Matthew Sinclair

A green-light for HS2 — but the coalition’s political instincts should tell it to stop

A green-light for HS2 — but the coalition's political instincts should tell it to stop
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Earlier today, the Government announced that it is still planning to go ahead with a new high-speed rail line that will reach Birmingham by 2026, and then be connected to Manchester and Leeds. And it's doing so in the face of widespread scepticism among the public and business leaders.

When we at the TPA commissioned YouGov to test public support for different cuts in public spending, 48 per cent of the public supported cutting the project against just 34 per cent opposed. While organisations like the CBI back high-speed rail, the Institute of Directors (IoD) actually asked their members and found that 38 per cent thought HS2 would represent poor value for money, against 30 per cent who thought it would represent good value. And more of them prioritise improvements to the motorway network, the local road network, existing intercity rail, commuter rail and local services like the London Underground above high-speed rail.

Is it really wise to go ahead with an investment of this scale when the public is so unconvinced? After all, ministers need to back the scheme not just today but through years of painful austerity before construction even starts. The debate over whether HS2 goes ahead isn’t done yet.

Almost everyone seems to acknowledge that the business case is weak. Looking at the original case for the line, our research found it was based on a number of implausible assumptions. And the updated business case released for the consultation was little better. So those backing the line have retreated to the idea that this is all about capacity, and the high speed is just a kind of pleasant side-effect. But Chris Stokes, an experienced rail executive, has set out a plan to massively increase capacity on the route with incremental measures that don’t have the huge all-or-nothing cost of HS2. Network Rail has argued incremental improvements would cause disruption on the existing network, but entirely rebuilding Euston will be at least as disruptive.

And if capacity was the big issue, surely we would focus on where the trains are the most overcrowded? Tim Leunig of the London School of Economics has written today that even ‘if the number of people coming into Euston doubles, and even if all of those extra are on services with no seats, and even if we add no more capacity, Euston would still be less overcrowded than services to London Bridge or Waterloo.’

It will be particularly hard to stand by this scheme because the Government still hasn’t been honest about either the consequences, or the cost. Ministers are still putting the cost at £32 billion, well over £1,000 for every family in Britain, But that is under plans that would see major towns like Coventry and Stoke-on-Trent getting slower and less frequent services; fares going up by 27 per cent above inflation; huge pressure on the London Underground connections at Euston, which Boris Johnson has said would be impossible to sustain without ‘Crossrail 2’; and significant impacts on the local environment along the route, where there will be pressure to drive the route underground. Again, Boris Johnson is saying that large parts of the route in London should be a tunnel.

Ministers promise that none of this will come to pass; that the fresh capacity will mean some new golden age, with competition driving down fares, and ample room for new services to towns on the existing route. But their business plan includes, for example, £5.4 billion in savings from reductions to existing services and the revenue from an ongoing rise in fares. If instead they are subsidising new routes — which will make a lot less commercial sense with the Birmingham traffic on the new line — and fares aren’t rising, then the cost to taxpayers will be a lot higher. Chris Stokes produced a rough estimate for the TPA that it could increase from £17.1 billion to £45.5 billion.

Napoleon rallied his troops at Waterloo by telling them that the approaching Prussians were actually French reinforcements. That kind of optimistic deception can work for a while but it doesn’t last. At some point reality kicks it, and panic with it. In the case of HS2, it would be better for the government to quit kidding the public, and produce a proper comparison between high-speed rail and its strategic alternatives. We need a full account of the costs and of the consequences. So forget today's green-light — this project needs to be put on hold.

Matthew Sinclair is director of the Taxpayers' Alliance.