2
Revised transcript of evidence taken before
The Select Committee on Economic Affairs
Evidence Session No. 13 Heard in Public Questions 143 - 155
Witnesses: Sir Richard Leese, Mike Blackburn and David Thrower
Members present
Baroness Blackstone
Lord Griffiths of Fforestfach
Lord Rowe-Beddoe
Lord Shipley
________________________
Sir Richard Leese, Leader, Manchester City Council, Mike Blackburn, Deputy Chairman, North West Business Leadership Team, and David Thrower, Transport Consultant, North West Business Leadership Team
Q143 The Chairman: Good morning and welcome to this, the seventh meeting of the Committee’s inquiry into HS2. We are delighted to be here in Manchester. Thank you very much indeed for joining us. Perhaps I could kick off with a rather general question. In April 2014, YouGov found that 32% of people from the north were supportive of HS2, compared with 47% who were opposed. I presume, from your evidence, you do not share the opinion of those who are opposed. Why are you supportive and why is the majority of the population opposed?
Sir Richard Leese: I think the reason that not just I but the entirety of the Greater Manchester Combined Authority are supportive is that we see the development of High Speed 2 as being essential to the long-term economic future of not just Greater Manchester but the north. Perhaps a hint about some public scepticism is that they will look at now, not 20 years’ time. We are talking about a network for the future and, indeed, a network that is intended to give capacity for at least 60 years beyond that. The argument is relatively simple: it is that good transport is absolutely essential to a thriving economy, and the easiest way to demonstrate that is to look at the converse. If you had had to arrive here by stagecoach, you would have noticed the economic impact of that. Good transport is essential. We do not have that north-south; we do not have it east-west either, but if we look at north-south, the highways network—the motorways—is increasingly congested, particularly the M6 between Manchester and Birmingham. Our railway network is increasingly congested in two ways. First, trains are increasingly full because of the growth in passenger numbers, but there is no capacity within the network for running additional trains or even longer trains. Virgin has already extended the length of its trains and cannot do any more. There is no more capacity, not just for passengers but for freight as well. Unless we address that capacity issue, not only will it prevent growth in our economy but it will start to constrain our economy. It is principally about capacity, although it is the case that speed matters. The quicker you can get goods to market, the quicker you can get business connections, the quicker you can get more skilled workers within range. It is principally a capacity argument but speed counts also.
Mike Blackburn: To go back two or three years, it is fair to say that the HS2 argument and debate in the public domain through the media tended to be about speed. It may be that we should not have called it “High Speed” in the first place. Therefore, the question that people were asking was, “How would you like to get 30 minutes off your journey? And, by the way, it will take 30 years to get there”. Therefore, most people were not engaging at all. Businesses we talked to in Manchester through the Chamber of Commerce and through the business leadership team again could not see the argument first. As Sir Richard pointed out, once you start talking about the capacity getting fuller by 2020, and ask, “We will have this number of passengers and no more extensions. Do you want to go back to the way it was in 2004-05, when we had five years of closures on the West Coast Main Line, just to upgrade the signalling system?”—I remember that my journey was taking between five and six hours from London on a daily basis—I was commuting at the time. It was taking five or six hours every day to come back. That was just nonsense—and once you start engaging in a conversation around the impact of those increasing levels of passenger numbers and the slowing down of journeys, and the effect that that would have on the economy, then you start to have a different engagement. The last two years have been a completely different engagement with businesses and people about the impact that HS2 could have. Now, I suspect, if you ran the YouGov poll again, you would get a different set of results. Now the Chamber of Commerce is completely behind it, as is the business leadership team. As you go around the north, from Liverpool across to Leeds and Sheffield, again, chambers are absolutely behind it because there is recognition that the capacity constraints will hit our ability to grow our economy and therefore get thriving businesses.
Q144 The Chairman: You are in a unique position working in BT to understand and perhaps explain to us the impact that superfast broadband will have on work and travel patterns.
Mike Blackburn: First and foremost, I am here in my capacity as a representative of the North West Business Leadership Team, so I am not here to give a BT view on HS2. However, as regards superfast broadband, it is not an “or” conversation; it is always an “and” conversation. Technology for the past 15 years has had an impact on people’s lives, both at a business level and at an individual level. We now have some 75,000 people who do not have an office base, who can meander round the country but then need to go into offices; and about 15,000 people are working at home. Superfast broadband for those people will be absolutely helpful, as it will be superbly helpful to businesses as they address new markets and new customers, and therefore make a more effective and economic business. But it is a not a combination: people are not going to live at home, work at home and stay at home for ever. Businesses still need to communicate and connect. You still need to get your goods and services to market, and there is nothing like a face-to-face conversation. You can do that by video conference, but more effectively you will do it by collaboration and face to face—and the combination of the two. That is how we run our business—with a combination of those two things together. It is not an “or” conversation; it is an “and” conversation.
