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David T Breaker: I love high speed rail, but High Speed 2 doesn't add up

By David T Breaker

Living in Kent, it seems hard to imagine the county without the high speed 'Channel Tunnel Rail Link' - what is now the prosaically named HS1 - that zips through the garden of England, shadowing the M20 and M2 for all but a few deviations. I've always been a supporter, and it's been rather enjoyable to have people - once sworn critics of rail - now sing its praises. You also don't need to spend long in my house to realise I am somewhat interested in railways, the postman no doubt cursing the advent of eBay.

It's quite bizarre then that just recently I was called "anti-rail" and a "NIMBY" because I oppose the new High Speed 2 railway between London and Birmingham. Now the first thing that must be commented on, and as far as I'm aware nobody else has made this point, is the use of the word NIMBY (Not In My Back Yard) as a term of abuse and means of dismissing the critic's point of view. "You're just a NIMBY" has an unspoken meaning, it is to say that your opinion is void as it affects you personally. "Go away and let us decide! How dare you even think that individuals matter versus the 'national interest' as decided by the State you selfish rich person".

But here is the crux of the matter: aren't we all NIMBYs? No one wants their area blighted by road or rail or wind-farms, and we should not condemn those who complain or object to these intrusions when we would do exactly the same if in their position, otherwise are we not surely hypocrites of the highest order? (BOONMAs perhaps, Build On Others Not My Area?). Indeed although it was a Conservative minister who coined the cursed NIMBY anacronym, Conservatives should often celebrate the NIMBY: it's the NIMBYs who saved London in '73 from the London Motorway Box, who saved historic Canterbury from the post-war planners, who saved Covent Garden from the GLC.

You show me a NIMBY and I'll show you someone who maintains their home, picks up litter, and does their bit in what we'd now call the Big Society. NIMBYs up and down the land are keeping our towns and villages tidy, well maintained and pleasant. Do we instead desire a nation of people who do not care about their back yard, who do not care about the local environment, who allow things to go to wrack and ruin? Did we not sell council houses off under the right to buy scheme partly with the argument that home owners look after their back yard more than tenants?

It is simply unacceptable for supporters of a project and the Transport Secretary Philip Hammond to dismiss opponents of HS2 as NIMBYs as if that is an argument and as if they wouldn't be protesting if such a scheme cut a swathe past their corner of Britain. (Indeed one HS2 supporter has admitted to me that he would). As much as the DfT wishes it could dismiss critics of HS2 as NIMBYs, however, they soon find that they can't.

For starters many opponents do not live in the area, and furthermore many opponents are not against high speed rail - they are simply against HS2, for a variety of reasons - which roughly sums up my position, that of the leading rail commentator Christian Wolmar, and a growing number of rail supporters. To me the whole argument for HS2 comes under three headings: the business case, the economic case, and the environmental case. On each of these I have tried to give HS2 a fair hearing, tried to be excessively optimistic, and tried to find upside potential - I would genuinely love to support the project - but the more I research, the less sense it makes.

In terms of a business case, there simply isn't one. Government departments are very good at churning out reports and graphs and diagrams in colossal sized PDF files and confusingly arranged websites with expensively branded logos, they are less good at business plans as history demonstrates. Under each assumption made by the DfT there are terminal flaws, and even then the sums don't add up - which is why no private company wishes to pay for it! (The sale of the HS1 to a Canadian pension fund has excited some, but that investment represents just one-third of that much more viable line's far lower build cost).

Projections by HS2 Ltd and the DfT show that the net operating profit over 60 years will only cover 42% of the capital construction costs, with those projections based on an unprecedented 267% increase in demand. No sane person would invest their money into a business that will take a century or more to recoup the purchase price even when being wildly optimistic, yet the government wishes to invest ours in just that - and this is only phase one, wait until the costs of the Y-spurs across the rugged northern countryside are released after this consultation, at which the government will as usual say that they've started so may as well finish to make good the already sunk costs.

But whilst the costs stack up, it's also the case that a 267% increase in demand is very unlikely and that reality will see nowhere near the growth projected: HS2 cannot expect the results of the TGV. In France the TGV had no real competition from other railways of any quality or speed and, most of all, by greatly reducing journey times the TGV opened up the cities of warmer climes - the UNESCO World heritage ste Lyon, former Papal seat Avignon, glamorous St Tropez - to commuters for the first time. With no disrespect, HS2's destinations sadly do not have the draw to wealthy commuters of Southern France with its Mediterranean weather; and unlike those French towns our great northern metropolises have been served by commuter services for well over a century. We cannot expect the same uptake or "big bang" arrival. There is simply no business case for HS2.

The current favoured argument of the HS2 lobbyists, however, is the economic one - narrowing the north-south divide - which they claim makes HS2 vital. It would be nice to think - as many genuinely do it seems - that HS2 will transform the North into an economic powerhouse; the Transport Secretary indeed seems to think that Birmingham will be the new Lyon (it's worth noting here that Birmingham is already quicker to reach from London by rail than Lyon is from Paris, so surely it would be like Lyon already if journey times to the capital were the key factor).

