A firm prediction... HS2 will never happen

By Tim Montgomerie
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That's my firm prediction and I think Lord Adonis, the Labour Transport Secretary who pioneered the idea, knows it too. Earlier this week he accused the Government of dither and delay over what was once thought to be a flagship environmental and economic project.

Three things have changed the Government's view of HS2. The two most important factors are the rising cost of the project - partly because extra tunnelling has been promised to protect the countryside but also because costs of these projects nearly always run out of control - and secondly new doubts about the perceived benefits of the project. These doubts will be heightened by today's Sunday Telegraph story from Andrew Gilligan. He reports that a Department of Transport analysis into HS2's benefits was suppressed after it questioned whether the giant scheme would produce anything like benefits that had been claimed it would bring. The original claim was that HS2 would cost £17 billion but produce benefits of £23 billion. Estimated costs have already risen by 10% to 30% while the benefits may have been grossly overstated.

The third factor is the politics. The Tories were willing to swallow unhappiness amongst shire Tories if the project won support in target northern seats. Again both sides of this equation have changed. The party leadership had calculated that neither Labour nor the LibDems as supporters of HS2 would seek to capitalise on southern discontent. They hadn't anticipated the UKIP factor. Nigel Farage has instructed all UKIP candidates in the south to campaign strongly against the hi-speed rail link and its impact on England's green and pleasant land. On the other side of the equation the project is not so popular in the North. By 53% to 32% northern voters told pollsters for Policy Exchange that HS2 was poor value for money. The idea of immediate rail investment - as advanced in the Alternative Queen's Speech - might prove more compelling.

George Osborne - behind last week's scepticism on windfarms - is thought to be leading the change of heart. The Treasury has always been sceptical of 'grand projets'.