Speech

High Speed Rail conference

The role high speed rail plays in the transport strategy, the benefits it brings and the agenda for rebuilding Britain’s economy.

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

The Rt Hon Philip Hammond MP

Introduction

It’s a pleasure to be here today (4 November 2010), and I would like to thank David Begg and his team for giving me the opportunity this morning to tell you about the progress to date on HS2 and our commitment, at a political level, to taking the agenda forward.

I’d also like to thank you for your patience, given that it is now this afternoon.

One thing I’ve learnt about the transport portfolio in 6 months is that it’s never predictable!

You’ve already heard from Sir Brian Briscoe this morning on the work HS2 are doing to make high speed rail a reality.

I don’t think there’s much I can add to the excellent overview he’s given you on how he and his team are going to progress this project in the coming months.

So what I want to talk to you about today is the bigger picture for high speed rail. And the political dimension to the project.

The role it plays in the coalition’s transport strategy.

The huge benefits I believe it can bring to our country.

How it fits in our wider agenda for rebalancing and rebuilding Britain’s economy.

And why - even in these difficult economic times - we are committed to pursuing such a huge investment.

Economic context

Let me set the scene by putting our decisions in context:

You don’t need me to tell you that we faced an unprecedented fiscal crisis when we came to office.

We were saddled with the biggest budget deficit in the G20 and had just limped out of the longest and deepest recession in our peacetime history.

Every single day we were adding £400 million to our national debt.

Had we kept to the spending plans we inherited, we would be paying out nearly £70 billion a year in interest alone by the end of the parliament - more than we spend on schooling our children and defending our country combined.

If we’d let those debts go on rising, it would have led to higher interest rates, undermined confidence in Britain and put the recovery at risk.

So we have had to take tough decisions to get the deficit under control.

By cancelling £6 billion worth of planned public spending this year.

By setting out, in our emergency budget in June, an ambitious four year plan to eliminate entirely our structural deficit and get debt falling as a percentage of GDP.

And two weeks ago, by delivering the conclusions of the spending review, with firm and fixed spending totals for each government department for the rest of this parliament, and far-reaching reforms to welfare and our public services.

And it’s working already.

Our early action to balance Britain’s books is already paying dividends.

Our AAA credit rating has been reconfirmed and we now have a clean bill of health from the IMF - who described our budget as ‘essential’ to securing the conditions for sustainable economic growth.

But that vital fiscal readjustment is only part of the story.

A necessary, but not sufficient, condition for Britain’s recovery.

Growth and importance of infrastructure investment

The challenge is to secure the growth, the jobs, the investment that will drive our prosperity in the future.

So now the hard work really begins, as we seek to lay the foundations for building a strong, competitive economy for the longer term, while delivering on our climate change targets.

And the chancellor made clear in his budget speech that infrastructure investment will be a key part of our approach.

We will not repeat past mistakes where governments spent too much and invested too little.

Or of indiscriminately cutting infrastructure investment - previously seen as the easy option behind which countless governments, of all persuasions, have sheltered from taking the tough decisions on current spending, and on welfare in particular.

Our recently published National Infrastructure Plan - the first ever published by a UK government - underlines our commitment to investment in infrastructure as a platform for growth.

And transport infrastructure in particular.

The settlement transport received in the spending review - £18 billion of rail investments; £4 billion in Highways Agency investment, and £6 billion on local transport investments - overall an 11% reduction in capital spending against a government-wide 50% benchmark - the plans our predecessors put in place in their last budget - demonstrates the coalition’s commitment to prioritising the projects that will support economic growth and job creation.

That settlement also included over £750 million to fund the development of our plans for a national high speed rail network over the spending review period, with the bulk of capital expenditure occurring after 2015 - when, on our plans, the public finances will be back in balance.

So today I want to explain why I believe high speed rail can make a critical contribution to our economic future, as well as our climate change agenda. And talk through the processes and the politics that lie ahead.

The government’s transport strategy

When I took over this brief, the challenge was clear: with limited resources, support economic growth and rebalancing, and support greenhouse gas reduction.

The need for a cross-modal approach was obvious.

For instance, our decision to reject new runways at Heathrow, Gatwick and Stansted because of local environmental impacts and CO2 concerns, coupled with the need to ensure that the scarce capacity at our international airports is available for the medium- and long-haul routes that are vital to our economic success, inevitably points to modal shift.

