step change.

The second problem is disruption. As upgrades mean working on active lines in daily use, we have to resort to closure for much of the work. This House will have seen the Atkins report showing 14 years of weekend closures, and that is with an aggressive work programme of two simultaneous schemes on each route at any one time. It would frankly be a nightmare.

HS2 also transform connections across Britain. It will link eight of our 10 largest cities. It links up great cities of the north and the Midlands. Just as important as cutting times from London to Birmingham and Manchester, HS2 takes more than an hour off the journeys between Birmingham and Newcastle, York and Leeds. It will be integrated with the nation’s main airports, with stations directly serving Manchester and Birmingham and short connections to Heathrow via Crossrail and to East Midlands Airport from Toton station. It is this new connectivity that provides a spur to growth, and it is the reason why the great northern cities are so supportive of HS2.

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My noble friend Lord Deighton and the HS2 taskforce are looking at ways to maximise the growth benefits of the line. The great cities are doing exactly that without prompting. They can see the opportunity to rebalance the economy of the Midlands and the north. The economic analysis shows them gaining double the benefits of the south.

The national gain is £15 billion a year by 2037. Construction and its supply chain alone will provide 19,000 jobs. The Core Cities group predicts that HS2 will underpin the delivery of 400,000 jobs, and 70% of the jobs created by HS2 are expected to be outside London. HS2 will be an opportunity to build a British supply chain, as discussed previously in this House, with skilled jobs for our young people—a supply chain and skill set that will support not just this project but British industry at home and abroad in future infrastructure markets. Of course not every part of the UK benefits from HS2. It benefits more the areas that it physically reaches. However, so does every transport infrastructure project past, present and future; that is a characteristic of infrastructure.

That brings me to the cost. The budget for HS2 is £42.6 billion. That is an upper limit with a contingency of £14.4 billion. Rolling stock will be another £7.5 billion. This means a benefit-cost ratio of 2.3, which is frankly remarkable for a large project, especially given the limitations of a formula that caps passenger demand three years after phase 2 is finished. Sir David Higgins, the new chairman of HS2, has been instructed to bear down on those costs, and he has said that he can and will do so. The noble Lord, Lord Heseltine, recently reminded us that part of those costs can be picked by up the private sector rather than the taxpayer. That is the intention of the Government and will be part of plans going forward.

I remind your Lordships that while the sums for HS2 are large, they are only part of the transport spending budget. In the next Parliament we will spend £73 billion on transport, only £17 billion of which is for HS2. We are tripling the national roads budget and adding 400 extra lane miles of motorway. We are tackling 195 local pinch points to break up jams. We are delivering the biggest rail modernisation programme for generations, with more than £9 billion of government funding for major rail projects, including a new £500 million rail link from the West Country to Heathrow, an 850-mile national programme of rail electrification, Crossrail and Thameslink in London and more than £900 million in flexible funding for smaller schemes.

However, infrastructure on this scale always has some negative impact, and I understand the anguish of those who cherish the countryside along the proposed route. That is why 70% of surface lines between London and the West Midlands will be insulated by cuttings, landscaping and fencing. We are at present consulting at present on property compensation, another issue that is often raised in this House. An exceptional hardship scheme is already in place. The Government have said that they intend to be fair but generous, going beyond the requirements of the law. I urge noble Lords with an interest in this area to respond to that consultation before it closes on 4 December. The detailed environmental statement for phase 1 will be

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laid alongside the hybrid Bill. It will be the largest environmental impact assessment ever undertaken in the UK.

We have the opportunity today to support a Bill that takes Britain into the future. We cannot opt again for make do and mend, relying on an exhausted Victorian system for our vital rail transport. Doubters have always decried new infrastructure projects, from the M25 to the Jubilee line to HS1 to Crossrail, but we will build HS2 responsibly and within budget. I ask your Lordships across all parties to join in this commitment to a modern rail network that can support our ambitions for growth and our economy. I beg to move.

6.25 pm

Lord Adonis (Lab): My Lords, this is my first opportunity in the House to congratulate the noble Baroness, Lady Kramer, on her appointment as Transport Minister. I do so very warmly.

The previous Government started work on what became HS2 five years ago. In March 2010 we published the Command Paper that set out the case for HS2, together with the detailed route plan from London to Birmingham and the outline plan to extend the line from Birmingham to Manchester, Derby, Nottingham, Sheffield and Leeds, linking to the existing main lines to Liverpool, Newcastle, Glasgow and Edinburgh. HS2 transforms connections between London and the major cities of the Midlands and the north in the spirit of the great Victorian pioneers who built the main lines from the 1830s—starting with Robert Stephenson’s London & Birmingham Railway—upon which we still depend today.

It was always clear to me that without cross-party agreement and a fixity of national purpose to rise above short-term party politics, HS2 would never happen. HS2 through to Manchester and Leeds is a 20-year project. The golden rule of high-speed rail is that while everyone wants the stations, no one wants the line. From the outset of planning HS2, I therefore consulted with the Conservatives and the Liberal Democrats, and the Cabinet agreed to publish the Command Paper in 2010 only on the basis of their support. I am glad to say that the coalition Government have maintained this cross-party approach and very largely stuck to the 2010 plan for HS2. We may disagree on other areas of transport policy—for example, I am proud that East Coast is doing such a good job for the public as a state company and believe that it ought to be allowed to continue as such—but on HS2 I acknowledge the constructive role played by the Prime Minister, the Secretary of State and other Ministers in keeping this a national project, not a party project. This approach is fully reciprocated by my right honourable friend the Leader of the Opposition.

I also applaud the decision to appoint Sir David Higgins as chair of HS2. The biggest infrastructure project in Europe needs the best infrastructure manager available. Sir David Higgins, fresh from delivering the 2012 Olympics on time and on budget, is the very best. As with all major infrastructure projects, HS2 has experienced some teething problems. Sir David must get a firm grip on management and costs at HS2, including the recent increase in the total projected cost

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from £32 billion to £42 billion—an increase largely due to a sudden, and in my view hard to justify, decision by the Treasury to impose an extra £6 billion of contingency reserve on the project, taking the contingency reserve alone to £14 billion. HS2 cannot be “at any price” and this represents a 50% contingency on the costed design of £28 billion. We look to Sir David to review these costs and to stress-test the figures with some urgency. I was glad to hear what the noble Baroness said about that. I know that Sir David will also take to heart the good advice on project costs and management from the noble Lord, Lord Heseltine, in his excellent lecture on HS2 to the Royal Town Planning Institute last week.

I will say a few things about the history of HS2. There have been claims that the 2010 Command Paper was not a thorough analysis, that I and others were kidnapped by rail fanatics who bamboozled us into mortgaging the Exchequer simply to cut half an hour off the journey time from London to Birmingham, and that the whole project has had to be relaunched on the basis of capacity rather than speed. None of this is correct. Capacity is and always has been the central argument for HS2. The 2010 Command Paper could not have been clearer. It set out the previous Government’s intention to proceed with HS2 in these words:

“The Government’s assessment is that over the next 20 to 30 years the UK will require a step-change in transport capacity between its largest and most productive conurbations, both facilitating and responding to long-term economic growth … alongside such additional capacity”—

I stress those words—

“there are real benefits for the economy and for passengers from improving journey times and hence the connectivity of the UK”.

So, capacity first, with speed and connectivity significant additional benefits. That was the argument for HS2 in 2010, it is the argument in 2013 and, if we see this through, it will be the argument on its completion in 2033—and no doubt on HS2’s centenary in 2133—because capacity is the fundamental problem, solved for a generation and more by HS2. It is a problem that, if not solved, will mean that in just 10 years’ time we will have to start closing the north-south intercity railway to new business, which would be a betrayal of the future prosperity of this country, given that HS2 connects the five principal cities and conurbations of the UK.

The facts on capacity are compelling. Long-distance rail demand has doubled in the past 16 years alone; the trend growth rate is 5% a year, consistently ahead of economic growth, as other modes of intercity transport such as motorways and domestic aviation become saturated or simply unavailable, and as railway services steadily improve.

Furthermore, HS2 does not just meet rising demand for intercity travel; by freeing up substantial capacity on the existing lines, it also provides a huge capacity boost for freight trains and for commuter and regional passenger services. Rail freight volumes have increased by more than 50% in the past 20 years and continue to grow fast. Moving freight from road to rail is a national imperative, placing a special pressure on the west coast main line, which gets most of the relief from the additional capacity of HS2 since 43% of all rail freight

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movements in the country use it to get from the ports to the nation’s major goods distribution centres in the Midlands.

As for commuter rail, demand has also increased sharply over the past 20 years, particularly into the biggest cities served by HS2—London, Birmingham, Manchester, Sheffield and Leeds—because the big cities are the national dynamos of population and employment growth, and they will continue to be so as the UK’s population increases by a projected 11 million people in the next two decades. Here, again, HS2 is an essential congestion-buster, to the benefit of dozens of towns and cities in and around the major corporations. Coventry, Wakefield, Bradford, Stockport, Leicester, Peterborough, Stevenage, Bedford, St Albans, Cambridge, Milton Keynes—the list of beneficiaries goes on.

The question before Parliament and the country is this: if not HS2, what? Given that we are not going to be building new intercity motorways or encouraging more domestic aviation—nor should we—the only alternative to HS2 for dealing with the capacity crunch is massive further upgrades of the existing Victorian main lines. This would be very expensive and destructive and yield only a fraction of the capacity and other benefits of HS2. You do not need a crystal ball to appreciate this reality. It is only five years since the most recent upgrade of the west coast main line was completed; it cost £9 billion and entailed a decade of constant chronic disruption, at weekends and often on weekdays too, without services or with severe delays and diversions. Upgrading a busy main-line railway is like conducting open-heart surgery on a moving patient—horrendous for all concerned.

The 2010 Command Paper estimated that to achieve two-thirds of the capacity of HS2 by conventional line upgrades, just for London to Birmingham, would cost more in cash terms than HS2. In practice, though, many of those proposed upgrades, like four-tracking the Chiltern line, are simply unattainable. If I was in any doubt about that, I have been seriously disabused by the large number of your Lordships who live in the Chilterns and rightly treasure it, and who have given me freely the benefit of their advice on these matters.

