The Treasury dislikes HS2. Labour is equivocal. Tory backbench opposition could kill it off.

By Paul Goodman
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When David Cameron, Nick Clegg and George Osborne all rally round HS2 within the space of a few days, you know that it may never leave the station. Alistair Darling and Peter Mandelson have come out against the plan.  Owen Paterson is said to be doubtful, and determined to kill it. The CBI is equivocal. However, the biggest threat to the project comes in a pincer movement from Labour's front bench and the Treasury.  Ed Balls could make great play of the billions of pounds which cancellation would allow him to spend elsewhere - however ropey such calculations may be.  And Nick Macpherson, the Treasury's Permanent Secretary, said earlier this week that the scheme may be scrapped after all: he was reflecting the Treasury's institutional resistance to its rising costs. 

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Is there anyone left who still supports HS2?

By Mark Wallace
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Things just keep getting worse and worse for HS2. After the IEA's cost warning, the revised financial estimates by Treasury officials and the criticism of the scheme by Alistair Darling and this site's own Tim Montgomerie, now it turns out even its target market don't want it.

A survey of 1,300 business leaders, carried out by the Institute of Directors, shows that 70 per cent think that HS2 offers them no improvement in productivity.

Aha, supporters cry, of course the majority wouldn't expect to benefit directly, as HS2 is targeted at particular regions. That's true, but unfortunately for them only 29 per cent of the business directors polled in the North West think it offers good value for money.

There's also a handy reminder that Yorkshire and the North West are not the sum total of "the North" - support in the neglected North East is even lower. In fact, in no region of the UK do more than 35 per cent of those polled think HS2 is good value for money - and this is from a survey carried out before the IEA and Treasury's higher cost estimates were released.

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Scrap HS2 and scrap it now

By Tim Montgomerie
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It's been another terrible week for the Coalition's High-Speed Rail 2 project.

It began on Sunday with an IEA report which warned that costs for the project might eventually exceed £80 billion.

Then two days ago the FT reported that Treasury officials (not the Chancellor) were also worried that costs for HS2 might reach £73 billion.

Today the former Chancellor, Alistair Darling, uses an article in The Times (£) to call for the termination of the project. Mr Darling has previously expressed his scepticism about a project he once gave the green signal to but, worried at the latest cost projections, he has now become a firm opponent.

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Three reasons why Cameron wants to stick with HS2

By Paul Goodman
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There is a double-edged case against the Government's H2 project, whether one believes in high speed rail or not.  If one doesn't believe in it at all, it follows that the £50 billion that will be spent on the plan (or whatever the sum eventually turns out to be) would be better spent on other communications projects - including high speed broadband as well as rail.  And if one does believe in high speed rail in principle, it is all arse-about-face to plan the HS2 route first and airport expansion later.

This logic is eating away at business and political support for the scheme.  The CBI has said that HS2 needs to "wash its face" after the latest escalation of costs, and Peter Mandelson has suddenly labelled the project "an expensive mistake".  Although Labour repeated its support for the scheme after his remarks, it was scarcely likely suddenly to announce a change of view.

Nonetheless, opponents of the project claim that Maria Eagle, the Shadow Transport Secretary, is keenly aware that the plan will do nothing much for Liverpool (where her constituency is), and Ed Balls is bound to have an eye to the costs.  In doing so, he is reflecting traditional Treasury caution, which some also claim to detect in George Osborne.  Philip Hammond is known to have considered, when Transport Secretary, the merits of a review.

Why, then, is the Government pressing ahead with the plan?  I think there are three main reasons.

• David Cameron's personal commitment to HS2.  The Prime Minister has bought hook, like and sinker into the Andrew Adonis-inspired logic of building a new line rather than refurbishing an old one - and seems to share with the former Labour Transport Secretary, a tenderness for this grand projet.  One critic of the plan told me that in his view HS2 has become a legacy issue for Cameron - and once Prime Ministers have settled on legacy issues, it's very hard to budge them.