David Thrower: Very briefly, obviously I endorse the things that have just been said. The issues of passenger capacity are paramount. The difficulty that we have had in terms of the YouGov poll has been getting across a mass of detail to the public succinctly, in a way that they would understand, with all due respect to non-technical people—and to get them to take a long-term view. It will take 15 to 20 years to deliver a new rail line. We know from Network Rail’s route utilisation strategy that it is expecting another 60% growth in inter-city traffic to Manchester between now and 2024. Now, obviously, some things could be done with the existing railway; you could squeeze in an extra train, add an extra carriage, demote coach G to standard class or whatever. However, doing those things will buy you only five, seven or 10 years. At the end of that 10 years, you find yourself with an even fuller railway, nowhere to go and facing the same problem that we are facing now, which is, what do we do for the years 2030, 2040 and 2050? Because rail infrastructure has such a long lead time, especially in this country with the planning processes and consultation periods, we need to think as soon as possible and get started as soon as possible in terms of solving the problem that will be upon us in the years 2030, 2040 and 2050. When you talk to people, you find that although they are sceptical about HS2, what they are actually most sceptical about is whether it will happen. They are not against it but just shrug their shoulders and say, “This is Britain, and I’ll believe it when it turns up”. But then, of course, you can point to Germany, Italy, Spain, France and China, and they ask, “Why can’t we have that, too?” The YouGov poll is more a reflection of their lack of faith in the processes than their lack of belief in the outcome.
Lord Rowe-Beddoe: The YouGov poll was earlier this year and your suggestion was that the basic attitude was, “It’s not going to happen, and that’s why I’ve got a problem with it”. Is that what you are saying?
David Thrower: I think the tone in the press—some of you will have seen the Sunday Telegraph last Sunday—is still one of scepticism, verging on complete disbelief. The reality is that the number of staff is in four figures, and they have been working on this scheme for four or five years. The scheme has been worked up to a great degree of detail, and a considerable amount of money has been spent. They know the alignment of the route to great precision—down to the last inch, in imperial terms. There are still some big decisions to be made about Toton and Meadowhall, but on this side of the Pennines we are very clear what we are asking for and what we are getting. I do not think that the media have caught up, with due respect to the press, in terms of the progress that has been made. An enormous amount of work has been done by High Speed Two Limited, and it deserves more credit than it is getting for it.
Sir Richard Leese: Perhaps I may add something. One thing that we have not adequately conveyed is that HS2 is not exclusively linked to London. If you are on the east coast, the links between Leeds, Sheffield and Nottingham are vastly improved, as are the links to Birmingham on the west coast. Our link to Birmingham is even worse than our link to London—and on to Bristol and other places beyond. Secondly, and I think this is one of the reasons for public concern, there is the issue of cost. To the public in general the notion of spending £40 billion or £50 billion on anything is a tough ask. That is the task for us—to do rather more to explain that major transport infrastructure carries those sorts of bills with it. In terms of major transport infrastructure, what seems like an enormous sum of money is not actually that enormous. As a country, we underspend on transport infrastructure and have done so for a very long time.
Q145 Lord Rowe-Beddoe: Do you think there could be a danger that greater connectivity could increase the north-south productivity gap—that greater connectivity could cause a decrease rather than increase in productivity?
Sir Richard Leese: The evidence we have available would suggest that that is not true and that good connections to the primary economic generator are a benefit rather than a disbenefit. If you look at smaller towns and cities around London, such as Swindon, Reading and so on, they have done remarkably well economically, largely because of their proximity to London and their ability to feed off it. If the argument is that the north will be killed off by high-speed rail, Swindon and Reading would have been killed off a long time ago. Some evidence has been published by KMPG. It says, “Yes, London does benefit and there is no reason why it should not benefit from high-speed rail but the rest of the country benefits a lot more”. I would be very confident that, generally, the Midlands, the north and beyond would get far more benefit from High Speed 2 than London. There are things that we can do to increase that benefit even more. David Higgins has talked about east-west connectivity in terms of high-speed rail and the economic task force associated with that, and what we can do in terms of the required targeted regeneration activities to maximise benefits. Just on its own it would increase economic activity at a greater rate. We can do more to accelerate that.
Mike Blackburn: One thing that Richard did not comment on, but links to the first question, was that the economic impact of the additional capacity therefore is released and has to be taken into account. Therefore, the east-west activity that is going on now through the northern hub and other electrification that is going on—fingers crossed for HS3 and the One North proposal—mean that you release capacity by building HS2 in the local areas. That means that businesses in the Greater Manchester area can get access to skilled resources, where currently it is ineffective to get access to them. It takes over an hour to get to Leeds and over an hour to get to Birmingham, and high speed will release the capacity to be able to do that. Businesses cannot employ those people because people do not want to go to Manchester or to Leeds because it takes too long. Similarly, it reduces productivity costs by decreasing costs because the costs of journey time therefore of getting your goods and services to market is massively improved by having HS2, as well as getting access to different markets.
