Responding to the new KPMG analysis of HS2 commissioned by the Department for Transport, Dr Richard Wellings, Head of Transport at the Institute of Economic Affairs, said:
"The new research shows how desperate the government is to find new justifications for High Speed 2. This loss-making project fails the commercial test, while standard cost-benefit analysis shows it to be extremely poor value for money. The government has therefore employed consultants to boost the economic case for the scheme.
"Unsurprisingly the analysis is one-sided and unconvincing. It fails to take proper account of the substantial wider economic losses resulting from the enormous tax bill for HS2 and ongoing rail subsidies. Moreover, its conclusions are based on highly questionable assumptions about the relationship between improved transport links and economic activity.
"Just because cities such as London enjoy a combination of good rail connectivity and high output does not mean better links will produce comparable results elsewhere. Economic success is built on a wide range of place-specific factors which interact in complex ways. Real world examples such as Doncaster – one of the poorest towns in the UK - show that fast rail links are no guarantee of eco