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Matthew Sinclair: Cancel High Speed Rail

Lots of major projects are being cut back at the moment:  the long suffering Nimrod is being broken up; we'll have aircraft carriers with no planes for years; some school upgrades planned under Building Schools for the Future have been cancelled.  In an age of austerity High Speed Rail stands out like a sore thumb, a huge £30 billion commitment that the Government is taking on.

So far the opposition has been identified very closely with those whose properties are likely to be blighted in Buckinghamshire.  As the people in those constituencies are loyal Tories, it has been easy to ignore them on the grounds they aren't floating voters.  Whether or not that is the case though, a far bigger group are set to be upset by the scheme: ordinary taxpayers.

The business case for the new high speed line just hasn't been made.  It won't come close to producing a financial return, net operating profit will only cover 42 per cent of the capital costs over a 60 year project life.  So the scheme is being justified on the basis of dodgy assumptions, like the idea demand will grow 267 per cent, or passengers have zero productivity while they are on a train.

All of that is in a new TPA research note, written by an experienced consultant who has worked in the industry for decades.  Chris Stokes was Deputy Director for Network SouthEast, British Rail’s largest business sector, from 1988 to 1993 and had a range of other roles since.

The political danger here is that this is a train line that will only be used by a fortunate few.  Nearly half of long distance rail trips are made by people from households in the top quintile by income.  Building it at the expense of ordinary families paying higher VAT - or while they are seeing spending in schools and commuter road and rail projects cut - is a recipe for the issue to become absolutely toxic.  As the cost becomes clear, and with the expectation they won't be the ones riding this train, people will turn against the project.

Politicians might be worried that cancelling HS2 will be an embarassing u-turn for a week or so.  But it is worth it to avoid endless battles over a new line the country can't afford, and which most voters will only see as a burden.  There are much cheaper alternatives like longer and more frequent trains, and much more pressing priorities.

Image Copyright Timothy Baldwin and licensed for reuse under this Creative Commons Licence.


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