David Thrower: We included in our submission a couple of quotes from early Victorian times. We pointed out the fear of English cities and towns that if they were connected to the railway it would be their downfall. If the theory that improving our connectivity would worsen the north’s economy was true, I cannot help but feel that that suggests that worsening our connectivity would make us better off—that we should add another hour into our present schedules to London—although I do not think anyone believes that for a moment. The experience of France was very much that Paris benefited very greatly from being at the heart of the spider of TGV lines and that was not at the expense of cities such as Lille, Lyon, Bordeaux and so on.
Lord Rowe-Beddoe: This goes on, because we took evidence last week from Monsieur Emile Quinet who was heavily involved in the creation of the TGV network and is a great proponent of it. He said that he thought that Paris had probably benefited more than Lyon in France. The thrust of this question obviously is: is it going to suck people down into the south-east rather than produce the increase of capacity and, more importantly, investment and job creation in the north? That view was also held by two Spanish academics who apparently researched this. They said that the number of passengers on rail trips to Paris had increased more than those from Paris as a result of the high-speed rail.
It is something which particularly concerns us. I would appreciate if you have a comment.
Sir Richard Leese: I have seen those data, but the direction and number of rail passengers do not necessarily correlate to economic activity in any of those places. There are also data which suggest that cities such as Lyon and Lille have had faster rates of growth than the Ile de France—in GVA terms rather than in passenger number terms. Although it is relatively early, that seems to be reflected in cities such as Zaragoza in Spain as well. Those figures are almost certainly right, but economic activity, decreases in employment and increases in GVA and so on suggest that the connected cities outperform the capital in France. Another factor goes with that: there is also a body of evidence that those countries which invest more in their second-tier cities—we are a particularly bad example of that—not only does the performance of the second-tier cities improve, the overall national economy improves. I see High Speed 2 as an example of investment in our second-tier cities and not as investment in the capital.
Q146 Lord Griffiths of Fforestfach: In its evidence to us, the Greater Manchester Combined Authority said that the economic potential for HS2 could not be realised unless the local conditions were right. Following on from the last question, I can see that London is the largest city in Europe, and it is something of a magnet attracting people to itself. The time to get there from Manchester and Birmingham will be reduced considerably, making London more attractive. In terms of commuting times at present, you are making the Midlands and the north that much easier to get to. In order to get people coming back to Manchester, what sort of thing do you have to do to make it a competing magnet? One thinks of the way in which Boston or Grand Rapids in America have become huge centres in terms of medical facilities. I thought coming up on the train: the BBC has moved part of its work here, but what if it moved its headquarters here and just had an office in London to deal with news? Do you see projects like this that could transform Greater Manchester?
Sir Richard Leese: I think the idea of the BBC having their headquarters here is fantastic, and I hope that it will be one of your recommendations in your report. Starting from where we are at the moment, Manchester as a city is not struggling to attract people. Over the last census period between 2001 and 2011, our population grew by 19%, which made us the fastest growing city in the country. Most of that growth is in young people. The very biggest element in that growth is in people aged between 25 and 29, largely high-skilled graduates. We are a net importer of graduates as a city as well, so we have a good base to build on.
You rightly asked about the comments that the combined authority made in its written evidence. They are largely about making sure that we have the local infrastructure in place to be able to support high-speed rail. That means that from Piccadilly station we have both the local commuter services and the intercity services across the north, which allows people to be able to access the network quickly and easily. We need that complementary investment to be able to support high-speed rail. Similarly, around the railway stations, we need to maximise the regeneration benefit in the way you see around Kings Cross on the back of the St Pancras development. That is certainly our very clear intention—we shall not do the same as there, because we want to do it in a Manchester context, but we will maximise the benefit in those ways. That is what we are talking about here. If we want to maximise the benefit from high-speed rail, we have to do things here, too.
Mike Blackburn: If you look at the economy in Greater Manchester and compare it to London, you find a complementary economy rather than a competitive economy. Therefore, when you upgrade any transport mechanism or transport system, you are always going to get movement of people. So if Manchester upgrades it, what happens to Burnley, Preston and other places around Manchester? Things just change. But we are very complementary to London, with 250,000 professional services workers in Greater Manchester. They deal with a professional services portfolio of areas that are very different to London’s in terms of investibility, so it is complementary not competitive. You will see some movement coming the other way, as people move their businesses to the north-west, based in Manchester, because that is where professional services are based for those people. Equally, our science and technology offer, which is world renowned, with the stuff that we are doing on graphene and materials generally as well as on nuclear, is very complementary to London. There is nothing like it in London at all. So we have to play to our strengths. We have to understand what our strengths are as well as our weaknesses and assets and play to them as an economy. That is exactly what the combined authority and the business organisations in Greater Manchester are doing—playing to those strengths in the key areas of economy that we know will grow and are attracting investment already. Therefore, we can see a projected growth in volumes of people, which is going to take those out of London not in a competitive way but in a very complementary way.