This argument has to be judged however on two criteria: economic impact, and opportunity cost. First there is the economic one, will HS2 boost the economy of the North? The answer is a rather muted one. The DfT projections show that HS2 will accrue £32 billion of benefits over 60 years, however £19 billion of these are "time savings" made by passengers over this time. In a trick of accounting worthy of Gordon Brown and twist of spin worthy of Alastair Campbell, the DfT are claiming that every minute saved from traveling time by every passenger can be effectively joined up and valued at an hourly rate of - quite unbelievably - £70 per hour! That I think is very over optimistic: most passengers will simply not get up quite as early and choose to get home a bit earlier to watch Emmerdale rather than unilaterally extend office hours by a few minutes.

It also rests on the assumption that time spent on a train is wasted time of zero productivity, when in reality for many it is very productive via emails, laptops, reading, etc. Finally this calculation relies on there being huge numbers of passengers, with even slightly less than their 267% growth projections proving even more catastrophic for the already atrocious economic benefit figures than such a miscalculation would for the fictional business case.

The remaining economic benefits are all equally spurious, resting on what they term "wider economic benefits" and fail to define much further. This is where the opportunity cost of HS2 becomes apparent. Despite what some people think, you cannot spend the same money twice; every penny sucked up by HS2 is a penny cut from other budgets, denied to other projects, or raised in taxes - today or in the future via debt - and thus taken out of the productive private sector.

The wider economic benefits of HS2 must then be measured not against doing nothing - as the Department for Transport has - but against what else that money could achieve. (For the sake of simplicity I'll stick to railways, but equally you could compare HS2 to tax cuts, motorway widening as supported by the Federation of Small Businesses, reducing fuel duty, etc). Here a little knowledge of our nation's railways helps a little as - contrary to popular belief - our railways are pretty good compared to our European rivals.

Built by private railway companies in the Victorian era, our network is one of the best in the world. Speed wise, though they are not "high speed" by the European standard, they are not low speed (what they bizarrely call "classic") by their standards either; most of our northern cities can be reached within 2 to 3 hours from London. Indeed our country's 5 largest cities can be reached faster from the capital than their comparables in any other major West European country, including France and the much lauded TGV.

These countries needed high speed rail as their cities are far further apart than ours and their "classic" network - the French one almost entirely State built during the 1800s - painfully slow and poorly constructed compared to our privately built engineering wonders. The problem in Britain however is not journey times - already faster to most major metropolises than those served by the TGV - but capacity. Yet for all its cost HS2 will do very little for capacity - as it only serves Birmingham northwards and the worst crowding is from the West Midlands southwards - and do nothing for well over a decade. Yes it will eventually take some long distance inter-city services off the West Coast Main Line and Midland Main Line, but for far smaller amounts of money capacity could be increased through electrification, lengthening platforms and longer trains. And for the sums we're talking about, regional intercity - rather than just London-centric intercity - could likewise be improved.

There is of course a limit to the capacity we can achieve on existing lines, but we are far from this maximum potential and we cannot spend money twice; it is an either/or choice. Indeed before politicians decided high speed trains were a nice and shiny toy with which to buy northern voters, even Network Rail deemed pure high speed lines unnecessary and a bad use of funds that could be better spent elsewhere; their alternative - the £2 billion Rail Package Two - provides 33% more capacity than HS2 and a benefit to cost return of 3.63 whilst - even when rigged - HS2's is a measly 2.4.

There is quite simply no economic case for HS2 as proposed, though there is an economic one against it if rebalancing the north-south divide is a priority; with a majority of passenger journeys expected to be for leisure and originating in Birmingham and the North, some economists are warning that HS2 will worsen the divide by shifting consumption towards the capital (as occurred with the Paris-centric French railway network both in the 1800s and since the arrival of the LGV/TGV).

The final argument for HS2 is a rather bizarre environmental one. Once upon a time there was an environmentalist called Swampy - remember him? - who made his name protesting against roads and such projects through camping out near by-passes much to the amusement of the television news. I was only very young but the image stuck in my head that environmentalists cared about the countryside; how things have changed!

Though the Green Party in a brief moment of sanity - if unusual logic - have voted to oppose HS2, many supposedly "green" people are now the nation's top advocates of environmental destruction. Whether wind farms or rail links, beauty must be sacrificed to marginally reduce our CO2 output by an amount so insignificant it can't be measured. Yet here again HS2 falls short. Rather than being "green", HS2 Ltd admits that the line is at best carbon neutral. It will not reduce CO2, as their projections are based on HS2 massively increasing travel. So being neither a business proposition or sound economic infrastructure investment, HS2 is also not an environmental policy either - and that's before you factor in the huge CO2 output from construction or the impact on the local environment.

Over the next five months of HS2 consultation we will hear a lot from lobbyists, a few genuine supporters and a lot of vested interests - operating often as AstroTurf campaigns, such as the "business leaders" writing to the FT last week - claiming that HS2 will transform the North, create "green jobs", boost the economy or save the ice caps. Beneath it all however is simple mathematic calculations and however optimistically I look at them, HS2 doesn't add up.

One of the first articles I posted on what was then called CentreRight was a cautious and disappointed welcoming of the then Labour government's decision to look into high speed rail. Since then a lot has changed in politics, but our dated view of rail as a rival to air and road over medium distances sadly hasn't. It's time the government scrapped this vanity project, and fast.


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