Posted 19th August 2013 | 10 Comments

Free market lobby group predicts '£80bn HS2'

A THINK TANK which promotes 'free market' principles has predicted that the cost of building HS2 could rise to £80 billion, and concludes that the project should therefore be scrapped.

The Institute for Economic Affairs has published a report claiming that costs of the High Speed line are set to almost double from the present official estimates, partly because of the requirement to build more of the route in tunnel to placate protestors who live nearby. 'Lobbying from local authorities for new links to HS2 stations' is also said to be boosting costs.

However, the IEA has been accused of presenting a partisan view which is in line with its general policy of opposing major publicly-funded projects in favour of allowing the market to decide.

The report -- called the 'High Speed Gravy Train' -- claims that ministers appear to have disregarded the economic evidence 'and have chosen to proceed with the project for political reasons'.  Its author, Dr Richard Wellings, said it was 'time the government abandoned its plans'.

He also alleges that 'a group of powerful special interests appears to have had a disproportionate influence on the government’s decision to build HS2'. This is partly because engineering firms which can expect contracts to build the line have joined the 'pro' lobby, according to the Institute. It goes on to explain that 'an effective lobbying campaign in favour of HS2 was initiated and funded by concentrated interests expecting to make economic gains from the project. This effort appears to have been effective at marshalling support for the scheme among policymakers'.

In a related development, Major Projects Authority head David Pitchford has told the Daily Telegraph that HS2 is likely to stay on an “Amber-Red” rating for now.  However, the reasons for this conclusion have been kept confidential.

Joe Rukin of StopHS2 said: "The Information Commissioner has been very clear, the details of why the Major Projects Authority think HS2 is a disaster waiting to happen must be released, both in the public interests and to comply with environmental legislation, but that is not good enough for a Government who want to make sure their consistent incompetence on HS2 remains buried. It is a disgrace that MPs weren’t told just how badly HS2 has been managed before they were asked to vote on a blank cheque for it. It is not in the public interests and completely undemocratic to withhold this information.”

Supporters of HS2 have been quick to respond. Emma Antrobus of the Greater Manchester Chamber of Commerce said the nation was 'suffering from decades of under-investment' in transport, and that HS2 will 'free up enormous amounts of capacity on the current rail network', as well as improving connections between cities.

The Department for Transport said that HS2 was 'absolutely vital', providing a 'huge economic boost which will generate a return on investment that will continue paying back for generations to come'.

A spokesman continued: "Without it, the key rail routes connecting London, the Midlands and the North will be overwhelmed. HS2 will provide the capacity needed in a way that will generate hundreds of thousands of jobs and billions of pounds worth of economic benefits.

"The Government is committed to managing the cost within the budget we have set for the project and to securing maximum value for money for the taxpayer, while also ensuring that preparations are properly made for the most significant infrastructure investment the UK has seen in modern times."

Development company HS2 Ltd cast doubt on the IEA's motives, claiming that 'the approach has clearly been designed to suit its aims and those of its funders to dismiss any major government project'.

Reader Comments:

Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.

  • Michael, London

    Nay Sayer's: always seem to pick imaginary numbers out of the sky!
    Why not try negative integers if you lot really want to get a few column inches lol
    It is a National Project - one that should have been completed by now, I suggest contracting it to China as the Chinese have built more of the world's railways (manual labour) than any other peoples!

  • John Gilbert, Cradley, Herefordshire

    I agree with Chris Neville-Smith. Think tanks are best dropped in another sort of tank - filled with water. They serve only to modulate air.

  • Chris Neville-Smith, Durham, England

    "The solution to this problem was abandoned with the modified upgrade in the last decade in favour of the Trent Valley upgrade.It will still have to be done sometime and soon, especially round Watford Junction."

    Which solution are you referring to. The only upgrade that has been abandoned is the Ledburn flyover, which would deliver a grand total of one extra train per hour.

    Now, do you think that increasing the services from Euston to 19 tph to 20 tph is going to solve the problem?

  • Melvyn Windebank, Canvey Island, Essex

    Following extract taken from STOPHS2 site :-

    The report also argues that £80bn spent instead on upgrading other road and rail infrastructure would produce £320bn of economic benefits. More than £30bn of extra costs are likely to come from areas including additional roads and infrastructure to service the new line and changes to the route to buy off local opposition.

    So while the wider press and public are being fed the story that HS2 has become totally unaffordable the above shows that's its more about getting this money spent on roads instead !

    At long last HS2 have countered this news in quick time by saying what nonsense this report is!

