Damning report from House of Lords committee questions case for HS2

THE Government has not made a convincing case for high-speed rail project HS2, says a damning House of Lords report published today.

It says the Government must do so before Parliament passes the Bill to enable the construction of the first stage of the railway to begin.

The House of Lords Economic Affairs Select Committee says it supports transport infrastructure investment but stresses that at a cost of £50bn HS2 will be one of the most expensive infrastructure projects ever undertaken in the UK.

The Committee argues that the Government have not yet made a convincing case for why it is necessary.

And it says London will be the main beneficiary unless the project gets underway in the north. 

The report – The Economics of High Speed 2 –  says the Government set two main objectives for HS2: increasing capacity on the railway and rebalancing the economy but, concludes that it fails to make a convincing case for either.

It says that on capacity the evidence shows that long distance trains arriving at and departing from Euston station in London are, on average, just 43% full and even during peak times are only between 50 and 60% full.

Overcrowding is largely a problem confined to Friday evenings and weekends on long-distance trains and to London-bound commuter trains,” it suggests.

The report says there are less expensive options to remedy these problems than HS2 but these have not been properly reviewed.

The Committee agrees with the objective to rebalance the economy but disputes the claim that HS2 is the way to achieve it. The evidence from other countries, such as France, shows that the capital city is the biggest beneficiary from high speed rail, it says.
 
It suggests London would most likely be the biggest beneficiary from HS2. The Committee argues there is a strong case for improving the trans-Pennine links or building the northern legs of HS2 first, both of which could be a better way of rebalancing the economy than building the southern leg of HS2.
 
On cost, the Committee says that the cost per mile of HS2 is estimated to be up to nine times higher than the cost of constructing high speed lines in France.

The Committee suggests that, if HS2 is to go ahead, the cost could be reduced by building it to run at 200 mph, as in Europe, instead of 250 mph, terminating the line at Old Oak Common or learning lessons from France to reduce the cost of construction.
 
The report suggests that the huge public subsidy to HS2, an estimated net £31.5bn, conflicts with the Government’s declared objective of making rail less dependent on public subsidy.

The Committee argues that such large expenditure should be considered against the background of financial restraint. It queries whether the users of the proposed line, mainly business travellers, should carry more of the cost than is currently proposed.
 
The report also points out that the cost-benefit analysis for HS2 relies on out-of-date evidence, some dating back to 1994. The Department of Transport admits that fresh evidence is required and the Committee believes this should be provided before Parliament passes the HS2 enabling legislation.

The Government’s claim that the cost-benefit analysis placed HS2 in the high value-for-money category was disputed by a number of witnesses giving evidence to the Committee, who assessed it as being in the bottom 10% of projects.
 
It is expected that the enabling legislation for HS2 Phase 1 will come to the Lords in the next Parliament and receive Royal Assent by the end of 2016. The committee concludes that this should not happen unless the Government has answered the important questions its report raises.
 
Lord Hollick, chairman of the House of Lords Economic Affairs Committee, said: “At £50bn HS2 will be one of the most expensive infrastructure projects ever undertaken in the UK but the Government have not yet made a convincing case for why it is necessary. 
 
“We have set out a number of important questions on HS2 that the Government must now provide detailed answers to. Parliament should not approve the enabling legislation that will allow HS2 work to begin until we have satisfactory answers to these key questions.”

Jonathan Isaby, chief executive of the TaxPayers’ Alliance, said: “This damning report takes apart every one of the arguments for HS2 and taxpayers will demand that politicians listen.

“There is no capacity case, no business case and no value for money case, and this expensive vanity project will take scarce resources away from where they’re really needed on the rail network. It’s time to scrap this scheme before taxpayers get landed with the bill for a costly white elephant.”

Supporters of the HS2 project are likely to respond to the report’s conclusions today.