Regions will be the big winners from HS2 – report
HIGH Speed rail will benefit regional economies more than London, adding up to £1.3bn a year to the Manchester city region by 2037.
That’s according to a new report commissioned by HS2 Ltd, the company behind the link, which seeks to debunk claims that the line will drain jobs and investment away from the regions to the capital.
The report, prepared by KPMG, says the investment will deliver an annual £15bn boost to the UK economy, with up to £7.8bn of that outside Greater London.
It concludes HS2 will give the Birmingham city region economy a yearly boost equivalent to 2.1%-4.2% of the city region’s GDP. For Manchester the figure is 0.8%-1.7%, while for Leeds it is 1.6% and South Yorkshire 1.9%-3.2%, compared to Greater London’s 0.5%.
According to the study business connectivity – driven by increased capacity and reduced journey times – will be improved by 18.8% in the Manchester area, 21.1% in the West Midlands, 19.7% in West Yorkshire and 21.5% in South Yorkshire. This compares to 11.3% in the rest of the country.
KPMG argues businesses will be better connected to their labour markets and that increased capacity will result in “widespread improvements to services on the classic network”, meaning that the line will benefit businesses and passengers throughout the country regardless of whether they live or work near the route.
Baroness Susan Williams, campaign director of North West Rail Campaign, said: “The findings of this important report are very welcome. They show the enormous promise of HS2 to our region and the importance of the line in unlocking the huge potential of the North West as a place to live, work, study and do business.”
Earlier this week the Public Accounts Committee said the Department for Transport was failing to present a “convincing strategic case” for the line which will see 225mph trains linking Birmingham and London by 2026 and linking to Manchester and Leeds six years later.
Criticism from the committee follows soon after business group the Institute of Directors (IoD) called HS2 a “grand folly”. Senior Labour politicians Alistair Darling and Peter Mandelson have also come out against the project as has right-leaning think tank the Institute of Economic Affairs.
Richard Threlfall, KPMG’s head for infrastructure, building and construction said: “There have been repeated calls for a business case for the HS2 scheme focused on jobs, productivity and growth. KPMG’s analysis forms a key part of that business case, setting out the economic impact across the country of the HS2 scheme.
“It shows beyond reasonable doubt that HS2 brings net benefits to the country of many times the scheme’s cost. It shows the UK will be £15bn a year better off with HS2, recovering the cost of the scheme within just a few years. Our analysis also shows that HS2 will significantly help counter the corrosive effects on our country of the widening north-south divide. There has been a long-running debate about ‘who wins’ from HS2, the north or the south? The answer is both.”
KPMG has drawn its conclusions by looking at how connectivity influences productivity and competitiveness.