The success of high speed rail across Europe has shown how effectively such links can cater for journeys that had previously been dominated by aviation.

That’s why our commitment to a high speed rail network has been a key factor in taking the difficult decisions we have taken on additional capacity at London’s airports.

And that’s why we have said from the outset that a meaningful high speed rail network must include a link to our principal gateway airport.

But high speed rail isn’t just about modal shift. It’s also about addressing the rail capacity challenges that are facing our most congested inter-urban routes.

Reducing crowding, improving reliability, speeding up journeys, and catering for the increased demand that comes from continued economic growth.

And, of course, it is not only inter-city journeys that would benefit from a new high speed line. As long distance point to point services transfer to the new line, valuable capacity is released to meet the growing demand for longer-distance commuter travel and for services to intermediate towns.

High speed rail will be an unbeatable option for inter-urban travel. With none of the hassle of short-haul flying. Even I could not contemplate driving from London to Birmingham in 49 minutes. It took me that long to Park Royal last time I did it.

The role of high-speed rail in delivering the government’s growth strategy

But high speed rail isn’t just a central plank of our transport strategy. It is also key to our wider plans for securing sustainable economic growth.

In the short-term it has the potential to create thousands of jobs planning, constructing and operating the proposed line.

New high speed rail lines, on which construction would begin as Crossrail is completed, would also form part of a predictable pipeline of major rail infrastructure projects.

Allowing the UK supply chain to plan for the long term, reducing costs and building a skills base for the future.

In the medium term, the proposals put forward by HS2 Ltd would lead to the regeneration of significant brownfield sites in West London and Birmingham.

Further regeneration opportunities in Manchester, Leeds, the East Midlands and South Yorkshire will open up.

But in the longer term, I firmly believe high speed rail would deliver a transformational change to the way Britain works and competes in the 21st century. Just as profound a change as the coming of the original railways delivered in the 19th century and the advent of motorways did in the 20th.

It would slash journey times between major urban centres and international gateways.

It would free up capacity to enable the continuing shift of freight from roads and onto rail, reducing carbon emissions and cutting congestion.

It would allow the economies of the Midlands and the North to benefit directly from the economic engine of London and the south east, tackling the North-South divide more effectively than half a century of regional policy has done as we expand labour markets and merge the travel to work areas of our major conurbations.

Providing a railway for the 21st century.

Recent route developments

It was the transformational potential of high speed rail that captured the imagination of David Cameron back in 2008.

And since we have been in government, we’ve lost no time in developing our plans for a truly national network.

At the beginning of October, following work by HS2 Ltd, I announced that our preferred option for high speed rail north of Birmingham was for two separate corridors.

One direct to Manchester, and then connecting onto the West Coast Main Line, and the other to Leeds via the east Midlands and South Yorkshire - with stations in both areas - before connecting onto the East Coast Main Line south of York.

As Brian has already said, this would reduce journey times to Manchester and Leeds to around 80 minutes - only slightly longer than many journeys across the capital.

Meanwhile, the trip from Birmingham to Leeds would be almost halved - dropping from around 2 hours today to just an hour and 5 minutes.

And by shifting long-distance services onto the new line, we would free up valuable capacity for commuter, regional and freight services on the West Coast Main Line, the East Coast Main Line and the Midland Main Line.

Meanwhile, I’ve commissioned and received advice from HS2 Ltd on the options for the link to Heathrow, and for connecting to the wider European high speed network via the HS1 line.

Addressing the critics

Now, I know that our plans for high speed rail are not universally popular.

If I didn’t know it before, I found out doing a series of meetings in the communities through which the proposed route will run.

People claim it’ll damage the environment.

That the business case doesn’t stack up.

And that we’ll never get this through parliament in a million years.

Well, I am happy to take each of those challenges head-on.

Environment

Of course, I am not blind to the environmental impacts of HS2.

And I understand that the national benefits of high speed rail have to be balanced against the impact on local environments.

That’s why, in recent months, I have been visiting communities that will be affected by the proposed route. Listening to them.

And why I, personally, have been over every mile of the route with HS2 engineers, looking at the stress points; challenging the alignment; exploring different approaches to mitigating the most intrusive local impacts.

