Is High Speed 2 worth it?

Recently, with the release of the proposed route of Phase Two of High Speed 2, the debate surrounding the project has resurfaced. With these additional details, it’s likely that the No campaign will intensify over the next couple of months. There is real potential for conflict, especially amongst the people who are affected by the proposed route. As with other big issues, it’s important to look at both sides of the story. Britain’s Rail Network is ageing and in many places capacity is a real issue. The country is also falling behind its rivals, such as France, who already have a high speed network. With this in mind, investment is needed. On the other hand it will be very expensive and as with other government projects the benefits are likely overstated, so it might not be such a great idea.

Supporters of the project claim the project has three main advantages: modern infrastructure; lower journey times and economic benefits for the whole country.

As with most of types infrastructure other countries such as Germany and France have increased investment over the past few years, meaning that the UK is falling behind. These countries already have high speed networks as well as having new hub airports. In the UK, capacity is a real issue, with many of the main services including the West Coast Main Line running many times over capacity at key times. A new high speed rail network would help to improve this, while also modernising the system to take advantage of modern efficiencies rather than being based on a largely Victorian design. If designed correctly a modern system could set up the country for many decades to come.

Lower journey times are an obvious advantage of HS2, with the government suggesting that journey times between major cities will be around 1 hour faster, so people would spend less time travelling and more time working and being productive, adding to the economy. In turn, connections between cities would mean in theory that businesses spread out more, potentially placing offices in Manchester rather than all in London. Despite this, it could actually result in the opposite as people find it easier to get into London. Furthermore, the assumptions suggest that time spent on rail is a waste, but with laptops, iPads and iPhones that have constant internet connections, many are now able to work while travelling so it isn’t wasted time. Of course a lot of this assumes that people are able to get a seat and potentially a table, but passengers travelling in first class already do.  At the same time, with our country being so small, transit times between major cities are already low compared to other countries, so the 20 minutes saved when travelling to Birmingham isn’t actually as big a benefit as it first appears.

Governments are also suggesting that the network will help to reduce the North/South divide that is likely to become a much bigger issue over the years. The theory suggests that the new stations will help to regenerate the areas, while also providing faster connections so that the other regions aren’t neglected. Supporters of HS2 have claimed that rich London commuters could decide to live in Birmingham, bringing new money into the area. If this happens, the country would really benefit with a more sustainable and equal development path. However, yet again, in reality I don’t think this will happen. People wouldn’t relocate from places like Milton Keynes, which has good rail links and potentially Crossrail, just to save 20 minutes especially if the cost of a Season Ticket on HS2 is much higher. Companies like banks who the government would like to move support facilities to places like Manchester are also unlikely to be bothered, with transportation being a relatively small expense. Instead, we’re likely to see effects which could increase the divide, as London benefits but others don’t – basically a “suck-in” effect. London would just get richer while the areas North of Birmingham get poorer.

However, a lot of these benefits are based on demand forecasts, which help to formula running costs and profits. If these are incorrect the whole project is likely to be unprofitable, leading to more issues. While we could usually assume that demand will meet expectations, as capacity on current rail lines is already near current limits, the government has got this wrong in the past. High Speed 1 the line which connects London to the Continent experienced the same problem. Many years later demand doesn’t meet predictions and the government is having to write off a large part of their investment. There is so much additional capacity that a service from St. Pancreas to Stratford International could run 12 times per hour during the Olympics without any knock-on effects. If the same thing was to happen to HS2, it would all be a waste of money.

In addition to potential demand models, they are based on another assumption that seems rather difficult to defend: that the average traveller will have an income of around £70,000. I believe that the assumption is unlikely to match reality as although London commuters have higher than average incomes they are unlikely to travel regularly to Newcastle and utilise all of the line. Current rail prices are already high with even many commuters simply finding the cost unaffordable, so with HS2 cost being even higher, it seems like potential ticket prices make the policy seem bad value before planning even begins. It’s possible that many people might avoid HS2, sticking to the current rail lines at cheaper prices, meaning capacity would remain tight on those while having very few people moving over to the brand new system.

Central to many of these negative points is the cost. At £160 million per mile, it would the world’s most expensive railway. As with any government projects the final cost is likely to be even higher. You can argue that it needs to be done anyway, but in time of fiscal tightening, all projects need to be value for money. Of course our rail network needs to be improved, but alternatives should be fully considered first. Projects such as the Northern Hub and the Great Central Railway could be reintroduced to meet demand. On existing lines, platforms and trains could be made longer.

