Speech

Business Travel Conference

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Speech to the Business Travel Conference.

Stephen Hammond

Check against delivery

Thank you for that introduction.

And good afternoon ladies and gentlemen.

It’s a pleasure to be here today (5 June 2013).

And to have this opportunity to speak at the Business Travel Conference.

Because of all the transport audiences I address as a minister, you must be among the best informed and most discerning.

As professionals whose job it is to keep business people on the move, in the most efficient, reliable and cost-effective way…

You have a unique insight into our transport system…

Where it delivers, and where it falls short.

You also understand the vital importance of transport to our economy.

And why we need invest in road, rail and air links if we’re to attract the multi-national investors of tomorrow.

So today I’d like to talk about the progress that we in the coalition have made over the past 3 years.

How we’re reversing decades of underinvestment.

And why we still have a hugely challenging agenda ahead of us building the modern transport system that we all want to see.

Lessons from the past

One of the reasons why Britain was so prosperous in the Victorian era was our control of trade routes – over both land and sea.

Transport gave us a huge competitive advantage…

Connecting manufacturing industry with raw materials, parts and labour

Opening up a huge international market for our products and services

And helping attract foreign investors to Britain.

Today, it is the same ready connections and access to global markets that is driving the growth of economies like China, India and Brazil.

Yet somewhere along the line, Britain forgot this lesson.

After the coming of the motorways, we increasingly neglected our transport infrastructure….

Adopting a ‘patch and mend’ approach…

Because it was cheaper, easier, and less politically sensitive.

In 2009, the World Economic Forum ranked the UK 33 in the world for the quality of its infrastructure.

By contrast, France and Germany were in the top ten.

For much of the previous decade, the UK had been the lowest infrastructure investor of all the OECD countries.

So even in good times, when money was plentiful, we failed to close the infrastructure gap with our competitors.

Transport key under coalition

But today, we’re breaking that cycle of underinvestment.

Under the coalition, transport has a higher government profile than it has enjoyed for decades.

The Department for Transport is no longer a political backwater.

It’s a core economic ministry.

We may not have the luxury of a thriving economy and healthy fiscal surplus that the previous government inherited.

But we do understand that we have a real responsibility to tackle our most stubborn and enduring transport problems.

Roads

Take road congestion.

It needs sorting out.

So we announced £1.5 billion in the ‘Autumn statement’ to improve the road network, ease congestion and speed up journeys.

We’ve moved forward construction of key road schemes.

And we’re piloting new models that will halve the delivery time for new roads.

We know this is only a start.

But we’re also working on a more radical and ambitious strategy that will consider new ways to finance roads, and get traffic moving.

Rail

We’re also delivering the biggest rail modernisation programme for well over a century.

Network Rail plans to spend £37 billion to run and expand the railway between 2014 and 2019.

Of that, the government is investing over £9 billion to deliver major improvements across the country.

At any time, this would be a considerable sum.

But in the current economic climate, it’s an unprecedented commitment to the future of rail.

It means we can deliver Crossrail and Thameslink.

850 miles of electrification.

And the £4.9 billion Inter City Express Programme.

But we’re not funding these schemes by simply borrowing more and more.

Instead, we’re making our railway more efficient.

Reducing annual rail bills by £3.5 billion.

And redirecting money towards schemes which offer the highest rates of growth.

As a result, by the end of this decade, we will have delivered an extra 140,000 seats on trains at peak times.

Real money. Real action. Delivering real improvements for business travellers.

HS2

But it’s a sign of how far behind we’ve fallen as a country that even this unparalleled investment in rail won’t be enough.

The overall number of rail journeys in this country has doubled in a little over 15 years.

That’s an astonishing growth rate.

And it’s one that has had very serious implications for the millions of business travellers who use the railway, and who have seen services decline over that period.

Long distance rail travel is growing even faster – from 54 miles to 125 miles journeys over the same period – and demand continues to rise year-on-year.

