Meanwhile, in another committee room, part 1

Barely more than a week after the House of Commons Committee of Public Accounts had met to receive oral evidence on the National Audit Office report on HS2, another select committee assembled for an oral evidence session. This was the Treasury Committee and the topic for the session was the 2013 Spending Round. I’m sure that HS2 would have figured in this session anyway, but dogged questioning from Andrea Leadsom MP ensured that it could not be overlooked. The Hon Lady is, of course, one of the fiercest – and if I may say so, knowledgeable and eloquent – opponents of HS2 in the House of Commons, representing, as she does, a constituency (South Northamptonshire) that will feel the impacts of Phase 1 of the project acutely.

The session lasted for about three and one quarter hours, including a recess of about fifteen minutes, and was split into three parts.

Ms Leadsom’s intervention in the first part came about half-way through; 16 mins 24 secs into the video and spanning Q25 to Q31 in the transcript. The witnesses were two representatives of the Institute for Fiscal Studies (IFS) and Ms Leadsom tried to solicit an opinion from this eminent body as to whether “£50 billion spent on HS2 represents good value for infrastructure spending”. The IFS did not prove to be a very rich vein to mine; it appears that the IFS has not done any work on HS2. The best that Ms Leadsom could do was to prize out from Gemma Tetlow, Programme Director, Pensions, Savings and Public Finances at the IFS – who stated that HS2 was not her “particular area of expertise” – that, “we want to make sure that we are spending investment spending in the places where it is going to have most long-term value” and that, “it certainly matters what you spend the money on” (Q25 and Q26).

Ms Leadsom faired better in the second part. One of the witnesses was Professor Douglas McWilliams, Chief Executive and founder, Centre for Economics and Business Research, and Gresham Professor of Commerce. At 51 minutes into the video and at Q67 in the transcript, Ms Leadsom asked him whether he thought that HS2 will help rebalance the economy. He referred to the research of Dr Daniel Graham (Reader in Transport Economics and Statistics at the Centre for Transport Studies at London’s Imperial College), who he described as “acknowledged to be the major expert in the world on the subject” and said that Dr Graham’s conclusion was that “it will have some effect but is a very expensive way of achieving that effect”. He added, “If you connect two ends, you cannot always tell which of the two ends is the one that is going to benefit most, and I think his calculations are that about 20% of the benefit is regional and about 80% of the benefit goes to London and the south-east”.

When asked by Ms Leadsom whether he thought that HS2 was “a good way to promote regional growth” (Q68), Professor McWilliams expressed the view that it was “a very expensive way of promoting regional growth” and that a study that the CEBR had done showed that “demand was way overstated”.

She also asked the professor whether he agreed with John Tomaney, the Professor of Urban and Regional Planning at University College London, that regional policy was more important than transport for regional rebalancing and that investment in skills, knowledge and technology mattered more than “a piece of transport infrastructure”; Professor McWilliams’ reply was, “Very much so”. He gave as an example the way that the economy in London had recovered from the financial crisis, and said that, if you applied this example to the regions, “it is clear that skills and technology look a lot better as candidates than a high-speed rail project, although urban transport in these regional economies is also important”. He agreed with Ms Leadsom’s suggestion that urban transport would be “buses and local train links and so on, as opposed to intercity”.

Immediately after this exchange, Ms Leadsom tackled John Cridland, Director-General of the Confederation of British Industry. This exchange was so interesting that I am going to dedicate the next but one posting to it, and so will say nothing at present.

The final part of the oral evidence session gave the members of the Committee the chance to question the Rt Hon Danny Alexander MP, Chief Secretary to the Treasury. This time the topic of HS2 was raised initially by the Committee’s Chairman, Andrew Tyrie MP, with Andrea Leadsom picking up the baton from him. The exchange on HS2 runs from approximately 2 hrs 17 mins to 2 hrs 29 mins on the video and spans Q131 to Q140 in the transcript.

Much of Mr Alexander’s evidence was rehearsing the Government’s case for HS2, and he didn’t really concede any of the counter-arguments that were put to him. I don’t have the space here to report it all in detail – I suggest that you view or read the part of the session that I have indicated above if you are interested – but there are some features of what he had to say that I wish to highlight, however this will have to wait until my next posting.

(To be continued …)

Important Note: The quotes from the Treasury Committee oral evidence session that are reproduced in this blog are taken from an uncorrected transcript of evidence, which is not yet an approved formal record of the proceedings of the Committee. Neither witnesses nor Members have had the opportunity to correct the record, and it may therefore be subject to changes being made in the light of any such corrections being requested.

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One response to this post.

  1. Posted by chriseaglen on August 16, 2013 at 9:49 pm

    HS2 must be a project, plan and progamme subject to more tangential opinion than any similar mega-project in the UK and Europe. Treasury and the think tanks did not help avoid the capital depreciations in the UK and in Ireland or Europe. Perhaps this is why this committee has been less than effective in the past years others than to apply condradictory public statements with opposite practical stimulation effect. The Select committees are becoming less effective hence the Executive Steamroller claim in Parliament this week. With Parliamentary TV they are less useful to the adminstration and are projections of personalities rather than power, or assistance to curb Executive actions of policies, strategies, guideline, project, plan, programme, legislation or nudge.

    Reply

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