Why Labour must abandon its commitment to HS2

Speaking at the Labour Party conference today, Shadow Transport Secretary Mary Creagh reiterated her support for the HS2 project.  Economically, environmentally and politically, this is the wrong decision.

The economic and political arguments against HS2 have been well-rehearsed – put simply, the claims made by its proponents do not stand up.  Notoriously, its economic case is largely grounded in assumptions around the value of first-class passengers’ time, based on the assumption that time spent travelling is “dead time”; it is partly based on passenger forecasts that have, in the past (as in the case of HS1) proved to be ludicrously optimistic.  Its environmental case is unravelling; official forecasts suggest that the 400kph line is as likely to increase carbon emissions and reduce them, and its high-value passengers will mainly gain access to the trains by car via parkway stations.  The regeneration case is largely nonsense; it is more likely to suck resources into London than to boost regional economies.  And the case for increasing capacity falls when one considers that it is Virgin Trains’ pricing policy that means that off-peak trains on the West Coast Main Line are grotesquely overcrowded while peak trains run half-empty.

But the politics of HS2 are disastrous, too, for two reasons.

First, given the risks associated with the project, it will be built in the public sector, at a cost of £50bn. It’s a colossal investment at a rate of return which, by the standards of Government-funded projects, is on official estimates low; the reality is that those benefits will almost certainly never be achieved.  The day before Creagh’s speech, the Labour conference was told by Ed Balls that real cuts in child benefit – one of the most effective and efficient of benefits – were necessary to save £400m over two years.  Obviously there is a difference between current and capital expenditure; but the economics of HS2 simply do not stand up.

Moreover, as a transport priority it wholly misses the point.  For most people – especially those outside London and the South East and in particular for those on lower incomes – public transport means buses.  But local bus services – especially outside London – are in crisis.  A report published today by the Campaign for Better Transport shows how rising fares are pricing the most vulnerable into transport exclusion – but Creagh’s speech included barely a single sentence about local buses.  A tiny fraction of the money to be spent on HS2 could transform bus services; but Creagh appears to be determined to frame the public transport debate in London and South East terms.  Her predecessor, Maria Eagle, understood that it is small, local transport schemes that provide real benefits, locall y and nationally

Second, the political battle over HS2 will be debilitating.  The legislation to approve HS2 will be a Hybrid Bill, running over several Parliamentary sessions and with opponents able to put their objections to Select Committees of both Houses of Parliament.  There is serious opposition to HS2 along its routes, with backbench Tory MPs constrained by the Government Whips but with UKIP at their heels.  The Bill to authorise HS1 (on which I worked as a Civil Servant) had a relatively easy passage, because the local authorities along the line supported the principle.  But there will be no such respite next time.  A Labour Government will have to devote enormous quantities of Parliamentary time, diverting other, more important legislation, in order to manage a process which will inevitably drive costs higher.

HS2 is a bad project.  Even on the Government’s own projections it offers poor value for money – a vast amount of money that could be so much better spent on other, smaller projects. Its economic case is based on the perceived benefits it brings to a small, wealthy elite. Environmentally it’s a basket case; in terms of regeneration it will increase, rather than reduce, the North-South divide. Labour needs to abandon this vast vanity project and focus instead on transport policy that will make a real difference to people’s lives – and understand the vital importance of transport exclusion as part of the cost-of-living crisis.

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