Magazine article The Spectator

The Line to Nowhere

Magazine article The Spectator

The Line to Nowhere

Article excerpt

In June last year I predicted in these pages that the government would allow High Speed 2 to die a quiet death. Although the government has since reaffirmed its commitment to the proposed railway line, I am sticking to my prediction. Indeed, if the line is ever built I will book a ticket on the first train out of Euston and consume my hat in the dining car.

How can I be so sure? Because the projected costs of the project are now so ridiculous that it cannot possibly go ahead. Even before George Osborne, in his spending review in June, added another £8 billion to the estimate cost of HS2, the project had a feeble and a deeply flawed benefit-to-cost ratio of 1.4:1. As a suppressed Department for Transport report, finally disclosed in a freedom of information report last summer, made clear, most of the supposed benefits of HS2 are based on the false assumption that businessmen do not use their time sitting on trains productively. But with the new costings even the flawed benefit-cost ratio falls to just above one: the level at which the cost to the public purse equals the forecast benefit to the economy. And that is assuming that you believe the new costings. Many do not. This week the Institute for Economic Affairs published an analysis which, including all the related projects required to make HS2 funct ion , such as another Crossrail from Euston, brings the project to close to £80 billion. The record of HS1 (the Eurostar line through Kent) does not bode well: in 1985, when first proposed by British Rail, it was costed at £1 billion at current prices. It eventually cost £11 billion.

The National Audit Office, too, is deeply sceptical about the justification for HS2. It produced a scathing report in May attacking the 'lack of clarity' about the objectives of the project. The government immediately dismissed the report as 'out of date' (w hich it was only to the extent that George Os borne's upwards-revised costings had not been published). For a government committed to eliminating the deficit - which preaches austerity on virtually every other area of government spending - it was an astonishing attitude.

Just why are high-speed railways allowed to break every rule in the fiscal book? In a report on transport investment policy for the then Labour government in 2006, Sir Rod Eddington caught it perfectly. 'The risk is that transport policy can become the pursuit of icons, ' he wrote. 'Almost invariably such projects - "grands projets" - develop real momentum, driven by strong lobbying. The momentum can make such projects difficult - and unpopular - to stop, even when the benefit-cost equation does not stack up, or the environmental and landscape impacts are unacceptable.'

It is a conclusion at which other countries are gradually arriving, having themselves invested billions in high-speed rail. Last month the Hollande government cancelled a planned TGV line from Paris to Nice, declaring that the money would be better invested in existing railways, whose poor condition was soon afterwards highlighted by a crash caused by badly maintained rails in the Parisian suburbs. The Spanish high-speed rail system has failed to attract anything like the passenger numbers predicted. The economic case for a proposed line from San Francisco to Los Angeles has been undermined as costs have grown and the planned sections of the line have been chopped, so that it is now unlikely to happen. …

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