David Thrower: Part of Sir David Higgins’s concern in his report is that the whole of Britain, and England in particular, has become economically unbalanced. We are in a very good position in the north of England to offer lower rentals, a big workforce and so on, but we are starting in some ways from quite a divided country. I do not know how many of you have read the Cities Outlook 2014 report, but from the top 10 cities for business start-ups only one is in the north of England, and that is Warrington. Of the top 10 cities with the highest business stock, none is in the north of England, and of the top 10 for patents granted or the addresses of patentees, none is in the north of England. Then you get into the house price thing, where you get a 22% rise in London matched by a 4% rise in the north of England. One of our concerns is the average wage divergence. Not only are average wages much higher in the south-east but the gap is widening steadily so that between 1997 and 2011 the average wage in the north-west of England went up by 60%, while in London it went up by nearly 80%. So we very much feel part of the overall drive to move some of London’s economic activity to the north of England. We have to do that by being more competitive and observing market forces, but providing the infrastructure to be able to do that is part of the picture.
Q147 Lord Shipley: Can I pursue two different issues based on two things that you have said so far on which I am not clear? In the evidence that you gave us of 22,000 jobs in the area by the early 2040s, how much of that is actually relocation displacement from elsewhere to the north-west of England? Mr Blackburn, you said a moment ago, if I heard you correctly, that business will relocate to the north-west as a consequence of HS2, but you then said, “based in Manchester”. What studies have been undertaken to work out what the displacement effect of the HS2 coming to Manchester would be on, say, the rest of Lancashire, east and north Lancashire, and on Merseyside, as well as in the area to the south such as Stoke-on-Trent?
Mike Blackburn: I will take the last points first, if I may. Yes, some business will relocate into Greater Manchester, and some will locate into the peripheries around Greater Manchester, whether it is into Lancashire, Cheshire, Merseyside or the rest of the north-west. Businesses will locate where they decide to locate, and where the economic conditions are right for them. But I was talking specifically about areas such as science and technology and nuclear, where some will go to Cumbria and north Lancashire and some will go to Manchester, because they are complementary in their nature. With materials, we are hugely superb on the international stage, with Liverpool, Leeds, Manchester, Sheffield, Imperial, Cambridge and Oxford the seven big points for it. We have got four of those in the north, but they all do specifically different things. Some businesses that want to do advanced materials in the area that the University of Manchester is involved with will come to Greater Manchester, while those in the area of tropical medicine will go to Liverpool. So the economies of that are very different between all our northern cities. Of course, we have our own inward investment arm in Greater Manchester, MIDAS, which is out there talking to international as well as domestic businesses, trying to encourage them to come to Greater Manchester, where we think that we can offer them good economic conditions and great housing. The two main, critical things that businesses always ask about are the plans for skills for young people through to adults, retaining talent, as well as the transport links. They want to know about local transport, regional, national and international. The third reason why I think our economy is very different from the rest of the north-west and why we are a gateway is because of our international airport. Manchester has the second biggest international airport in the UK. Therefore, it is naturally a hub to connect the whole of the north of England and the Midlands—arguably the whole of the UK in some respects, but certainly the north and the Midlands. It connects all of those. So we see Greater Manchester as a natural economic hub through which it gets economic growth locally in the north-west region and in England more generally.
Sir Richard Leese: I think that it is quite complicated question in many respects. First, you have to bear in mind that railways are not the only show in town, although they are very important. For example, Liverpool SuperPort will have a very positive impact on the economy in Liverpool but will also have wider implications for the north-west. There are other developments that have to be taken into account when we look at this.
In terms of job growth, there will be relocations in either direction, but we can clearly say that there will be net growth; these are net jobs, taking account of flows that go in either direction. Certainly, a fundamental part of our argument is to reject the traditional Treasury view that economic growth is a zero-sum game, such that if someone gets over the expected average in one place, it has to be because there is a reduction elsewhere. Our clear argument is that by doing the right things—and high-speed rail is part of doing the right things—you get accelerated growth that will lead to overperformance against whatever target has been set. That is certainly what the north of England says.
We have talked about the risk of the concentration of business in Manchester rather than in the wider region generally. We have a number of bits of evidence that suggest that that is not likely to be the case. First, it is about who works in the major centres, whether that is Liverpool, Manchester or Leeds. Currently, more people who work in Manchester do not live here than do, and they take income out to wherever they do live. Secondly, in terms of business start-ups, there is a lot of evidence that businesses start and grow in the core of a city—in this case that would include Trafford and Salford as well as Manchester—but there is then a tendency to move out. So there is a displacement that goes the other way. Thirdly, not all businesses can be located in city centres or urban areas. Quite a lot of businesses are completely unsuited to being located in the core of a city and they are in some of the industries, such as automotive and aerospace, that this region is particularly strong at.