The present Government have since identified a more credible upgrade alternative from London to Birmingham, Manchester and Leeds, which is set out in chapter 6 of the strategic case document that was published last month. The key points about the upgrade alternative are these. First, the upgrade is projected to cost £19 billion. That is nearly half the cost of HS2 but the capacity increase would be less than one-quarter—so half the cost for one-quarter of the capacity.

Secondly, that increase in capacity would be insufficient by the late 2020s even to keep pace with the lower of the growth projections for intercity traffic set out in the Government’s strategic assessments. So in all likelihood we would complete the upgrades of the existing lines, spending £19 billion, only to be faced with the prospect of either carrying out yet more expensive upgrades to the existing main lines or, at that stage in the 2020s, of embarking on HS2. That would be an even more expensive repeat of the situation that we now face in taking forward HS2, having already spent £9 billion

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on the most recent upgrade of the west coast main line when we might have done better to have started HS2 15 years ago.

Thirdly, the £19 billion price tag for the upgrade alternative does not take into account the chronic disruption of the upgrades in question—the open-heart surgery on the moving patient that I just described. Look at the description of these upgrades and you will see that to undertake them would require, as the Minister said, the equivalent of 14 years of continuous line closures every weekend. Furthermore, the list of projects involved in the £19 billion upgrade alternative, with its 14 years of disruption, is colossal, to say the least: a new 30-mile stretch of tunnel and surface line to get the east coast main line out of King’s Cross, avoiding a series of acute existing bottlenecks including the Welwyn viaduct; the rebuilding of most of the major stations on all three of the main lines going north from Euston, St Pancras and King’s Cross, including those three termini, to accommodate more platforms and longer trains; and four-tracking a lot of two-track sections of line, including in urban areas. The idea that this would be an easy alternative to HS2, let alone a cheap one, is wishful thinking, to put it mildly.

It is true that putting the £19 billion upgrade option through the Treasury’s benefit/cost ratio methodology produces a somewhat, but not much, higher ratio figure than comes out for HS2, but from my experience of major transport projects I would always be cautious about the value of benefit/cost ratios because they involve so many artificial assumptions. The M25, the Victoria line and the Jubilee line extension all had low benefit/cost ratios and faced a deeply hostile Treasury, but which of those do we now think it would be a good idea to close? All three of them have recently been upgraded to deal with congestion.

Much has been made by the critics of HS2 of the value given in the benefit/cost ratio to the benefit of time saved by business travellers, as if they were not able to work on trains. Equally artificial, though, and far more significant in its impact on the BCR for HS2, is the fact that the benefit/cost methodology caps traffic growth projections in 2036, only three years after the opening of HS2, on the grounds that further growth thereafter is too speculative. Do any of your Lordships seriously think that traffic will stop growing in 2036? Brunel did not build the Great Western Railway on the assumption that there would be no traffic growth after 1870—thank goodness, otherwise the GWR would have been built single-track. He might even have been told by a Treasury economist that upgrading the canals offered better value for money. Nor did we build the M25 thinking that traffic would stop growing in 1995, which would have been an equivalent assumption. What is needed here is a dose of common sense plus a grasp of history, which shows that in Britain, with our historic aversion to major infrastructure investment, we have consistently under- estimated the value of better transport links serving our major population and economic centres.

I have a few other points to make. Faster journey times, although not a principal reason for HS2, are a considerable benefit that cannot but be advantageous

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to the unity of Britain and the strength of its economy. As HS2 proceeds further north, the time savings become steadily greater: an hour off every journey between London and Manchester, Sheffield and Leeds. Journeys will be further shortened by the proposed interchange between HS2 and the new Crossrail line at Old Oak Common, just west of Paddington. This will give an 11-minute connection direct to Heathrow and fast underground trains direct to the West End, the City and Docklands without going via Euston and its congested Victoria and Northern lines. This could be a rare British example of joining up two major traffic infrastructure projects at the point of conception.

The second point is that the notion peddled even by some reputable commentators that bringing northern and Midland cities closer to London will suck the lifeblood out of them is utterly farcical. If it were true that modern transport connections between great economic centres were a negative factor, we should close existing motorways and intercity rail lines because Manchester, Birmingham, Sheffield and Leeds would be better off without them, prospering in splendid isolation.

The third point is that HS2 not only dramatically improves connections between these cities and London but between the cities themselves, as the noble Baroness said. This is a crucial part of the connectivity improvement brought about by HS2. The Victorian railway companies built mostly separate main lines from provincial cities to London, which is why rail links between most of our provincial cities remain terrible. Birmingham and Manchester are only 67 miles apart, yet the rail journey takes one and a half hours. It is 40 minutes by HS2.

Fourthly, while I do not think that just because most other developed countries do things we should follow suit, I believe that when a technology has proved successful elsewhere we should take note. Almost every developed country with an economic geography similar to ours has over the past generation built high-speed rail to link their major cities. Japan started in 1964 with Tokyo to Osaka, about the distance from London to Glasgow. Since then, France, Italy, Germany, Spain, the Netherlands, Belgium, South Korea and Taiwan have all followed suit. China is constructing more high-speed rail than the rest of the world combined, and the United States is building its first line from LA to San Francisco—two major cities also about the same distance apart as London and Glasgow.

In conclusion, I am not aware of a single country that has introduced high-speed rail between its major cities and now thinks it was a mistake. They know that high-speed rail is integral to building a modern economy and a modern society. I believe it will be the same here in Britain, so we should get on with HS2.

6.42 pm

Lord Bradshaw (LD): My Lords, I warmly endorse the words of the noble Lord, Lord Adonis. I do so having managed all four lines out of London towards Edinburgh and Birmingham, including via Marylebone. They are now full. When I managed them there was about half the amount of traffic that there is now and very little capacity has been added since then. The noble Lord mentioned the upgrade on the London to

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Birmingham line but, in fact, it has not produced much in the way of new track; it simply patched up what was there before.

I am quite convinced of the need for a new line north of London. The problem is that, whichever way you go, it is going to upset somebody. There is not a way you can build a line without building it through areas that will be badly affected. It is therefore extremely important that the compensation arrangements, to which my noble friend Lady Kramer referred, are fair and the environmental impact is measured carefully. This is going to be the case because, while I agree that during construction there will be damage to the environment—there is bound to be as there is on any construction site—once the work is done, the countryside can get back almost to where it was. The wildlife and flowers will return—whatever you value will return—as a railway does not interfere with the area around it in the same way that a road does.

As the noble Lord, Lord Adonis, said, there is a strong management team in place, probably the best person possible is now in the lead on this. He will not need any lessons from us on the questions of delivery, keeping costs under control, and generally driving the scheme forward. The idea has been put about by some of the opponents that once you have the high-speed line, other places which formerly had a train service to London will lose theirs, so somehow Coventry and Rugby, to name two places, will suddenly lapse back into having poor quality services. That is most unlikely to be the case, because the case will exist to provide good services on those lines and there is no reason why the providers should not seek to meet that demand, under any structure you might imagine.

People have also said that there will be cuts elsewhere and I have heard some very depressing stories about the draining of so much away from Cambridge and Bristol. That is nothing to do with the argument and there is no reason to suppose that it will draw the lifeblood out of anywhere, but particularly places such as Cambridge, which is one of the strongest economic growth areas in the country.

I do not think any town or city will be worse off. I do not think we are suddenly going to stop spending money on the railway as there are very good plans to do so. I accept that there is objection from people in the Chilterns that deserves mitigating as far as possible. Of course, they will have the opportunity, as the hybrid Bill goes through both Houses, to make their case twice if they want. At the same time, it will be up to us to ensure that the matter is handled as sensitively as it can be handled, through what we all know are very sensitive landscapes. I am pleased to speak in support of the Bill.

6.46 pm

Lord Freeman (Con): My Lords, I am a strong supporter of the project for HS2. I am sure that those on the government Benches will welcome the fact that the noble Baroness, Lady Kramer, is the Minister is charge. She will bring her reasonableness, calmness and courtesy to the progress of the Bill through your Lordships’ House, which gives me a great deal of comfort.

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I find myself in some difficulty regarding the speech of the noble Lord, Lord Adonis, as I agreed with everything he said, which will make my contribution understandably brief. I speak with modest experience as the Transport Minister responsible for the day to day planning and then construction of HS1. There are very few lessons to be learnt about the strategic need for HS1, because it was about speed through the Channel Tunnel. At two hours and 15 minutes between Paris and London, it beats the alternative of flying from Heathrow if you are coming from central London. It has been an unqualified success, in my judgment, and we can learn some lessons for HS2, to which I shall briefly refer at the conclusion to my remarks.

The noble Baroness, Lady Kramer, and the noble Lord, Lord Adonis, referred to the fact that we are nearing capacity on certain sections of existing railways. I am going to refer briefly to the west coast main line. Without proceeding with this Bill, in 25 or 30 years’ time, we will have a shambles of a national railway system. We have to upgrade the capacity. My noble friend Lord Heseltine, whom I served, is absolutely right to focus on capacity as one of the key arguments for this line. It is estimated that up to £20 billion is required to upgrade the west coast main line. I hope that figure is right; it is certainly that order of magnitude. Upgrading that line, as opposed to HS2, would create absolute mayhem for many weekends over many years and deliver only about half the benefits.

I will make one or two points about the alternative of trying to upgrade the west coast main line. Your Lordships might be interested to know that, at present, in the final peak hour for passengers coming into and out of Euston on the west coast main line, on average there are 120 passengers on board each train for every 100 seats. There is already a capacity problem. If we look forward to the 2020s without an HS2, the mind boggles.

I know that my noble friend Lord Bradshaw is particularly concerned about freight, as I am, too. HS2 will do a great deal for freight, particularly by taking it off the M1 and the M6. Creating more capacity at the southern end of the existing west coast main line by moving that passenger traffic onto the high-speed line will, I am told, deliver 20 extra daily freight paths on to the line. I see my noble friend Lord Bradshaw nodding, so I must be right. There will be relief for freight traffic on the M1 and the M6. Without HS2, that freight traffic can only increase. I am told that the order of magnitude is of half a million lorry journeys coming off the motorways per annum. That is what will occur if we not only proceed with this legislation but build HS2.

The noble Lord, Lord Adonis, referred to three other advantages of HS2 which relate directly to capacity: the link to HS1, so that one could travel from Birmingham to Paris directly through Old Oak Common; the link with Crossrail, which will certainly help with congestion in central London; and ultimately, if Heathrow is to remain as our key airport, the link to Heathrow.

