High Speed 2 (HS2) is a deeply flawed scheme that will damage the economy by consuming resources that could be allocated to more productive uses. In commercial terms the railway will make huge losses, with taxpayers bearing the lion’s share of the costs Indeed, the government’s own models suggest that the first phase, from London to Birmingham, is only a ‘marginal’ project. A host of alternative road and rail schemes – many of them small-scale and incremental – have a far higher ratio of benefits to costs.
HS2 is therefore a very poor way to spend the transport budget. Worse still, the economic case for HS2 is based on a series of unrealistic assumptions that exaggerate the benefits and understate the costs.
Perhaps most ridiculous is the assumption that business travellers can’t work on trains. In the age of laptops and mobile technology this is clearly false. Yet it forms the basis of the time savings calculations that are central to the economic case for the new line.
The government also uses very high estimates of future growth in passenger traffic – much higher than most independent projections. If passenger numbers are lower than expected, fare revenues will be reduced and taxpayers will end up picking up an even larger share of the tab.
Read the rest of the article on the GovToday website.