Rail 968: HS2 future uncertain

(This was written before the Nov 17th announcement which appears to leave much HS2 spending intact though scepticism remains about it being fully funded) 

Let me debunk a myth. I tweeted out the other day that cutting back on rail services while continuing to spend £10m (it is in fact £13.4m) per week on HS2 will not be a good look for the new government. I made comparisons with the cutting of income tax for the top earners while the rest of us struggle.

One of the respondents to my tweet – and I know there are many in his camp – said that it was mistaken of me to equate capital spending on HS2 with revenue expenditure to keep the railway operating. These are not at all the same thing, he argued, and therefore my point was utterly false. HS2 spending has no bearing on the existing railway.

I’m afraid that his argument is wrong on two counts. First, there is no magic money tree. Yes, the government can create money to pay for things and it should not be viewed as a big household which has to balance its books. But, like it or not, at the end of the day there has to be a reckoning and while I welcome extra borrowing at a time of crisis like now, it is not entirely free money. Borrow to pay for HS2 and it limits borrowing for other purposes.

Secondly, there is the perception, both among the public but also, crucially, among Tory politicians. HS2 is not a popular scheme with the electorate. For most people, especially those who do not travel much or at all by railway, it is a bit meh. They do not really care one way or the other, though they do think that it is a lot of money. For many Tory politicians, HS2 is an outrage, a waste of money, a grand projet pushed through by the tousle haired blond who used to inhabit number 10. Now that he is no longer there, it is open season to attack the scheme. And behind the scenes, I can assure you, there are guns blazing with HS2 in the crosshairs.

HS2 supporters can argue all they want about the fact that scrapping HS2 will not save any money and that it is too late, but this will not wash with its enemies. Last month, Lord Berkeley, in a letter to the Tory contenders for the leadership, suggested the whole scheme should be scrapped which, he argued, would only waste around £8bn – as some of the land could be sold off at an estimate of £9bn – but save what he reckons would be £147bn. Frankly, I don’t think that is feasible either politically or practically. Even as a long term sceptic of the scheme I think cancelling the London-Birmingham is not a realistic proposition. Leaving the Chilterns strewn with half finished tunnels and lots of random concrete embankments would not be a good look. And Berkeley’s figures are questionable. As well as the £17bn spent so far, there is a further £10bn already contracted. And all those contractors who are generous donors to the Tory party would not be pleased.

However, while axing the whole scheme is a no no, chopping off bits is definitely on the agenda. We have already seen that with the scrapping of the Golborne Link and the changes to the Eastern leg. The bean counters are currently looking at what could be saved. The current estimation is that most of the contingency for the Old Oak Common to Birmingham section will be used up, raising the cost from £40bn to around £45bn. None of that can really be stopped but there are extras which can. The estimate for the West Midlands to Crewe – section 2A – for which legislation has already been obtained is between £5bn and £7bn, though inflation will add considerably to that.

A well-informed article in the Sunday Times on October 9 suggested that Northern Powerhouse Rail – essentially a high speed link across the North from Liverpool to Hull – would be prioritised over the completion of HS2. This would involve a tunnel and a station under Manchester rather than the surface HS2 terminus currently being worked on. This was put forward by Andy Burnham, the mayor of Manchester and apparently is being considered by Anne-Marie Trevelyan, the new transport secretary who, as an MP in the North East may well be receptive to such an idea. This might, in turn, result in a delay to the basic HS2 scheme which, with the eastern leg costed at around £30bn, might satisfy the anti-HS2 brigade. Moreover, giving priority to the North is a plan that fits in with the levelling up agenda that may or may not survive in the Truss government. My preference has always been to improve the railways in the North, but not with a HS3 but rather by electrifying and improving the existing network.

Another option being seriously considered in Tory circles is scrapping the terminus at Euston. Indeed the station at Euston, as Lord Berkeley recently pointed out in his letter to the Tory leadership contenders, still has no definitive design ‘even 6 years after HS2 Ltd promised Parliament it would find affordable, safe and deliverable solutions’. The new station at Euston and the associated railway works has been costed at £4.4bn which would represent a considerable saving. However, as with all these plans, it is not necessarily simple. A terminus at Old Oak Common would mean a much larger station and would cause disruption on the Great Western Main Line for at least half a decade.

In truth there is no cheap way out of the HS2 fiasco which, remember, has now been running for 13 years and has produced not a single inch of new useable track. My key concern about HS2 is precisely, as I stated at the beginning of this column, the opportunity cost. Privately many people in Network Rail and elsewhere in the industry know that but will not say so publicly. I can think of countless transport schemes, from subsidising local bus services and installing cycle lanes to building major tram networks and improving existing rail routes that have a far higher benefit cost ratio than HS2. Think what £17bn, let alone £40bn could have provided.

Now we are going to get some half baked HS2 scheme that probably has the worst benefit cost ratio of them all. The prospect of HS2 surviving unscathed is further reduced by the mismanagement of the scheme. It’s executives on huge salaries seem incapable of focussing on controlling costs. My contacts in the Tory party tell me that HS2 was  very much seen as Boris’s baby who nixed any attempt to scrap it. Now that he is gone, it is vulnerable especially that if ‘levelling up’ is being downgraded. Growth is the new game in town and it is unclear whether Liz Truss and her team see HS2 as encouraging economic development. Close scrutiny of the business case would undoubtedly lead to doubts about whether it does. None of this gives me any pleasure despite my dislike of the scheme. I have said all along that HS2’s cheerleaders should have been far more critical of what was happening on the ground rather than angsting over whether there will be 10 or 11 platforms at Euston. Now we risk ending up with a huge amount of money wasted for a scheme that will offer a quicker way from London to Birmingham at the end of the decade, and not much else and which could have been achieved by electrifying the Chiltern line.



Railway reforms need to sort out inconsistency


One of the key negatives of the fragmentation and privatisation of the railway has been the lack of consistency throughout the network. I have written about this in recent columns focussing on aspects as different as lost property and the approach to suicide prevention. The franchise system could and should have been designed to ensure that there were certain network standards that meant passengers knew what services to expect and employees responded to key sets of rules.

There are numerous other examples. Should there not, for instance, be a consistent approach to the carriage and storage of bicycles. Is it too much to ask that every station should have a set amount of cycle parking, based perhaps on local usage and past experience? Should there not be a standard approach to ticket checking, so that, say, every station with a particular throughput would be staffed while those with fewer passengers could be left unstaffed?

And here’s another example of the dysfunctional nature of the railway. The guy who runs the QPR blog, Clive Whittingham has had to claim refunds on several journeys as strike days have prevented journeys and the response is so inconsistent. LNER, the supposedly terrible state run railway enables refunds immediately with one click and the money appeared in his account within 30 minutes. With Avanti, he had to set up a separate ‘delay account’ and he had to upload pictures of all the tickets – but the refund did arrive quickly after that. Similarly on GWR, he had to set up an account and the refund was slow in coming but the worst was EMR. The company at first which claimed he was not entitled to a refund because it had not been a strike day when it clearly was. After a lengthy correspondence with very poorly written letters that kept on wishing his family well (!), the refund did eventually arrive.

Again, this shows the disadvantages of fragmentation – the system is not geared towards helping customers but instead is determined by whether the company cares or doesn’t. Another issue for reform but with Great British Railways now stillborn, who will be in charge?


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