• “I am in blood/ Stepp'd in so far, that, should I wade no more,/ Returning were as tedious as go o'er." In other words, it's relatively easy for a government to commit to a grand scheme such as HS2, but extremely hard for it to escape the commitment.  Cancellation would bring with it both an actual and reputational cost.  It would also expose the Government to Labour attack, which is especially feared given the third reason, namely -

• HS2 has become a symbol of Conservative commitment to the midlands and north.  This may seem strange, since some polls find that the project is no more popular there than elsewhere.  But local councils and chambers of commerce near the route are generally for the plan, and cancellation would expose Downing Street to assault from them, too.  HS2 will be pushed near the front of some Tory MPs' manifestos in 2015, curious though that may sound.

Furthermore, Cameron will be well aware that the scepticism-to-hostility the scheme arouses elsewhere isn't reflected in the Commons, where Conservative opposition tends to come from MPs who are directly affected by the route (most noticeably in Bucks) and fiscal hawks.  There are not many Bucks MPs, and there are fewer fiscal hawks on the Tory benches than one might believe.

Very simply, HS2 isn't research on animals or the Iraq War or same sex marriage: MPs aren't been lobbied by their constituents to vote against it.  So they don't.  The project will grind on; successive Transport Secretaries will come to the Commons with fresh and bigger estimates of the cost; most MPs will turn a blind eye - and it will stagger its way to completion when we are all even older, unless the courts or Treasury civil servants kill it off first.

The Government should speed ahead with an 80 mph limit

By Harry Phibbs
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The splash in The Times this morning is taken from their interview with the Transport Secretary, Patrick McLoughlin, who is shelving the plans of his predecessor, Philip Hammond, who said that raising the speed limit "would bring hundreds of millions of pounds of economic benefits from faster journey times." 

The report adds:

Last May Mike Penning, then the Roads Minister, announced that he would set up 80mph trials on parts of the motorway network. Only last week his successor, Stephen Hammond, told a motoring forum that the initiative was still alive and suggested that trials would be held next summer.

However, Patrick McLoughlin, the Transport Secretary, made clear in an interview published in The Times today that the plans had been dropped.

“Look that’s not a priority, to be absolutely honest,” he said. “You would have to do trials in certain areas so it’s not something that’s a high priority.”

Why isn't this a priority? Measures to boost economic growth are supposed to be. The explanation given for the change, that women voters oppose it is contradicted by the same report:

A survey of 13,000 drivers conducted for the AA found that 63 per cent of drivers were in favour, including 73 per cent of men and 53 per cent of women. However, 41 per cent of women drivers think that the limit should remain at 70mph.

So most women would favour the change - it is just that the majority among men supporting it is even greater.

However another explanation is offered: 

A source close to the Transport Secretary added: “This is not going to happen with Patrick McLoughlin as Transport Secretary. Safety is paramount to him and his view of how to run the roads and he would not be confident about how you would do it.”

There will always be scare mongering from campaign groups. There are also the vested interests of those in the road safety industry whose salaries are paid by the fines from speed cameras.

On the other hand some will have genuine concerns. It is responsible to hold trials in case the concerns that acccidents would increase are valid. However international comparisons show evidence to the contrary. The United States has among the lowest speed limits, but has the same fatality rate as Germany which has no limit. Increases in speed limits in various parts of the US  coincided with reduced accidents.

Perhaps there was less bunching. Perhaps motorists were concentrating on their driving rather than looking out for police cars or cameras.

That last point is not only about safety but also the rule of law. A law that is so unreasonable and so widely flouted not only wastes police time but also undermines the authority of the police.

Mr McLoughlin should get Mr Hammond's proposal back on the road.

Unsexy perhaps, but deadly serious - the Coalition must not fail on infrastructure

By Mark Wallace
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Infrastructure is never going to be the sexiest part of the deeply unsexy field which is public policy. But it is just about the most important - if it goes wrong. 

There are few rewards given to politicians who get our transport, digital and energy systems right. In the short term, they are bashed over the head by pressure groups and people who don't like planned developments in their neighbourhood. If things go well, then the economic benefits take sufficiently long to become clear, and are so wide-ranging, that the ministers who made the right decisions in the first place rarely get the credit they deserve.

If these systems break down, or go over budget, though, there is immediate hell to pay. Power cuts, unaffordable energy, rail delays, endless traffic jams - few things make the electorate more furious, understandably.

So the Government must not ignore today's infrastructure headlines.