I strongly support this Bill and when we come to the hybrid Bill—I look forward to that being introduced as quickly as possible—I am sure that the Government and the Minister will pay great attention to the legitimate concerns of those affected. The one lesson I learnt

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from HS1 is that it will be better to be reasonable, which will often mean some money as compensation, to get HS2 built. I hope that we can be reasonable, constructive and sympathetic.

6.52 pm

Lord Stevenson of Balmacara (Lab): My Lords, I declare an interest as a resident of Little Missenden, a small village in the centre of the Chilterns. I live in the village and have done for nearly 20 years. The proposed route currently goes close, but not that close, to the village, and it is tunnelled in the immediate environment of Little Missenden, but that does not stop me having concerns about the way in which the programme has been developed. I thank the noble Baroness, Lady Kramer, for her eloquent introduction of this paving Bill and I particularly thank the noble Lord, Lord Bradshaw, for his concern about the Chilterns, which I listened to with great interest. That is in fact what I will talk about in my brief address.

Much time has been spent in your Lordships’ House recently on the National Planning Policy Framework. In its section on conserving and enhancing the natural environment, it says:

“The planning system should contribute to and enhance the natural and local environment”;

and it gives some examples, the first of which is by,

“protecting and enhancing valued landscapes”.

Later it says:

“In preparing plans to meet development needs, the aim should be to minimise pollution and other adverse effects on the local and natural environment. Plans should allocate land with the least environmental or amenity value, where consistent with other policies in this Framework”.

It continues:

“Great weight should be given to conserving landscape and scenic beauty in National Parks, the Broads and Areas of Outstanding Natural Beauty, which have the highest status of protection in relation to landscape and scenic beauty ... Planning permission should be refused for major developments in these designated areas except in exceptional circumstances and where it can be demonstrated they are in the public interest ... planning permission should be refused for development resulting in the loss or deterioration of irreplaceable habitats, including ancient woodland and the loss of aged or veteran trees found outside ancient woodland, unless the need for, and benefits of, the development in that location clearly outweigh the loss … Planning permission should … identify and protect areas of tranquillity which have remained relatively undisturbed by noise and are prized for their recreational and amenity value for this reason”.

There is clearly a tension here between conservation and what may be claimed by those who support the proposed route for HS2 to be in the public interest. For example, the Woodland Trust has demonstrated that the Government’s preferred routes for both phases of the HS2 scheme will cause loss or damage to at least 67 irreplaceable ancient woods. When the Secretary of State—who was in his place a few minutes ago—announced the preferred route for phase 2 of HS2, he said:

“The scheme would avoid any national parks or areas of outstanding natural beauty”.

So, the Chilterns AONB is now the only AONB along the entire HS2 phase 1 or phase 2 routes that is adversely impacted by the proposed project. Actually, it will be destroyed as the present tunnel erupts into an ancient monument and an ancient wood bang in the middle of the AONB.

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The draft environmental statement consultation published on 16 May accepts that a tunnel through the Chilterns AONB would perform better on environmental grounds when compared with the current HS2 Chilterns tunnel option. It accepted that it would also reduce operational noise impacts and, for certain locations, would result in reduced construction impact. In other words, it seems to meet many of the concerns expressed in the national planning framework. It is feasible in engineering terms and would fully protect the only unique area of outstanding natural beauty on the HS2 route; meet local concerns without damaging the overall objectives of the HS2 project; avoid major surface construction at 10 sites in the AONB and the loss of ancient woodland and the Grim’s Ditch ancient monument; and is supported by all the local councils and action groups within the AONB.

The designation of the protected landscape of the Chilterns AONB rests on the unique characteristics of its landscape. The design of the Government’s proposed scheme takes no account of the designated landscape of the Chilterns AONB or the protective provisions of Part IV of the Countryside and Rights of Way Act 2000. Conserve the Chilterns and Countryside has commissioned a study into the practicalities of extending the tunnel from the proposed current termination point to the boundary in Wendover. This study was published in October 2012 and HS2 Ltd was asked to comment on it. The conclusion it reached was that such a tunnel extension was a practical engineering solution, but it declined to pursue it because it is of the opinion that it will cost more than the published scheme.

However, there are other factors to be taken into account here—factors that have so far been ignored but which need to be debated. The analysis undertaken to date has shown that the published scheme affects 60 square kilometres of the Chilterns AONB; the tunnel extension through the Chilterns would affect six square kilometres. The published scheme would result in the loss of 13 historic sites; the tunnel extension would affect one. The published scheme removes 9.2 hectares of ancient woodland; the tunnel extension affects none. With the published scheme, approximately 250 hectares of agricultural land would be lost but under the tunnel extension only 20 hectares would be lost. From the figures that I have given, your Lordships can see that there are other factors to be taken into account. Analysis of these further indicates that the proposed scheme will incur environmental and other costs of the order of £500 million to £750 million, which is about twice the additional cost of building the tunnel extension.

Given the duty of the Government under Section 85 of the Countryside and Rights of Way Act 2000 to,

“have regard to the purpose of conserving and enhancing the natural beauty of the area of outstanding natural beauty”,

the scale of any cost differential between the published scheme and the proposed tunnel extension has to be balanced against the incalculable loss of an AONB—the only one on the line, and the one nearest to London.

In his speech last Tuesday, which has already been referred to, the noble Lord, Lord Heseltine, recalled his long interest in regeneration. He gave the example

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of Canary Wharf, where he recalled that he had appealed over the heads of his senior Cabinet colleagues—perhaps the noble Lord, Lord Freeman, was one of those—the Permanent Secretary of his department and all the leaders of the London boroughs to the Prime Minister who, he said, “backed me”. Perhaps he should have added “on this occasion”. He also recalled that another Prime Minister backed him against the Department of Transport when he,

“argued for HS1 and the regeneration of Stratford against British Rail’s preference for the Channel Tunnel to hit the buffers at Waterloo and exclude the rest of the UK”.

The noble Lord’s example of the late change of route imposed on HS1 is instructive. In truth, there ought to have been a lot to learn from that episode. HS2 appears to have ignored many of the principles established by HS1. The lower design speed of 300 kilometres per hour allows the line to be twinned with the M2 and M20 motorways through Kent. It used existing major transport corridors. HS1 crosses the Kent AONB at its narrowest point. The published route for HS2 crosses the Chilterns at its widest point. As the noble Lord, Lord Heseltine, pointed out, bringing the main terminus out of London to Stratford brought much needed regeneration to the East End and paved the way for the Olympics. What would be the analogy for HS2, and why is the noble Lord not suggesting that at this time?

While I do not agree with everything that the noble Lord says in his speech, he does echo the recent Armitt report's call for us to do our infrastructure planning differently in future, although appealing over the heads of one's colleagues is probably not what Armitt had in mind. The reality is that the Government will not get their hybrid Bill for phase 1 of HS2 through in this Parliament. Given that the public interest would be better served if the proposals could be evaluated in the context of a fully developed infrastructure plan and a national planning framework of the type outlined in the recent report by Sir John Armitt, why not pause—which seems to be the vogue—the process now? There would then be time to engage in a proper cross-party debate and take a fresh look at HS2 to help the Government build in greater connectivity, sustainability and flexibility, and also help meet local concerns without damaging the overall national objectives of the HS2 project.

7.01 pm

Lord Rodgers of Quarry Bank (LD): My Lords, the Secretary of State for Transport says that what he calls the “north-south railway”,

“is one of the most potentially beneficial, but also challenging infrastructure projects on the planet”.

Again, and all too often, “on the planet” is an example of pointless hyperbole. However, he also says:

“The case for the new line rests on the capacity and connectivity it will provide”.

Capacity is a lot more down to earth than the glamour of speed or the need to show France, Germany, Italy, Spain, Japan and China that we can do better. I would have been well disposed towards the speech of the noble Lord, Lord Stevenson, but I regret that there has been no provision for an ad hoc Select Committee

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of the House to examine HS2. If this is such a challenging project, the procedures of the House should have allowed time ahead of today’s Second Reading.

Last month, there were at least two new HS2 Engine for Growth documents. The origin of The Economic Case for HS2 is not clear. The second document is called The Strategic Case for HS2. It has a ministerial foreword, which I mentioned earlier. However, it has no command paper reference. Is it a White Paper, like the other reports on HS2 that we had in January 2012 and January 2013? I would be grateful to know its status in order to keep track of the burgeoning HS2 literature.

Chapter 7 of The Strategic Case for HS2 is fascinating about governance. Paragraph 7.2.19 refers to,

“processes for project cost control of Phase One”.

It goes on to state:

“This oversight regime includes a dedicated High Speed Rail Board which has representation from HMT and IUK which oversees the overall HS2 programme and reports progress to DfT’s Senior Board and to Ministers”.

Then, in paragraph 7.2.27 it states:

“It is unlikely that a project as complex as HS2 could be delivered simply by one organisation being given sole responsibility for implementing it … Therefore an important consideration is how best to align roles of different bodies”.

Finally, it says:

“The structure of how HS2 will be delivered requires careful analysis and consideration, and consequently a joint group led by DfT and including HMT, IUK and HS2 Ltd is undertaking options analysis to consider what is the most appropriate structure for the delivery of HS2”.

I find all this breathtakingly obscure.

The Secretary of State has appointed Sir David Higgins as chair of HS2 Ltd, with eight other members of the board, but it can hardly be claimed that this is an independent board. A clearer, simpler governance and managing structure should have been established well ahead of today’s Second Reading. When I was Secretary of State for Transport many years ago, I had responsibility for four nationalised industries, including British Rail. I took the view that I should have an arm’s-length relationship with the excellent chairman, Sir Peter Parker. It worked well, with only a little constructive tension. It is crucial to have a clear, agreed responsibility for HS2 Ltd and a transparent relationship between the Secretary of State and the chairman of HS2 Ltd. I hope that my noble friend will reassure me on these matters. I would be grateful if my noble friend would remind us whether MPs and Members of this House will have direct access to the chairman of HS2 Ltd or access only through Ministers.

I make a further point related to funding and financing set out in paragraphs 9.7 to 9.11 in Command Paper 8508 of January this year. Paragraph 9.7 states that,

“the Government is engaging with third parties to secure funding contributions towards HS2”.

