The Economics of High Speed 2
CHAPTER 1: AN INTRODUCTION TO HIGH SPEED
2
"This is the age of the train"
"The train can whisk you to your destination
at speeds up to 125 mph in air conditioned comfort. With special
ergonomically designed seats it allows you to forget you ever
suffered from cramp and back ache. And instead of admiring the
boot of the car in front you can admire the scenery. If you've
work to catch up on before a meeting, the train is the ideal place
to do it. And after the meeting, instead of the long drive home,
you can start to unwind."[1]
1. In the late 1970s and early 1980s, Britain
had one of the "most exciting" inter-city schedules
anywhere in the world: "Only Japan could seriously rival
Britain for the sheer number of trains operated at 200 kilometres
per hour (125 mph), then regarded as the threshold for high-speed
operation."[2] This
was the result of the InterCity 125, first introduced by British
Rail in 1976. It was viewed as an immediate success.[3]
An advertising campaign from British Rail proudly declared that
"This is the age of the train."
2. Since that age, other countries have caught
up. In September 1981, two months before the advertisement quoted
above appeared in The Times, President Mitterand inaugurated
the Train à Grande Vitesse (TGV), the French high speed
train which covered the 260 miles between Paris and Lyon at a
top speed of 260 kilometres per hour (160 mph). France has built
a further nine lines and the network today spans over 2000 kilometres
with a maximum speed of 320 kilometres per hour (200 mph). Four
further lines are under construction. Germany, Italy and Spain
also have intercity rail networks capable of speeds of 300 kilometres
per hour (185 mph). Other countries including China, South Korea
and the United States are building new high speed lines.
3. In January 2012 the Government committed itself
to building High Speed 2, a railway designed for speeds of up
to 400 kilometres an hour (250 mph). Is there substance to the
claims of some critics that High Speed 2 is merely a costly vanity
project; 'who has the fastest train' a proxy for the "global
race"?[4] Or are the
British Chambers of Commerce right to be concerned that:
"A U-turn on HS2 would be a turning point
for the UK economy. It would be a signal that Britain has
a poverty of national ambition, satisfied with third-rate infrastructure,
and unable to make the most basic of decisions to support economic
growth"?[5]
What is High Speed 2?
4. High Speed 2 (HS2) is the Government's proposal
for a new railway line that will run from London via Birmingham
to Manchester and Leeds, to be built in two phases:
· Phase One: London Euston to a new station
at Birmingham Curzon Street via Old Oak Common in West London
and Birmingham International, serving Birmingham Airport, connecting
to the West Coast Main Line north of Birmingham.
· Phase Two: The line will be extended north
in two legs, one to Manchester Piccadilly ("Western leg")
and one to a new station in Leeds ("Eastern leg"). Intermediate
stations are proposed at Manchester Airport and Crewe on the Western
leg; the East Midlands and Sheffield Meadowhall on the Eastern
leg.
5. HS2 will be connected to the existing rail
network[6] which means
that some trains (known as "classic compatible" trains)
will be able to use the HS2 line to provide direct services from
London to Glasgow and Edinburgh via the Western leg, and Newcastle
via the Eastern Leg (passengers travelling to Edinburgh on the
Eastern leg would be required to change at Newcastle).[7]
Figure 1 above illustrates the HS2 line, lines that could provide
classic compatible services, and existing lines with the capability
for future connection to HS2.
6. The Government has set up HS2 Limited (HS2
Ltd) as the company responsible for developing and promoting the
project. The High Speed Rail (London-West Midlands) Bill, currently
being considered by a Select Committee of the House of Commons,
would confer the powers on HS2 Ltd to build Phase One of the railway.
The Select Committee provides individuals and bodies directly
and specially affected by the Bill with the opportunity to object
to the Bill's specific provisions and to seek its amendment. Phase
Two would require Parliamentary approval through a separate Act.
The reasons for building HS2
7. The Government's Strategic Case for HS2,
published in October 2013, states that the objectives of the
project are to:
· "Provide sufficient capacity to meet
long term demand, and to improve resilience and reliability across
the network; and
· Improve connectivity by delivering better
journey times and making travel easier."[8]
8. Capacity and connectivity drive economic growth,
claims the Strategic Case.[9]
9. We are fully supportive of investment in UK
infrastructure and, in principle, high speed rail. We agree that
the Government's should invest in the UK's rail network. In this
report we assess whether the Government has made a convincing
case that their specific plan for HS2 is the right investment
to make at this time and at this cost. We question whether alternative
investments have been adequately considered.
HAS THERE BEEN A CONSISTENT STORY ON THE REASONS
FOR BUILDING HS2?
