HS2 is one big punt

Let battle commence. The controversy so far over the building of the new north-south high-speed railway line, HS2, has been led by well-heeled residents of the Chilterns who are seen as self-serving nimbys. Now that the northern sections of the route have been announced, the arguments will undoubtedly intensify and broaden out to examine the viability of a project that will cost at least £33bn and take 20 years to build.

Indeed, ministers face an uphill task in convincing many of their own supporters, let alone a sceptical public, of the project’s wider benefits. Let’s take that price tag first. It was first announced when the broad outlines of the scheme were set out by the Labour government in its dying days and is therefore merely a guess with no detailed analysis to back it up. Indeed, the decision announced today to build stations in the centre of Leeds and Manchester, while definitely correct in terms of bringing benefits to those cities, will increase the cost enormously since, as our Victorian forebears found out, that last mile or so of rail line into urban areas is by far the most expensive.

Then there is the gradually weakening case for the line. When HS2 was first announced, it was presented as not only having enormous economic benefits but also as environmentally sustainable because of people transferring from road and air to rail. In fact, subsequently the environmental case has all but collapsed since the effect of the line would be pretty much carbon neutral according to the study by HS2 Ltd, the government body charged with taking forward the scheme, if the impact of its construction were taken into account. The environmental case was fatally weakened by the realisation that few high-speed train passengers would transfer from air. Again, HS2 Ltd found that most users would otherwise have taken conventional train services or simply not made the trip.

That left the business case as the principal justification for the scheme and this has steadily worsened over time as more details of the plan emerged. The benefits are based largely on journey time reductions made by those travelling, but when opponents highlighted the fact that since people now can work on trains with their laptops and mobiles, these savings are largely illusory. Today’s document promises “benefits” of just £2 for every £1 spent, a pretty weak ratio for such a massive scheme, especially as it is based on an unrealistic cost estimate and these imaginary savings.

That is why, in announcing the second stage, the government is now focusing on the regeneration benefits, presenting the line as a way of bridging the north-south divide. However, the evidence that the new line will help reduce divisions between the regions is thin and, indeed, can point the other way, with London being the beneficiary. On Radio 4’s Today programme, Prof John Tomaney of the School of Planning at University College London, who has researched the effect of high-speed lines across the world, said: “The argument that high speed can reshape economic geography has been used in several countries around the world such as France, Spain, South Korea… but in practice there is very little evidence that building a high speed rail line heals north-south divides.” In fact, Tomaney found there was strong evidence the other way, with the capital cities rather than the provincial towns, benefiting from the line. In terms of employment, therefore, the argument in the government’s report that the line would create 100,000 jobs smacks of pure fantasy.

Ultimately, this whole scheme is a finger-in-the-air job. The Victorians built their railways on that basis, not really aware of the huge impact they would have or, indeed, whether they would ever pay for themselves. However, in the 19th century, the railways were a monopoly and it took almost a hundred years before the car and the lorry made inroads into the railways’ market.

Today we have the internet, broadband, mobile telephony and even the possibility of driverless cars let alone more mundane exogenous factors such as oil prices and planning policies that ultimately could all affect demand for rail travel. The variables and what Donald Rumsfeld would call the unknown unknowns over a 20-year period are so great that in effect, despite all the pseudo scientific business case methodology, this is all one big punt by the politicians. Yet, despite the lack of evidence to support the case for the line, it has now become part of the political consensus supported by all three main political parties rather like the idea in the noughties that Britain’s wealth would be sustained by allowing bankers free rein. And we all know what happened next.