The Spending Plan policy 40: scrap HS2

June 10, 2015 11:30 AM

Each day we are publishing a blog on one of the policies from our Spending Plan.
Click here to read them all.

HS2 should be scrapped. It was based on a bad business case that has continued to unravel since it was first presented. For instance, the costs and benefits of the project were calculated on the basis of zero productivity on trains – in other words, it assumed that passengers don’t do any work on their commute. This is clearly untrue and puts the assumptions on shaky ground. Furthermore, the initial business case assumed average passenger income of around £70,000. If this materialises, then the project is quite openly a high speed rail line for well-off passengers paid for by less well-off taxpayers.

HS2 is only cons

The stated case for HS2 has also morphed over time, as politicians found their arguments wanting. The project was initially about quicker journey times. Then it became about capacity, which again was debunked.

The case then moved on to argue that HS2 would rebalance the economy between North and South, and help drive regeneration in the North. But the precedent for such claims is unfavourable. The Institute of Economic Affairs examined what has happened since high-speed services were introduced in east Kent as part of HS1, and the region has actually performed worse in terms of employment than the rest of the South East and the rest of Britain.

The case is now being made that HS2 will free up capacity for freight. But this will not happen to any significant degree until 2026 at the earliest. Not only that, HS2 could damage freight capacity on key parts of the rail network. On the southern section of the West Coast Main Line, for instance, it is possible that freight trains will continue to operate on the ‘slow lines’, together with semi-fast and stopping passenger trains. That would not free up any useful additional freight capacity.

The stated costs – above those calculated in this report – could also escalate significantly. The Treasury has said that the government will spend £4 billion on HS2 in 2019–20 and £4.5 billion in 2020–21. These are the figures we used to calculate savings. But another Institute of Economic Affairs report found that councils, transport bodies and local business groups are lobbying central government to fund other projects along the route. Along with other new costs not accounted for in the business plan, the total cost could reach £80 billion.

There are far more worthwhile transport projects. Easing congestion around commuter towns and increasing capacity on existing lines would be cheaper and preferable. Furthermore, the benefit per pound spent is usually better on road projects than rail. New technologies will make HS2 redundant by the time the first train is due to leave Euston, too, not least the development of driverless cars.

HS2 is a bad project and it is unaffordable. It should be scrapped now for a significant saving.

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commented 2015-06-14 19:46:41 +0100 · Flag
If we were asking Richard Branson, Hermann Hauser, or some other entrepreneur to invest in HS2, it’s very clear that they wouldn’t. Why? Because there are significant risks (route through countryside and Chilterns); it’s very expensive (lots of tunnelling due to going through Chilterns and route out of London); it is a ‘big bang’ project requiring substantial amounts to be spent before any benefit is delivered because it uses bigger trains on a separate railway; and is expected to negatively impact many journeys.

For this the expected return on investment would need to be exceedingly high to match the risk.

If however an entrepreneur were looking at High Speed UK’s proposals (see comparison at, which utilise the M1 corridor; cost £20bn less; provide enhancement to far more rail journeys and negatively impact none; avoid the Chilterns; run high speed trains onto normal rail networks; and can be delivered incrementally, then what you’d have is a National Rail Strategy that is worth taxpayer investment to connect up our regions and genuinely spread the wealth across the country.

HS2 doesn’t need to be scrapped, but it does need a very big haircut, and High Speed UK’s plans (which we’ve looked at in detail) provide what any competent government should have done.
commented 2015-06-10 23:46:00 +0100 · Flag
“More worthwhile projects” should include the sensible and far cheaper alternatives to HS2. Labour MP Kelvin Hopkins (for one), submitted brilliant and carefully costed ideas to the House of Lords inquiry in 2014. 1st Electrifying and upgrading the Birmingham Snow Hill to London route, easily linking to Crossrail hence Canary Wharf etc. AND Heathrow. Cheap because the line is mostly already there.
2nd Upgrade the ECML making London to Edinburgh possible in three and a half hours at 140 mph. Quicker than HS2 could do it! A bit more upgrading to the WCML north of Birmingham would also make 140 mph possible on most of it.
3rd Upgrade the Midland Mainline. ALL THIS would cost in the region of 10 billion. In cab signalling would be needed to achieve 140 mph with trains running closer together enabling greater track capacity. So the cost might be more than 10 billion but still a fraction of the cost of HS2 without all the damage to environment, homes and businesses.
Mr Hopkins is also an advocate for the GB Freight Route to be built on existing track beds and under-used tracks to the Continental Gauge so lorry trailers can be moved to and from the continent and the main areas of the UK as far north as Glasgow carrying more than double the freight of the existing mainlines and relieving the motorway network! Again, minimal cost compared to HS2 with huge benefits to the WHOLE UK economy. What’s not to like?