High Speed 2: the next government project disaster?

Challenging the economic case for this white elephant

Executive summary:

  • There is a significant risk that High Speed 2 (HS2) will become the latest in a long series of government big-project disasters with higher-than-forecast costs and lower-than-forecast benefits. HS2 is not commercially viable and will require substantial and increasing levels of subsidy. Taxpayers will therefore bear a very high proportion of the financial risks, which are wholly under-represented in the Economic Case presented by the Department for Transport.
  • The level of financial risk of HS2 is huge, far more than for the earlier HS1 (Channel Tunnel Rail Link). The estimated cost of £34 billion to construct HS2 is equivalent to £1000 per UK income-tax payer. Most taxpayers will derive no benefit from the scheme.
  • The wasteful allocation of resources is demonstrated by the ‘gold-plating’ of the HS2 route. The first five miles from Euston to Old Oak Common, for example, will add almost 25% (about £4 billion) to th