On 28 January 2012, the Secretary of State for Transport, Patrick McLoughlin, announced the go-ahead for HS2, a 331 mile high speed inter-city rail network that will connect major cities in England.

HS2 is one of the most significant, and controversial, improvements to Britain's rail infrastructure in over a century and follows a public consultation on the national strategy for high speed rail which ran from February to July 2011.

The two phases of the route planned so far will take on a "Y" shape. Phase 1 will connect London to the West Midlands and is intended to become operational in 2026, and phase 2 will connect the West Midlands to Leeds and Manchester and this is intending to become operational in 2032. The rolling stock for the route has not yet been confirmed although the Department for Transport (DfT) has confirmed the trains would have a maximum speed of at least 220 miles per hour (350 km/h) and length of 200 metres (660 ft).

The new high speed rail network will reduce journey times between Birmingham and Manchester to 41 minutes and will reduce journey times between London and Manchester from two hours and eight minutes to just 68 minutes. Leeds and Manchester will both have new terminals built alongside existing mainline stations in their city centres.

The need for effective solutions to overcome capacity constraints is a pressing concern for UK rail. Passenger journeys have increased by 92% since privatisation in 1995. By 2020, a further 400 million journeys will be made, with growth in demand especially pronounced in long distance travel. The DfT argues that HS2 will divert long distance services to the North, thereby freeing up paths on the West Coast Mainline for increased local and regional services as well as for more freight trains, where demand has also witnessed strong growth.

The DfT has put forward the economic case for HS2, arguing that it will support economic growth in the North, with significant benefits to cities such as Birmingham, Manchester and Leeds. The DfT claims that HS2 will generate £47 billion in user benefits to businesses when the entire network is completed, as well as between £6 billion and £12 billion in wider economic benefits, with a cost benefit ratio of £2 for every £1 invested. The basis for these claims relies on the assumption that reducing journey times and increasing capacity will allow companies based in the North of England to compete for market share in the South and encourage labour mobility. The proposal also appears to have public support. Polling by the DfT suggests that 56% of adults agreed that high-speed rail would be better for the environment while 63% thought it would create jobs and growth.

Nevertheless, the proposal has encountered strong resistance with lobby groups such as HS2 Action Alliance and the Taxpayers Alliance arguing that the economic case and capacity improvements promised by HS2 have been overstated. Concerns have also been expressed that as HS2 will not connect to either Heathrow airport or the Eurostar terminus at St. Pancras, the benefits of the development will flow disproportionately to the South in giving better access to markets in the North and, perversely, compounding rather than reducing the North/South economic divide. The Greater London Authority has also expressed reservations that HS2's connection to Euston station will result in severe capacity constraints at the London terminus, requiring additional rail improvements, dubbed "Crossrail 2", to deal with increased passenger flows.

Two judicial reviews have been brought against the DfT by local councils and an anti-HS2 action group. They have challenged the process of public consultation for HS2, claiming that the government failed to carry out a proper strategic environmental assessment and that it provided inadequate information to the public during the public consultation. These were largely decided in favour of the Government so for the time being at least the project is back on-track.

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