Aug 2009 28

High-speed rail8

When are politicians going to get real and start confronting excessive public spending?  With the high-speed rail announcement earlier this week, it appears that they are still living in a fantasy land where such ambitious and enormously expensive schemes can be announced without a word about where the money is coming from.

Some simple fiscal realities:

  • Britain is facing enormous deficits which will lead to a massive debt of between (PDF) £1.54 and £2.34 trillion by 2017/18.  The deficits are partly the result of the economic cycle, but the structural deficit is the result of politicians jacking up spending as if the boom would last forever.  The Government is borrowing a huge amount despite a decade of tax rises; further hikes will either do huge damage to the economy while raising next to no revenue – if politicians try to tax high earners and firms that can easily invest elsewhere - or create unacceptable hardship for ordinary families.

  • The Transport budget, in particular, faces cuts of up to £29 billion over a ten year period.  This will put existing projects like Crossrail under considerable pressure.  No one serious about the issue can be under any illusion that there is money to burn without compromising other priorities.  There is a particular need for investment in the road network - which moves the vast majority of passengers and goods - and commuter rail - all of the most crowded routes are on commuter lines taking people into major cities.

  • Big government projects routinely go over budget.  TaxPayers' Alliance research (PDF) has shown that major capital procurement projects tend to go over budget, on average, by one third – even including defence projects whose final cost fell thanks to a cut in the amount ordered.  That suggests this scheme could well cost over £40 billion.  An over-run is particularly likely with a project this complicated.

I don't think many people dislike the idea of a new high-speed rail line, and we're not going to suggest that taxpayers wouldn't get anything in return for their £34 billion.  But, all the 'industry leaders', politicians and other worthies praising this now should also be setting out how they plan to cut other spending sufficiently to get rampant borrowing under control and pay for such big expensive schemes as this.

All we're hearing from politicians on either side of the partisan divide at the moment is what they want to protect from cuts and new commitments like this.  If that continues, then we might all pay a heavy price.

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  • Hardeep Singh

    Yet aviation is still far safer, quicker and more cost effective than this proposal. Just another desperate annoucements out of the Labour party’s archives (the words “break glass in case of emergency” sping to mind, hmm).
    These feel good annoucements are quite frankly little in terms of tangible worth. There would have been a high speed train link by 2030 anyway, society doesn’t sit still. What Labour can’t say is what they’ll do tomorrow or the day after just pie in the sky projects that are so far into the future they’re of little meaning.
    As Mathew rightfully stated after a deacde of rising taxes and borrowing and they can’t make the books balance how do Labour hope to fund it. Besides how can Labour be so definative about the project, will future administrations toe the line maybe one of them will cancel it. Why not just start of with something that has a very near term impact namely roads, they carry significant traffic yet receive little attention.

  • Tim Kyle

    Excellent article. Why on earth did people vote “New Labour” into power in the first place. Did they never learn their history about political parties like these? How many of today’s MPs have worked in the real world of producing goods for sale etc.

  • http://www.rottenborough.org.uk Ian Johnston

    As a regular passenger on the West Coast Main Line, I regard this proposal as a politicians’ ego project, not a serious transport solution. It duplicates existing services, which could be considerably improved for a fraction of the cost. There is insufficient demand to justify sixteen trains per hour to Scotland, and no need to get there in two and a half hours. It is not the speed which needs to be improved, but the punctuality and reliability.
    How little chauffeur-driven cabinet ministers and car-bound civil servants understand of public transport.

  • ERIC J RYAN-LANDER

    This VAST amount of money would be far better spent on something like the Severn estuary barrier,to generate electricity and thus reduce our dependence on foreign gas & oil and electricity from France. We simply don’t need to get anywhere faster – where’s the return on that? Our MP’s are mostly complete cretins with no vision whatsoever!

  • adrianS

    Have to agree with Article and Hardeep Singh, many of the short haul turbo prop aircarft are very fuel efficent, rivalling diesel cars. A terrorist could easily break the high speed link for months and months, yet it would be difficult to put too many airports out. I live in southampton and if I wanted to go to Birmingham and back by train it would be about £150. In mind diesel VW PAssat I can take 5 people to Birminghman and back for about £45.
    High speed rail is a total waste of money

  • adrianS

    Perhaps this is Labour’s parting shot for a possible forthcoming Conservative Goverment– a nice big ball & chain around their fiscal foot in the shape of a multi billion pound rail link agreed by Labour.
    Trouble is I dont trust Cameron either

  • Peter Phillips

    The recently completed upgrade of the West Coast Main Line, which this proposed high speed line effectively duplicates, lacked long term vision when it was planned by Railtrack, the predecessor of Network Rail. But Railtrack’s business objective was simply to cut costs and make money. The Conservative Government that created it gave it no long term strategic national objectives. Labour’s Strategic Rail Authority was supposed to redress that, but it was just another ‘independent’ quango that was inevitably doomed to failure. Now we have a another ‘not-for-profit’ semi ‘independent’ quango, Network Rail, running the show with, of course, senior officers (sorry ‘executives’) earning huge salaries, questionable bonuses, and final salary pensions. The usual gravy train.
    The West Coast Main Line upgrade could, and should, have planned for potential passenger growth much further into the future. If the loading gauge (the size of tunnels and clearances) had been increased to the Continental gauge of the Channel Tunnel link, it could have accommodated double deck passenger trains and full-size freight trains. If the 4-track sections had been changed to ‘pairs by direction rather than the present ‘pairs by speed’ (the equivalent of the two carriageways of a motorway being used as separate 2-way roads) when the track was renewed, together with several other technical enhancements the line could have had at least twice it’s present capacity for perhaps only twice it’s eventual £13bn (I think it was) cost. The need for this new high speed line, costing God knows how much and which we can’t afford anyway, would then have been unnecessary.
    I suggested these, and many other measures for the whole rail network, in an article advocating a rolling 25-year strategy for the railways in the August 1999 edition of Rail magazine.
    More waste
    Now, £1/2billion is about to be spent on rebuilding the passenger part of Birmingham’s New Street Station. But it doesn’t address the already serious shortage of train capacity that the station suffers, let alone the forecast increased demand for services over the next few years, and reliability and punctuality will therefore suffer. Nor of course does it address accommodating this new high speed line, or even just improving the still very limited capacity of the West Coast Main line through the conurbation.
    It just goes from bad to worse.

  • Hardeep Singh

    Good points Peter and yet the government calls for increased taxation espevcially with a ‘green tint’ to it yet are unable to aloocate it appropriately. It’s not the money it’s the mechanism that channels it. If the engine’s leaking oil and pushing it to the parts of the engine that need it most then simply adding more oil is not going to fix it in the longterm.
    As Doncaster’s mayor has shown already it the mechanism that needs to changed/adjusted before you can do anything effective with it.
    Nevertheless some greeat posts in to this article! :)