3 Meeting future transport needs |
Demand for travel between major British conurbations
is expected to increase significantly over the next twenty to
thirty years. High speed rail appears best placed to provide significant
and sustainable additional capacity to meet that demand, whilst
also improving journey times.
It [HS2] would address Britain's future transport
capacity challenge-providing a huge uplift in long-distance capacity
and relieving pressure on overstretched conventional lines.
28. The growth in rail passenger demand since the
mid 1990s is one of the successes of UK transport policy,
reversing the previous long-term trend of decline.
The number of long-distance journeys made by rail passengers more
than doubled in the 15 years to 2009.
Despite the economic downturn since 2008, passenger numbers have
continued to grow strongly, partly fuelled by a switch from car
use due to the increase in petrol prices. This growth seems to
have been widespread and not restricted to certain parts of the
country or to specific journey types.
Some of the highest recent growth has been on the WCML where journeys
have increased by around 10% per annum for the past three years,
partly as a result of the completion of the WCML upgrade with
its new "very high frequency" timetable and reliable
weekend services. The downside to this growth, on WCML and elsewhere,
is that many services are overcrowded, particularly some peak-hour
services into major cities such as London, Leeds, Birmingham and
Manchester, where improvements, such as more frequent or longer
trains, cannot be made cheaply or easily.
29. Growth in rail passenger demand is forecast to
continue, based on projections for growth in the UK population,
economy and personal incomes. The industry's view is that by 2035
the railway will be carrying twice as many passengers as today.)
Improvements in communications technology (high-speed broadband,
video-conferencing etc) are not expected to reduce demand for
travel and may even increase it.
In addition, demand for rail freight is expected to double by
30. For the WCML, HS2 Ltd has forecast that "background"
growth for rail trips over 100 miles will be 95% between 2008
and 2043, an average of 2% per annum.
HS2 Ltd also estimates that HS2 will generate 37% additional passenger
demand (above the background growth forecast) due to the attractiveness
of faster journey times.
For modelling purposes only, HS2 Ltd has "capped" demand
at 2043 but it does not anticipate that demand growth will cease
after this point. The Mr Hammond described these forecasts as
"conservative" and was confident that it HS2 Ltd had
not overstated them.
Due to the scale of the High Speed Two proposal it
is imperative that the economic case is built on robust forecasts
of future rail patronage and revenue and we are comfortable that
this is the case.
31. Opponents of HS2 challenge these demand forecasts.
HS2 Action Alliance argues that, amongst other things, the link
between wealth and travel demand has weakened and that it is unsound
to forecast 35 years ahead.
51m criticises not only the forecasts but also the way in which
the Government has presented them:
Both the Secretary of State and HS2 Ltd argued that
the project assumed forecast growth in demand of 2% a year, and
that this was conservative. However, the HS2 Business Case in
fact assumes c209% growth by 2043, an average demand growth of
3.3% a year, reflecting significant forecast generated demand
as a result of journey time improvements. This is a tripling of
demand on the route - we don't believe this can be considered
"conservative", particularly bearing in mind the massive
over-estimation of demand for HS1.
The original passenger demand forecast for HS1 did
indeed prove much higher than actual demand.
However, HS2 Ltd says that that a more appropriate forecasting
model has been used for HS2. Oxera concluded that HS2 Ltd's passenger
demand forecasts are, except for the length of period forecast,
based on industry standard guidance
which has tended to underestimate demand over the past seven years.
Others, including those in the rail industry, have supported HS2
Ltd's passenger forecasts and also pointed out that the recent
high growth rates are not reflected in the forecasts. 
Indeed, the WCML passenger demand levels forecast by HS2 Ltd for
2021 have already been overtaken. This suggests that growth is
not following previous demand patterns and may have entered a
new, higher trajectory, though it is uncertain for how long this
32. The view of the DfT is that some of the country's
key rail routes are forecast to be "completely full in peak
hours in the next 20 years"
and the necessary capacity increases cannot be achieved through
enhancements to the existing lines or services. The rail industry
has endorsed the view that a major increase in capacity is desirable
and should be provided through a new high-speed network.
