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Speaking at Railtex 2011 at Earl’s Court, Mr Hammond said he had a genuine sense of optimism for the future. However, he warned that his optimism rested on the sector delivering efficiencies and cost reductions.
Railways, he said, would play a big part in increasing transport capacity while reducing carbon emissions. It was with that in mind, he stressed, that the spending review had allocated a remarkable £18 billion to rail investment despite the pressure on the public purse.
Mr Hammond used that context to declare himself a rail realist. He explained that he would support the railways, but that they had to be affordable and efficient, noting that unit costs were as much as 40% higher than on equivalent European networks.
With a need to drive down public subsidy, he suggested the changes being made to Network Rail would help improve competitiveness. He noted that wage bills had risen faster than the UK average, and that productivity had not kept pace with those rises.
However, he held out real hope that collaboration with train operating companies, unions, the government and rail suppliers could help make the railways look more like a competitive customer service than a public sector monopoly.
Looking towards major projects, the secretary of state was pleased with the significant projects already underway. He then noted that once Crossrail and Thameslink complete, the focus would move away from London.
In particular he turned to High Speed 2, which will reduce journey times, increase connectivity and reduce the need for internal flights.
Mr Hammond emphasied the economic benefits of investing in the new railway. He said that £17 billion of investment would generate £44 billion of economic activity. The regeneration zones around HS2 stations would benefit from thousands of new jobs and he noted that the classic railways would benefit too.
With more intercity journeys taking place on high speed rail, the capacity for commuter services and freight trains on existing lines would significantly improve.
However, the Secretary of State issued a stern warning on HS2.
Philip Hammond expressed the concern that opposition to High Speed 2 was articulate, self-interested and well organised. He contrasted this to the major beneficiaries of the new line, who for the most part did not know they would be the ones to benefit from the jobs and opportunities it presents.
He therefore called on his audience to respond to the government’s consultation and asked that they help to spread the word and encourage colleagues and friends to do likewise.
Asked why, given the strong figures in the cost benefit analysis, he could not just press on and make HS2 happen, Mr Hammond counseled caution.
He acknowledged that simply planning to build 200 miles of high speed rail in the UK would take longer than China will take to build 5,000 miles. But he stressed that as a democracy it was right that consultation and due process was in place. He then repeated that it was important that supporters of the project engaged with that due process.
Have your say on HS2
http://highspeedrail.dft.gove.uk/
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