High Speed Hijinks on the HS2.

It is curious how, from nowhere, there was suddenly this summer a caucus opposing the proposed High Speed 2 railway. It was the summer season, Parliament was out, no bill was due, and in fact nothing was happening to promote HS2. But out of the shadows came Lawson, and then Mandelson, saying that HS2 was a waste of money. They were quickly followed by Darling and Prescott and finally the Public Accounts Committee. Then there was a critical report from the Institute of Economic Affairs, a little known right wing pressure group. All of which was then orchestrated by the BBC and The Independent.

The cost of HS2.

The coincidence of all these attacks on HS2 is almost as odd as the inconsequential and incompetent arguments that were deployed against the project. Top of the list was that it was going to cost too much. Well, a figure of 50 billion pounds sounds a great deal when said like that. But since the program of building HS2 will take over a decade, this amounts to no more than 5 billion a year. And when one considers that there are currently programs of nearly 21 billion pounds being undertaken right now to improve our railways, this does not seem to be particularly excessive.

A serious look at this figure would have revealed that over 14 billion is a contingency and 7 billion is for trains. The contingency is there to cover a wide spectrum of eventualities, many of which will either disappear or be more cheaply dealt with: and new trains are needed in any event. The IEA even came up with an ‘estimate’ that it would really cost 80 billion. This has turned out on examination to be pure guesswork plucked from the air.

Then they all argued that we would be better spending that money on something more worthwhile. This is a very silly argument since the amount actually to be spent per year is a fraction of what we already spend on new transport facilities. Not only that, the resources required for building a railway are not easily transferred to other projects. Different kinds of expenditure require different kinds of resources and transferring them is no easy matter. Spending public money is not like organising a family budget.

HS2 is all about capacity.

The second argument against HS2 was that we do not need to get to Manchester half an hour quicker. While faster journey times are a significant market driver because, in travel, time is money, the truth is that the high-speed line is to be built because we need the capacity. At the speed proposed this railway will allow for over twice as many train pathways per line section per hour as the present system. The additional capacity will mean that for local trains, commuters, and freight, there will be a great deal of new capacity released from the present system. And, if we are going to do anything to reduce the amount of traffic on our already overloaded road system, this new capacity is absolutely vital.

 

Then again it was suggested that a high-speed line would attract a premium fare and that is somehow discriminatory. So far there is no expressed intention to do so. However, the Kent high-speed lines are charged at a premium and are heavily used. Furthermore, a car journey from London to Manchester currently takes about 4 hours at an average speed of 50 mph; by rail this is 2 hours and ten minutes at 86 mph. The High Speed Train will take one hour and twenty minutes. Of course this will be valuable and be charged accordingly.

Protecting the environment.

Then it was argued that the railway would cause a great deal of disturbance to the people who live along the tracks. This objection has been met already in two ways. Firstly, the Treasury has indicated that there will be a much more generous compensation package for those who are either to loose their land or believe they will be seriously affected. This has been the practice throughout Europe in building high-speed lines in recent years because it is well understood that, in many cases, the land purchased, other than that needed for the track itself, increases in value and there is a net gain to the project.

The second way in which the environmental problem has been tackled is to include a number of tunnels, in many cases in open country and along parts of the route where tunneling would not normally be necessary. This is a very expensive way of dealing with noise pollution. Throughout Europe new railways and roads have been built with a great deal of sound deadening structures alongside them to shield urban areas from the noise. Incidentally, if these environmental tunnels, currently estimated to be more than 20 miles, were removed the overall cost of the line is significantly reduced.

The business case.

Then there are the arguments about general transport strategy, and these say that while there is currently strong growth in rail transport this cannot be expected to continue into the future and therefore the “business case” is not valid. In this instance there has been an attack on the figures produced by HS2 Limited. However, this company is wholly owned by the Government and was set up to provide objective research and advice, and to engage all the consultants who will be needed in the planning and acquisition phase. It is specifically required to do all this economically and objectively.

Again the truth is a victim of prejudice. The current cost benefit case excludes all wider benefits both now and in the future. It is also constrained by a time horizon of 2036. There is no doubt that such a significant infrastructure investment will have far reaching positive economic consequences as has been the case with similar investments throughout Europe. If all long and short term benefits are included the case for this investment is overwhelming. Having been myself involved in cost benefit analysis from its very inception, I can vouch safe that those who do it test their assumptions and forecasts very carefully before constructing a full business case.

Of course the argument in this case, like so many others, is conducted without any reference to what is happening across the Channel. Since 1978 the countries of Europe have built nearly 8000 km of high speed railway. Another 1200 km is under construction. Do the detractors from the HS2 project really believe that the politicians in the rest of Europe are in some way deranged in putting so much of their capital investment into this program? Throughout Europe the high-speed network has drawn freight off the roads and made much short haul air service obsolete.

