HS2 highly unlikely to transform the North

New HS2 research casts serious doubt on the government’s regeneration claims

The government risks misleading the public with claims that HS2 will transform the North of England. Independent economists have debunked the arguments about the benefits of faster journey times and the case for increased capacity. Now new research outlines the flaws in the government’s latest favoured justification for HS2: its regenerative effects on the economy and employment in the North.

In Failure to Transform: High-Speed Rail and the Regeneration Myth, Dr Richard Wellings studies the relationship between high-speed rail and economic performance, using the UK’s only example of a high-speed domestic rail service from London to Kent. The results suggest that it is extremely unlikely that HS2 will bring about economic transformation in the North. From 2010-2013, following the introduction of high-speed services, East Kent’s employment rate had fallen over 3 percentage points more than the national average.

Other constraints on the economic impact of HS2 include the negative effects of its enormous tax bill – estimated at £80bn including ‘off-balance sheet’ costs – as well as the risk of new technology undermining its purported benefits by the time of completion. Taken alongside the major flaws in the business case and capacity argument, a project which will only carry roughly 2% of passenger traffic when the full route is completed should be reconsidered urgently.

High Speed 1 and East Kent

  • Since the introduction of high-speed services East Kent has performed far worse in terms of employment than the rest of the South East and the rest of the UK. From 2010-2013 the average employment rate was 5 percentage points lower than during the pre-high-speed period examined, compared with falls of 2.1 percentage points for the South East and 1.8 percentage points nationally.
  • The impact of fast train services has been too small to counteract other more important economic factors.

Doncaster

  • Doncaster has enjoyed a fast rail link for several decades, with journey times to London broadly similar to the times HS2 would provide to some cities on the route. Despite its advantageous location, it was ranked 42nd worst out of 318 boroughs in England in a recent deprivation index.
  • Only 23% of Doncaster’s working age residents are qualified to NVQ level 4 or above, compared with a national figure of 35%. Low skills, poor education and little entrepreneurship have seen the town struggle to exploit the opportunities provided by improved transport links. Many places in the North on the HS2 route have broadly comparable socio-economic characteristics, calling regeneration arguments into serious question.

Adverse effects outside the HS2 route

  • The areas around the HS2 stations will be redeveloped if the scheme goes ahead. But these new districts will most likely be ‘Potemkin villages’ – examples of fake regeneration built for political reasons using large taxpayer subsidies.
  • Resources will be drained from other areas to fund these showpieces, restricting economic development outside public transport corridors. Whilst a large proportion of the costs will be borne by taxpayers as a whole, the benefits will go to a small minority.