Minister to face MPs over claim HS2 to bring in £15bn a year

Concept designs of what the HS2 train could look like

A Commons select committee has summoned Transport Minister Patrick McLoughlin and the authors of the financial analysis – KPMG – following claims its report was flawed and excluded less positive aspects of the £50bn scheme.

It was announced today that a special hearing of the Transport Select Committee has been called for November 26.

The committee carried out its own inquiry on HS2 and while its report in 2011 backed the strategic case for the project it warned that for high-speed rail to realise its full potential the plans had to be accompanied by complementary regional and local strategies for transport, housing, skills and employment. It also questioned the economic emphasis on savings in journey time.

Labour MP Louise Ellman, who chairs the committee, said: “HS2 is a hugely significant and controversial investment.

“We are following up the questions we raised in our earlier report, in the light of significant new information.

“Our first report was generally supportive of HS2 but we did raise some serious issues particularly about the economic benefits of the project and how they will actually materialise.”

The one-off hearing comes after the KPMG report, produced in September, assessed the regional impact of HS2, and the Government’s strategic case for the project, which was published last month and echoed the consultancy group’s findings.

KPMG said its analysis found that HS2, which would link London with Leeds, Sheffield, Manchester and Birmingham, could benefit the country’s economy by £15bn with up to £1bn of economic benefits annually for West Yorkshire.

Mr McLoughlin used the upbeat findings of the study, which was commissioned by HS2 Ltd, in a fresh push to bolster support for the £50bn project.

But while the KPMG report listed the areas that would benefit from the construction – with the biggest winners being Greater London by £2.8bn and the West Midlands by £1.5bn – it omitted details of those that would end up worse off.

The full findings were released in response to a Freedom of Information request, showing economies in some parts of the country, such as parts of Scotland, Wales and Norfolk are actually expected to lose out as a result of the scheme. Some transport experts have also questioned the reliability of the methods used to calculate the expected benefits of HS2.

KPMG’s head of infrastructure, building and construction, Richard Threlfall, has rejected suggestions his employer “cherry picked” the most positive aspects of the research.

He said the firm had “gone out of our way to be as transparent as possible” and said there had been no pressure from HS2 Ltd over the way the report was published.

He was answering questions at another parliamentary examination of the analysis, last week, by the Commons Treasury select committee.

Lewis Atter, a partner in KPMG’s global infrastructure and projects group, told the MPs that if anything the £15bn figure was “a little low”.

The Yorkshire Post’s Big Debate project has been exploring the issues to bring together the views of key opinion-formers, politicians, business leaders and readers about HS2.

Last night people on both sides of the debate welcomed the Transport Committee’s decision.

Nigel Foster, the president of the Leeds Chamber of Commerce said: “I think it is right that any project which involves spending £30 or £40bn of public money is subject to proper scrutiny at every stage of the way.

“The case for HS2 is as much about improving the capacity of the railways as it is about high- speed trains. I believe it is essential if the country is to remain economically competitive in the future.”

He said HS2 would not only improve connections between London and the core cities of Leeds, Sheffield, Birmingham and Manchester but would also improve the system’s ability for freight trains to travel between the North and South, which has already enjoyed huge investment in its transport networks with London’s Crossrail scheme alone getting £16bn.

Bradford Council leader David Green said he was not convinced by arguments the entire region will benefit “based on some sort of trickle down effect from the cities where HS2 will be stopping” and added: “I welcome any new investigation into the benefits of HS2 because I still do not think the case has been proven.”