Q148 Lord Shipley: Thank you for that. May I pursue the second issue, on which I would like greater clarification? Lord Griffiths asked about local conditions being right, and mention has been made of complementary transport infrastructure policies to make HS2 work most effectively. However, I am not clear who is funding those complementary infrastructure projects. To give a specific example, Manchester Airport will have an HS2 station, but it will not be met as part of the HS2 project. It will be funded partly by Manchester Airports Group, partly by Greater Manchester Combined Authority and partly by Transport for Greater Manchester. What is not clear to me is who is going to be paying the biggest percentage of that. Some of the money that we are talking about here is, I think, actually government or public money. I wonder what thought has been given to how all these additional complementary projects are going to be funded.
Sir Richard Leese: The most direct answer to that is we have not yet resolved how the Manchester Airport station is going to be funded. The economic case for the Manchester Airport extension—which is not simply about the airport itself but about the ability to serve a broader area including the southern half of the conurbation and north Cheshire—was made on the basis that it would generate sufficient economic activity, which would eventually come in tax returns to the Treasury, justifying the station being there. That could leave us looking at the classic Nine Elms power station sort of solution to funding the station, which would appear to be viable. But there is still a piece of work to be done there.
Q149 Baroness Blackstone: When we received evidence from Professor Overman at the LSE, he told us that he thought that local investment in your transport infrastructure would lead to greater economic growth in Greater Manchester than HS2. I wonder whether you agree with that and also whether you think that the speed of such investment could be rather greater than HS2 in terms of producing some returns for you. You, Mr Thrower, said at the beginning that it would take us to 2040 or 2050 before we really saw the true benefits of HS2. Many of us in this room will be dead by then, as will quite a large part of your population, so their scepticism about this investment might be understood on those terms. How do you respond to what Professor Overman told us?
Sir Richard Leese: I have a lot of respect for Professor Overman. He was part of the team that oversaw the Manchester Independent Economic Review and the subsequent strategy. Part of the benefit of that was that he was sceptical that there would be any growth anywhere outside of London ever—that was a useful addition to the debate but not something that we would necessarily agree with. There is other evidence. In particular, the Northern Way, in its day, made a direct comparison between investment in local transport infrastructure and intercity links, and came to the opposite conclusion: you got more benefit out of investment in intercity links than you did from investment in local transport infrastructure. I think that the reality is actually in between those two and that if you are serious about maximising benefit, you have to have investment in each of local, intercity and long-distance transport infrastructure. It all needs to be linked together and properly integrated. That is what we have got an opportunity to do now, not just with High Speed 2 but with the developing plans for One North and, as you go further south, the Midland link and with being able to integrate local transport plans with those. That is the right place to be. These are not “either/or”s, they are “and, and, and”.
Baroness Blackstone: You are not prepared to attach greater priority to one or the other?
Sir Richard Leese: I think it would be very short-sighted to do that. We could have a wonderfully connected Greater Manchester, but if we are not connected effectively—not just to the rest of the UK economy but to the global economy—that will not help our economic growth. Similarly, on east-west links, we can have a superconnected north, but if the superconnected north is not connected to the rest of the world, that is going to undermine our long-term economic prospects. We need all of those things. I would also say, from a northern perspective, that we have been too willing to expect bits and bobs here and there. Here is an opportunity to start a major stage of developing a proper transport network for the country, looking to the next century. We should not miss this opportunity, but it requires all those elements to be able to do that.
Q150 Baroness Blackstone: You have put a lot of emphasis on intercity connections and their importance. In that what view do you take of the trans-Pennine investment, HS3, and the Chancellor’s announcement not very long ago that the Government may have missed a trick or two in not coming up with a proposal for this earlier? The evidence that we received last week from the Mayor of Liverpool and the two chambers of commerce in Yorkshire was that this should be given greater priority over HS2. I would like you, if you can, to answer that question. It is very easy to say, “We would like to do everything”, but this is a matter of making difficult choices sometimes because there is not always the money to do everything. Do you agree or disagree with that proposal from Liverpool and Yorkshire?
