When the Institute for Economic Affairs reported last week that HS2 could cost £80 billion (as opposed to current £42 billion cost), fresh doubt was cast over the project. Even Alister Darling, once a keen advocate, said it could become a 'nightmare'.
Well it almost is a nightmare, with not just the expected opposition from the Tory shires, but from commerce world too (with the Institute of Directors claiming it should be scrapped all together, and even the CBI expressing scepticism). Essentially, the economic case is the effects of increasing capacity on rail, taking traffic off the motorways and flightpaths up North ( but alledgely could just turn the formerly great economic city of Birmingham into another London commuter town) and reducing journey times (but this calculation is based on the idea the business travellers use their time unproductively, and this is simply wrong to anyone who's actually been on a train and seen business travellers; sending spreadsheets via 3G dongles). The government's own cost benefit only estimates that the Birmingham line will bring 50p of benefits for every £1 spent on it (compared to arts investment based regeneration, which brings in £4 for every £1 spent on it...which is admittedly hard to believe). The London-West Midlands section alone is expected to bring in 40,000 jobs. But then again, this doesn't seem so great given the fact that a third runway (kicked into the long grass) would come at no cost to government (paid for BAA) and is forecast to bring 65,000 new jobs. There is consensus among economists that the money would be better spent on less glamorous road upgrades. However, this wouldn't have an Olympic style confidence effect (but this is a fairly insignificant factor anyway, especially when two thirds of the British public are opposed to the project anyway!). Furthermore, expect the cost to rise as time progresses (as government tends to artificially keep the price of big infrastructure projects down to boost public support for them, and by the time the public realise the ridiculous price its too late for the project to be cancelled...think HS1 or Olympics). So from this we can establish from this that there is little relative economic case.
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| Glamorous...but economically weak idea |
The environmental case is stronger, in that taking cars/lorrys off the road and planes out of the sky will reduce emissions. However, it will result in the damaging of 21 ancient woodlands and the Cotswold AONB. But much of the environmental opposition is from generally relatively wealthy middle England Tories, who oppose a link that will help the poor city of Birmingham out of deprivation and its people out of poverty (you only need to look at the effect wealth has had on poverty in London, although much does remain). Other environmental opposition is expected to come not from informed scientists, but from professional protesters who protest against everything that means press attention to express their hate of the free market (eg at Balcombe this group pitched their tents to protest against a technique that will reduce emissions by displacing dirty coal/natural gas from the UK's power stations and which damaging earthquake/methane water effects are discredited by academic research).
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| NIMBYs (or 'pet-hate..due to their historic disproportionate influence on debate') with some surprisingly strong arguments against the project |
And by the time phase 1 is finished in 2026 the link may look a little 20th century, with Japan already testing 500mph Maglev trains (with this line set to be complete in 2027) and the Elon Musk's hyperloop concept technically possible (this could be envisioned in the UK from London to Birmingham for around £6 billion, and be made this cheap by constructing it on the land below powerlines, which doesn't need to be bought, just used). Furthermore, new technologies such as 4G then 5G, video conferencing and driverless cars will make the link even less desirable. And if new technologies do displace the need for the link, it is likely to be too expensive to cancel it once under construction as government is locked into contracts and has already bought land. Other more rational alternatives than my UK hyperloop idea (but less imaginative, which is a word sadly never associated with government civil service policy propositions) include lengthening platforms , allowing longer trains (costing just £3 billion). However, Network Rail claim this would cause too much disruption to passengers (...or I believe this would not be in their commercial interests as even a little disruption would damage their brand further and thus reduce short term profits, while a completely new HS2 line would allow greater expansion and as a result.... profits). Of course I fully support the free market and small government as the historically proven system of wealth creation, but this is a case of market failure (although just a theory from a non-expert).
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| Self driving car: A cheaper (in long term) and easier alternative to rail travel |
It is difficult to come to a verdict on HS2. The future isn't easy to predict, but at present (given the economic, technological and environmental arguments) I would support spending a much cheaper £3 billion to increase West Coast Main Line capacity for the next 30 years (which will act to reduce emissions too and prevent £80 billion being wasted in the face of new technology) ,and spend more on improving roads which give better return on investment, especially as road use expected to grow 44% by 2035 (according to DfT), and roads were heavily congested in the 2007 road traffic peak anyway (this approach is also supported by IEA).
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