IEA report mixes the good, the bad and the ugly

There are good reasons and bad reasons to oppose – or indeed support – HS2. The report by the right wing Institute of  Economic Affairs published yesterday is a mix of both.

It is excellent on debunking the business case. which it tears asunder, quite rightly. It shows quite clearly that the fundamental arguments for HS2 are based on very flimsy foundations.  I  do not buy, however, the notion that HS2 will need a new underground line at Euston at a cost of £6-9bn. That seems to negate the very thrust of the IEA report which suggests projected demand has been overcooked. Nor do I think the £1,000 per household argument holds water. That makes it look as if we will all get a £1,000 bill through the post when clearly that is nonsense. Yes there will be a cost, but it will be over a long period of time and much of it will be recouped from business, and, of course, higher level taxpayers will contribute more than their share.There is, too, much nonsense about blight which is, of course, a problem, but would be with any scheme, even the motorways which I suspect the people at the IEA would like to see built.

The clear recommendation from the report with which I totally concur is that the HS2 business case has been put forward without any proper comparable analysis for the alternatives. One scheme has been selected, in great haste and without any context, and driven through. The other measures, such as Rail Package 2 are merely scenarios that have been put in to then knock down, and no serious analysis has been applied to them.

Therefore, the consultation is presented as an ‘either this or nothing’  choice whereas a range of suggestions should be assessed in the same depth. The crucial point made by the IEA is ‘The whole case for HS2 is predicated on a single scenario projection of future demand, a mistake accepted by the DfT in its 2007 White Paper but now to be repeated for HS2’. To my mind – as a sceptic, a very deep one – that is irrefutable.

The business case is widely accepted as a nonsense, and in a way all the arguments about whether time savings are productive or not are irrelevant. The key point is whether HS2 can be shown to be needed according to various scenarios, not just the one presented by the government. That would be a real test.

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