Sir Richard Leese: I disagree, quite clearly. There is not an evidence base to support that contention anyway. The work that has been done suggests that within the context of the likely transport budgets over the next 15 years the proposals that have been put forward are affordable within that context. I should say that I also chair One North, so I have been overseeing the work to develop that northern investment framework, including what is mistakenly called “High Speed Three”, a 125 mph railway line. I think David Higgins was absolutely right when he said in January that if we want to maximise the benefits of the north-south links, we need to improve trans-Pennine links, east-west links, which need improvement anyway. The fastest train between Manchester and Leeds, and there is only one an hour, takes 48 minutes, which for a distance of less than 40 miles is ludicrous. They need improving but to improve those in isolation from other transport links will not give us enormous benefits. From the perspective of Liverpool, a big issue for it, given the ports at the other end such as Hull, is freight. Ultimately, its freight needs to get on to the East Coast Main Line or the West Coast Main Line. If there is not the capacity there, it will just get stuck in a siding somewhere between Liverpool and Hull. Those links on their own will not provide the benefit. I would say, from a One North perspective, having chaired it since its inception in January, all the work that has been done by it, particularly on the new railway line, is predicated on high-speed rail being built. We will not be able to get effective links between Leeds, Sheffield and Manchester in an economically sustainable way without that high-speed line, in particular between Sheffield and Leeds. That is a prerequisite in order to be able to get that effective east-west link.
Q151 Baroness Blackstone: May I ask you about the timing? Would you have to wait to do the east-west link until HS2 has been started, or would you begin that immediately to try to get the benefits from it? Which would you start first?
Sir Richard Leese: It is a good question. First of all, the One North plan indicates that we can make a number of improvements to east-west links, including completing work already underway—the northern hub, electrification of a range of lines and so on. There some improvements going on, particularly north of Leeds—going off to Newcastle and the north-east—that can be done on an incremental basis en route to this. Our estimate is that the new east-west line needs to be in place by 2030. We also have an argument that once all the necessary approvals are in place, high-speed rail does not need to be built in a straightforward linear way by starting at the south and just keep building north. Part of our argument would be that as soon as the powers are in place the Leeds-Sheffield section should be brought forward in the Bill, because that would facilitate those improved east-west links. Our study at the moment shows that 2030 is when the line will be needed. However, that could be accelerated simply by the order in which high-speed rail is built.
Mike Blackburn: I should like to make a couple of points. We in the North West Business Leadership Team wrote a booklet on transport. It fully endorses from business perspective exactly both your line of questioning and the way in which Sir Richard has answered. We talked about short, medium and long-term priorities for transport and said that you cannot disassociate the medium from the short and the short from the long. You have to have a continuum. We also said, “Be careful of the unintended consequences if you do not follow through on your actions”. For example, upgrading the A556, which is a bit of a bottleneck in the north-west, without thinking about the impact on the next piece of motorway is short term and short-sighted. We argued for a truly integrated set of planning around transport, including road, rail, air, metro, walking and looking from a business perspective—saying that you cannot stop the short term just because HS2 is coming, because HS2 will not resolve all the problems we have around capacity and interconnections. Equally, to reinforce Sir Richard’s point, if you have a fantastic metro in Greater Manchester, which is growing now and getting better, but which is not connected to anything else, it merely supports the people within Greater Manchester. As Sir Richard was saying before, the economy is based on the vast majority of people coming from outside Manchester into it, as well as on people going into Leeds and Liverpool. So the whole thing is completely connected and you cannot do HS2 without thinking about how you take the northern hub, look at its interconnections and local links, then grow that into HS3, and then grow that into the airport, with its international links. It is absolutely all interconnected. By doing that, you get the most leverage—a sort of compound leverage—on the impact of spending on all those parts. It is only when you have done them all do you start getting that compound effect. Up to that point, you do not get as much.
Baroness Blackstone: I just comment that these are very expensive projects, so I assume that you think about the opportunity costs of investing so much money in rail transport, as against other things that might generate economic growth.
Sir Richard Leese: One North’s work makes those comparisons with other modes of transport. One North is a multimodal proposal, which covers roads and rail, including freight and passengers. In that sense, it is quite unusual. We are now doing more detailed work to cost that and build the business case, including the economic benefit case. That is why I say that I am surprised by the comments Mayor Anderson from Liverpool made, because we have not done the economic case yet, so the evidence base is not in place. The estimated total cost of the package between now and 2030 for the entire pan-northern scheme for the north of England, which includes all the incremental bits and so on, is less than the cost of Crossrail. That does not seem to me to be an enormous investment for the north of England. In terms of the totality of high-speed rail itself, it is a large investment in terms of the total sum, but if you take it as a proportion of even just the transport spend over the 15 to 16-year period of investment, it becomes not that enormous in proportional terms.