    No one seems to point out that the total amount for HS2 will never exist at a single point in time but will just be an annual spend by government of £2-3 billion and if HS2 were cancelled so would this money !

    In fact given money spent on HS2 will generate taxes that are paid to exchequer the real net cost is actually less than the headline cost and only governments can do this trick !

  • Stephen cryan, Warrington

    ALL lobby groups work on the assumption of a conclusion and provide the material to justify that conclusion, so all should be taken with a pinch of salt

    Your opinion is just as valid as mine - the difference lies in the evidence and the way of presenting such evidence.

    I have always supported a fast train network but the longer the debate goes on the more I come to the conclusion that this HSR2 project is not the one to support.

    The interested parties mix(wittingly or not) two clear problems. The first is the overcrowding of the WCML, especially from Rugby to Euston. The solution to this problem was abandoned with the modified upgrade in the last decade in favour of the Trent Valley upgrade.It will still have to be done sometime and soon, especially round Watford Junction.

    The other problem is the limited track speed illustrated by present stock running at less than its manufactured capability. The reasons for this are antiquated signalling systems, winding track on certain sections, speed restricting cross-over points, among others.

    If you really want to improve journey times between Scotland, Northern England, the Midlands and London, then you must seriously consider major rebuilding of the ECML from Edinburgh to Newcastle, and the WCML from Glasgow to Oxenholme.These efforts would result in major time improvements belying the need for such heavy investment in HSR2. The HSR2 line(s) will never be extended from their present end points. thus the clients(!!)who need the investment most will never receive it.

    The present proposals for HSR2 are from London to Manchester and Leeds - way way south of the really needed improvements. There is so much investment that will have to be done in ECML and WCML anyway with or without HSR2 but will be delayed by the badly thought out vainglorious project.

  • Chris Neville-Smith, Durham, England

    "The anti-fracking protesters are gearing up to move onto HS2 when and if someone turns up to turn the first sod."

    If they do, great. No construction project has ever been terminated because of Swampy and his mates. Every government knows that if you back down to that sort of action, you encourage people to do it again. Protestors will guarantee the completion of the scheme.

    "which affects no house or farm or beauty spot,"

    True, but HS2 barely does. With the exception of a few greens, not one person opposing HS2 has expressed the slightest problem with the far greater blight on the Chilterns from the M40 and A41 (both build whilst the Chilterns was an AONB), so this outrage over blight now is mostly either fake or disguised nimbyism.

    "and everyone wants"

    I think you'll find a lot of northerners are exteremely unhappy with the idea of London getting yet another £10bn+ megaproject and the north getting the crumbs.

    "HS2 which absolutely no-one has any idea of its costs"

    The costs haven't changed. The figure quoted in the paving bill is merely the 95th percentile of cost estimates instead of the 50th. There would be the same uncertainly with Crossrail 2.

    "or future patronage."

    The case for Crossrail 2 is mainly based on passegers on the North-South tube lines and some Wimbledon services transferring to this service. The case for HS2 is based on passengers from London to Birmingham and north-west tranferring to these services. What's the difference?

  • Tony Pearce, Reading

    The anti-fracking protesters are gearing up to move onto HS2 when and if someone turns up to turn the first sod. My view is that the money and design team would be better off from tomorrow concentratin their efforts on Crossrail 2 which affects no house or farm or beauty spot, and everyone wants, instead of HS2 which absolutely no-one has any idea of its costs or future patronage.

  • Ian Andrews, Warrington

    I wish these protesters would wake up and smell the coffee ..

    The WCML is full, the M6 is full .. something needs to be done, personally I prefer a 2 or even 4 track High speed line to a new 8 lane motorway anyday

    One or the other is coming ... take your pick protestors

  • Tim, Devon

    This report seems to offer no sensible analysis of the likely costs of HS2. All it does is speculate with wild figures and then add them up.

  • Chris Neville-Smith, Durham, England

    Sorry, can someone please explain to me why think tanks qualify as newsworthy? They are accountable to no-one but financial backers, are not subject to peer review, are not required to back up their claims with evidence, don't have to make separate fact and opinion, and are free to pick a conclusion first and then construct an argument to support the conclusion.

    I fail to see how this is more newsworthy than a report written by me and a few of my mates. I'm also a Dr. and I at least attempt to consider evidence first and conclusions later like I did in my PhD. Can I have a headline article too?

    Also, does the BBC know that Dr. Wellings proposes eliminating the need for HS2 by shutting down public sector jobs in Manchester, including the BBC, and relocating everything to London.