Network Rail was unequivocal in its evidence to us:
On the West Coast Main Line in particular, strong
growth on intercity services and continued growth on commuter
and regional services to towns including Milton Keynes and Northampton,
will soon mean that capacity on the line will be effectively exhausted
and it will be impossible to do anything to further increase capacity
on the existing line. Our New Lines Study (published in
August 2009) and West Coast Main Line Route Utilisation Strategy
(RUS: published in December 2010) predict that this point will
be reached around the end of this decade.
Network Rail clarified that its reference to the
line being "full" meant that, at certain times of the
day, it would not be possible to provide train paths for additional
servicespassenger or freightwhich train operators
33. AGAHST challenged Network Rail's conclusion,
saying that Network Rail had made a number of recent statements
on the capacity of the WCML which were inconsistent and failed
to account for realistic possible increases in capacity on WCML.
They also argue that Evergreen 3, the recent upgrade to the Chiltern
Line between London and Birmingham, has been wrongly excluded
from the Government's assessment of future capacity.
Christian Wolmar accused Network Rail of having vested interests
in this matter in that a major expansion of the rail network presented
Network Rail with more business opportunities than enhancements
to existing trains and services.
HS2 Action Alliance says that Network Rail's WCML RUS has started
from the position that HS2 will go ahead and therefore had not
investigated possible alternative capacity enhancements.
The analysis by Network Rail is clearly important in this matter
and we would expect them to advise us and the Government impartially.
Ultimately, of course, the Government, as prospective promoter
of HS2, must satisfy itself on these issues through independent
analysis rather than taking the word, however authoritative, of
a third party.
Alternatives to HS2
34. Opponents of HS2notably 51m and HS2 Action
Alliancehave proposed that the capacity of the existing
WCML be enhanced through a combination of lengthening the existing
Pendolino fleet from 9 to 11 or 12 cars, converting some cars
from first to standard class, introducing smart ticketing and
demand management to "spread" peak demand and selective
infrastructure enhancements. They further propose that services
between Milton Keynes and London be improved with a new fleet
of Javelin-type trains. 51m has claimed that these enhancements,
an "optimised alternative", would treble existing capacity,
providing an additional 211% standard-class seating capacity,
more than meeting the Government's background growth forecast.
They argue that these changes could be introduced incrementally,
more quickly, with less risk and at considerably less cost (around
£2bn) than HS2.
35. The Government's general response to suggestions
that the existing line should be upgraded is to refer to its consultants'
report which concluded that such alternatives would either fail
to provide adequate capacity or would be poor value for money.
51m and others claim that the best alternatives to HS2 were not
assessed and that
those options that were assessed were inferior to their proposal
which the Government has not discussed with them or tested:
Neither DfT nor HS2 Ltd has made any attempt to engage
with us directly on our proposed approach or the Optimised Alternative.
The DfT acknowledges this situation:
The Government has not at this stage carried out
a full analysis of the 51m Group's proposals, but at the strategic
level, its current view is that no package of upgrades to existing
lines could offer the same level or range of benefits as a new
high speed line.
In relation to Evergreen 3, HS2 Ltd says it has not
modelled its impact but will be "exploring this further."
DISRUPTION DURING CONSTRUCTION
36. Many witnesses were concerned that capacity improvements
to the existing WCML would involve significant disruption to services
which had only recently recovered from the previous major upgrade
Government also took the view that a further upgrade to the WCML
would involve unacceptable disruption to passengers.
Other witnesses, however, pointed to the disruption to services
which, in their view, would be likely to arise from the proposed
demolition and reconstruction of Euston station.
HS2 Ltd has not assessed the relative degree of planned disruption
between HS2 and strategic alternative options.
LOAD FACTORS AND PEAK DEMAND
37. The standard measure of crowding on passenger
rail services is the load factorthe number of passengers
relative to the capacity of the train. For commuter and regional
services, the capacity includes an acceptable allowance of standing
passengers, whereas for long distance services, the capacity is
the number of seats. HS2 Ltd provided forecast load factors for
the long-distance WCML services (all-day), in the absence of HS2
or a strategic alternative. On the services currently operated
by Virgin West Coast, these show averages at the southern end
of the line of 56% in 2008 growing to 75% in 2043. Such levels
are not unusually high on the inter-urban rail network.