Paragraph 9.8 states that it will,

“examine the potential for private financing to reduce the up-front capital demand on the taxpayer and offer value for money”.

My noble friend Lady Kramer made an important contribution to discussions on the disastrous outcome of the maintenance and upgrading of the London Underground a dozen years ago. Referring to the stability

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of public-private partnership, she said that any joint venture involved high risk. As Minister, my noble friend has only just inherited HS2 and cannot be held responsible for any shortcomings hitherto. However, I hope that she can confirm today that no planning arrangements will involve joint ventures in the spirit of public-private partnerships such as Metronet.

I have spoken about the governance of HS2 because it is crucial to the project’s success or failure and to avoid any major delay or significant additional cost. In turn, it is related to the concerns expressed earlier today by the noble Lord, Lord Stevenson, and, on 24 October, by my noble friend Lord Bradshaw and the noble Lord, Lord Berkeley, who referred to the loss of more than 2,000 properties in the London Borough of Camden. As speed rather than capacity is no longer the principal case for HS2, it must follow that HS2 Ltd is now free to take rather longer to reach its destination. On the face of it there should be scope for more flexibility and choice, thus easing the problems in the countryside and at the London end of the line—if, for instance, taking 20 minutes longer than the White Paper’s route is more acceptable. I hope that my noble friend will reflect on that option.

There is a separate specific question, the answer to which I cannot find in the HS2 papers, although that may be my fault. What proportion of all travellers—or customers—on High Speed 2 will be business travellers? Whatever the answer, what has been put into the calculations of the increased use of video conferences, Skype and other emerging internet facilities? Busy business people do not want to travel, even on faster trains, if they are able to work in the office or at home by using the latest technology.

It is said that High Speed 2 will bring the north and the south together, leading to living standards rising disproportionately in deprived areas, or where the population is declining, or in areas of high and persistent unemployment. For many years I have spoken in both Houses and elsewhere about economic geography and the two nations. I was born and brought up in the north-west, in Liverpool, and for 20 years I was a Member of Parliament in the north-east, for Stockton-on-Tees. In the light of the outstanding contributions from noble Lords today, in particular the opening speeches, I wish I could believe that High Speed 2 would contribute to major regional benefits. However, I remain deeply sceptical.

7.11 pm

Lord Berkeley (Lab): My Lords, it gives me great pleasure to support this High Speed 2 Bill. I congratulate the noble Baroness on the way she introduced it and, of course, my noble friend Lord Adonis on his very full and fascinating description and arguments in favour of it. It is great that we now have all-party support for this project. I declare an interest as chairman of the Rail Freight Group.

As several noble Lords have very kindly said about rail freight, it is forecast to double over 20 years. We have discussed that, and passenger increase, in previous debates. Therefore I see High Speed 2, certainly in phase 1 and continuing into phase 2, as in effect adding two more tracks to the west coast main line in a way that will not obstruct or close it while it is being

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built. I think that the noble Lord, Lord Freeman, said that he expected that if we did not have this, there would be a shambles in 20 to 30 years. I believe that it will be closer to 10 years.

As part of the preparations, the freight industry is discussing the capacity with HS2. Noble Lords will understand that when phase 1 gets to somewhere around Lichfield, where it joins the west coast main line, you have lots of different train services going on to the west coast main line, which happens to go into a short section of two tracks that go through Shugborough Tunnel. We have had very useful discussions with Network Rail and HS2 about where all these trains will go when seven extra High Speed 2 trains in phase 1 join the residual services on the west coast main line—although “residual” is not the right word, because they are very important services. As noble Lords have said, there is no intention to reduce those services provided to people who are not on High Speed 2. If you add to that the increase in freight, you have a problem. Network Rail is working with the industry on what to do about that problem, but it will still be there in 10 years’ time. Whether it involves diversions, more night working or whatever, that challenge will happen now.

As I have said here previously, if it does not go by rail, it will go by road, and do we want another three-lane motorway somewhere? I think that the answer, as my noble friend said earlier, is that we do not. Therefore we have to find solutions to the capacity problem. It is a problem mainly on the west coast main line and, funnily enough, it is not just near Lichfield and thereabouts, but will happen north of Crewe as well, because there are sections of two-track there when you go over Shap towards Carlisle. The network needs looking at in a 20-year horizon so that the demands of freight and passenger—not just up the line but across it and parallel to it—are met. It is good that it has begun, and we shall probably have to have quite a few debates about the detail of this when one gets to the hybrid Bill and the Select Committees to see what answers and commitments can be made. However, in many ways that is a good challenge to have.

I was struck by comments from my noble friend Lord Adonis and the noble Lord, Lord Bradshaw, and others about the appraisals. It is absolutely crazy to say that that the growth will stop three years after phase 2 opens. That is rather like the announcement last week by either the Treasury or maybe the Department for Transport that the forecasts are that the growth of cycling in London will suddenly stop in 2015 and will thereafter decrease. Leaving aside the terrible run of accidents in the past week or two, what evidence is there that the growth in cycling in London over the past 10 years, which has been pretty surprising and gratifying for me, will suddenly tail off? It is probably something to do with the fact that they do not want to spend any more money on it. We need a review of the whole appraisal methodology. Maybe the noble Lord, Lord Deighton, is the person to lead that. The whole structure is not fit for purpose. Having arguments about what the cost-benefit ratio on a project the size of HS2 is is a pretty good waste of time, but still, we have to do it.

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The noble Lord, Lord Stevenson, spoke about environmental issues, particularly in the Chilterns, and about AONBs and woodlands; I do not think that he mentioned bats, but they will come in. I was involved in a way with the construction of HS1 and had many dealings with the noble Lord, Lord Freeman, when he was Minister. He certainly tried very hard and very successfully to deal with the objections of some of the people who lived along that route. One person said, “You are destroying the garden of England”. In three years’ time, after the line was opened and the trees had grown up a bit, he told me that it had not made any difference to his life at all. The construction will be hard, but we have to be careful about overreacting to what will, I hope, be a temporary and well managed construction phrase. When it is built, it will not be particularly serious. This makes me worry about how one balances the concerns of people against environmental concerns. As the noble Lord, Lord Jenkin, said, 2,700 properties in Camden are affected against 100 in the Chilterns. How do we balance those? Are the Chiltern people more important, or is the environment more important? That is a very difficult judgment to make, although I am sure somebody will make it. However, we have to be careful that we do not overreact. I say this as someone who was brought up in Great Missenden; I know it very well.

I have had lots of letters from people about objections. Some say that this is about capacity, others that it is about speed, while others argue about the economy. However, let us just look at what has happened to Lille and Lyon in France, which were two of the first provincial cities in France to be connected to the high-speed network. The city of Lille paid a lot of extra money to get the station in the middle of Lille rather than having the line go round the outside, as originally planned. The two cities are completely transformed. To say that such a line pulls economic benefit away from such cities to the centre is all wrong. It will help. Even outside cities such as Lille—up to 20, 30 and 40 kilometres away—there are benefits. We should look and see what has happened there.

We should also reflect on the fact that the first high-speed line in France, to Lyon, was built as a means of providing more capacity; it was nothing to do with speed. It is a virtually straight line from Paris to Lyon, which goes through very sparsely populated countryside, and it has done so well in the 20 or 30 years that it has been open that they have had to replace all the track already and have signalled it so that, I believe, it can now take a train every two minutes, because the demand is increasing. That will probably go on.

The track is very steep and undulating. I remember taking some Members of Parliament there when I worked for Eurotunnel, and they drove a train; we were allowed to drive the trains in those days. It was great fun, although people normally got a bit seasick in the front. It was also very exciting, and it still is exciting—and it just shows what the demand really could be.

To conclude, I shall say a word or two about connectivity. A lot of people have said that the HS2 line is not connected, but I think the Government are right not to specify what services will be operated in

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10 or 20 years’ time. The links are there. They are linking into the west coast main line. They are going to link to Manchester, to the west coast north, to Leeds and everything. In the south, Old Oak Common, as some noble Lords have said, is a wonderful interchange.

I have concerns about some of the connections in London. The noble Lord, Lord Bradshaw, and I are coming up with an alternative idea that, we hope, will reduce the demolition around Euston and provide better connectivity. I also have concerns about the station in Birmingham and the lack of connectivity on to Wolverhampton, because people will not save much time if they have to walk for 15 minutes between the new station and Birmingham Snow Hill to go on to Wolverhampton.

However, these are small details. The key issue is how to get the connectivity between these new services and the existing ones and city centres. We have problems in many station termini in London: Victoria, Paddington and Euston all get very congested in the rush hour, particularly on the Underground. Connecting some of the west coast main line suburban trains into Old Oak Common and directly into Crossrail will save an enormous number of passengers from going into the Underground at peak times.

Those are the kinds of issues that need to be discussed because HS2 is part of a network, and I hope that HS2 trains will go to many different parts of the north and west on electrified lines. That will provide enormous benefits in capacity. The speed will help in some places, but the important thing is capacity, because if we do not have the capacity we will be really lost. We have to get on with this as quickly as we can. I do not believe that doubling or quadrupling the great central or the midland main line will be enough. Just imagine the hassle in High Wycombe and Princes Risborough if we had to demolish half the houses there and build four tracks. The midland main line will probably have to be reconstructed as four tracks, as it used to be, in addition to HS2, within 10 or 20 years anyway. This is the kind of growth we are looking at. We have to get on with this project. It has been well thought out. I am sure that there are still some improvements that can be made, but I end by asking the Minister this question, to answer when she winds up: when will the hybrid Bill be published?

7.24 pm

Lord Howard of Rising (Con): My Lords, this country’s debt is increasing at a rate in excess of £100 billion a year. I find it hard—almost impossible—to believe that in these circumstances Her Majesty's Government propose to enter into a financial commitment the case for which—I say this in spite of the eloquence that I have heard today—looked at in the very best, kindest and most positive way, is weak. Looked at in any normal way, HS2 is, frankly, insane. No sane businessman, dealing with his own money, would dream of making an investment based on the criteria being used to justify HS2.

Granted, the economy is improving, so that by the time bills have to be paid the financial position might be better, but the country will still have a burden of £1 trillion of public debt to deal with. There is no certainty about what the project will cost. I do not

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think anyone knows. In 2008 the cost was estimated to be £17 billion, in 2010 the estimate had increased to £30 billion, in 2012 it was up to £33 billion, and this year the figure has increased to £42.6 billion. And that is without counting the cost of the odd £10 billion for rolling stock. For what it is worth, the

Financial Times

has estimated the true cost to be £73 billion. Who knows what the final cost will be? Major Government spending plans have a habit of going over budget distressingly frequently.

