Sir Andrew Cook explains why he believes Britain’s domestic supply chain should receive the lion’s share of the money for HS2
‘We’ve got to have this thing… whatever it costs… we’ve got to have the bloody Union Jack on top of it!’ So said British Foreign Secretary Ernest Bevin in 1946. The ‘thing’ which Britain had to have was the Atom Bomb, to defend herself against the aggressive power of the Soviet Union. Work began, and five years later, following enormous expense and effort, Britain had created her own nuclear deterrent: a deterrent which helped bring over 60 years of peace, won the Cold War and kept the country safe from nuclear annihilation.
We could say the same of HS2. Britain’s got to have it. Our motorways are choked with traffic, our regional cities are in decline, and huge sums have already been invested with nothing to see. Why stop now? Get it built, whatever it costs, and get it built now!
It is a historical fact that with very few exceptions no railway line ever justified the initial expense of constructing it. Construction costs were almost always underestimated and projected passenger revenues artificially inflated to make the numbers work. Seldom was a line busy from the start. Had it not been for the coal traffic, railways such as the Great Western and the Midland would never have made money.
In our own time, the Channel Tunnel was a financial disaster, applying for bankruptcy protection in 2006 before traffic levels eventually rose and revenues stabilised at profitable levels. Today, 30 years later, just as the Channel Tunnel is now taken for granted as an essential element of our transport infrastructure, so in parallel a renewed bout of negativism focuses itself on HS2. Costs are rising. The naysayers bray their hostility to the project. Corners are cut with the specification to save money. All the time there is delay and doubt. The end result, if it ever happens, will be inadequate.
Let us step back and assess the HS2 project. I start with the specification. My rule in determining large capital projects is, get the spec right first, and then look at the costs. Recent railway history is littered with the mistakes of doing it the other way around, putting cost first and tailoring the project to fit the budget. The Channel Tunnel, now at capacity, could have had a third track added at very little marginal extra expense. As an alternative, a much more expensive bridge could have been built, as was done over the Great Belt between Denmark and Sweden. Costly, yes, but traffic problems would have been solved for generations to come. And it’s not just in this country that the ‘cost-cutting at the expense of specification’ mistake is made.
Even the Swiss, whose legendary rail system is the envy of the world, made the mistake of reducing half the new Loetschberg base tunnel to single track to save money. Capacity is already saturated and many benefits have been lost.
HS2 is making four bad ‘cost-saving’ mistakes, which will dog it and its users for all time if not rectified now. First, the absence of a Heathrow chord. Do we seriously expect passengers heading from, say, Birmingham to Heathrow to bother with the hassle of changing trains at Old Oak Common? No, we don’t. They will just call a taxi at source, pile in with their luggage, and risk the M1’s chronic congestion.
Secondly, the Euston terminus. Euston is one of the worst-connected London termini. Adjacent Kings Cross, with its four underground lines, the Thameslink, Midland and Great Northern main lines and, last but not least, its neighbouring Eurostar terminal, is infinitely better. So, instead of HS2 ending in a truncated terminus, its lines should be carried down underground to a through station beneath the Euston Road – let’s call it London Central – eventually running back to the surface the other side to connect with HS1 somewhere around Stratford. Travellators would
connect the subterranean platforms with the existing Euston, St Pancras and Kings Cross passenger infrastructure. There are recent examples of just such developments in continental Europe. The newly opened subterranean through platforms for the trunk lines at Zurich Hauptbahnhof is one, and the above-ground through stations of Berlin and Vienna Hauptbahnhofs are others. An early example is Tokyo Central on the original Tokkaido high-speed line in Japan. Through stations are far more efficient than termini. Why not follow these examples with HS2?
Thirdly, the Chilterns. This is a political and environmental problem rather than a design mistake. Why not cut the gordian knot, and silence the nimbys, who do at least have a point: the Chilterns are a beautiful part of the home counties, and their proximity to London make them of especial value to the inhabitants of that hugely populous capital city. So why not put the whole trans-Chiltern section in a 30- mile tunnel? The environmental problem is solved at a stroke.
Lastly, and here I declare a special interest, HS2 should be routed through Sheffield city, not some out-of-the way station several miles away. In the city of my birth there still stands the derelict but intact infrastructure of the former Great Central Railway, built, uniquely in Britain until HS1 was constructed, to the international UIC profile. This infrastructure could be restored at moderate cost and a new city centre ‘Sheffield HS’ station built on the foundations of the old Sheffield Victoria.
‘Cost!’ the deniers cry. ‘It will cost too much!’ What nonsense. The current estimate of the cost of HS2 is £60 billion. Let us double this, to £120 billion. £120 billion is a little less than the NHS budget for just one year. Build a decent HS2 for £120 billion, and what have you got? A piece of pivotal infrastructure that will last for at least a century. Spend £120 billion on the NHS, and what have you got at the end of the year? Another gaping black hole, ready to devour another £120 billion, most probably more.
