Rail 652: the arguments mount against HS2

The launch of the compensation scheme for people affected by the High Speed Line between London and Birmingham shows that the Coalition government mean business in pressing ahead with the scheme. Real money is being spent with an initial £50m expected to be paid to people on the route although that is a guesstimate since legally the total amount cannot be capped and it could end up being much more. This shows that people’s lives are being affected and there is clearly an attempt to create a perception by the government that HS2 will definitely happen despite all the doom and gloom around.

 However, just as momentum builds up, the case set out in the HS2 document published earlier this year by the government is already unravelling with the publication of the National Travel Survey for 2009 showing that demand for travel is falling. The principal justification for the new line is the prediction of a massive increase in travel demand. And this will have to be on a massive scale. The HS2 document suggests that rail demand on the route will rise by 267 per cent by 2033  – in other words by more than double – while long distance car journeys and domestic aviation will go up by 44 per cent and 178 per cent respectively.

 Yet, remarkably, in recent years, the trend has been the other way: people have been taking fewer trips annually and travelling less distance. Despite the economic boom between the mid 1990s and 2008, there was a marked decline in travel, not something that the supporters of big schemes like HS2 tend to mention. The newest figures from the National Travel Survey, issued in July and covering a period of downturn in economic growth, not surprisingly confirm the trend. So overall in 2009, there were 973 trips per person per year and an average of 6,775 miles travelled compared with, in 1995/97, 1,086 trips per person per year and 6,981 miles, representing respectively falls of 10 per cent and 3 per cent. According to the press release ‘most of the fall in overall trips rates between 1995/97 and 2009 can be accounted for by a fall in shopping, visiting friends at private homes and commuting.’

 In other words, it is beginning to look like transport demand is saturated. Rail use, of  course, went up for most of that period – by an average of 3.7 per cent annually – until growth slowed almost to a standstill in the past year. This increase in rail usage is, therefore, a result of modal shift as people become more affluent and choose rail. Being able to work on the train and having more comfortable and faster modern trains, such as on the West Coast Main Line, account for much of that increase but continued growth will be undermined, as I mention below, by above inflation fares rises.

 Moreover, there are bigger societal factors at play which ultimately make the predictions in the HS2 document untenable. The widespread availability of broadband, together with the development of internet shopping may at last be having an effect on our desire to travel ever further. Therefore the link between economic growth and transport demand, which has been strong ever since the start of the industrial revolution, may be decoupling.

 This would fundamentally and fatally undermine the viability of the line. As a very thorough piece of research produced by two consultants, Hilary Wharf and Bruce Weston, for the HS2 Action Alliance shows, any reduction in this projected growth makes a significant difference to the so-called ‘business case’ for the line. Currently, the benefit cost ratio for the new line is around 2.4. Reducing the predicted growth to just 214 per cent would knock that benefit cost ratio to 2, the crucial threshold that is needed to obtain DfT support, which would make it impossible for a rational government to support. Certainly the figure for the Channel Tunnel Rail Link – High Speed One as now it is – passenger forecasts was out by much more than that as by now, according to predictions when the scheme was given the go-ahead, there should be well over 20m passengers annually compared with the 9m being carried by Eurostar. That is why the line that cost upwards of £5bn – and much more if everything is properly accounted- will be sold for about a quarter of the cost when it is privatised.

 The accuracy of the predictions is, of course, irrespective of the fact that the whole methodology of ‘business cases’ is based on ludicrous assumptions about the value of time to people on the move. As I have mentioned before (Rail 640), because most of the benefits are made up of small time savings by millions of people, which makes the whole science of ‘business cases’ a mere fig leaf for guesswork, and while possibly valid as a way of comparing schemes, it has no intrinsic value in terms of expressing societal benefits. Saying a scheme is worth a net gain of, say, £30 bn to the country as whole simply does not stand up to any kind of scrutiny and in their honest – private – moments transport economists and consultants will admit that.

 Significantly, the other expressed benefits of the scheme are undermined too by the consultants’ analysis. Take the notion of capacity which is the core of the case for the line. The consultants explain that through the simple measure of changing the composition of the Pendolino trains on the West Coast so that two of the four first class carriages were given over to standard class passengers and extra seats installed, there would be a 50 per cent increase in standard class accommodation. Of course the franchise negotiations would be horrendous and there would be claims of loss of income, but now that government officials and other public servants are under great scrutiny to reduce their spending, demand for first class is bound to tail off anyway. Certainly, before £15-20 billion is spent on a high speed line, such cheaper alternatives need to be worked through. Note, too, that even in the HS2 report, simply upgrading the West Coast Line, at a cost of a mere £3.1bn which would also allow an increase of 50 per cent in capacity, would have a cost benefit of 2.2, hardly different from building HS2 – and considerably cheaper.

 Then there is the oft quoted – by ministers – justification for the line that it would take planes out of the sky. Again, ignoring the fact no one flies between London and Birmingham or Leeds, and that Virgin already has an 80 per cent share of the market between London and Manchester, according to research by John Whitelegg, experience in Germany suggests that even connecting airports to high speed line railway stations does little to damp down demand. Germany has a well developed high speed rail network but despite a tenfold increase in its use over the past two decades, domestic passenger numbers have risen steadily from 18m passengers annually in 1993, to 24m in 2008.

 Finally, there is the issue of fares. The HS2 report published earlier this year does not say what assumptions are made about fares but not only have the fares on HS1gone up by 3 per cent above RPI for Kent domestic services at the insistence of the Treasury, but Philip Hammond, the transport secretary, is clearly considering increasing fares by more than the RPI plus 1 per cent which prevails on the remainder of the network. Any such increases are bound to damp down future demand making the assumptions appear even more ludicrously optimistic.

 If this were a time of plenty with no shortage of funds for basic investment in the railway, I would probably argue that it is not too important that the government is pressing ahead with what is clearly a scheme with a very weak case. However, that is not the case, as we all know. The railway is bracing itself for cuts of an order that not been seen since Beeching.  The crucial electrification plan is in danger. Other investment schemes are bound to be sidelined. Franchises may be relet on unworkable terms. Yet, blithely, the industry is, for the most part, backing a scheme that will suck up any spare cash available for investment for a generation to come. Make no mistake. This is a zero sum game. Money being spent on HS2 will not be available elsewhere in the industry. We cannot have it all. Let’s work to protect what is essential, rather than trying to reach for the moon. 

BTP taking bike theft seriously

I managed to thwart a bike theft the other day and was impressed with the reaction of the police, who did take the matter seriously, and sent out a couple of squad cars to try to catch the thieves. I followed the thief through the streets of Kings Cross while through to 999 on my mobile for a good ten minutes and eventually managed to get the bike back.

 You can read the whole story on my blog, but pleasingly it prompted a response from a John G who had a very good experience with the British Transport Police. He said that he had components stolen from his bike a few months ago while it was locked-up at the bike stands of a large station in NW England. The station CCTV images weren’t good enough to identify the thief but the BTP were able to see the trains he used and contacted the TOCs for on-train CCTV footage: ‘A good facial image of the thief produced – which was then printed in my local press and also sent to local newspapers at his journey start and end points.’ Unfortunately, no arrest was made, but he says: ‘Nevertheless, 10/10 to BTP – as far as they were concerned a crime had been committed and they wanted to catch the person they thought did it – and many thanks in particular to PC Shoan’. That’s very different to the bad old days when the CCTV coverage was never clear enough or the police simply could not be bothered.

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