Thursday, July 4, 2013

Labour HS2 the rescue?

There is light at the end of the railway tunnel.

The tide might just be turning against HS2, the nightmarish money pit of a plan to build high speed rail links between London, Birmingham and other Northern cities.

Currently only UKIP (see "The best and worst of UKIP") and a few MPs whose rural constituencies are in danger of being disfigured by the line against HS2.

With the Coalition seemingly wedded to the plan however much business case for it is discredited, the best hope for stopping HS2 is Labour.

Officially the Opposition support HS2, but Labour bigwigs like Lord Mandelson and Alistair Darling are voicing strong doubts and threatening to break up the big party consensus in favour of HS2.

Mandy even admitted that the last government's backing for the proposal was "politically motivated".  It certainly looks like the cost-benefit analysis done to back it up consisted of numbers picked out of thin air to justify a weak economic case.

The cost projections are clearly a joke.  They keep changing every week and no one seems to be factoring in any interest costs on the money that will have to be borrowed to fund the £50bn they now say is required.

There can be little doubt the real investment cost will be higher but also it is very likely to run at a loss as most high speed networks do.  This is mainly because the estimated passenger traffic never materialises as the public choose cheaper alternatives.  HS1 and the Channel Tunnel are used nowhere near half as much as was originally claimed.

The idea that HS2 will be good for the environment is highly debatable and essentially unknowable this far from its launch date (2026 although these projects are almost always delayed).  By then we could all be using driverless cars powered by algae fuel.

The worst element of the business case though is the tens of billions claimed for the so-called wider business and economic benefits.

The economy is supposed to benefit from spreading growth from London and the South East to the North but any objective analysis would allow that the benefits are just as likely to flow in the opposite direction.

Most of the business benefits are calculated by placing a value on every hour saved by the shorter journey times, as if businessmen don't work on trains.  This is clearly nonsense: given the rate of technical advance I imagine by 2026 businessmen will be able to hold virtual conferences in a toilet cubicle if they had to.

Finally there is the lie that the Coalition has been putting around - that tickets will be no more expensive, or maybe even cheaper, than regular fares.  This is completely implausible but if it is true then the line will run at a massive loss.  So the taxpayer will be on the hook for £50 bn, the inevitable cost overruns, interest on the debt and operating losses for decades.

I hope to God Miliband listens to his party grandees and turns on HS2.  It could be one more thing he could do to make Labour a shoo in for the 2015 election (see The bold policy that could put Miliband in No 10) but more importantly save Britain from a horrendous and costly mistake.

No comments:

Post a Comment

OctoFinder Blog and ping Spanish Insight - Blogged