Until quite recently the main argument to support this project has been the financial benefit to be gained from faster train journeys, because they would give more time for travellers to get on with their affairs—indeed, 79% of all benefits in the business case for HS2 are attributed to these savings. However, the vast majority of passengers on trains do get on with their business: reading, writing, using laptops and so on. They do not just sit there doing nothing. If the proponents of this Bill had ever sat on an intercity train they would have seen this. As a businessman who has never had a head office, but has had interests all over the country, I have spent many hours travelling; half an hour more or less on a train has never mattered. In practice, travelling time on trains is useful, as it enables one to get on with things, such as writing and reading, without interruption. The other point your Lordships might care to note is that the time-saving calculations assume trains travelling at 140 mph—a speed not yet achieved.

More important is the time spent journeying to and from stations, when it is considerably more difficult to use the time to good effect. In five of the seven main provincial cities to be served by HS2 trains, the line will not even go into main railway stations. In Sheffield, Nottingham and Derby the HS2 station will be 10 miles from the city centre. With the extra time required to get from the station to the final destination, one has to question whether there will be an overall time saving at all: will the journey door to door take just as long with HS2 as it did before?

With increasing recognition of the weakness of the time argument, the justification now being emphasised is the need for the extra capacity that HS2 will provide. How this will happen with, for example, the number of platforms at Euston presently used for existing services being reduced from 18 to 13 is difficult to understand. Figures that became available in December 2012 as a result of a judicial review show that intercity trains on the west coast main line were only 52% full in the evening peak period, and there was still scope to increase the size of trains if necessary. In spite of what the noble Lord, Lord Adonis, said, I believe that if there is a need for spare capacity there are other and considerably cheaper solutions.

The existing line could be upgraded. Claims that this would take 14 years and cost £19 billion have been comprehensively rubbished by a number of different commentators—so much so that the objectivity of the arguments in favour of HS2 must be seriously suspect. In any event, it would take 17 years before both phases of HS2 were complete.

There is also the possibility of opening up the Chiltern Line, another cheaper alternative. We are a trading nation and depend on the trade we do with other countries, be it in services or manufactured

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goods. To be effective we need the best possible communications with the outside world. It beggars belief that Her Majesty’s Government are proposing to spend quantities of billions of pounds on a project for which the business case does not even stand the most cursory examination, instead of getting on with increasingly desperately needed airport capacity—something the Minister hardly even mentioned in her long list of money to be spent on transport. Even today there is an article by Sir Martin Sorrell in the newspapers begging for better airport capacity. I urge the Minister to have a look at this side of life as well as the trains.

7.30 pm

Lord Faulkner of Worcester (Lab): My Lords, I hope that the House will forgive me if I do not follow the noble Lord, Lord Howard of Rising, in all the points he made. Needless to say, I disagree with every single one of them. On the question of cost—

Lord Howard of Rising: How flattering.

Lord Faulkner of Worcester: On the question of cost, to which he referred, if he reads the speech by his noble friend Lord Heseltine to the Royal Town Planning Institute, he will find that a number of those issues are addressed and answered very fully. I draw his attention to the fact that the noble Lord, Lord Heseltine, refers to the Government selling a 30-year concession in 2011 for High Speed 1 to a Canadian pension fund for £2.1 billion. I understand that something in the order of £10 billion could be realised for a similar concession on HS2, and there is a great deal more of the same.

I start by thanking the Minister—the noble Baroness, Lady Kramer—for convening the meeting for Peers with her officials last Tuesday. I certainly found it helpful and informative and left the Committee Room hopeful that this Bill and, indeed, the whole High Speed 2 project are in good hands. As we had such an excellent debate on High Speed 2 in your Lordships’ House on 24 October, there is no need for me to go over the ground that I covered then. However, I am grateful to the noble Baroness for quoting a sentence from what I said that evening.

The important thing that came out of the debate was a demonstration of the overwhelming need to add capacity to our railways as a consequence of the phenomenal growth in demand for rail transport over the past 20 years. Passenger demand has doubled since 1995. As the noble Lord, Lord Rodgers, is still in his place, I will go back to 1976 and recall a conversation that Sir Peter Parker had with Tony Crosland, who was then Secretary of State for the Environment, which Sir Peter wrote about in his autobiography. He said that he was depressed by Tony Crosland saying to him:

“Peter, I see a future for BR as a smaller, sensible little railway”.

Spare capacity was ruthlessly removed throughout the 1970s and 1980s as BR desperately tried to cut costs to meet the financial objectives imposed on it by the Treasury, about which my noble friend Lord Adonis spoke so eloquently earlier. Therefore, it is no wonder that more capacity is needed for the railways now.

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Given the gloomy forecasts for passenger and freight demand produced at that time, which were all proved hopelessly wrong within 10 years, I am reminded of the words of the great economist John Kenneth Galbraith, who said:

“The only function of economic forecasting is to make astrology look respectable”.

The lesson we should have learnt, post Beeching, is that you must keep your options open, retain the flexibility for future growth and never sell the track bed as it is a resource that must be protected.

At the Minister’s meeting on Tuesday I pointed out that the task of building a high-speed railway to the Midlands and the north would have been much easier if previous Labour and Conservative Governments had not closed the Great Central Railway—the last main line to be built in Britain until High Speed 1, and the only main line, until High Speed 1, built to the continental gauge. One of its routes to Rugby, Leicester, Nottingham and Sheffield went straight through the Chilterns, including the towns of Amersham, Great Missenden and Wendover. I am sorry that my noble friend Lord Stevenson is not here to—

Noble Lords: He is here.

Lord Faulkner of Worcester: Oh, he is here. He has moved down to the Front Bench. I expect that a number of your Lordships have been on the receiving end of lobbying from residents of these places. As my noble friend is in his place—I am delighted to see him—I say to him that this lobbying from people in the villages and towns of the Chilterns has to be balanced against the voice of the representatives, from all political parties, of the eight core cities of England outside London: Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield. In their letter to the Daily Telegraph, published on 29 May this year, they wrote:

“Research has shown that an over-reliance on the capital city is bad for national economies. England needs these eight core cities to succeed. If these cities performed at the national average, another £1.3 billion would be put into the economy every year. Unlocking growth relies on rebalancing the economy of Britain, which HS2 will help to do, bringing regeneration benefits outside the South East … High-speed rail is not just about fast trains. Increasing capacity on the rail network is critical to our economic future. There is an important relationship between growth, jobs and HS2. High-speed rail is the best way to achieve a more sustainable economic future for the nation as a whole”.

Of course, the residents of the Chilterns are entitled to express their views, although I have to say to them that the effectiveness of their lobbying would be enhanced if they wrote individually to us. For last month’s debate, the first seven paragraphs of all the e-mails I received were exactly the same, and the same happened with the e-mails sent to me about this debate—all of which, incidentally, got the date of this debate wrong. If you do a little research, you discover that they were all generated through an American company which, according to its website,

“has developed a cloud based service that solves the challenge of email delivery by delivering emails on behalf of companies”.

This is not exactly evidence of spontaneous local initiatives on the part of the residents.

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However, I would certainly support generous compensation for those affected. As the Minister reminded us last Tuesday, and again this evening, the levels being offered are far greater than those which have been paid—and, as far as I know, continue to be paid—to those affected by highway schemes.

While we are on the subject of the Chilterns and its area of outstanding natural beauty—I know about this, having been brought up, like the noble Lord, Lord Berkeley, in that part of England—is it possible to imagine a more destructive transport project than the construction of the M40 in the 1970s right through the heart of the Chiltern escarpment above the Vale of Aylesbury, known as the Stokenchurch Gap? That was driven through the middle of the Aston Rowant National Nature Reserve, and all pleas to the inspector to put the motorway in a tunnel or follow a different route were ignored. Still active today is the M40 Chiltern Environmental Group, which says on its website that it represents 25,000 people who live along the M40 corridor from junction 3 to junction 8, and say:

“Day and night we all suffer from intolerable noise pollution”.

By comparison, the residents of Amersham and Great Missenden are being offered a pretty good deal in terms of compensation and environmental protection. This will be confirmed by the residents of Kent, where HS1, so controversial when proposed 20 years ago, is simply no longer an issue. Indeed, it is hard to hear the trains in Kent because of the noise from the M20.

Make no mistake; if we do not build High Speed 2, we will have few options to meet the demand for transport. One would be to return to the days of the 1970s and 1980s and resume a massive programme of motorway construction. However, we should remember that the width of land required for a dual three-lane motorway is 36 metres, compared with just 22 metres which will be needed for High Speed 2. Over the entire 330-mile route, HS2’s land take will be 11.7 square kilometres, compared with 19.1 square kilometres for the equivalent length of motorway.

The other option would be to patch up Victorian railways, even though we know, as we have heard from other speakers tonight, that that will come nowhere near meeting the demand for rail travel after 2020. It is worth remembering that “make do and mend” would inflict on all of us 2,770 weekend closures, endless bus substitutions and increased journey times over 14 years —all for a capacity increase between London and Birmingham of just 53%, compared with High Speed 2’s 143%, with no increase in current line speed.

At some point I hope that the whole nation will again take pride in its railways, in the same way as other countries with modern high-speed lines do, such as France, Germany, Italy, Spain, Japan, China and Taiwan. Some of our finest architecture and engineering structures are to be found on our railways. Just consider such icons as Brunel’s bridges across the Thames and the Tamar, Robert Stephenson’s Royal Border Bridge at Berwick, the fantastic Forth Rail Bridge, wonderful Victorian stations, as fine as our medieval cathedrals, such as Bristol Temple Meads, York, Newcastle, Glasgow Central, and modern treasures such as Manchester Piccadilly, St Pancras and now, again, King’s Cross. There is no reason why High Speed 2 should not be in

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the same league as Brunel’s Great Western Railway or Stephenson’s London & Birmingham Railway, adding to, not detracting from, the landscape, with soaring viaducts, fine stations and supremely engineered track and alignments. Above all, it is a project that will meet the nation’s transport needs in the 21st century.