10. We heard evidence that the Government's explanations
for why it is building HS2 have not always been consistent. Dr
Richard Wellings, Deputy Editorial Director and Head of Transport,
Institute for Economic Affairs said he "found it highly suspect
how the case has changed over time":
"It was supposed to be an alternative to
Heathrow expansion … Then it became all about the time savings;
then it was about capacity. Now it is all about rebalancing the
economy and bridging the north-south divide, which just shows
it is politically driven or, if you like, PR-driven."
[10]
11. The Department for Transport insisted that
the case for HS2 had always been about capacity and generating
growth. David Prout, Director-General of HS2 Group at the Department
for Transport, denied the case had changed over time: "the
[Labour Government's] 2010 Command Paper, which first set out
the strategic case, identified the need to provide a step change
in capacity and improve connectivity in order to support growth
and help re-balance the economy."[11]
12. Announcing the Conservative Party's support
for high speed rail at the Party Conference in 2008, Rt Hon. Theresa
Villiers MP, then Shadow Secretary of State for Transport, listed
three main benefits of high speed rail: relieving overcrowding,
generating "huge economic benefits" and closing the
north-south divide.[12]
13. Lord Mandelson, in his article 'Why I no
longer support a high speed railway line for Britain' for the
Financial Times in 2013, said that when the Labour Government
decided to back HS2, the decision was "partly politically
driven." He told readers to remember the context:
"We were emerging, or so we hoped, from
the worst financial crisis of our lifetimes. We were on the eve
of a general election and keen to paint an upbeat view of the
future. Such publicly built infrastructure projects seemed to
provide so much of the answer to our short and longer-term economic
and employment needs … this was about the limit of our collective
cabinet consideration. We were focusing on the coming electoral
battle".[13]
Should HS2 be part of a wider
plan?
14. HS2 is being developed without reference
to a National Transport Strategy because the UK does not have
one.
15. When considering whether a transport project
goes ahead or not, the Department for Transport carries out a
cost-benefit analysis. This method allows one project to be compared
against other projects to see which provides the best value for
the money. Some witnesses raised concerns that this fails to take
into account the wider context against which to prioritise projects.
16. Sir David Higgins, Chair of HS2 Limited,
told us that:
"[Cost-benefit analysis] is meant to be
a method of rating various infrastructure projects against other
infrastructure projects to determine which is the most important.
What would be nice, of course, would be to have a national transport
strategy against which to measure that; that would be a discipline
that would improve the whole debate on how you analyse individual
projects. We do not have that today."[14]
EXISTING ROAD, RAIL AND INFRASTRUCTURE PLANS
17. The Department for Transport have set out
investment plans for road and rail. The Road Investment Strategy
published in December 2014 set out a strategy and visions
for motorways and major roads in the UK and provided an investment
plan for the five years to 2020/21.[15]
The rail High Output Level Specification, published in 2012, "defines
the railway that the Government wishes to see by 2019" and
set out strategic priorities and funding for the period.[16]
18. The Government published a National Infrastructure
Plan in 2010. The Plan was intended to "provide a broad vision
of the infrastructure investment required to underpin the UK's
growth"[17] The
Plan has been updated every year since and the most recent 2014
version sets out all planned infrastructure investments, including
transport.[18] Lord Deighton,
Commercial Secretary to the Treasury, described the evolution
of the plan in the House of Lords Chamber:
"At the beginning, it was a little more
like a list of projects, but now it is a plan and is underpinned
by a clear strategy. We have a road investment strategy: it is
the road investment strategy which drove the list of projects
which then enabled us to put a five-year funding plan in place."
He continued that the "next step is to develop
a plan that addresses the UK's infrastructure needs in the much
longer term."[19]
A COMBINED PLAN FOR ROAD AND RAIL?
19. Professor Stephen Glaister, Emeritus
Professor of Transport and Infrastructure, Imperial College London,
noted the publication of the 2014 infrastructure plan but said
it did not consider:
"what the national needs are in surface
transport and how conventional rail, high-speed rail and road
contribute to those needs … there is never a discussion about
how the options of spending more on roads and less on railways,
or more on railways and less on roads, have been evaluated."[20]
20. These concerns were recently echoed by the
House of Commons Public Accounts Committee. In their January 2015
report, the Committee said that the Department for Transport "still
lacks a clear strategic plan for the rail network…the Department
should set out a long term strategy covering the next 30 years
for transport infrastructure in the UK, and use this strategy
to inform decisions about investment priorities."[21] Box
1: Co-ordinating transport policy in the UK—a brief history
| Sir Rod Eddington, author of a 2006 report on development of transport infrastructure, bemoaned the lack of progress towards a co-ordinated transport plan when appearing before the Transport Committee in 2007:
"We have historically taken a modal view of transport. We have thought about transport in its modal silos and not started with, 'What is our transport strategy?' … There has been a lot of talk about integrated transport in the past but my observations are that we have not done much about it."[22]
As early as 1933, the Road and Rail Traffic Act established a 'Transport Advisory Council':
"For the purpose of giving advice and assistance to the Minister of Transport … in connection with the discharge by him of his functions in relation to means of facilities for transport and their co-ordination, improvement and development."[23]
The Council was abolished by the Transport Act 1947.[24]
In February 1965, Harold Wilson, while Prime Minister, established another 'Transport Advisory Council' to "advise on transport in the longer term" and appointed Lord Hinton to study "transport coordination". In particular, Lord Hinton was asked to investigate "the pattern of long-distance transport services likely to be required in the future, with particular reference to the coordination of investment policies for road and rail."[25]
By November 1965, Gordon Campbell MP was wondering "what had happened to the integration of transport about which so much had been heard. Would the mystery of Lord Hinton's reports be solved?"[26] The report was never published.
