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Those think-tanks and analysts who were publicly sceptical of HS2’s over-optimistic budget early on were not thanked for questioning the official figures.

In 2013, the Institute of Economic Affairs estimated the true cost to be around £80 billion. In 2017, the TaxPayers’ Alliance forecast a low-range bill of £90.8 billion. Their reward was for various figures in Government, and supposed specialists in the sector, to pooh-pooh these concerns.

If only the sceptics had been listened to, because they have turned out to be correct. The Transport Secretary conceded in the Autumn that the bill was set to run to between £81 billion and £88 billion, meaning that the official estimate is now a figure strikingly similar to the supposedly unhelpful IEA/TPA numbers.

It gets worse – to the extent that those foresighted critics might yet prove to have been too optimistic. Lord Berkeley, the former Deputy Chairman of the Government’s official review of the project, has now issued a minority report estimating the true cost to be £107 billion. He argues, not unreasonably, that the original budget was so unreasonable as to amount to deliberately misleading Parliament in order to secure consent for the project.

The question of what will actually happen to HS2 is becoming more political and less economic, however. That Berkeley felt the need to go rogue with his own number implies that outright opposition to the line is not a very popular view in Government. The argument – bolstered by energetic campaigning by Andy Street, the imminently up for re-election West Midlands Mayor, among others – appears to be that HS2 is totemic of a Government commitment to supporting the swing areas which proved so decisive in the general election.

I’m not sure it’s quite so simple. There are undoubtedly some places, and some strata of society in various areas, which are specifically set to benefit from HS2. If it runs to your door, or aids your sector, then great; likewise, if it helps your re-election campaign, then you’ll go great guns to back it.

But that leaves quite a lot of people for whom the project isn’t of particular interest or relevance. In these early days of Westminster learning again where the North of England is and how large it is, we still hear people talk of HS2 “connecting the North to the South” without realising how inaccurate (and therefore annoying) that is. It connects some bits of the North, but a railway to Leeds and Manchester is essentially irrelevant to the North East, where people get understandably peeved at being bundled in with places miles away, and thereby overlooked.

Dualling the A1 north of Newcastle – mentioned by Dominic Cummings in his recent blogpost – would change more lives, more quickly, in the North East than faster trains from London to Sheffield.

That also links in to the question of whether improved connections down to London are really the biggest need; bigger than, say, links within and across the North of England itself. With HS2’s costs rising all the time, a growing number of more modest, more localised schemes look affordable compared to its massive bill.

Sometimes the debate on HS2 sinks into an uninformative row about whether it’s popular or unpopular. The fact is that it has supporters and detractors, but they are not evenly distributed. Even more confusing, there still seems to be only limited insight into who and where they are.

I reported back in 2018 that Michael Gove was operating on the basis of private polling which suggested that there was political mileage in potential swing seats in the idea of cancelling it and reallocating the money elsewhere. With the political map redrawn by the the recent general election, and with key local elections in a range of important areas – not least the West Midlands and the Tees Valley – coming up, there is surely new work to be done to find out if the political case for HS2 has held up any better than its financial plans.

129 comments for: HS2’s financial case gets weaker and weaker – but has its political justification held up any better?

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