7.42 pm

Lord Rooker (Lab): My Lords, I ask myself, “Has everything already been said about HS2?”, but I think the answer to that is no. I shall just repeat two points that I made on 24 October. The first is that it needs better leadership. The noble Lord, Lord Rodgers, in reading out that paragraph, identified that. I still do not know who is in charge, although I realise that Sir David Higgins will obviously be in charge. The second point is that it is not about a few minutes off journey times.

The Secretary of State made an excellent speech on 11 September at the Institution of Civil Engineers, but the noble Lord, Lord Heseltine, made a much better speech at the Royal Town Planning Institute on 12 November. We could do a lot worse than get the podcast in here tonight, switch it on and go home. The Library provided me with the podcast; it is no good reading it, listen to it. It is electrifying to hear the noble Lord set out the case for HS2.

At this point I need to mention a couple of interests. I do so in particular because the Register of Lords’ Interests is frequently attacked over a lack of transparency. I can say that I have never discussed HS2 with either the company or other rail operators; I have had no discussion with the roads lobby, the landowners lobby or the airlines lobby; and I have had no discussions with local government, although I have requested written briefings. However, earlier this year, HMG was seeking someone to chair the HS2 planning forum, which is the meetings between HS2 Ltd, the Department of Transport and the local authorities along the proposed route. It was for just a handful of days per year. I offered. I did not get past the first cut and I have never spoken to anybody. I have nothing to register but I am being open and transparent, because the offer is there in the files, so that trouble makers in the future cannot make any mileage out of my position.

Following the sad death of my noble friend Lord Corbett of Castle Vale, I was asked by residents to take on the chair of the partnership board at Castle Vale, which is a very large-scale regeneration project on an estate of 10,000 citizens in my late noble friend’s constituency of Birmingham, Erdington. Colleagues will have driven past it. There were 34 tower blocks there at one time; there are now two. The link from the north-south route of HS2 into the centre of Birmingham will traverse the outer perimeter of Castle Vale. It has not been on the agenda of the board to date, although various local representatives have attended consultation meetings. I have not been involved to date, but the Castle Vale partnership board is in the register anyway.

I support the HS2 project. I am not locked into one route or to the starting stations. There will probably be some changes as the thing makes further progress. It has to be straight and cannot stop too often as it has to be fast. Those are a given and I do not see a

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problem with that. A new north-south link, which in my view should reach both Glasgow and Edinburgh, using modern technology, will bring benefit to generations and regions in the UK. Not many of us here today, as the noble Lord, Lord Heseltine, said, will see the benefit, but the crazy way in which the figures are presented is designed to put people off, designed to put supporters off, even. If it is going to benefit generations, why are most of the headline figures less than half a lifetime? It does not make sense. Talk about selling the project short.

My noble friend Lord Adonis in his excellent speech mentioned some of the alternatives. What are they? We could raise the fares; stop people using the railways. Reduce demand—it can be done, but it will not be much good for connectivity, economic productivity and growth. There could be a major expansion of domestic air flights, with extra check-in times, more pollution and a few more local runways. Enough said. We could build more motorways. The road lobby would welcome that. In fact, I wonder how much it is spending on anti-HS2, but I am not making any point about that. Of course, we need to improve the motorway network, junctions and feeder roads, especially on the M40 and the M20, but a major network of new motorways cannot be what the country needs. I have to assume that nobody from the Chilterns ever goes on the M6 north of Birmingham. That road has been 60 feet from the bedrooms of some of my ex-constituents, from 24 May 1972 until today: an elevated section at rooftop level 60 feet from their houses. Think about that for the way people move around the country. It works, but we do not want any more. We do not want a new motorway system. The idea that nobody travels on the existing infrastructure, which does disturb people, is, of course, palpable nonsense.

We could patch and mend the railway. I have not seen the attack on the 2,500 weekends. Basically, it is 14 years of weekend working, as the Minister said, on two out of the three north-south lines at any one time. That is the reality and what is more, it would cost £19 billion to £20 billion and we would not get a great deal from it. None of these alternatives will create the ingredients for regional economic growth and bring the private sector investment on the back of public expenditure which has occurred elsewhere. A new classic rail, the figures say, will cost 9% less than high speed, but high speed rail delivers journey time benefits by a factor of more than 5:1. It is not about journey times but the factor has to be taken into account that HS2, compared to the classic rail, is 5:1.

Not everything has to done at once, which is the impression given by the loose talk of some about the costs. The noble Lord, Lord Heseltine, mentioned that the annual £2 billion on London Crossrail ends as the HS2 annual expenditure of £2 billion starts. The two things merge together, and this benefits the whole country, not just the capital city. That has to be taken into account. Buried deep in the publications on HS2 is the point that we are talking about generations benefiting. Therefore, why cannot we use assumptions beyond the 20 years set out in the main body of the documents? The cost-benefit ratio goes from 1 to 2.3 to 1 to 4.5 if we go to 2040. It is preposterous to say

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that it will benefit generations and then cut off all the calculations showing how beneficial it will be at half a lifetime. It does not make sense. It may be the way that it has been done in the past by the Department of Transport and the Treasury, but it does not make sense in making the case.

I would like to hear from the Minister about one aspect of the speech of the noble Lord, Lord Heseltine, as I thought that it was the most important point he made. He said that the Government should propose development corporations at points of development on the route in order for the public to recoup some of the planning gains in exactly the same way we did in Docklands. Let us face it, in Docklands four local authorities did nothing for 30 years. That is why Docklands had to be seized into a development corporation to get the planning gain back for the public investment. That is exactly what the noble Lord said we can do along the HS2 route. I would genuinely like to know about that because it has not been referred to elsewhere. We cannot be certain—nothing is fixed about this—but the evidence in Docklands, the Thames Gateway and other areas of public investment, such as in the new city of Milton Keynes, which is doubling in size, is that along with public investment comes private investment to create the jobs and an economic future. We cannot, however, factor that into the calculations, although it is clearly self-evident. The noble Lord, Lord Bradshaw, made that point. The public sector must lead on this project. It is no good saying that the private sector should build HS2; the public sector has to lead but it does not have to do it all. By using our brains we can recoup as much of the extra land values as possible, as we have done in the past.

I hope that with this Bill we can hear the whistle blown for HS2 to leave the station of Whitehall to spread economic and social regeneration throughout the UK. So far, the only whistle I have heard regarding HS2 is the dog whistle blown by some colleagues in Labour’s high command, aimed at those living in the Home Counties. Dog-whistle politics are not honest politics in any case. In this case, it happened that the dog whistle was heard in the town hall corridors of the northern cities of this country, and the message came back loud and clear. I hope that we hear no more of the dog whistle.

This is a visionary project on a scale that transcends the Channel Tunnel—although that is unique by definition—and the post-war new towns. It cannot be right, therefore, for any political leader to claim the project for themselves, and the Prime Minister is not doing that. As my noble friend Lord Adonis said, it is to the credit of this Government that they have taken this project forward. This has to be all-party or it will not happen; it is as simple as that. Furthermore, the final decision cannot be left to the financial bean counters because we know that the finance figures are fiddled. The 20-year cut-off helps to destroy the case, so I do not accept it. I reject the scrimping “Britain can’t do it” approach. Leaders need to lead and show vision. They should connect public good investment, much of which can be recouped, with the substantial private gains in jobs and economic and social prosperity. A petty, party, tribal approach is to be condemned and

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condemned hard and fast to nip it in the bud, otherwise this 20-year project will not get off the ground. I am happy to support the preparation Bill.

7.53 pm

Lord Cormack (Con): That is the sort of rumbustious and splendid speech that we are used to hearing from the noble Lord, Lord Rooker. I am sorry that I cannot entirely follow him or agree with all he said, but he would not expect that. I begin on a congratulatory note—first to my noble friend the Minister, who in 10 minutes presented an argument forcefully, cogently and persuasively. She brings to her task many gifts and qualities from which we will all benefit. I was also delighted to see the Secretary of State sitting on the steps of the Throne during her speech and that of the noble Lord, Lord Adonis. It is far too rare that Cabinet Ministers come and listen to debates in your Lordships’ House, and the Secretary of State set a very good example tonight. He is a man for whom I have very considerable respect and affection.

However, even for the Secretary of State I am unwilling easily and willingly to endorse a blank cheque—and that is what the Bill is. There is no limit on the expenditure that the Secretary of State can sanction in preparation for this project. The noble Lord, Lord Adonis, who also made a forceful and powerful speech, would clearly not object to that, but it is a matter for which we should have a care, even though in this House—quite rightly—we do not have the power to send back or amend money Bills. I would not wish to have that power. The unambiguous democratic mandate in this country is at the other end of the Corridor, and long may it remain so. That is why I have always been such a staunch defender of the secondary role of your Lordships’ House in these matters.

However, there are things that we have to consider. My noble friend Lord Howard of Rising made some very good points—and, after all, he is a man who has considerable business knowledge and is not alone in voicing his concerns at the prodigal expenditure on this scheme. We have heard many comments from the Institute of Directors and other business men and women who know what they are talking about and do not see this project as the panacea that many in the debate would claim.

Only this morning I had breakfast with one of the most successful British businessmen. It would be wrong to mention his name because I did not tell him that I would do so, but when I said that I was going to speak in this debate and that I would be voicing a degree of opposition to HS2, he warmly encouraged me to do so. He felt that the project was a distortion of priorities and said he did not feel that it would bring the benefits that so many in the debate have claimed. He is clearly not alone. Many in your Lordships’ House agree and we heard spirited speeches in the previous debate—in which, sadly, I was unable to take part—from the noble Baroness, Lady Mallalieu, the noble Lord, Lord Mandelson, and others who put a different point of view. After all, we are having a debate and it is important that different points of view should be put.

There is one thing that we do not consider as carefully as we might. This is a finite country. People have been talking this evening about France and Germany,

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which are enormous European countries on our continent, and have thrown in references to China, which is not exactly a miniscule country. Noble Lords sought to suggest that because those countries depend so much on high-speed rail, given the enormous distances that have to be covered, we should follow suit. I do not think that to have an efficient transport system in this country we need necessarily to follow the suit of other countries that are enormous in extent.