HS2 Ltd says, however, that on busier sections and at peak times,
"very significant levels of crowding" would occur.
38. The crucial aspect is not all-day capacity but
capacity in relation to demand during peak periods. 51m has argued
that standard-class capacity is the critical factor as there is
no shortage of first-class seating. However, HS2 Ltd's forecasting
has not looked separately at how peak and off-peak demand would
grow; it has forecast only the overall growth.
This seems inadequate. We therefore asked our specialist advisers
to examine some of the capacity calculations; their analysis can
be found in Annex 2.
39. Annex 2 shows that alternatives to HS2, such
as 51m's proposal, might meet the background passenger growth
forecast to 2043 at peak times, depending on assumptions about
peak demand and future rates of passenger growth. The recent dramatic
growth in WCML passenger demand, which does not feature in HS2
Ltd's modelling, makes it less likely that the alternatives would
be viable. Annex 2 shows the dramatically higher capacity that
would be provided by HS2 relative to the existing situation or
the alternative proposed by 51m. HS2 would provide a step-change
in capacity, not only on the new high-speed line but also on the
existing classic lines where additional services could be provided
as a result of improved efficiency from a greater separation of
local, intercity and freight services.
For example, faster journeys could be provided to and from larger
regional centres such as Lichfield Trent Valley, Tamworth, Nuneaton,
Rugby and Milton Keynes.
ATOC, Passenger Focus and other bodies have also pointed to the
enhanced reliability that such an increase in track capacity could
bring, whereas squeezing more services onto existing lines would
have the opposite effect.
40. Sir Roy McNulty's report on rail value for money
calls for a move away from "predict and provide" (i.e.
calculating future passenger demand and attempting to provide
for it in full) to "predict, manage and provide", whereby
the high cost of meeting peak demand is reduced by fare structures
and other methods that shift demand from the peak to the off-peak.
51m and others have argued that increased demand management should
be part of a package of alternatives to HS2. They point out that,
currently, some of the worst crowding on WCML occurs in off-peak
periods, particularly at Euston at 7pm on Friday evenings, when
off-peak tickets become valid. 51m and others say that this is
an anomaly of the fare structure and could be addressed by more
41. The DfT seems to reject attempts to manage demand
over the long term:
Whilst there may be a case for employing demand management
as a tactical response to managing demand on the railways, it
is unlikely to significantly alter the case over the medium-to-long
term for the provision of additional capacity.
It argues that demand management is already employed
to a substantial extent and that, commuters and others travelling
at peak times, currently paying higher fares, find it hard to
switch to off-peak periods.
Mr Hammond, citing the above case at Euston station has, however,
accepted the need to adjust the fares structure in order to address
overcrowding and avoid "perverse incentives".
42. In response to the suggestion, made by opponents
of HS2, that fares would be so high that it would be used exclusively
by the rich, Mr Hammond said:
Uncomfortable fact perhaps No. 1 is that the railway
is already relatively a rich man's toythe whole railway.
People who use the railway, on average, have significantly higher
incomes than the population as a whole. [...] the assumption is
that the socioeconomic mix of passengers [on HS2] will be
broadly similar to those currently using the West Coast Main Line.
The fares strategy for HS2 has not been decided (the
modelling has simply assumed current fares levels). It
would have been helpful if the DfT had provided a more comprehensive
account of the options and implications.
It seems likely, however, that, should HS2 go ahead, the current
yield-management system of high peak-time fares and low off-peak
and advanced fares would apply. In our view, the significant expansion
in capacity that HS2 would bring, on both HS2 services and the
classic lines, would make it highly likely that cheaper fares
would be offered in order to maximise passenger numbers and revenues.
This would, potentially, make rail travel more equitable.
management, such as peak and off peak pricing, is already an integral
element in the way that train services are planned and operated.
It is, however, in our view, largely a tactical approach and not
a long-term solution to serious mismatches of supply and demand.
If capacity is seriously constrained, growing demand can be managed
only by means of ever higher ticket prices or increasing restrictions
such as compulsory seat reservations, neither of which are acceptable
as a long-term approach to rail service provision.
Planning for the long term
debate on capacity seems to us to reveal two contrasting views.
