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Vampire Railway - High Speed 2 to suck life out of local economies

October 21, 2013 3:51 PM
By Andy Boddington. in Lib Dem Voice

HS2The case for High Speed 2 is looking more and more like a Tonka project - a big showy toy that politicians can brag about, but will do little for the UK's economy. And it is not an equitable project. It is set to damage the economy of areas like east of England and boost London at their expense.

It's not long since KPMG published a report claiming that the line could boost the economy by £15 billion a year. Now BBC's Newsnight reports that the KPMG report left out data on those areas that stand to lose out from the project.

In cash terms, the BBC lists Aberdeenshire, Aberdeen City and Moray as faring the worst, losing £220m a year by 2037. But local economies are different sizes, so it helps to look at percentages.

Taking the worst case scenario, there are eleven areas that stand to lose more than 1% of their GDP if High Speed 2 is built. Ten of these are in a belt stretching from Wellingborough in East Northamptonshire to Cambridge (see table below).

That's a big growth area for housing and employment. On KPMG's analysis HS2 is set to suck jobs out of the area. So what will happen? More people will have commute to London, boosting the capital but overcrowding trains.

Eighty eight of 236 areas across the country will lose £2.5 billion from their local economies if HS2 is built; 148 will gain £17.8 billion. Its a gain overall, but its also a major distortion to local economies and a statement by the government that London, Birmingham, Leeds and Sheffield matter more than Corby, Kettering and Lancaster.

High Speed 2 Ltd, the government's champion for the line, told the BBC the results were "unsurprising" and claimed that the government planned to spend £73 billion elsewhere. That's not quite the case.

According to the statement made by Danny Alexander in June, the government is planning to spend £73 billion inclusive of £16 billion for the first stages of HS2. Only £22.5 billion goes to Network Rail, most of the rest on roads. But the real difference is that if costs for HS2 continue to soar, or the economy does not grow quickly enough, it is these projects that will be delayed, cut back or axed, not High Speed 2.

Once we start High Speed 2, we can't turn back. It can't be the railway to nowhere. But it could be the vampire railway that sucks much of our country dry at the expense of the narrow corridor of cities that benefit, and most of all London.

High Speed 2 has become an act of faith rather than a rationale proposal. The government and HS2 Ltd need to come clean on it and stop playing footloose data.

But I for one don't have faith in vampires. Especially one that will suck the lifeblood out of local economies to feed London.


HS2 Data Losers

The full data set is here in PDF. Full data Excel spreadsheet: High Speed 2 KPMG BBC winners and losers

Andy Boddington is a Lib Dem living in Ludlow, Shropshire. He is Friday Editor for Lib Dem Voice.