We also have to bear in mind that other priorities should be considered. When I drive from my home in Lincoln to London, I come down the A1. It is a scandal that the main arterial route to the north is not of motorway standard. I agree with the noble Lord, Lord Rooker, and I know spaghetti junction almost as well as he does; for 40 years I represented a seat in Staffordshire, and from the opening of the M6 onwards I used that road weekly—year in, year out. I agree with him that we do not want a lot more motorways, but parts of our road system are wholly inadequate for the needs of our people, and the A1 is one of those roads. A number of things could and should be done, if there is £50 billion going begging, to improve the infrastructure of our country.

We should also have regard to the size of our country when we have a concern for its environment. I have spent a long time in this place and the other seeking to speak up for heritage causes. As long ago as 1976 I wrote a book called Heritage in Danger, in which I talked about the threats to our landscape from unthinking development. I well understand why people living near the Chiltern Gap feel as they do about the M40, skilfully as it has been landscaped. Our country is precious. Our countryside, once destroyed, can never be brought back. We must have very real concern about the environmental effects of HS2, particularly in the Chilterns. I was in that area for a couple of days last week when we had our brief break. It is one of the loveliest parts of England. It is not selfish of the noble Lord, Lord Stevenson, or anyone else, to point that out.

Why is the National Trust, our largest environmental charity—four million of our fellow citizens are members—so opposed? Not because its members are nimbys or introspective, but because they are seeking to be protective. This has to be taken into account. We have to look at proportion, and we have to look at balance. If I may say so without sounding insulting, I think that some people who are going over the top for HS2—and I would gently reprimand the noble Lord, Lord Adonis, in that regard—do not pay sufficient attention to the environmental side of things. I have great respect for the noble Lord. He was one of the most successful Ministers in the previous Government, deservedly gaining a fine reputation, and I am glad to see him back in front-line politics. However, I urge him to consider a little. Perhaps I could quote the famous remark of Cromwell that you should,

“think it possible that you may be mistaken”.

We can all have that quoted at us, and he would with good cause perhaps want to quote it back at me. However, I say to him as one of those passionately concerned about the beauty of our countryside, which is not only ours but which brings enormous economic gains from the tourists who come here, that it is infinitely precious and should not be easily sacrificed.

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This is a complex issue. I well understand why people feel that to upgrade our transport we have to build something brand new, but I am not convinced of the argument. We do not pay sufficient regard to those who say that HS2 will possibly suck the life-blood out of some of our other cities and make us more of a London-centric country than we are already—and we are far too London-centric as it is.

These are all points worthy of consideration, and although they are causing infinite amusement to my dear friend, the noble Lord, Lord Snape—Lord Snape of the railways—who is sitting on the Back Bench and grinning like the proverbial Cheshire Cat, nevertheless they are worthy of our regard and our consideration. I hope we can develop some of them as we debate HS2 again, as we certainly shall when the hybrid Bill comes before us.

8.04 pm

Lord Lea of Crondall (Lab): My Lords, in following the noble Lord, Lord Cormack, I doubt very much that he will reflect that he might be mistaken on the basis of the arguments that I will put forward. On two things, he ought to reflect on whether he might have got them wrong. I shall begin with his phrase “a small island”. Actually, that is the argument for railways, compared to larger countries. It is undoubtedly the case that as the economy grows, there is a propensity for the coefficient describing how fast passenger miles grow to increase. People have more discretionary expenditure which, as family dispersion proceeds, produces more family passenger miles as well as more business passenger miles, so these extra passenger miles will be generated. There is a positive coefficient in relation to economic growth. No one now flies between Heathrow and Manchester as they used to some time ago, and so the alternatives are much greater congestion on the roads or more capacity on the railways.

Higher speed attracts and is part of the equation. So is the fact that the size of the country is shrinking, if we think of economic geography in terms of how long it takes to get somewhere. We see as a cluster the whole city region of Manchester—where I was born—West Yorkshire, South Yorkshire, East Midlands and West Midlands. It is less than an hour all the way round. I ask the Minister whether the department ought to produce a study of a regional cluster compared with some European and other ideas, because this is a way in which we can learn from each other. I think that the answer will be that we are talking about an economic transformation.

I remember when Alastair Morton, the visionary chief executive of Eurotunnel, described economic geography as the basis of economic development. I am an economist myself. That is what I did for my first few years, and I think that the Channel Tunnel has produced a very interesting answer; namely, that it is very easy now to jump on a train in Paris and be in London or Brussels in two hours, and this is transforming so many things in terms of an economic growth model. So is the regeneration of Kings Cross. Even the Shard is on London Bridge station. Whether we have stations on the edge of cities or not, there will be different patterns of demand which fit.

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Heathrow is not in the centre of London, but on the Surrey-Hampshire border where I live, we are part of the Heathrow economy. The noble Lord, Lord Howard of Rising, has got things 180 degrees wrong. There is no contradiction in talking about the need to deal very quickly with 98% of Heathrow’s capacity already being full—national scandal that that is—and getting on with HS2. The scandal of not doing HS2 would be very similar to the scandal of not building the two extra runways, which should probably be to the west of the two runways at Heathrow.

I say to the noble Lord, Lord Cormack, that we can learn from the experience of Kent in another way. My noble friend Lord Adonis, who is not in his place at the moment, knows that I convened a meeting about four years ago because I happened to know some of the people in Kent who had been in consultations there. I got the National Association of Local Councils to bring together all the local councils in the Chilterns at a meeting here in the House of Lords to find out about all the stages of the consultation that had been gone through in Kent. The people from Kent confirmed what I think the noble Lord, Lord Berkeley, and others have said, that they had been very satisfied with the experience of the consultation. Although they never became what one might call protagonists, they all agreed that the noise envelope from HS1 is nothing like the noise envelope from the M2 and the M20. Those are the alternatives that we have to look at.

The noble Lord, Lord Howard of Rising, tried to ridicule the idea that £50 billion should be spent on a project of this kind. I do not know what goes on in his mind when he talks about £50 billion being spent on this, as if it is spent on social welfare in some sense, but it is value added in the supply chain in the west Midlands and other parts of Britain. It may well be that we have to look to our laurels to make sure that the tunnel boring machines are not all from ThyssenKrupp or whatever in Germany, but that is a slightly different question, about our industrial capacity. I put a second question to the Minister: has the Business Department joined up in Whitehall, as on Crossrail, to make sure that British industry gets the great share—the lion’s share if I may call it that—of the £50 billion that we are looking at? That is the wages, salaries, profits and engineering progress that are entailed.

I can only echo what the noble Lord, Lord Heseltine, of whom I have always been a fan on these matters, said:

“It is 120 years since we built a new railway north of London”.

It is a bit of a shock when you say it like that. Why should we not have built another railway north of London for 120 years? It is not as if railways, à la Beeching, are now a thing of the past. Ending—in due course—where I began, the argument is precisely that we are a small island. We should not be frightened of this because we are a small island.

We seem to have the idea that the Victorian era was some sort of golden age. I think Wordsworth wrote a poem about the Ribblehead viaduct or something—these exact arguments took place during Victorian times, even though we now all talk about the Victorian railways. The noble Lord, Lord Cormack, whom I greatly admire, is exactly the sort of person who probably has a society for the admiration and better

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understanding of the Ribblehead viaduct. I would not be at all surprised, and the noble Lord is nodding his head. He probably is the president because he is the president of everything like that. But it was not exactly top of the pops at that particular time.

I am also reminded of when, exactly 20 years ago, in the presence of Her Majesty the Queen, President Mitterrand said, with a straight face: “Having travelled at 300 kilometres per hour across the plains of northern France, we came through the Channel Tunnel and reduced our speed to 100 kilometres per hour, to better admire the beauty of the Kent countryside”. I did not know that the French were up to that sense of humour, but President Mitterrand somehow put his finger on a fallacy of our national psyche at that time.

In conclusion, I believe that we could be running the risk of another procrastination by having endless procedures which, in other circumstances, I could only call red tape. The Government are very committed to a bonfire of red tape—apart from when it comes to tying up the trade unions in red tape, although that is not the question we are discussing this evening. I suggest that, side by side with a statement about when we are going to see the next stages of legislation, we have a clear timetable, like the Olympic timetable, so that the thing does not slip and so that the people who are looking at the new patterns of economic geography can have some confidence. Many of the stations will not be in the middle of cities—I do not think that is necessarily a bad thing but more work can be done in the city clusters study that I recommend to look at the consequences of some of the stations not being in the centre of the cities and the connectivity there. That may have the upside of what I call the Heathrow Airport type of economic geography, as well as what you might call the downside, given that we all want to arrive at Kings Cross. There is a lot of very exciting work to be done and I have very little doubt that the Government and the Opposition are, on this issue, speaking for the nation’s future and, also, for the environment on the small island on which we live.

8.16 pm

Lord Smith of Leigh (Lab): My Lords, I should declare some interests, in view of the remarks of the noble Lord, Lord Cormack. I am a member of the National Trust, but it does not speak in my name. I am also the leader of Wigan Council, as most Members know, and chairman of the Greater Manchester Combined Authority. I confirm to the Minister that all the local authorities in Greater Manchester, whatever their political control, are supportive of High Speed 2 coming to Manchester. Indeed, it has the support of the business community in Greater Manchester. We have great support and are getting very positive comments from the consultation for Greater Manchester as a whole and, I am sure, for each and every one of the local authorities.

We support the strategic case that the Minister and other noble Lords have made. It is about capacity. Let us get this clear: it is about capacity on the railways in order for people to continue to travel. The growth that noble Lords have talked about, in both numbers of passengers and freight, means that we cannot cope with the existing infrastructure and we have to invest in new.

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One of the alternatives, which noble Lords have talked about, is to try to improve capacity. That has been well established, but I can remember the misery of being a passenger on the west coast main line during its refurbishment. It was not much fun; I even missed an appointment with the Garter King of Arms to come into this place because the train was late, as was every train on the west coast main line at that time. Therefore, that is not really an option.

I am a former director of Manchester airport so one might think that the idea of increasing air transport would appeal to me. But we cannot possibly have the capacity at our airports to handle intercity transport within Britain; we want that capacity to be used for international connections and not for too many internal connections. We could not do it; it is not a possibility. Of course, in order to get to airports, infrastructure needs to be designed. Although I am sure that the noble Lord, Lord Heseltine, is normally correct, we actually built a new railway into Manchester airport to enable better connectivity.