Another problem is the length of time for construction with the first trains not running on Phase 1 until 2026 at the earliest which in turn will help drive costs higher. This is simply too long, with China able to build something similar in just 2 years. Of course part of this is due to consultations and compensation that takes place in the Democratic United Kingdom, but it’s something to consider. There is no reason why China would be much quicker than the UK, apart from the inevitable legal battles that add years to the timescale and drive up the costs, lining lawyer’s pockets. When the project is complete, it’s likely that a new form of high speed rail currently being worked on in Japan and the UK would be finished making HS2 outdated just as it begins.

Looking to the future, I believe there are even more flaws. With Silicon Roundabout, Canary Wharf and the regeneration of East London, the Central Hub of London is moving to the East. Euston is the planned terminal for HS2, so this too could be in the wrong place. Instead, I believe Stratford should be used, as it already has the spare capacity and has great connections into Central London already. At the same time, it could provide better connections to the Continent with services already using Stratford International. If that isn’t enough, it would also provide a better link if a new airport is built, likely in the Thames Estuary region. A new airport could even be ready before HS2 is complete, so this is really something to consider. If Euston is used, travellers might still prefer flying, being able to jet straight into the new airport before flying to India, rather than getting into Euston and having to spend over an hour getting across London with baggage.

Overall, although it seems that there would be benefits for HS2, there are also many disadvantages that really need to be considered. In a time of fiscal consolidation every project needs to be looked at to ensure that it isn’t a waste of money. While something needs to be done about our rail network, alternatives might be a better idea, especially as the evidence and experts suggest that the benefits to HS2 would be overestimated. At the same time, the plan isn’t as good as it could be, with Euston being outdated as London moves to the East while also forgetting a potential new airport located in the Thames Estuary. The lessons from HS1 need to be considered before anything is done, and with a new Hub Airport, such as London Medway Airport, bringing a lot more benefits while being mostly financed by the private sector, potentially that should be considered first. After all, it’s likely that the project could be completed before the first train even runs, allowing us to catch up to our rivals in Paris, Doha and Berlin even sooner.

One response to “Is High Speed 2 worth it?”

  1. A very interesting and insightful article but I would like to address several of your points.

    Capacity

    Capacity is the main driver behind the development of HS2. Network Rail forecasts the West Coast Main Line (WCML) will be reach capacity by 2020, and as you alluded to, peak time services are already at capacity. Rail demand has proven resilient over the five years growing at an annualized rate of 5% despite above inflation price rises.

    One approach to meet this demand is to maximise capacity on the current network. Rail Package 2 calls for £9 billion worth of investment, introducing slightly longer trains and upgrading signalling producing a useful increase in capacity. However it would fall significantly short of meeting anticipated future growth. It would also effectively turn the WCML into a passenger only route driving substantial freight traffic onto the already congested road network.

    The only viable alternative to meet future demand is to add an additional two tracks between London and the Midlands. The Department of Transport (DfT) considered adding an additional two tracks as close as possible to the WCML but on a route that would allow 250kph operation. However the proposal was quietly dropped due to astronomical cost of routing the line through the mainy urban areas along the route. Other alternatives such as reinstating the Grand Central Line while providing an additional two tracks north-south, its alignment prohibits serving Birmingham, making it impractical as a relief for the WCML. Projects such as the northern hub are certainly welcomed however they will not address the capacity issue on the WCML.

    HS2 will provide adequate capacity to meet the growing demand for intercity traffic. Moreover it will also benefit commuters on the current WCML between London and Birmingham. By moving intercity traffic to HS2, the released capacity on the WCML would allow for increased regional and local services. Additionally as these services have similar calling patterns and more homogenous speed profiles even greater capacity can be achieved than at present without the need for expensive upgrades to additional infrastructure.

    Developing a high speed line (300kph+) is approximately 10% more expensive than a conventional line but provides significantly greater capacity and greater agglomeration benefits as the level of economic interaction between neighbouring economic centres increases.

    Economic Case, Costs & Forecasts

    HS2 forecasts of demand for rail assume a conservative 2% annualised growth rate compared to an historical average of 5% over the last decade. These forecasts are independent of those used in the tendering process for the WCML franchise and have been independently verified by several different consultancies including Atkins.

    The Benefit Cost Ratio (BCR) for phase 1 and phase 2 are 2.0 and 2.6 respectively. Incidentally phase 1 costs the same and has the same BCR as Cross Rail. The business case does not include any wider regional befits that may occur. Admittedly the original business case did assume zero time spent on trains was time lost HS2 has since factored in these consideration and they make little impact on the BCR which remains well above 1. While passengers in first class may have a guaranteed seat the majority of passengers carried by WCML travel in standard class where the lack of capacity as a significant impact on passengers productivity.

    While the HS1 demand forecasts proved to be overly optimistic HS2 forecast are conservative by comparison. In fact much has been learned from the HS1 experience. Moreover HS1 was actually delivered on time and to budget, as have several recent major UK infrastructure projects.

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