High Speed Rail

Written evidence from David Miles (HSR 84)

The Proposed Building of the HS2 railway

The Business Case for HS2

HS2 is not a sound investment. Commercially it loses money. It costs £25.5bn, but only generates £15bn of extra fares. So Government turn to cost benefit analysis (CBA) to justify the expenditure.

The CBA claims its value for money (NBR of 2.7). But it’s based on heroic assumptions that underpin excessive demand and illusory benefits, with a flawed assessment of the alternatives to HS2.

On demand:

§ A huge increase in rail demand, some 267% - over 3½  times more than now. DfT both ignore the evidence of demand saturation for domestic travel generally and that the engine for rail growth is modal substitution.

§ DfT’s underlying model assumes a relationship with GDP that no longer exists (and not just in the UK)

§ DfT use out of date data that inflates forecast demand, ignoring recent analysis that give lower growth factors

§ Projected demand takes no account of new technology or Government’s own initiative to reduce travel

§ Domestic air travel is overestimated given the trends, inflating air modal shift numbers (and carbon impacts)

§ Car occupancy assumptions are too low which overestimates potential gains from cars

§ Despite obvious uncertainty only a single case for demand is presented, instead of a range of scenarios

§ The effects of competition (from classic rail) are assumed away despite the devastating consequences of inadequately anticipated competition for HS1, and Channel Tunnel.

On benefits:

§ Biggest benefit wrongly assumes businessmen don’t work on trains -so 30mins saved adds 30m productive time

§ Using 10 year old data assumes top draw earnings for rail business travellers (£70k/a in current money) unadjusted for a nearly fivefold increase in journeys by 2033. HS2 represents a regressive subsidy

§ The £5bn overcrowding benefits depend on implausible levels of crowding if HS2 does not happen

On alternatives:

§ HS2 is assessed against a ‘do minimum’ scenario that is an unrealistic alternative as it can not accommodate forecast demand (because it takes no account of overcrowding and its effect on choking demand growth)

§ DfT’s own alternative (Rail Package 2) is ignored despite meeting demand with less crowding than HS2, being cheaper (£2bn), better VfM (NBR 3.63), and delivering benefits incrementally, unreliant on long term forecasts

§ DfT justify rejecting RP2 on the basis it does not provide the surplus capacity that HS2 provides

§ 65% more capacity can be created on WCML with more rolling stock and hence without material disruption

On the recently claimed transformational benefits (to redress the north/south divide):

§ Wider economic impacts are already assessed in the business case, at just £3.6bn - only 11% of HS2 benefits

§ Any additional economic growth from faster connectivity assessed by Imperial College is small (£8/10m/a)

§ The redistributive effects will benefit London, UK’s dominant city, not the regions. DfT assume trips to London grow at twice the rate as those from London, and with 70% leisure travellers the result is obvious

§ HS2 Ltd say biggest regeneration opportunity is Old Oak Common (not outside the M25, or even the N Circular)

§ Respected experts say there is no evidence base to support such claimed benefits (Overman, Tomaney)

All this ill befits a government overseeing spending cuts of unprecedented severity.

To solve rail capacity issues does not require a new £30bn+ railway. Instead of spending £0.75bn this parliament on planning for HS2 it could have a complete but unglamorous solution for £2bn.

Government first focused on HS2 as part of the low carbon economy (although even HS2 Ltd says it is ‘broadly carbon neutral’); then the spotlight moved to its business case (but increasingly found it holed below the water line); it appealed to catching up with our EU partners (but little has changed since Eddington, we still have faster connections between our key centres); most recently it is economic transformation and breathing economic life north of the M25.

But moving the goalposts is a poor smokescreen to cover an ailing business case, failing to disguise that HS2 is a terminally anaemic white elephant.

These cost figures do not include the cost of blight compensation, compulsory purchase, new rolling stock and the development of a new generation of engines and rolling stock!!!! There has been no cost calculation for the additional electricity generation required or where these capital assets will be located. As one living close to the proposed route I am also concerned that compensation for "loss" will be restricted to property value and not even go near to quality of life or disruption during construction. The Secretary of State for Transport has said that compensation payments will be better than ever before, but has not published what these will be.

How can an economic argument be put forward in favour of HS2 when so many questions remain not only unanswered but also un-costed.

Such a huge financial commitment needs to be based on a certainty that it will provide national benefits and that those funds cannot be used better in other ways. Parliament needs to satisfy itself that HS2 will lead to significant economic activity in excess of its costs and that it will provide environmental benefits including dramatically reduced emissions of greenhouse gases. How it can do this with no stations en route is to say the least baffling.