Another option is to do something with the motorways. They are already congested and if we do not do anything to the rail system or to the motorways, we will just end up in gridlock. The impact of an increased capacity on the motorways, as the noble Lord, Lord Berkeley, said, is going to be far greater than anything that High Speed 2 would create. Therefore, High Speed 2 is really our only alternative.

We support the economic case even more strongly because of the benefits that we believe High Speed 2 will bring to cities such as Manchester. I am willing to take the gamble that it will not suck business out of Manchester; rather, it will create more activity in our city region. We think that the benefits of HS2 alone will be about £1.3 billion but, of course, the additional facility in Greater Manchester of the airport station will probably add to that by a further half a billion pounds. Therefore, HS2 could result in an increase in activity in Greater Manchester of almost £2 billion.

Piccadilly station is bang in the heart of Manchester and will help to regenerate more of the city centre. There will be additional benefits resulting from that and the regeneration will be important for Manchester. As the project is being constructed, as noble Lords have said, jobs will be created. We are already working locally to see what skills will need to be developed so that we can maximise the benefits of construction in Greater Manchester.

In Manchester we benefit from this national connectivity. As noble Lords have said, it is not just connections from Manchester to London—although that is clearly important—but Manchester to Birmingham, Leeds and other cities that will be greatly improved. We also recognise that we need to improve local connectivity and through the Greater Manchester Community Transport Forum, we are already investing considerable amounts of money into improving the tram system and the bus network so that people will be able to get access from across the conurbation into the new station at Piccadilly. The airport will provide us with international connectivity that will mean more jobs.

If we are serious about rebalancing the economy in this country, then High Speed 2 is really important. Otherwise, the south-east will tend to dominate, as it

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has done in the past. I particularly welcome the creation of the growth taskforce, which will concentrate minds on how we can best engineer that growth, and I am sure that the Minister is aware that we have two members of that taskforce from Greater Manchester who are, I am sure, making a contribution.

Noble Lords have hinted that in the early part of the 19th century, this country had a phenomenal period of building railways. In a period of 20 years we built about 6,000 miles of railways in this country, providing the basis of the network that we have today. We did it because we had the confidence and engineering skills, and we did it without the cost-benefit analysis; no Victorian asked “What will be the benefit?”. They just had the confidence that this thing would work—it did, and it produced the benefits for the Victorian economy that we can see.

On the whole, during that period, Parliament was supportive of railway developments. The only hiccup was when the first Manchester to Liverpool railway was mooted and turned down, and they had to reroute it so that it did not go across too much of the Marquis of Stafford’s land. George Stephenson’s ingenuity meant that he managed to get it to go across an impossible area of Chat Moss and to float the railway as he did, meaning that that railway could be built. Other than that, Parliament supported the building of railways during the Victorian period and I hope that we can do the same in this particular Bill.

I want to briefly mention, as noble Lords have done, this odd contradiction between what Britain thinks about high-speed rail and what other countries, particularly in Europe, think about it. Spain has already got 3,000 kilometres of high-speed line, carrying 29 million passengers. The Germans are planning a network of about 2,500 kilometres and they have about 78 million passengers. We are planning to get about 317 kilometres and we currently have 9 million passengers—somewhat behind Belgium. Then, as noble Lords have mentioned, there is France. France was the leader in high-speed rail, planning for nearly 5,000 kilometres. It has with well over 100 million passengers currently on the TGV system.

On holiday in France last summer, I was delayed by some construction work near Tours for a new TGV line. When I came home, I checked what was going on, and it was a new extension of the TGV from Tours to Bordeaux, eventually on to Toulouse and the Spanish frontier. They announced this on roughly the same day that my noble friend Lord Adonis was planning to talk about HS2. It will open in 2017. We are now at the stage of a paving Bill and the lines in the north will not be completed until 2033. The French seem to be able to do these things somewhat faster than we can.

My only criticism of the Bill and the Government’s plans—not just this Government but both Governments —is not that we are building it but that we are building it too slowly. Actually, we ought to be building the two phases together. I accept that the congestion on the southern bit of the west coast main line is causing the greatest pinch points and needs to be tackled, but the economic benefits are greatly needed in the north and should be considered. If the Minister wants to examine the relative spending on rail by region, she

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will find that in the south-east they are spending roughly £2,700 per head of population; in the north-west it is £178, so there is quite some way to go.

There are two visions of Britain in the future. One is a vision where we try to make do and mend with the current system; we accept that Britain will be a second-class country with a second-class economy and a clapped-out transport system. The other is a vision for the future, a vision for our children, a vision of a Britain that can compete in the modern world, and for that we need high-speed rail.

8.26 pm

Lord Teverson (LD): My Lords, it was a great delight to hear the noble Lord, Lord Rooker, in full flight again. I remember very well when he was a Defra Minister the great thing about him was that occasionally he used to throw away the script and agree amendments that the Government did not agree with. Those days are long gone, most regrettably.

A role that I had in this House until May was chairing one of your Lordships’ Select Committees, EU Sub-Committee C on external affairs—the nearest thing we have to a foreign affairs committee in this House. Last week I had one remaining engagement that came out of that: the University of Kent asked me to give a lecture to its politics and international relations department about the External Action Service, which we had just done a report on. The university said that it would book the fares for me, so I got the tickets and went to the station, which of course was St Pancras, and was swept over the Thames and along the north Kent coast in a Javelin train.

The train was at about 4 pm and it was pretty full, not of businesspeople but normal people. We sped down, and I was met at Canterbury, where I did my lecture, and we had dinner afterwards, courtesy of the University of Kent. My hosts remarked on how Canterbury had changed substantially for the better, not just in terms of the restaurants—I am sure that is not important to everybody but it was quite good for that evening—but the whole place had been significantly regenerated, effectively with private money, over the past few years since that service had started.

I was quite interested in HS1’s domestic transport function as opposed to its international one so I looked it up on the web. I came across an article on the BBC website from about 2010 which was all about how they were moaning in Ashford about the fact that nothing much had happened since the Javelins were announced, the train fares were going to be too much and really it was a waste of time, but then, moving down the results on Google, which I sometimes use—I am sure other noble Lords never do—I came across some rather more contemporary articles about this high-speed Southeastern service into Kent.

This time it was the citizens and the chambers of commerce of Deal and Margate really concerned that their service should continue feeding into High Speed 1. There had been help from Kent County Council, which I think was going to go into the main franchise, and there was real concern that there was going to be a hiatus for a couple of years until that franchise was sorted out. There was news about Canterbury and how property prices had increased quite substantially.

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While this was not good news for everyone, it showed the economic reaction there had been to this minor extension of the domestic use of HS1. This part of Kent surprised me. I come from Essex and now live in Cornwall, so I do not know it. I thought east Kent was an area where you got on a train and half an hour later you got off at Charing Cross. It was nothing at all like that. A two-hour journey has come down to one hour, and the regeneration of Canterbury and the seaside has happened because, as noble Lords have said, private money has followed the public money.

I am delighted to say that I have never had to use the west coast main line a great deal. I was interested that my noble friend Lord Cormack said that maybe £21 billion was difficult to imagine. The west coast main line upgrade was completed in 2008, after a decade of upgrading. It cost £9 billion. It was a pretty feeble and incredibly awkward upgrade that was inconvenient, I am sure, to local citizens, let alone travellers, for a whole 10 years. I could never understand why, at a time when France was rolling out its TGV programme—it had been doing it for a decade and was about to connect Strasbourg to Paris at that time—we ever thought of upgrading the west coast main line. We should have built a new one with technology that was already tested in Europe and elsewhere. The upgrade was the wrong option then; to increase capacity you need a new line. Clearly one would never build a new line to old, slow standards. You would build it to fast standards. That is quite obvious. I cannot see that you could argue that any other way.

Noble Lords have already mentioned rail services worldwide. China is not the best example because it is a very large country. In fact, high-speed rail is probably not the best solution for countries like that, but it has been done in other parts of Asia, not old sclerotic Europe—we have talked about that. Forging-ahead eastern Asia is also doing high-speed rail. I have been on the trains in Taiwan. The noble Lord, Lord Adonis, mentioned Japan. I think the bullet trains started in 1964 for the Olympics. I do not think it a complete coincidence that this coincided with Japan’s fantastic economic growth through the 1960s and 1970s and into the 1980s, where it paused for a while.

Those are the reasons why it is quite clear that we should invest in this project. We should move ahead with it because there is no viable alternative. Like many noble Lords, I have a business background. How can you have an economy where you do not plan your capital expenditure well enough ahead so your organisation starts operating inefficiently with congestion and overcrowding and your business goes the wrong way?

The United Kingdom is the right size for high-speed rail. It can substitute, as it has done in France, for air passenger routes, and it stops the degree of airport development that perhaps there might be otherwise. There is rising demand for train services, so clearly it is necessary. If we decarbonise the electricity energy sector, we can have a much more environmentally friendly and less carbon-intensive form of transport as well. We have one of the highest population densities in Europe. It means that public transport naturally works in this country, whereas in more sparsely populated areas it does not.

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From my point of view, this is not a complex question, as other noble Lords have said; it is absolutely straightforward. This is something where UK plc has to decide whether or not it is going to invest in the way that it is going to work and have its infrastructure into the future. I think that there is only one answer to that and only one way to do that. What I have been terribly disappointed about during the past couple of years is the lack of political leadership on this matter within the Government of whom I am a great supporter. They have said yes, they have pushed it forward and this Bill is here, but somehow we have managed to muffle the message. That is why I am also delighted that my noble friend Lady Kramer is here on the Front Bench and is going to be leading on this. It is also great to see the noble Lord, Lord Adonis, sending from the Opposition Front Bench that really strong message again that we can bring all parties together for this essential investment in the UK. It needs that political leadership. From this evening, I hope that that will continue.

8.35 pm

Lord Snape (Lab): My Lords, it is a pleasure to follow the noble Lord, Lord Teverson, whom I have not heard speak on these matters before—although that probably reflects neglect on my part rather than on his. I agreed strongly with much of what he had to say. I am not seeking to make any particular political point here, but he was not quite right when he said that £9 billion was the total cost of the west coast main line upgrade. It is not finished yet; it was stopped at £9 billion in order to stay within that amount. He said that he does not use the west coast main line very much. If he makes the mistake of doing so next year, he will find that the re-signalling of Watford, which was not done in the original upgrade, will cause quite a bit of delay and dislocation to that line.