UK: The Strategic Case for HS2

Last Updated: 3 December 2013
Article by George Morton Jack

The previous blog entry 21 touched upon the contents of Government's latest attempts to persuade the public that HS2 is worth the money, in its publication 'The Strategic Case for HS2' (published on 29 October). Patrick McLoughlin, the Secretary of State for Transport, says in the foreword to this document that the case for HS2 'rests on the capacity and connectivity it will provide. We need this capacity because in the future, as our economy and our population grows, we will travel more. We need the connectivity because bringing people together drives economic growth.'

The Strategic Case goes on to spell out what the Government sees as the main benefits of HS2:

  • Britain's railway network today is like its roads were in the 1940s when the motorway network was given the go ahead: the railways are in increasing demand from commuters, businesses and freight, and the existing rail system won't be able to supply enough trains by 2040. HS2 will provide a new north-south connection, taking the strain of rail traffic off existing lines, freeing them up for new and better services. The HS2 stations – from London Euston to Birmingham (in Phase 1, to be up and running in 2026) and on to Manchester, Sheffield and Leeds (in Phase 2, to be completed by 2032-33) – would receive 400m long trains, running up to 18 times an hour, and each capable of carrying 1,100 passengers.
  • HS2 would help to pull British cities and regions together to boost economic growth. In return for its estimated total cost of £51 billion, including £14.4 billion for contingencies and £7.5 billion for rolling stock, HS2 could increase economic output by £8 billion a year, and even as much as £15 billion (KPMG's estimate in its HS2 report commissioned by the Government, which has of course been widely criticised since). HS2's quicker rail journey times – reducing London to Birmingham by 35 minutes to 49 minutes, and London to Manchester by 60 minutes to 1 hour 8 minutes – would energise business productivity, partly through bringing about more easily and quickly the face-to-face contact that businesses thrive on. HS2 would also create new jobs, including 24,600 in construction alone, and up to 400,000 via commercial development generated by HS2 in areas immediately surrounding the stations.
  • HS2 is the only form of transport investment that could deliver its benefits for the cost. The other options, whether an expanded road network, incremental improvements to the existing railway, or heavier reliance on domestic aviation, are not good enough. Take improving the existing rail network, for example; that would cost at least £20 billion, involve huge disruption over many years, and not address capacity problems in the long-term.

The Government has again altered its forecast of HS2's cost-benefit ratio. Previously, HS2's predicted returns were £1.90 for every £1 invested, rising to £2.50 as HS2's "wider economic effects" kicked in. But now, as the Financial Times has shown in an article dated 29 October, the Strategic Case presents a more cautious prediction: £1.80 for every £1, rising to £2.30. This is the Government's response to earlier criticisms of the thinking behind the higher estimates, such as the assumption that people on trains were not at work.

For all the document's attempts to address past concerns on HS2, to stress that the contingency budgeting for Phase 1 is a deliberate overestimate of £4.24 billion, and to persuade with substantial back-up publications, many of HS2's critics are not impressed. According to the protest group HS2 Action Alliance, the Strategic Case is just 'voodoo economics', casting a weak spell of manipulated data and unrealistic double-counting. Lord Mandelson remains one of HS2's most sharp-tongued critics, telling the House of Lords on 24 October 'I do not support HS2, because its sheer cost will suck the very lifeblood out of the rest of the country's rail system':

'I ... face the fact that no empirical case has been established for HS2, despite repeated attempts. The so-called business case, when the original justification for HS2 was all about speed, duly collapsed under scrutiny when it was discovered that in real life people actually work on trains, and sometimes even better than when they are in the office. Now the whole justification has shifted to assumptions about increased overall capacity, reduced crowding and the economic benefits to a handful of the nation's cities – none of which assumptions, I might say, have been authoritatively quantified or verified, academically or otherwise. They all depend on forward projections of passenger loads which are uncertain, famously unreliable and greatly affected by the future price of tickets and elasticity of demand. ... I fear that HS2 has become ... a political trophy project, justified, on flimsy evidence, as being about modernity and prosperity, with, I might say, a lot of pressure being put on those conducting the cost-benefit analysis to come up with the answer that Ministers want.'

Mandelson is more outspoken than the leader of his party. Ed Milliband is pro-HS2 in principle – so long as it provides value for money. Labour are yet to pick a party line on whether it does, the risk of saying it doesn't seeming too great when its core city council supporters in the Midlands and the North might not like that ( as our blog recently discussed).

So Labour are trapped between not wanting to upset key party people by going anti-HS2, and not wanting to miss a chance to cause trouble for the Government by contesting what would be the biggest infrastructure project in Europe. As it is, Labour likes HS2 if it provides 'value for money' (which sounds more than a little like the Government's own message in the Strategic Case document), and this left too too few MPs in opposition on 31 October to sink the Government's motion in the Commons to get preliminary funds for HS2 - the motion was passed by 350 votes to 34. The more the Labour Party drifts on the issue, the firmer the Strategic Case's arguments can stand.

BDB HS2 seminar on how the hybrid bill process will work for HS2 - 27 November 2013

All of this is preliminary to the imminent introduction of the hybrid bill, which will contain the Government's firm proposals for Phase 1, including the necessary permissions to acquire land and carry out works. Hybrid bill offer those affected a specific opportunity to influence the project, by "petitioning" against the Bill and appearing before a Parliamentary Committee.

We are holding a seminar on how the hybrid bill process will work for HS2 on 27 November, the details can be found here including how to register.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.