Mr Redwood’s interventions during the debate on the High Speed Rail (London – West Midlands) Bill, 28 April

Mr John Redwood (Wokingham) (Con): Does the Secretary of State agree that we are talking today about a very big item of public spending, not an investment, because the business case makes it very clear that none of the debt can be repaid out of fare revenue and much of the interest in the early years will also fall on the taxpayer?

The Secretary of State for Transport (Mr Patrick McLoughlin): I believe there is a good cost-benefit ratio. We estimate the cost-benefit ratio to be 2.4 and it is worth pointing out—I will come on to this in my speech—that the initial cost-benefit ratio for the Jubilee line was less than 1% and if that had not been built I do not think we would have seen the subsequent development in Canary Wharf. However, I do not want to be tempted too much away from the very detailed contextual part of my speech, which I have worked out.

Mr Redwood: What has changed between last autumn and today to move the Labour party from thinking that HS2 offers very poor value for money to thinking that it is a great financial project?

Mary Creagh (Wakefield) (Lab): David Higgins and Simon Kirby, the former Network Rail chief engineer, have been appointed to the project, and the Higgins review has shown where costs can be brought down. The key risk to the project costs is political delay. We have also looked at the strategic alternatives, as we did in government, and we believe that HS2 is the best way to move to the low-carbon transport infrastructure that our country needs if we are to meet our climate change emissions targets.

Mr Redwood: Is the hon. Lady at all worried that the business case says that load factors on the west coast main line will be only 31% in 2037, and that there will have to be cuts of £8.3 billion to non-HS2 services to try to keep costs under control?

Mary Creagh: The right hon. Gentleman refers to a part of the report that does not immediately spring to mind—I have not perhaps digested it and kept it in mind as thoroughly as he has done—but there is broad consensus across the parties that the project is the right thing to do for the nation, and I hope that we can proceed on that basis.

Mr Redwood: I am grateful to the hon. Lady. As over this weekend the marketing materials for the current railway said that one could travel to Birmingham for £7.50 and to Liverpool or Manchester for £12.50, is she worried that when this huge amount of capacity comes on stream, if it does, there will be even more intense price competition and huge disappointment in the fare revenue needed for the scheme?

Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op): One of my concerns is that if the new line is not built, the problems of capacity will lead to whatever Government are in power being tempted to increase rail fares to manage demand.

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One Comment

  1. JimS
    Posted April 30, 2014 at 4:58 pm | Permalink

    I believe there is a good cost-benefit ratio. We estimate the cost-benefit ratio to be 2.4 and it is worth pointing out—I will come on to this in my speech—that the initial cost-benefit ratio for the Jubilee line was less than 1% and if that had not been built I do not think we would have seen the subsequent development in Canary Wharf.

    What does this mean? Is the estimate that the cost of HS2 will be nearly two-and-half times the benefit? What was the initial cost-benefit ratio for the Jubilee line? Half a per cent is less than 1%, i.e. o.5% or 5 parts in a 1000 or 1 part in 200, so the initial benefit was perhaps 200 times the cost!

    I’m sorry but do MPs have any clue about what they are debating?

  • About John Redwood

    John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College, and has a DPhil from All Souls, Oxford. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.
    Published and promoted by Thomas Puddy for John Redwood, both of 30 Rose Street Wokingham RG40 1XU
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