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Transport: High-speed Rail

My Lords, as I said in answer to an earlier question, we believe there is room for substantial third-party funding in stations through public/private partnerships, which would deliver discrete parts of the project. There will be big income streams and huge development opportunities in respect of the stations, so we think those sources of funding will be considerable. However, I am not ducking the fact that this high-speed line will only come to fruition if there is significant state investment. The noble Lord says that there is a history of cost overruns on projects of this kind. I see the noble Lord, Lord Lawson, sitting in front of him. As a former Chancellor, he is only too well aware of having to deal with these issues in the past. It is precisely because of the history of cost overruns that the Treasury—it may have been under the noble Lord’s guidance—insists on large risk additions to the preliminary costing of projects, typically in excess of 50 per cent of the cost. The figure of £30 billion that I referred to includes a substantial risk premium. We have set up a review into rail costs, because the work of HS2 seems to indicate that the cost of delivering rail projects in this country is twice or more the cost of delivering new rail projects on the continent. We want to get to the root of why that is the case. It may be, as the noble Lord, Lord Bradshaw, says, that it is because we have armies of consultants and advisers who boost costs. It may also be that putting risk premiums into the costings encourages people to bid up costs because they see that in the cost profile; that argument has been put to me. We need to get into these figures because it is a fact that our continental counterparts are able to build high-speed rail lines significantly more cheaply than we appear to be able to, on the experience of High Speed 1. We need to understand why that is the case long before we start constructing this project. On the point about whether it is affordable, if this becomes the successor project to Crossrail, construction would not start until 2017 when Crossrail is due to be completed. There is, I am glad to say, a near cross-party consensus on taking Crossrail forward. I say "near" because the Conservatives have not absolutely guaranteed that it will proceed, but there is a Conservative Mayor of London who, as he puts it all the time, is joined at the hip with me in delivering Crossrail. The work is proceeding well and I believe this will be a flagship of London’s public transport system when it opens in 2017. The rate of spending on Crossrail now is about the rate of spend you would need to deliver the high-speed line after 2017. So I simply put it to the noble Lord that if it is possible for us to fund a Crossrail line for London, and if this is the big national transport infrastructure project we want to take forward as a country, it is possible in principle to fund this line going north of London after 2017. I do not believe we necessarily get everything right when we do things differently from our colleagues on the continent. If almost every major European country and most leading Asian countries have found it affordable to build high-speed lines and see huge benefits—such that when they have built their first high-speed line, they almost invariably build other lines thereafter—it may just be that we should follow suit.