David Thrower: Just looking at the size of the investment in London, which obviously we are very supportive of, Thameslink is costing £6.5 billion and Crossrail £15 billion. London did not have to choose between Thameslink and Crossrail; it rightly has both and is rightly looking at having Crossrail 2. There is a historic underinvestment in the north-west, not just in the rail network but in much infrastructure, including transport infrastructure. We are trying to catch up with the two-thirds remnants of the Victorian railway system and turning it into a 21st-century transit system that connects all the cities of the north. If you look at the north-west of England, it has a population of 6.9 million. If you cross the Pennines, you can double that straight away. The population of the north of England is every bit as large as “greater Greater London”, if I can put it in those terms. The amount of money that has been spent on upgrading the infrastructure in this region is paltry. I think that you would be quite shocked. We have 30-year old trains running at an average speed between here and Stalybridge at 29 mph, which even George Stephenson would find was slow. In terms of Manchester to Leeds and Manchester to Liverpool, there is also a problem with trying to disaggregate the stopping trains from the fast trains. One problem that we have in the north of England with the polycentric cities is that people want to get from city to city quickly but there are lots of places in between that need train services also. There are lots of small stations in between which are quite well used but you only have two tracks. You really need to segregate your fast trains from your slow trains. We struggle to do that in the north of England as there are very few places with four tracks. I was co-author of the paper that led to HS3, with Sir Peter Hall and Professor Ian Wray. We saw the very first phase of HS3 as something going on outside right now, this minute—electrification from Liverpool to Manchester. It will be opening in February or March next year. That was our first phase, and our second phase would be Manchester to Leeds. The third phase would be extending with extra tracks, and a new tunnel through the Pennines would be the fourth or fifth phase. That gets us to Sir Richard’s 2030 date. So it is important to recognise that we are coming from a bad place to start with. We have a lot to do to catch up. Our infrastructure in terms of city-to-city connectivity is remarkably poor. If you look at the sorts of speeds that places such as Peterborough and Swindon have, or even places like Basingstoke, when compared with the north of England, we are really down in the bottom league. The average speed from Marseilles to Paris is 154 mph. That makes our trans-Pennine links look extremely unattractive. Yet our motorways are very congested and we very much want, and all the policy documents point trying to get, more people off the roads and on to electrified railways, for reasons of business efficiency, reducing congestion and, of course, the environment.
Q152 The Chairman: Sir Richard, from your position as chair of the Northern Hub, do you see primary responsibility for co-ordinating this as resting in the region or in central government? We have had conflicting evidence on that issue.
Sir Richard Leese: It has to be shared. We are talking about a national transport infrastructure, and that needs to have an element of leadership nationally. However, a lot of the planning needs to be informed by local knowledge, which is not necessarily available in the Department for Transport or in Whitehall. What we are currently putting in place for One North work are steering arrangements that would have that mixture of involvement from local bodies, both private and public sector, but also from the Department for Transport, Network Rail, High Speed 2 and the Highways Agency. So this needs to be a shared activity, which is what we are putting in place.
The Chairman: And do you have the resources available to Northern Hub, if we can use that as the umbrella organisation for the region, to play a significant part in this?
Sir Richard Leese: In terms of developing the plans, it probably is sufficient, although that is largely down to the role of the North of England, particularly in the metropolitan areas, having organised itself into combined authorities, so it is not individual authorities all doing their own thing, which has given the capacity to be able to take a more active part in developing major programmes. I think that at some point in the cost of this, clearly Network Rail will be able to apply some financial underpinning of development. That is the case because that is where the lines are at the moment.
Q153 Lord Rowe-Beddoe: Can we deal with capacity, constraints and overcrowding? I will put those together. I will ask the obvious question: are there currently capacity constraints on the rail network in Greater Manchester, and if so, where would HS2 help them? The second part is: on the Virgin train service between Manchester and London, are there currently overcrowding issues that you think should be dealt with now?
Sir Richard Leese: If we run through things in that order, recent figures—I think from the Department for Transport—show that two of the 10 most overcrowded trains in the country are trains from Manchester to the north-east; so yes, we have very real overcrowding problems. I say from experience that you can get a train from Newcastle to Manchester, and people stand from Durham all the way, so there are very real overcrowding problems there. Our commuter train services are operating to up to 90% over capacity and people have to stand for longer than 20 minutes—that is normal. So there is a lot of overcrowding on commuter train services. On Virgin services to London, there are times in the week—I suppose the biggest peak is probably on Friday afternoon—when there is severe overcrowding on the services, and there are periods of time when if you have not booked, you are not allowed on. There are times in the week when that is not the case, but there are periods in the week when there is overcrowding on those services. When you talk about longer-distance services, such as Virgin and CrossCountry services to Birmingham, Bristol and so on often suffer severe overcrowding. How does high-speed rail help those issues? Basically, it releases capacity in the existing network; again, not on its own—other work is under way, not least the Northern Hub work, which should be completed by 2018. However, taking those very long-distance services off the classic network gives us the capacity to run more services on that network, to deal with more localised inter-town services and commuter services.
Lord Rowe-Beddoe: To what extent do you think longer trains and reconfiguration of first class and standard class could alleviate some of these issues? I speak as a Welshman; I have taken many a train from Birmingham to Wales, and it is a horrible journey. It is horrible because there are only two or three carriages. That is one of our CrossCountry trains.