A new high speed network would bleed the rest of the railway of money and care. What travellers want are boring unglamorous improvements to the services we actually use. This can be better accomplished with greater access to "all" the population by improving the existing corridors.

· HS1 network has already been shown to only be worth 60% of its costs. The rolling stock and train length levels have been cut and new trains cancelled as a result of inadequate demand. This on a line that DOES have stations.

· No weight is given to the importance of IT, which will result in a dramatic decline in the need to travel for both business and social purposes.

· HS2 Ltd has assumed that time on a train is wasted and therefore there is a monetary value assigned to time saved for all travellers. In reality most travellers make good use of time of a train especially for business purposes - it is not wasted.

· The value assigned to that time saved is exaggerated by HS2 Ltd and is equivalent to the average business traveller earning £70,000 per annum in today’s prices. This is clearly an overestimate of 150%! Research has shown that passengers want reliability and value for money much more than high speed.

· Faster journey times will only lead to people staying in bed longer in the mornings, not getting to work earlier, so no economic benefit there.

· Traffic and volume can be increased in existing corridors at seriously less cost, with the advantage of stations en route. These alternatives are of so much more benefit to the whole country but HS2Ltd ignores these economic issues as it has only one remit, therefore it can only be biased

· Using existing corridors will also significantly reduce the impact of the incredible noise levels projected for these trains. The HS2 Ltd noise survey has only been modelled using both the time trains are passing and when they are not so that it can demonstrate "acceptable" levels. This is nothing less than a "swindle" and you as a leader of this country cannot be seen as part of this. There is political expedient and there are down right lies!

· HS2 Ltd believes that an additional 135,000 passengers per day will use the line (existing usage of the West Coast Main Line is 45,000 per day) just because it exists. This is not sustainable argument and is wholly unproven, especially in an era when energy saving should be an every day habit.

Is High Speed Rail Environmentally Friendly?

· According to HS2 Ltd, HS2 will not reduce overall carbon emissions and will be carbon neutral at best. Even assuming there will be an increase in renewable energy production this will not create the low carbon economy claimed. It is much more likely to generate a net increase in carbon dioxide emissions.

· The number of passengers switching from planes to HS2, according to HS2 Ltd will only be 3.5 million per annum - less than 7% of all passengers using HS2 and less than 5% of all passengers using Heathrow. There is evidence that domestic flights to London have been in decline for several years. Therefore the "green" argument for masses of travellers switching to train is nonsense.

· The modal shift from cars and planes to trains will be small. Fewer than 2% of those driving on the motorways between Birmingham and London will switch to HS2. So what and who is this railway for?

· HS2 Ltd. assumes a worst case scenario for aviation emissions, when the CAA expects aviation emissions to show a significant improvement by 2030. If domestic flights are displaced by long haul flights HS2 will have triggered an increase in aviation emissions. This is a blatant attempt to load the dice in favour of a dream and the earning of the major contractors who will be involved.

· The carbon emissions generated by the construction of the line are significantly underestimated - the quantities of concrete, steel and stone required by HS2 will be colossal. So when will these emission be offset, 100 years?

· The energy used by high speed trains will be at least double that of existing inter city electric trains. If HS2 reaches speeds of up to 400 kph they may use more than 4 times the energy. Where is this coming from?

· HS2 Ltd believes the demand for through trains to the continent from north of Birmingham will be very low. This is consistent with the low numbers using the Eurostar services, which have stagnated. It will not significantly reduce the demand for short haul flights to the continent. According to the rail industry itself any journey taking more than three and a half hours is more likely to be taken by plane than train. So where is the economic argument in favour here/

· The countryside will be permanently damaged all along the line including the nationally protected Chilterns Area of Outstanding Natural Beauty. It calls into question why these areas are given a special status if they can be so badly damaged by the government. How will the economic "benefit" be attached here/.

Just in case you need reminding. There will be 14 – 18 trains per hour in each direction (28 – 36 trains in total). Operating hours for line are 5am – midnight.  Maintenance overnight. Noise levels will be 95 decibels at 25 metres (Health & Safety requirement to wear ear defenders at 85 db.) Trains will run at up to 360km/h (225 mph) with ultimate speed planned of 400km/h. Trains will be 400m long. Therefore noise will just about be continuous. How to you place an economic value to this?

HS2 is a delusionary dream with no real economic benefits. Politicians are not supposed to be dreamers.

21ST March 2011

Prepared 31st May 2011