Sep 2010 24

The HS2 consultation will be pointless if the Government doesn't listen10

Yesterday on the Daily Politics show Hilary Wharf from the HS2 Action Alliance went up against Transport Secretary Philip Hammond about the HS2 consultation. Hilary Wharf argued that the business case for HS2 put forward by the government is very weak and it is not in the national interest to spend a whopping £17 billion (that’s just for the high speed rail line to reach Birmingham) building it.
   
The major defence put forward by Philip Hammond was that HS2 would regenerate the north, an area not as economically vibrant as the south. He stated by “bringing the great northern population centres into the dynamic economy that we already have in London and South East” these areas will be economically revitalised.

But the economic benefits generated by HS2 are not as steadfast as the transport secretary would have you believe. The HS2 Action Alliance devastating report on the illusionary benefits of HS2 pointed out that the potential for wider economic benefits was small and only constituted £3.6bn in benefits out of projected £32.3bn total.

HS2 will not magically create economic prosperity in the north just because it’s on the HS2 route. If anything it is likely to draw northern populations towards the southern conurbation because it is already more economically vibrant.

Another important point made during the interview was that connectivity between London and the five other major UK cities is already pretty good. The current journey time between London and Birmingham is 80 minutes. Spending £17 billion on a high speed rail line will only cut that journey down by 30 minutes.

Philip Hammond’s defence was that the network will eventually go further than Birmingham and that journey time savings to cities like Manchester and Leeds would be more significant. However HS2 Action Alliance pointed out that estimates of benefits associated with decreased journey times were very high. The Alliance highlight that time spent on trains can be very productive due to laptop outlets and wifi access. Consumers would therefore be less incentivised to spend significantly more money on a high speed rail ticket when they know they can still be productive on a cheaper train journey.

Quite astonishingly the transport secretary ended the interview by stating that the consultation on HS2 will deal rationally with those who put forward economic arguments against HS2 but is less inclined to engage with those people “who just don’t want it [high speed rail] through their backyard”. It should be pointed out to the transport secretary that there are completely rational reasons for not wanting HS2 through your back garden- declining property prices, noise, disturbing picturesque landscapes to name but few. It confirms the HS2 consultation is all “window dressing” because the government is committed to the scheme and rational economic concerns or rational personal concerns are not going to stand in their way.   

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  • Nick

    There is a very neat way of funding HS2. You have to make sure that those that benefit from the line, pay for the line. After all, if you don’t use it, you don’t benefit directly.
    By making sure those that benefit pay for it, you get rational decisions. So if a Midlands business benefit, they will gladly pay because their costs go down.
    It’s called a ticket. You just put the cost on a ticket.
    Lets see. Interest on the money, 3 million a day. 50,000 passengers a day?
    So that’s 60 quid on top of the current ticket price. 120 pounds an hour for the savings.
    No wonder people want to be subsidised.

  • http://www.labouronly.com Graham Thomas

    Total waste of money, just a way for politicians to grandstand and pretend to be helping the economy when in reality they haven’t got a clue as virtually none of them has ever run a business.

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  • gordon-bennett

    One thing that struck me about the piece was that while Hilary Wharf was trying to make her points about the business case anita anand kept on trying to label her as a nimby.
    It tells you a lot about bbc staff that when confronted by a clever, articulate middle class person on planning issues they immediately jump to the conclusion that said person can only be acting in their own narrow interest.
    It should be obvious that until the business case has been argued out that the planning impacts of the route are second order issues.

  • BNaylor

    Now the railway experts are coming out and saying HS2 is not the best solution, or in the national interest.
    Chris Stokes, former Executive Director of the Strategic Rail Authority has written an article on this subject in this month’s Modern Railways. He does not think the business case stacks up. Arup believe that HS2 Ltd’s proposal is not the right one. Atkins have done a study for the DfT on alternatives and they say there are schemes with better benefit:cost ratio.
    Are the experts going to be dismissed by Hammond too?

    • Anonymous

      @BNaylor

      Both Chris Stokes and Christian Wolmar seem ideologically opposed to HS2 but the overwhelming majority of the rail community are firmly in favour – perhaps you should visit the Greenguage21 site where the arguments advanced by Chris Stokes are systematically deconstructed and debunked – we can all produce evidence to support our case if challenged?

      I don’t work in the sector nor do I have any financial interest in the progress of HS2 – just an ordinary citizen residing in a peripheral UK region fearful that we will suffer yet more isolation from the mainstream economy if HS2 is thwarted by narrow self-interests.

      I’m strongly in favour of HS2 – I’ve read up on the Business and Environmental cases and I can see both merit and flaws in them. It is misleading to look at HS2 as a stand-alone strategy because phase 1 is only the first piece in a much larger infrastructure jigsaw to create a 21st century mass passenger transport network.

      Neither can HS2 be seen as a short term project to be viewed exclusively on the basis of commercial ROI criteria – if HS1 or the Channel Tunnel had been judged in that manner, neither of them would have seen the light of day but years later we can now clearly see their worth to the wider British economy.

      I realise that on the Tax Payers Alliance site I’ll be shouting into the wind but let’s hope long term vision and common sense prevail in the case of HS2 – succeeding generations will thank us for our foresight!

  • S. Archer

    Surely the onus is on the Government to prove a business case to the Public before they even contemplate spending this sort of revenue. I have seen no evidence thus far that they are able.
    Those who are most affected by the route as it stands (even this is clouded with doubt) should be given courtesy and deserve not to be sneered at and labelled nimbys.
    After all, none of us would be able to take out a loan on a business venture unless it was to be a guaranteed success and I am sure the business case would have to be very thoroughly researched!

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  • Kyn Aizlewood

    The business case for HS2 is clearly paper thin: even allowing for substantially inflated estimates of demand and dubious “wider economic benefits” it shows a NPV “loss” to the taxpayer of around £8 Billion. It also ignores evidence of saturated demand and the DfT’s views set out in its earlier White Paper. It ignores the published advice of the Public Accounts COmmittee, 2006, to consider competition and to undertake a proper risk assessment in projects using OUR money. It even ignores the Cameron notion of “big Society”, steaming on instead with a big government project to symbolise a “Modern Britain”, paid for by taxpayers because not enough passengers will buy tickets to make it economic. But none of that seems to matter, Big Government is pressing on with a grand design to demostrate that Government can be “Strategic” as well as cost-cutting and giving us something to look forward to: the classic White Elephant [but a fast white elephant]!

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