On one view, rising demand on the West Coast corridor is essentially
a problem, to be tackled by least-cost incremental improvements
coupled with measures to suppress demand. On the other view, rising
demand is, for strategic reasons, to be welcomed and indeed fostered.
As noted in Chapter 2, we consider that the Government needs to
explain more clearly this strategic case and in particular why
such arguments do not apply to road and air transport. Provided
this is done, we support the step change that a high-speed rail
link between London, the Midlands, the North and Scotland could
bring to the capacity, quality, reliability and frequency of rail
services between our major cities, and to those served by the
existing WCML. Whilst the alternatives proposed by groups such
as 51m offer substantial additional passenger capacity, they are
not of the same scale as HS2. The rapid growth in passenger numbers
over the past 15 years shows the need to plan on a larger scale
and for the long term. We do not wish our successors to be faced
with a situation in ten years' time where demand has continued
to grow but insufficient time remains to provide the necessary
capacity. We call on the Government to set out a clear and comprehensive
long-term strategy for transport and the place of high-speed rail
68 Number 10 Downing Street website, http://www.number10.gov.uk/news/queens-speech-high-speed-rail/ Back
Rt Hon Philip Hammond MP, HC Deb, 28 February 2011, c15WS Back
Transport 2010, The 10 Year plan (DETR, July 2000) set
a target of 50% increase in rail use, measured in passenger kilometres,
by 2010. Back
TSO, Transport Statistics Great Britain 2010, Table 6.1,
p 115, September 2011 Back
Ev 249 Back
Office of Rail Regulation, National Rail Trends 2010-11 Yearbook,
2011, Table 1.1.b Back
ATOC/Network Rail/Rail Freight Operators' Association/Railway
Industry Association, Initial Industry Plan England and Wales
Proposals for Control Period 5 and beyond, September 2011 Back
Q 358. Improved telecommunications seem to stimulate additional
travel mileage but may reduce the number of trips. Back
Q 27 Lord Berkeley. The ATOC/Network Rail Planning Ahead
document shows rail freight going from 23bn tonne-kms in 2006
to 45bn in 2030. Back
Ev 267. HS2 Action Alliance says this is closer to 102% and 2.4%
per annum. Ev 220 Back
HS2 Ltd, A Summary of Changes to the HS2 Economic Case,
April 2011, para 6.2 http://www.HS2.org.uk/assets/x/77820 Back
Q 522 Back
Ev 254 Back
Ev 202 Back
Letter from Cllr Martin Tett, Chairman of 51m, to Mrs Louise Ellman,
16 September 2011. See also HS2 Action Alliance Ev 202. Back
Annex 1, para A2.18 Back
ATOC, Passenger Demand Forecasting Handbook v4.1, 2005 Back
Annex 1, para 3.14 Back
Ev 132 Back
HS2 Consultation, February 2011, p 10 Back
Qq 27-28 Back
Ev 292 Back
Q 52 Richard Eccles Back
Ev 166 Back
Ev 154 Back
Q 5 Back
Ev 216 Back
Atkins, High-Speed Rail Strategic Alternatives Study: Strategic
Alternatives to the Proposed Y Network, February 2011 Back
Ev 154 Back
Ev 161 Back
Ev 254 Back
Ev 267 Back
Ev 123 Back
Ev 249 Back
Ev w296 Back
Ev 267 Back
HS2 Consultation, February 2011, para 1.55/56, compares
WCML with MML and ECML: by 2043 the all-day load factor on MML
will be about the same as WCML without HS2 or an alternative. Back
Ev 267 Back
Q470 Alison Munro Back
Centro sets out in detail the opportunities for enhanced regional
rail services in the West Midlands, Ev 145. Back
Ev 243 Back
DfT, Realising the Potential of GB Rail - Final Independent
Report of the Rail Value for Money Study, 19 May 2011 Back
Ev 254 Back
Oxera suggests that season-ticket holders are becoming more responsive
to fares rises and that the current RPI+3% rises may have a downward
influence on passenger numbers and may not increase revenues as
much as the Government expects. Oxera, "Fares fair? The economics
of setting ticket prices", Agenda, July 2011. Back
HC Deb, 27 January 2011; Vol. 522, c. 426 Back
Q 553 Back
Ev 267 and Qq 471-473 Back