At the present rate, the West Coast Main Line will be overwhelmed in just over a decade.

In 2011, during the morning peak, there were on average 4,000 people standing on arrival into Euston, and 5,000 people standing on arrival into Birmingham.

That means there are already around 115 passengers for every 100 seats.

If there is a single reason why we need HS2, this is it.

HS2 will transform business travel in the UK.

Superfast connections.

Superb comfort and passenger facilities.

But most important of all, High Speed 2 will provide the capacity we need to meet demand, with up to 18 trains an hour, each carrying as many as 1,100 passengers.

It will more than double the number of seats between London and Birmingham.

And it will also liberate vital space on the existing railway and on our roads.

HS2 will also be a huge shot in the arm for our economy.

The benefits of the new network will truly be felt nationwide.

It will change Britain’s economic geography, bringing cities in the North and Midlands closer together so they can rival London for jobs and opportunities.

By connecting seamlessly onto existing rail lines, high speed trains will also link places like Newcastle, Liverpool, Glasgow and Edinburgh.

We have assessed the alternatives to HS2, and both Network Rail and Atkins confirm they will not offer the same benefits as high speed.

Upgrading the West Coast and Chiltern lines from London to Birmingham would cost more than the equivalent section of HS2 and deliver only two thirds the capacity.

That’s why we need to win the high speed debate – with your support – and get cracking with HS2 as soon as possible.

Aviation

Aviation capacity is equally important to our prosperity.

And despite the impression given by some recent media reports, the UK currently has excellent air connections.

London’s airports offer at least weekly direct services to over 360 destinations worldwide.

We have the third largest aviation network in the world after the USA and China.

Around the country, airports and airlines are investing in new facilities and new routes.

Gatwick’s in the middle of a massive development programme.

It recently announced a further £1 billion of investment.

And Heathrow’s being transformed too.

After Terminal 5…

And the opening of the new Terminal 2 next year …

Over half the airport will have been rebuilt…

Making it one of the most modern in Europe.

But with Heathrow’s runways practically full, it has little room in which to grow.

Unlike Paris, Frankfurt and Amsterdam.

Without action, they will be able to pick up new routes and expand as hubs at our expense.

So we’re determined to take the necessary action to maintain our status as Europe’s leading hub.

Make no mistake about that.

Past attempts to agree on a future hub airport strategy have been hampered by a lack of consensus.

We need to build that consensus, with an expert and independent body to take the work forward.

We also need accurate, up-to-date evidence to assess our hub airport requirements.

So we’ve established the Airports Commission.

A body without vested interests… and unencumbered by pre-conceived ideas or politics.

The Commission is chaired by Sir Howard Davies, whose expertise and experience is invaluable.

Sir Howard and his team are identifying how any need for additional capacity should be met in the short, medium and long term.

The Commission’s first report will come later this year, and will set out actions we can take now, and options for the future.

A final report will be produced in summer 2015.

It’s nonsense to suggest this about kicking a difficult issue into the long grass.

In fact it’s precisely the opposite.

This is about a government recognising that the only way we can end the years of indecision and inaction on this issue is by taking a new approach.

Conclusion

So to sum up.

Undoing the damage done by decades of failed transport policy is a big challenge.

But it’s a challenge we must meet.

How can Britain hope to compete with established competitors like Germany, France and Japan…

Or emerging competitors like China, India and Brazil…

If we continue to neglect our transport network?

It’s a sobering thought that by the time HS2 is due to open, the West Coast Main Line – which is the busiest and most important stretch of rail track in the country – will be almost 200 years old.

So we have to build a foundation for long-term transport change in this country.

Not just a change in investment – crucial though that is.

But also a change in the way we plan and deliver transport policy.

We have to raise our aspirations, and put the years of decline behind us.

Only then will we achieve the step change in transport services that business travellers have the right to expect.

Thank-you.

Published 5 June 2013