A co-ordinated transport plan had become the subject of satire by the 1980s. Sir Arnold Robinson, Cabinet Secretary in the television series 'Yes Minister':
"The PM [is] keen to bring in an integrated transport policy. I suggested that Hacker could be the best man for the job, as he doesn't know anything at all about the subject. The Secretary of State for Transport, who knows a lot about it, won't touch it with a ten foot barge pole … I agreed that this job was indeed a bed of nails, a crown of thorns, a booby trap—which is why I suggested Hacker, of course."[27]
|
1 '15 minutes after the meeting started is no time
to wish you'd taken the train', The Times, 3 November 1981
(advertisement) Back
2
Railway-technology.com, Biting the British Bullet, September
2007: http://www.railway-technology.com/features/feature1217 [accessed
February 2015] Back
3
Matthew Engel, Eleven Minutes Late, 1st edition (London:
Macmillan, 2009), p 230 Back
4
The Prime Minister said in July 2013 that fast and efficient transport
infrastructure such as HS2 was required "if we want to be
a winner in… the global race." Speech at Bentley Motors,
Crewe, 23 July 2013: https://www.gov.uk/government/speeches/bentley-motors-qa-with-the-prime-minister-as-1000-new-jobs-announced
[accessed February 2015] Back
5
Written evidence from the British Chambers of Commerce (EHS0045) Back
6
The Western leg will connect to the West Coast Main Line north
of Manchester and the Eastern leg to the East Coast Main Line
near York. Back
7
Trains running only on HS2 track only would be higher, longer
and wider than trains in use in Britain today. They could accommodate
up to 1,100 passengers. Back
8
Department for Transport, The Strategic Case for HS2, October
2013, p 18: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/260525/strategic-case.pdf
[accessed February 2015] Back
9
Strategic Case, p 1 Back
10
Q98 Back
11
Letter from David Prout to the Chairman, 7 November 2014 Back
12
Rt Hon. Theresa Villiers MP, Speech to Conservative Party Conference,
Monday 29 September 2008: http://www.conservativehome.com/transport/2008/09/tories-promise-2.html
[accessed March 2015] Back
13
Lord Mandelson, 'Why I no longer support a high speed railway
line for Britain', Financial Times, 2 July 2013 Back
14
Q239 Back
15
Department for Transport, Road Investment Strategy Overview,
December 2014: https://www.gov.uk/
government/uploads/system/uploads/attachment_data/file/382808/dft-ris-overview.pdf
[accessed February 2015] Back
16
Department for Transport, High Level Output Specification (HLOS)
2012: Railways Act 2005 Statement, July 2012: https://www.gov.uk/government/publications/high-level-output-specification-2012
[accessed February 2015] Back
17
HM Treasury and Infrastructure UK, National Infrastructure
Plan 2010, October 2010, p 3: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/188329/nip_2010.pdf
[accessed February 2015] Back
18
HM Treasury, National Infrastructure Plan 2014, December
2014: https://www.gov.uk/government/uploads/
system/uploads/attachment_data/file/381884/2902895_NationalInfrastructurePlan2014_acc.pdf
[accessed February 2015] Back
19
HL Deb, 22 January 2015, cols 1424-25 Back
20
Q38 Back
21
Public Accounts Committee, Lessons from Major Infrastructure Programmes
(Twenty-Eighth Report, Session 2014-15, HC 709) p 4 Back
22
Oral evidence taken before the Transport Select Committee, 16
April 2007 (Session 2006-07), Q30 (Sir Rod Eddington) Back
23
Road and Rail Traffic Act 1933, section 46(1) Back
24
The Transport Act 1947 nationalised the railways and some other
forms of transport, handing control of them to the newly established
British Transport Commission. Back
25
'Transport Task Goes To Lord Hinton', The Times, 9 February
1965 Back
26
'Liberal Tinges Detected', The Times, 10 November 1965 Back
27
Jonathan Lynn and Antony Jay, The Complete Yes Minister: the
Diaries of a Cabinet Minister / by the Right Hon. James Hacker
MP, 1st edition (London: BBC Books, 1989), p 424 Back
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