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25.03.15

Government yet to make ‘convincing case’ for HS2 – Lords report

The government has not yet made a “convincing case” for the £50bn HS2 railway, a report from the House of Lords Economic Affairs Select Committee has concluded.

It was noted that the government has based its justification for HS2 on two factors: increased rail capacity and rebalancing the UK economy. But the Committee says it has not seen evidence “that it is the best way to deliver either”.

On capacity, full information on railway usage has not been made publicly available by the government, on the grounds of commercial sensitivity, the Committee noted.

Also, evidence shows that long-distance trains arriving at and departing from Euston are, on average, just 43% full and even during peak times are only between 50 and 60% full.

Lord Hollick, chairman of the Committee, said: “At £50bn HS2 will be one of the most expensive infrastructure projects ever undertaken in the UK but the government have not yet made a convincing case for why it is necessary.

“Overcrowding on the West Coast Main Line is largely a problem on commuter trains and on long-distance trains immediately after peak time on Friday evenings and at some weekends. The government have not carried out a proper assessment of whether alternative ways of increasing capacity are more cost effective than HS2.”

But the Department for Transport (DfT) has claimed that the case for HS2 is “crystal clear”.

“It will have a transformational effect, supporting growth in the north by improving connectivity, freeing up space on our crowded rail network, promoting regeneration, boosting local skills, generating tens of thousands of jobs and helping secure the UK’s future prosperity,” said a DfT spokesperson.

“It is a vital part of the government’s long-term economic plan, strongly supported by northern and midland cities, alongside our plans for better east-west rail links confirmed in the Northern Transport Strategy last week.”

The Committee agrees with the objective to rebalance the economy but disputes the claim that HS2 is the way to achieve it. In particular, they claim London would most likely be the biggest beneficiary from HS2.

It was argued that there is a strong case for improving the trans-Pennine links or building the northern legs of HS2 first, both of which could be a better way of rebalancing the economy than building the southern leg of HS2.

On cost, the Committee says that the cost per mile of HS2 is estimated to be up to nine times higher than the cost of constructing high-speed lines in France. The Committee suggests that, if HS2 is to go ahead, the cost could be reduced by building it to run at 200mph, as in Europe, instead of 250mph, terminating the line at Old Oak Common or learning lessons from France to reduce the cost of construction.

In addition, the report suggests that the public subsidy to HS2, an estimated net £31.5bn, conflicts with the government's declared objective of making rail less dependent on public subsidy.

A DfT spokesperson said: “We have been fully transparent about the project. HS2 will deliver over £2 of benefits for every £1 invested and the economic benefit of the project was recognised by MPs of all parties who voted 452 to 41 in favour of HS2 at the second reading of the Hybrid Bill.

“Their strong support is shared by the Transport Select Committee which backs the strategic business case and is confident that HS2 is the only practical way to significantly increase rail capacity.”

However, Lord Hollick said that the report sets out a number of important questions on HS2 that the government must now provide detailed answers to. 

For example, the committee wants to know whether the funding envelope of £50bn for the cost of construction is an absolute limit or will it increase with inflation. Also, should passengers benefiting from faster journeys on HS2 pay premium fares to reduce the high level of taxpayer subsidy of the project? This is something Alison Munro, managing director in charge of developing HS2, said won’t happen at RTM’s High Speed 2 The Northern Hub dinner.

“Parliament should not approve the enabling legislation that will allow HS2 work to begin until we have satisfactory answers to these key questions,” added Lord Hollick.

Responding to the report, a spokesperson for the High Speed Rail Industry Leaders commented: “HS2 has been subject to more debate and analysis than any infrastructure project we have ever seen before. This national debate has resulted in widespread national consensus and clear public opinion in favour of the project.

“HS2 will transform Britain. It will power the economy by creating thousands of jobs, of which 70% will be outside London. It will bring our great cities closer together, and stimulate regeneration across the country, just as high speed rail has already transformed King’s Cross.

“The industry delivers similar projects all over the world already. We are ready, willing and able to deliver HS2.”

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