The House of Lords economics affairs committee has slammed the government over their failure to justify the £50bn cost of the HS2 high speed rail project.

 

The government announced that there should be two main benefits to the development of HS2; rebalancing the economy and increasing railway capacity, with the committee’s report arguing that the government hasn't made the necessary case for either.


The report details how trains arriving and departing from Euston railway station are on average only 43% full, with them only being 50% - 60% full during peak times with overcrowding only being a problem on Friday weekends with the report concluding that there are “less expensive options to remedy these problems”.



On the issue of rebalancing the economy, the Lords’ Committee argue that London would be the primary benefactor from HS2 with the North of England losing out due to a London-bound “brain drain”. The report argues that there is a strong case for improving the trans-Pennine links between Northern towns and cities, and building the northern legs of HS2 first to rebalance the economy before construction starts on the Southern phase of the HS2 scheme.


The committee has also pointed out that HS2 is around nine times more exspensive than the high speed rail projects in France and has suggested that the UK needs to look more closely at the lessons learned from these continental projects.


Whilst the Department of Transport has admitted that new evidence is necessary for the cost-benefit, the committee points out that because some of the cost-benefit analysis dates back to 1994 it’s so out of date to fail to stand up to reason.


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.”


Overall the committee does support the investment in rail infrastructure and the construction of new rail projects however they believe that the case needs to be made more clear and on the grounds that are being set out by the government.


“Overcrowding on the West Coast Main Line is largely a problem on commuter trains and on long-distance trains immediately after peak time on Friday evenings and at some weekends. The government have not carried out a proper assessment of whether alternative ways of increasing capacity are more cost effective than HS2.


“Full information on railway usage has not been made publicly available by the government on grounds of commercial sensitivity. The plausibility of the government’s claim that there are current long distance capacity constraints and also its forecast of future passenger demand are difficult to assess without full access to current railway usage. The investment of £50bn investment of public money demands nothing less than full transparency.


“In terms of rebalancing, London is likely to be the main beneficiary from HS2. Investment in improving rail links in the north of England might deliver much greater economic benefit at a fraction of the cost of HS2.


“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.”

 

In addition to the primary economic benefits of the project, this could be hugely beneficial to the construction industry in stimulating the growth the sector required to plug construction's skills gap and create a more balanced construction economy which is currently largely London-centric (think of HS2's construction base being based in the Midlands, along with the new National Construction College and the proposed redevelopment of many places in the West Midlands off the back of HS2).


Members of the committee include former chancellor Lord (Nigel) Lawson. The full membership of the committee is:

 

  • • Lord Hollick (Chairman) – Labour
  • • Baroness Blackstone – Labour
  • • Lord Carrington of Fulham – Conservative
  • • Lord Griffiths of Fforestfach – Conservative
  • • Lord Lawson of Blaby – Conservative
  • • Lord McFall of Alcluith – Labour
  • • Lord May of Oxford – Crossbench
  • • Lord Monks – Labour
  • • Lord Rowe-Beddoe – Crossbench
  • • Lord Shipley – Liberal Democrat
  • • Lord Skidelsky – Crossbench
  • • Lord Smith of Clifton – Liberal Democrat
  • • Baroness Wheatcroft – Conservative