My Lords, in moving Amendment 2 in my name and that of the noble Lord, Lord Bradshaw, I will speak to Amendments 3 and 4, which are in my name. I am getting very concerned about the costs of HS2. The reason for that is, as many noble Lords will know, that I with two experts, Jonathan Roberts and Michael Byng, came up with a scheme to provide a cheaper and more effective station at Euston for the end of HS2. I appeared with them in front of your Lordships’ Select Committee and, along with colleagues, pay tribute to the way that the members of the committee listened and took an interest. Frankly, I congratulate them on staying the course. If we ever get further such committees in both Houses, I hope that the House of Commons committees will learn something from the way that your Lordships’ committee operated, because it was really good.
I will not go into the detail of the scheme. We had a lot of support from people privately within HS2, Network Rail, TfL and Camden, but many of them are restricted from saying publicly what they felt. I believe it would work. We could never get a cost for the HS2 scheme out of HS2, so we ended up costing it ourselves with Michael Byng, who is a real expert in railway costing and has written the textbook on costing railway works for Network Rail, which is being implemented—not before time, I would say—and has a lot of credibility. We ended up demonstrating that we could probably save the Government £1.8 billion by putting all the trains into Euston and giving the west coast main line services a new station on top, so to speak, alongside the HS2 station. On a like-for-like comparison, the saving was £3 billion to £4 billion. Interestingly, HS2 never challenged any of the costs in the committee, which surprised me.
The reason I tabled Amendment 3 was to suggest that, before the Government embark on construction work on the ground, they need a comprehensive, up-to-date and independent cost estimate of the section between Old Oak Common and Euston. Having got some further information from HS2 since we appeared in front of the committee, we understand that it will cost £8.25 billion at 2014 last-quarter prices. This includes contingencies, risk compensation and everything else one might want.
The problem for me, and perhaps for the Minister, is that in a Written Answer he gave me on 21 December, the equivalent cost for the whole phase 1 scheme was £24.3 billion, on the same basis. That means that the section from Old Oak Common to and including Euston is about 34% of the total cost. That leaves £16 billion for the remaining 200 kilometres of line.
I am sure that this is not how it has been thought about, but one sometimes gets the feeling that, “Well, London’s expensive to build in, but when you get north of the countryside in Northamptonshire and Buckinghamshire, it is quite easy”. The Committee should be aware that this is a line connecting the two
major cities in this country. A tunnel has been proposed through the suburban areas in London, but not for the Birmingham area, from Water Orton to Curzon Street. It has to cross three motorways and several major railway lines and rivers. In fact, 40% of the total length is in either tunnel or viaduct, so it is a complicated structure. It will probably need new signal boxes and more power supply: my colleagues have calculated that the power needed for these high-speed trains is equivalent to half a Hinkley Point, when phase 2 is finished. It is a very big project.
We have got £16 billion to build 204 kilometres of line. Mr Byng has priced this, on the same basis that he presented to the Select Committee, pointing out that the cost of land acquisition, permanent and temporary, and disruption in the open areas is very expensive. We talked once to Professor McNaughton about the amount of compensation that was needed around Euston alone exceeding £1 billion—that was just the compensation. The costs are obviously very high. Mr Byng has now come up with an estimate, on the same basis, that the total cost of phase 1 of HS2 would be £53.6 billion, which is about double the figure that was in the Written Answer. Jonathan Roberts, who is a very experienced railway man, has compared those. I am not a cost engineer, but I respect the view of these two people. The costs when we started off at Euston have never been challenged. I want this scheme to happen, but I worry that there is no way that any bit of phase 1 can be completed at the price of £24 billion quoted in that Written Answer.
I believe that HS2 has spent about £1 billion on consultancy since it started, but why have they not done any credible costings on it? It is a very complicated route, but why have they not done it. We get back to the issue of value for money and business case, which my noble friend Lord Adonis mentioned earlier. Noble Lords will be aware that the chairman of the House of Commons Treasury Select Committee, Andrew Tyrie, wrote to Chris Grayling in the last week or so asking why they had increased the passenger number estimate, and whether it was just to improve the business case. I have not seen any answer, but I expect there is one. If one is going to increase the capital cost by anything approaching the figure I have given, that does not do a lot of good for the business case, because it goes down the other way. What can be done, because I do want this to happen? The first thing is to get a credible estimate by independent experts. I hope that Ministers will avoid the temptation of shooting the messenger, because it is important to get the figures right.
What can be done in a more positive way? As noble Lords have already said, one thing is to slow the trains down a bit, because the running costs of going at 400 kilometres an hour, or even 360, are extremely high, as are the capital costs of the trains and the track. Does it really matter if it takes two minutes longer to get to Birmingham? My view is that it does not, especially when you have got to walk 20 minutes from the new Curzon Street station to New Street, though that is a separate issue. You could leave out everything from Old Oak Common eastwards, as the noble Lord, Lord Bradshaw, mentioned earlier. He said it would work and I agree. Or we could adopt the cheaper scheme that we proposed for going to Euston.
You could leave out the Handsacre link, which is not so expensive—maybe £1 billion—which links the top end of phase 1 to the west coast main line. It is a particularly worrying design because you have got six tracks coming together into three.
Beyond Handsacre, going towards Stafford, there is a section of the west coast main line that is not four tracks but three. I am not quite sure why it is only three; I think that somebody who had a large estate did not want his land built on. Anyway, it has a serious effect on the capacity of the line. If you did not put in the Handsacre link and you carried straight on to Crewe, which is where it is needed, people in Stafford and Stoke-on-Trent might not be so happy; on the other hand, if the west coast main line is to operate well, as it does, they might be happy. That is another way of perhaps saving £1 billion.
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We will talk about the Wendover tunnel under a future amendment, but I am told that that could save about £750 million. If that does not happen, the only solution is to stop the line at Crewe or Nottingham, not to do phase 2 at all or for the Treasury to give double the money, although I cannot see that happening. Politically, if we stopped the line at Crewe or Nottingham, what would our friends who live north of that in the northern powerhouse think? They are already feeling pretty miserable about all the expense in the south.
I will not go on. I think that I have set out the reasons for tabling these amendments, but I urge the Minister to undertake this independent cost analysis and everything else that goes with it before the construction starts. Otherwise, in a couple of years, whoever is the Minister will say, “Sorry. It’s going ahead and we’ll need more money”. I can see Ministers in this Government and probably in any other Government saying, “Well, if you want more money, you’d better find it from the other railway budget”. That would be a complete disaster. I beg to move.