Of course, they argue, we are a small country and therefore do not have the wide open spaces of France or Germany for example. This is a particularly spurious argument when you consider that this small country has the most intense network of domestic air services of any country in Europe. We also have the most congested roads. Efficient and fast train services are very effective in a smaller land, as demonstrated by Japan.

Control of costs.

Perhaps the only issue that should be debated at this time is the one raised by the Public Accounts Committee. There is a serious question of cost escalation and the new chairman of the HS2 company should be addressing himself to this very urgently. In all major infrastructure investments there are choices to be made. One of the reasons why roads in Britain have cost typically 30% more than similar roads in France and Spain is because of the insistence of the highway engineers on taking very much more land per mile and building very much wider roads.

One needs to examine very carefully the engineering assumptions of the high-speed line to ensure that it is being built adequately, safely and economically. As already mentioned, one of the main reasons why it is costing so much more is to do with the environmental compromises which have been made. If you took all the rural tunnels out of the equation you would cut the costs substantially. There is also the issue of the trains, it is really incorrect to lump together the provision of the rolling stock and the building of the line into one set of numbers.

The actual railway line will have a long operating life. It will be built for at least 50 years continuous use without upgrade. Rolling stock on the other hand should have a life of no more than about 20 years and therefore should be looked at entirely differently. There will be commercial cases to be argued on all matters of the way in which these lines are used. We must take account of the use of HS1 by local Javelin trains. This has worked extremely well and has provided a great deal of additional use of that service.

One other thing to be said about the European experience with high-speed rail: Although initial costs were very high, nobody in either business, politics, or the general public doubts that there have been not only financial, but huge social benefits from the provision of the network. That we, in Britain, should turn our backs on such a development as the country that once had the most enviable transport system in the world, is nothing short of grotesque.

Why the sudden attack on HS2?

And here we come to the core of the present debate. I introduced this article by finding it curious that this sudden attack had been made. Then I realised that the committee on the future of London’s airports was sitting this year and would make an interim report in the coming winter. What a certain section of the business, entertainment and media industries want is the third runway at Heathrow because they think that this would reduce the level of delays there.

Of course HS2 is in part a solution to that, but not a substitute. The problem of London’s airports is simply one of pricing. If serious differential pricing were reintroduced and slot allocation policy made to favour business and long haul, HS2 would be seen as an important part of reducing airport demand.

There is no question that when HS2 is built there will be a major decline in air services between London and Liverpool, Manchester and Leeds. There will also be an impact on Glasgow and Edinburgh air traffic since the high-speed line will take us two thirds of the way there. This has been the pattern: France, for example, where virtually everybody who wishes to leave Paris for any part of the country will travel by the TGV.

We have to build High Speed 2.

Quite apart from all of the above, there is the fundamental issue of Britain’s future as a modern country. We were, after all, the inventors of the railway, and built the very first main lines. We are still trying to operate our services along those lines. We are the only country in Europe that still operates mainline, carbon hungry, diesel trains. Every other country has electrified its entire system while political inertia has prevented electrification of ours.

We still operate diesel express trains which are 30 years old and we have a great deal of other rolling stock of similar age. There has been a real poverty of investment in our railway system really since the days of Beeching, who tore the system apart and made it almost impossible to expand within the present network. If we are to face the future with sufficient capacity we absolutely have to build HS2. If we stop now all that happens is that we will delay the inevitable construction of a new high-speed line at some future date. In the meantime we will have to stand delays, congestion, and an increased amount of traffic on our roads.

Those senior politicians, like John Prescott, who are now beginning to argue against this, have simply lost the plot. This is not a chancy or useless investment in new technology as was Concorde, which could never be an economic or technical success. In this case, we would be installing known technologies, used right across Europe, and there is no reason why HS2 should not form the backbone of our future rail system in Britain.

The idea that somehow a railway like this will only favour the south, and not the whole of the United Kingdom, is just nonsense. Every part of Britain will benefit from such an investment, and those benefits will last, not only through the initial phases of the programme, but right up until there is a high-speed line all the way to Edinburgh.

Economic growth.

But perhaps the most compelling argument for embarking on the ten year construction programme is that it will produce a huge amount of growth in the economy. Most commentators neglect to recognise the multiplier effect. If the government creates employment through public expenditure it will stimulate demand, and ensure that all those employed will themselves create demand which, in turn, creates further investment and supply throughout the economy. It is estimated that every pound that the government would spend on HS2 will produce £3.50 of additional output in the wider economy.

There are clearly voices around that will continue to try to undermine this project. They are being encouraged and briefed by interested parties, but their arguments are weak or non-existent. The bottom line, as they say, is that HS2 will provide a serious engine of growth now, and the United Kingdom also gains a valuable asset for the future.