I love our countryside - its beauty and its tranquillity.

And I am determined that we will do everything we practically can to mitigate the noise and visual impacts of the proposed line and deliver a solution that far exceeds the expectations of those who would be outside the statutory blight arrangements but who are understandably apprehensive of the impact of HS2.

I intend to personally monitor the mitigation proposals - visual and acoustic - of every mile of this railway.

We have launched an Exceptional Hardship scheme for homeowners who need to relocate urgently, and whose property values have been affected by the published route proposal.

And we’ve committed to consulting on a further scheme to help those whose property values are significantly eroded by a high speed line.

Business case

Of course, it’s not only the route and the environmental impact that has come under scrutiny.

There are also many people who have questioned the business case for the project and, indeed, whether a line of this kind is needed at all.

Paul Plummer from Network Rail has already spoken about the capacity challenge that our inter-urban railways face.

But it seems clear to me that the question is not whether demand will increase, but what are the options for dealing with it.

Some people have argued that upgrading the existing West Coast Main Line is the best way to meet demand increases.

But I am unconvinced that that is a credible option.

First, because reliability would undoubtedly deteriorate through trying to squeeze ever more capacity out of existing, mixed-use, railway lines.

In contrast, a new high speed line could improve reliability by creating increasing segregation between different service types.

Second, trying to deliver such a massive capacity upgrade on working lines - particularly the main commuter routes into London from the north - would try the patience of the hardiest of rail passengers. Not to mention the occupiers of the very large number of houses that would need to be demolished.

We all remember the last West Coast Main Line upgrade.

And finally, because no upgrade of existing infrastructure can deliver the huge improvements in journey times, and step-change transformation of our economic geography, that a new high speed network would bring.

Political consensus

And as for getting the Bill through Parliament - well, don’t think I underestimate the scale of the challenge.

I’ve heard enough war stories over the years from colleagues who have served on hybrid Bill committees to know just how challenging it is to get them onto the statute book.

The key to the success of a project like this is cross-party consensus.

This is not a plan for a parliament. It is a plan for a generation. And we can only invest in it if we are clear that it will proceed over four or five parliaments, whatever the political weather.

So I’m grateful for the supportive position adopted by opposition transport spokesmen - and of my predecessor.

I will maintain an open and constructive dialogue with them as we move forward with this exciting project.

On High Speed Rail, if on nothing else, I believe they will agree that “we are all in this together.”

What happens next?

Brian in his presentation to you this morning, gave you an outline of what’s going to happen next.

We intend to announce the package for consultation, including a preferred route between London and the West Midlands, a corridor preference to Leeds and Manchester, and detailed plans for links to Heathrow and HS1, later this year.

The consultation we will be launching in the New Year will be as comprehensive, inclusive and wide ranging as possible… an opportunity for everyone to make their views clear.

It will cover both the government’s overall high speed rail strategy and the route of the initial London - Birmingham phase of HS2.

We will analyse the no doubt numerous responses, and publish our response, setting out our proposed way forward, in December 2011, with the aim of getting the first hybrid bill for the London to Birmingham route to royal assent by the end of this parliament.

Conclusion

There is still much that needs to be done. And I do not for one minute underestimate the challenges involved in making high speed rail a reality.

I first looked at this project through the sceptical eyes of a Shadow Chief Secretary to the Treasury.

And to those who ask how Britain can afford to invest in a project of this scale, I reply that we cannot afford not to invest in our future. And that if we are to prosper as a nation, every part of that nation has to prosper, has to contribute.

And strategic transport projects like HS2 have a vital role in making that happen.

Even while I still held that Shadow Treasury post, I convinced myself of the strategic potential of this project.

The potential to transform the social and economic geography of Britain.

By delivering greater mobility and connectivity; slashing journey times; and becoming the mode of choice for intercity travel.

The potential to reduce our carbon footprint, shift demand from air to rail and to transform the way we use our existing railway.

Above all, the potential to tackle the north-south gap in economic growth rates, a prize that has eluded all modern governments, boosting economic growth across the whole UK and helping to secure our competitiveness in the global economy. In short, a vital part of our plan to build a better Britain.

Thank you.

(This speech represented existing departmental policy but the words may not have been the same as those used by the minister.)

Published 4 November 2010