- 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 the cost of the first phase but deliver negligible time savings.
- The government’s economic case for HS2 depends on estimates of demand growth that are very high compared with a range of previous forecasts for long-distance rail travel. The long timescale adds to the uncert