As Bevin said, ‘We’ve got to have this thing, whatever it costs’. You could not have an effective nuclear deterrent and count the pennies at the same time. In its own way, the same applies to HS2. We can’t have an effective high-speed rail system on the cheap.
Now I turn to Bevin’s conjunctive clause ‘… we’ve got to have the bloody Union Jack on top of it!’, I see this as a bigger problem. Yes, the civil engineering will, to a degree, be undertaken using British labour and materials. The concrete will come from British plants.
But examine this more deeply, and one realises how much the British economy has been hollowed out. The reinforcing bar for the concrete will of necessity be imported, as there is no re-bar plant left in Britain.
The construction equipment will likewise be mainly imported. With one exception, Britain does not make heavy off-highway vehicles. The rails? Can they all be rolled in what is left of our steel industry? Look too at the labour required. Traditionally, great construction projects require significant numbers of migrant workers.
In the 19th Century, it was the Irish in Britain, the Italians in continental Europe and the Chinese in North America. Today, the net is cast wider still: most notably into eastern Europe. Where will the additional workforce for HS2 come from if not from across the Channel? What will Brexit and its attendant restrictions make of this?
But that is only a small part of the ‘Union Jack’ difficulty. What of the trains? Uniquely among the major countries of Western Europe, Britain has no domestic train builder. Yes, Bombardier still has an assembly shop in Derby, and Hitachi, Alstom and Stadler have factories in various stages of completion. But I wonder if these are ‘Potemkin factories’ with near zero actual manufacturing activity within: mere sheds, to keep the rain off the occupants as they bolt together imported kits of parts.
For the new trains themselves are coming in from the builders in Japan, Spain and Switzerland, at best as flatpacks, at worst as complete ready-to-run units, requiring only some final furnishing in their new British assembly shops. The supply chains in Japan, Spain and Switzerland are working flat out to make the bits and pieces needed, while what’s left of the British supply chain scratches around for orders.
This is the difference between Bevin’s diktat and the present day. The Department for Transport has resolutely avoided making a contractual requirement that HS2 has got to have the Union Jack on it. For whatever implausible or insufficient reasons, be they EU rules, competition or whatever, HMG is plundering the taxpayer to pay for the project without making the slightest attempt to direct this money into the British supply chain.
I myself, having spent £15 million of my own money creating a world class bogie and coupler component factory at Leeds that successfully exports high value products to blue chip customers across the world, am obliged to see complete new trains trundling on lorries past my factory gates, en route to their gleaming new assembly shops where they will have little more than the seats fitted and stickers applied prior to being put into service.
How can this be good for the economy? And how can it be stopped? Is it too late? Well, better late than never. Firstly, we should take a leaf out of the books of our neighbours and insist on a high proportion of UK content in all new trains. Start off with 65 per cent and increase it every time a new train fleet is ordered.
Our continental counterparts go even further. You will look in vain for non-French trains running on the SNCF, or for non-Spanish trains on Spain’s RENFE. Mr Trump has just specified maximum US content for the new trains he hopes will one day be running somewhere on the US system.
If anything, he will have an even greater difficulty finding domestic suppliers than is the case in Britain. Secondly, ensure all maintenance contracts are placed with UK firms, at all levels: primary, secondary and tertiary. When it comes to railway engineering, Britain has fragmented into a host of small and medium sized garage-type operations, taking in bits of trains, taking them to pieces, mending them and putting them together again.
A deeply unsatisfactory activity when compared with building new trains, but at least it is something. And thirdly? One of the reasons we are in this mess is that British railways had become a political tool.
The underlying reason behind privatisation was to reduce the damaging abuse of union power. Privatisation has brought certain benefits, yes, but it has also caused many problems and contributed to many more. Those who don’t remember the dark days of the 1970s call for renationalisation.
That is not the answer, but a halfway house along the lines of the Grouping in 1922 might be. In parallel, there is an equal case for de-unionising the rail industry. Returning to that apogee of excellence, the SBB, you will never find a single employee who is not proud of his job and his position.
Strikes are unknown, because there is a system to prevent and address grievances. Above all, there is an esprit de corps. If the Swiss can do it, so can the British. We should be proud of our railways, and they should be a testimony to a British revival. Britain invented the passenger railway. We have forgotten what we did. We should cast our minds back, look at our more successful neighbours and restore our long-lost status as world leader in rail transport. We need a thriving domestic rail engineering industry to achieve this.
Sir Andrew Cook is Chairman of William Cook Holdings