Sir Richard Leese: Mr Thrower referred to this earlier. Part of the One North plans are about first of all having more modern trains, but also longer trains with more capacity. We are now planning, or attempting to plan—in a way that is probably quite unusual for this country—for something that is more than a decade away. Longer trains, which require investment and longer platforms—we have quite a lot of stations that cannot take longer trains—will buy us a few years. They are not a long-term solution to the issues we face.
We tend to concentrate on passengers here as well; it is worth bearing freight in mind. Something like 43% of rail-haul freight will use the West Coast Main Line. With the sort of developments we are seeing both in Hull, where there is major port expansion, and in Liverpool and Teesport, we want a lot of that freight to be on rail, because our road capacity is also full, and we also need to free up capacity within the classic network to be able to carry that freight as well. Freight tends to get ignored but it is very important.
Q154 Lord Griffiths of Fforestfach: I wonder whether I might clarify my understanding of where you are. I think, Sir Richard, that in your opening statement you said something like, if we are to have continuing economic growth, an effective rail system is important, so the two are complementary. However, when one reads the case for HS2 from government Ministers and so on, it is that HS2 itself, at a huge cost of £40 billion to 50 billion—against whoever is in the next Government and considerable austerity—will drive growth. I can see the argument you first made when you said that, in a way, obviously one needs to improve infrastructure as well as growth. But are you saying that spending this vast amount of money will drive growth itself and productivity?
Sir Richard Leese: Yes, in a number of respects. That investment in infrastructure, and the fact that it is over a long period of time, has the potential to develop and grow a whole range of industries in this country, ranging from the building of the railways themselves through to the provision of trains—something that we are now beginning to build with all the new plant in the north-east coming on stream. There is sufficient throughput to justify that sort of investment, and that will help to build the economy. Once we start building trains for ourselves and start developing the skills that go with that, we might even start building them for other people, as we once did. How does transport drive economic growth? The way that government normally assesses this is simply through passenger journey wait times. The DfT’s evaluations of the economic benefits of any transport project are nearly always gross underestimates because of the way the DfT does them. We have been attempting to develop slightly more sophisticated mechanisms that look at the impact that they have on productivity and on the business-to-business connectivity that Mr Blackburn was talking about, putting figures on the real potential that comes out of that. That demonstrates, with examples from elsewhere, that transport investment will get growth over and above those estimates. An example that I am certainly very fond of in this country and which demonstrates that in spades is a London example—the Jubilee line. The Jubilee line had a benefit/cost analysis ratio of less than one. Under the current rules, it would not have been built; it would not even have got past the starting point. The impact that it has had on the economy of east London is absolutely enormous. That is because no account is taken of the wider benefits. Some attempt is made to evaluate them but they are not part of the evaluation or the assessment, although they ought to be.
Q155 The Chairman: I have one final question. Do you support the fact that Stockport will not be served by HS2? It is a very high-value traffic sector which would be beneficial to HS2. Will the passengers who currently use Stockport come to Manchester Piccadilly?
Sir Richard Leese: Equally importantly, Stockport supports the proposition as currently configured. It is a member of the combined authority and this is a unanimous decision from the combined authority. First, a commitment was given by the Secretary of State that no place would be worse off as a result of high-speed rail, so Stockport will get at least the same level of service. In fact, it will get a better service. In terms of the north-south routing, people from that area will be able to access trains at Manchester from the airport station. Stockport is currently building a very significant road that improves the east-west run to the airport. Of course, Stockport will get good links to the hub at Crewe as well. So Stockport will probably end up with not fewer choices but more choices. In terms of the planning for One North, the good linkages into Manchester Airport from Leeds and Sheffield ought to be able to benefit Stockport and give improved east-west linkages.
David Thrower: Perhaps I may add to that briefly. You will be aware of the recent debate on whether the north-west hub would be based at Crewe or at Stoke. Obviously Stoke is not going to be cut adrift from the intercity network at all. The Greengauge 21 group has put forward the suggestion, which seems very obvious when you think about it, that there should be a railway service from London, via HS2, coming off HS2 to serve Stoke, and that would then serve Macclesfield, Stockport and Manchester. So Stockport would still have an intercity service to London. It highlights the point that there is some confusion in the minds of the public between being on HS2 the route and being on HS2 the service. HS2 services will serve far more places than just London, Birmingham and Manchester. HS2 services will obviously serve Liverpool, Preston, Manchester, Carlisle and so on. So, as Sir Richard has just said, I do not think that Stockport will be any worse off and hopefully it will be better off, as obviously there will be a faster through-journey once it is on the fast route south of Stoke. It will go on to the fast route and there will be a quicker journey to London.
The Chairman: Thank you very much. That draws this session to an end. Sir Richard, Mr Blackburn and Mr Thrower, thank you very much indeed for your most helpful contributions.