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Osborne said to be considering introducing tolls on motorways

By Matthew Barrett
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The top story for a number of newspapers this morning is that reports suggest that George Osborne is considering introducing tolls on a number of existing major motorways in order to fund new road building.

"Aides to the chancellor" told the Financial Times (£) that the plan is "under consideration". However, the same newspaper reports that, whilst David Cameron is supportive of the idea, he will only want to implement it if he can neutralise the impact on motorists. The Guardian suggests "a cut in fuel duty and excise duty" for certain drivers could be the Government's remedy for any backlash against tolls.

The Daily Telegraph has more details of the proposals:

"Reforms that could give private investors control over Britain’s biggest roads will be included in the new policy agenda for the second half of the Coalition due next month... The private managers of the roads would then be allowed to levy tolls on any new capacity they provide, such as new lanes or bypasses. Existing roads that are “improved beyond recognition” by private managers could also be considered for charging, sources suggest."

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What will George Osborne do about fuel duty?

By Peter Hoskin
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In the end, last night’s vote on fuel duty did not yield the scare it might have: Tory backbenchers voted overwhelmingly in support of the government, and against Labour’s motion to postpone the 3p rise in duty that is currently planned for January next year. The government’s majority was 48.

But this victory may actually have been less easy than it looked — for, to stave off a rebellion, it appears George Osborne hinted that he will do something about fuel duty in the forthcoming Autumn Statement. As Robert Halfon put it yesterday, “the Government is in strong listening mode.”

This is not necessarily comfortable terrain for the Chancellor. He has already postponed the 3p rise on two occasions — and the fiscal conservative in him, eager to reduce the deficit, might balk at denying the Exchequer this money for another few months. This Osborne might want to draw a line in the sand before a third delay becomes a fourth, which becomes a fifth, and then a sixth, and so on.

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Cameron plays the “national leadership” card against Boris

By Peter Hoskin
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Boris having a dig, even just a friendly dig, at the Tory leadership? We’ve seen that a thousand times. But the Tory leadership having a dig at Boris? That’s a rarer species altogether, so it’s worth pasting into our collective scrapbook. Here, as recorded in today’s Times (£), is what David Cameron had to say yesterday about the Mayor of London’s opposition to a third runway at Heathrow:

“The Prime Minister said that the Mayor of London was wrong to rule out a third runway at Heathrow on the morning that the panel charged with studying the aviation needs of the capital was announced.

He also made clear that Mr Johnson would not have a veto over a once-in-a-generation decision that was critical for the country as a whole. ‘In the end the decision is a national decision that the Government has to lead,’ Mr Cameron told The Times. ‘What is not right is to say, I only want my options considered and not anyone else’s.’”

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Boris attacks the Government's "lamentable" airport plans, which could cause an "economic catastrophe"

By Matthew Barrett
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Boris Johnson has lobbed another grenade at the Government this afternoon, in a speech to aviation experts at City Hall. The Mayor criticised the Government's Heathrow plans (as if Patrick McLoughlin wasn't dealing with enough at the moment) as being "lamentable" and setting Britain on a course for "economic catastrophe". A section of the speech released to the press said:

"The Government programme to address the looming aviation capacity crunch in the UK is far too slow and I am hugely concerned that their intended timetable sets a course for economic catastrophe. This continued inertia is being fully exploited by our European rivals who already possess mega hub airports that they intend to use to erode our advantage. I will continue to work with the Government and the Davies Commission; but the urgency of the situation and the lamentable attention that the Government has paid to this pressing issue has forced me to accelerate the work that I will do to develop a credible solution.”

It's worth noting two things. The first is that this speech is unlikely to have been thought up over the last 48 hours, and so his comments are probably badly timed rather than calculated criticism to add to the Government's transport worries. The second thing to note is that instead of simply calling the Government's behaviour "lamentable", the BBC's Chris Mason tweeted that Boris actually used the words "lamentable, blind and complacent". That certainly would suggest a ramping up of the level of criticism.

The timing of it is all rather unhelpful. One can see Boris' point of view: on a basic level, the Heathrow runway is not the right road to go down (what happens when the "unashamedly pro-growth" crew demand a fourth runway?), and on a political level it would alienate plenty of the Tory voters Boris, or any Conservative in London or the country at large, needs to be re-elected). But did he have to say it all so close to the beginning of Conservative conference?