HS2: beware the naysayers!

This week is seeing another onslaught from anti-HS2 campaigners and other naysayers.  But it would be worth us all taking a step back and looking at this rationally.

Firstly, the Institute of Economic Affairs claimed that HS2 would cost £80bn (rather than the £42.6bn official cost, recently announced) – this was picked up by a number of media outlets (led by the BBC) who failed to apply any kind of scrutiny to this. The following day once the details of the report emerged, the reality quickly became apparent – the report was the construct of the highly-ideological free market IEA without any fair and objective basis (which, coincidentally, should lead to questions over how a group with charitable status can publish ‘research’ based so far away from fact).

The IEA added in additional transport schemes to come up with this figure.  Transport schemes that would be independently justified and therefore not part of HS2’s cost – for example Crossrail 2 in London.  Furthermore, they argue these schemes are necessary because of extra travel demand and in the same breath claim that noone will use HS2.  Talk about arguing from both sides – a spectacular piece of disingenuousness!  But one that is commonplace – the anti HS2 campaign has long been premised on arguing from paradoxical standpoints of HS2 not being needed and won’t be used while at the same time arguing that there are alternatives that can satiate the travel demand predicted.

The anti-HS2 campaign have, on the whole, stepped back from the IEA report.  For a couple of decent critiques of it, it would be well worth reading the Zelo Street and HS2 North West blogs.

Today, the Financial Times are running a lead story claiming that HS2 will cost £73bn. A quote from that story,

“The official projected cost of the flagship scheme is £42.6bn, but senior Treasury officials are using a much bigger figure to add bite to their criticism of the scheme. In an attempt to flag up the enormity of the enterprise, officials include the effects of inflation and VAT over the project’s 20-year lifespan to arrive at a £73bn cash figure.”

Yes, that’s right, officials are inflating the number to make a point! And the names of these officials in the Treasury…? And using inflation to inflate the figure??? We should also remember that it was the Treasury who changed the methodology a few weeks ago to grow the cost of HS2 from £33bn to £42.6bn.

Interestingly, the FT (even though they know the IEA report is fundamentally flawed) have used the £80bn figure again alongside the £73bn from ‘Treasury officials’.  So where does that leave us?  A project whose cost is constantly going up because people who do not support investment in public transport are making up figures as they go along.  The Treasury is seeing a straight fight now between HS2 and major road-building.  Any pretence that if HS2 is cancelled the money will be used for local transport schemes has been blown out of the water completely (it was never the case anyway), no, that money will go on more motorways, bypasses and dualling main roads across the country.

Why? Because the outdated and inadequate methodology for assessing the cost-benefit ratios of transport schemes is slanted heavily in favour of roads over railways.  The real world does not feature, the practicalities and wider implications are not properly quantified making it harder to defend major investment in rail infrastructure from the technical economic case in comparison to roads.

That is why it needs clear political statements and policy direction to favour rail and public transport.  And it needs a reassessment of how transport schemes are quantified, prioritised and justified.

HS2 must happen because we will soon see people priced off a number of train services.  The make do and mend approach is insufficient, new railway lines are required and making them high speed adds relatively little additional cost to the overall budget.  It also makes practical sense, separating fast intercity services from local and freight services allows for better use of capacity on the railways.

So when you see more reports claiming that the cost of HS2 is rising and that it isn’t needed.  Let the hyperbole die down and have a closer look.  Then consider what the trains are like now, look at the trends in rail demand which keep on growing year on year, even through a recession, and ask yourself – more capacity is needed, do we want more roads built, is that the future?

UPDATE 1140am

The Guardian have published this story with a robust response from DfT and Treasury

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