HS2 struggling to justify £50billion bill

For the past four years, the project to build a North-South high-speed line has looked as solid a bet as Andy Murray eventually winning Wimbledon. Despite the high cost and the protests of well-organised objectors in the Chilterns, HS2 seemed to have everything going for it.

First proposed by the Tories in opposition, the project was picked up by Lord Adonis when he was Transport Secretary and given impetus with the creation of a government company to design the line and push a Bill through Parliament. For the incoming Coalition, the project was a unifying force, since the Lib-Dems were even more enthusiastic. Even in these austere times, a cool £1 billion was allocated to work up the project.

However, while 1,500 planners are fleshing out the crude lines drawn on the map, suddenly the tide is beginning to turn. Lord Mandelson and former Chancellor Alistair Darling have both expressed doubts and while, so far, the opposition has largely been confined to time-expired politicians, there is a distinct feeling of unease about the viability of the project on both sides of the House. Even MPs who are publicly supportive often express doubts in private about the cost and nature of the scheme.

The trigger was the announcement, slipped out in a classic attempt to “bury bad news”, that the cost of the Y-shaped 330-mile line linking London with Leeds and Manchester via Birmingham had soared from £32.4 billion to £42.6 billion. With rolling stock, that means a total bill of £50 billion, all met by the public purse, since no private money has been forthcoming.

Forget the excuse that this extra money is down to contingency, as this was already included. It represents what will undoubtedly be the first of many cost rises. And the scheme faces the test of the parliamentary process, with objectors likely to force concessions on both the route and the compensation scheme.

The National Audit Office, which reported before this latest rise in projected costs, also weighed in, saying the case for the line had been “poorly articulated” (code for extremely tenuous) and that there was no clear explanation of where the promised new jobs would come from.

The fundamental problem with HS2 is that the scheme was drawn up without any detailed assessment of the need for it. Yes, trains heading north out of Euston are sometimes full but there is plenty of space left on most of them, as anyone travelling on expensive peak services can testify. Much of the overcrowding is a result of Virgin Trains’ policy of not allowing Milton Keynes commuters to use their services and of allowing off-peak travellers on cheaper tickets to travel only after 7pm. There is also far too high a proportion of first-class accommodation, making up four out of nine carriages (now 11 on some trains).

So supporters of the scheme have constantly changed their rationale. At first they stressed the environmental case — but then HS2 Ltd’s own report came up with the result that it would be, at best, carbon neutral. Moreover, there is the damage to the environment caused by construction. While the Chiltern residents have attracted most publicity, there is now a growing realisation that the damage done to a swathe of north London is being carried out with the same haughty disregard for local residents exhibited by the mid-19th century railway builders.

Despite my long-term support for investment in the railways, I have been against HS2 from the start. My opposition was strengthened by hearing from the residents of some of the 600 homes that will be destroyed in Camden. Many are in flats bought under right-to-buy and the compensation they will receive will never be enough for them to buy elsewhere.

There would, in fact, be a way of rebuilding Euston station on several levels that would enable most of these homes to be saved. However, in order to keep costs down, the most crude option has been chosen. This is typical of the hamfisted way that the scheme has been put forward.

Even more seriously for the scheme’s dwindling band of supporters, the business case has also weakened because of a huge hole in the methodology. Most of the supposed benefits come from the notion that people will save time by reaching their destination quicker. However, nowadays, people work with their laptops and mobile phones very efficiently on trains: saving half an hour on a long distance is not necessarily a real economic benefit,

In a last stand, supporters are now stressing the regenerative effects of the line and its impact on the North-South divide. Again, the argument is shaky. Academic analysis by Professor John Tomaney of University College, who looked at high-speed rail schemes in France, suggests that it has been the bigger cities, rather than the regions, which have benefited most from their construction.

The consensus over HS2 needs to be broken. It is unhealthy in a democracy that all three parties support a project that appears to offer so little for so much expenditure. There has been no proper discussion of the alternatives. For instance, the rapid roll-out of fast broadband may well lessen demand for travel.

And while the railways are a great success story and many trains are full, as Alistair Darling pointed out, it is actually commuter routes into our major cities that need the extra capacity. Yet the old Eurostar platforms at Waterloo, the country’s busiest station, still stand empty nearly four years after services transferred to St Pancras, for want of a few million in investment and a coherent plan on how to use them. Lots of other commuter lines could do with money to boost capacity.

There are many alternative ways to spend £50 billion that would prove better value for money, such as trams and more frequent bus services, than a scheme which, even on the Government’s own assessment, is at best marginal.

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