No Minister

Councillor Martin Tett: No, we can't afford to build HS2

 

Let’s be clear. HS2 is Labour’s project. The creation of those great tribal Labour politicians Gordon Brown and Andrew Adonis. Dreamed up in the days of classic high-rolling, high-spending ‘Grand Projects’ typical of Socialist Governments everywhere. They set a political trap for the Conservatives, similar to the 50p tax rate, into which the Government walked, and now cannot seem to get out of.

 

Yesterday it was announced that before a single inch of track has been laid - the costs for HS2 had already escalated by another £10 billion from £33 billion to nearer £43 billion. (It had already gone up surreptitiously by £3 billion when the Heathrow Spur was dropped from Phase1). And of course that only buys you the track. The costs of the rolling stock in already an extra £8 billion (and sure to escalate as well) and, in cash terms, the operating costs will add yet another £16 billion. This is a phenomenal amount of money. Were it private capital one might be tempted to say "good luck" to the shareholders, but it is not. This is taxpayers’ money, and we have an obligation as Conservatives to ensure that such money is spent only when necessary, and wisely.

 

Were the business case for HS2 even passingly good it would be hard to argue against. As local authorities, we often have to push through schemes that residents don’t always appreciate but they must always pass the ‘good value’ test. The business case for HS2 is quite frankly atrocious. Almost every independent analyst has examined it and condemned it. Even the BBC’s Stephanie Flanders commented that it was difficult to find an economist who still supports HS2.

 

The so called ‘benefits’ case rests on the blatantly absurd assumption, drawing on research from a decade ago, that business people don’t work on trains. In an era of mobile phones, I-Pads and laptops this is self-evidently nonsense. In fact the DfT’s own more recent research (conveniently not used ) shows that train journeys are some of business people’s most productive time and that shortening journey times actually reduces productivity! When one strips away all the flawed assumptions in the Business Case for Phase One between London and Birmingham the project actually loses 60 pence for every taxpayers’ pound invested in it. The Business Case for the whole line is little better. How as Conservatives can we defend that?

 

Of course the default line of defence then becomes "well. we are running out of capacity". Interestingly, the DfT likes conveniently to blur the differences between suburban, commuter and intercity capacity when it suits it. The department’s own figures, dragged out of them in court after repeated Freedom of Information Request refusals, shows that the West Coast Mainline is only half full at peak evening times!

 

Is there a problem with some suburban and local commuter capacity? Yes, but this can be dealt with far more quickly and cheaply by upgrading the existing network and taking out ‘pinch points’ than spending the best part of £70 billion. In fact, the DfT’s own comparison shown that the so called ‘Optimised Alternative’ put forward by the 51 m Alliance of local authorities opposed to HS2 would meet all of the forecast capacity requirements for approximately £3 billion, and importantly now would not require a penny of public subsidy!

 

Finally, of course, the last card is played by the DfT of ‘North- South divide’ with the inference that anyone opposing HS2 just does not care about regional inequalities. However, as pointed out by the National Audit Office, the case for HS2 narrowing regional inequalities is unproven. Far worse, many experts believe that it will merely increase the strength of London in the national economy. The real issue here is the ‘Opportunity Cost’. In other words, what else could nearly £70 billion be spent on, and would it yield a far better return, not just to the hard-pressed taxpayer but also to all the regions of this country - to our great cities in the north, north east, as well as East Anglia and the South West?

The answer is of course ‘yes’. There are scores of transport and economic development schemes, locally and nationally, with great cost-benefit ratios which could revitalise our great cities and towns. It is not a question of HS2 or no infrastructure investment: it is that there are so many far better schemes in virtually every Parliamentary constituency in the country crying out for investment now and which would bring jobs and growth now when we really need it rather than in 2033. Ask any local business.

 

I’m really sorry that so many Parliamentary colleagues felt obliged to follow the whips yesterday into the Lobby on the HS2 Preparation, but giving a ‘blank cheque’ for a failed project just does not constitute an ‘engine for growth’, but rather a ‘black hole for money’. I hope that by the time of the main Hybrid Bill more colleagues will have asked the question: why have we fallen for Labour’s Trojan Horse and why are we not investing in far better schemes now?

Martin Tett is the Leader of Buckinghamshire County Council

June 27, 2013