Beyond the hype: Assessing the WMCA’s claims for HS2

 

One of the key themes of the WMCA, driven by the three Local Enterprise Partnerships, is the claimed benefits of HS2. They make no pretence of offering a balanced case, weighing the pros and cons. Instead what they are engaged in is a high-powered sales campaign designed to convince you that HS2, currently estimated to cost at least £56 billion, is in the public interest as well as being a taxpayer-funded bonanza for business.

That is the message of, for example, The Midlands HS2 Growth Strategy: Accelerating the UK’s engine of growth, published by the Greater Birmingham and Solihull Enterprise Partnership in July last year [1]. The foreword is by its then chair, Andy Street, managing director of John Lewis and now being spoken of as the Tory candidate for Mayor of the WMCA.

Also on board HS2 is the Labour candidate, Sion Simon. In his manifesto he promises to:

Implement a co-ordinated strategy across the HS2 college and supply chain to ensure people living in the West Midlands fill the maximum number of jobs. HS2 growth board to be chaired by the Mayor (not the LEP), adding emphasis on quality of jobs and social justice.

The aim of quality jobs is welcome, as is the reference to “social justice” – not a phrase to be found in the 34 pages of the GBSLEP report – though the test is what Mayor Sion Simon would actually do about it. His views on what follows below would be worth hearing.

The questions that the WMCA needs to answer about HS2

The case for HS2 made by the government and HS2 Ltd has come under sustained criticism recently by a group of leading transport academics [2]. The following analysis is taken from its report HS2 and the railway network : the case for a review, published in May 2016 (hereafter referred to as “the report”).

High Speed 2 [HS2] has been promoted as a means of improving rail capacity and connectivity between London and the North of England, rebalancing the UK economy and increasing sustainability. It remains controversial, with concerns over its opportunity cost, its independence from the classic rail network, its environmental damage and its wider economic impacts.

It is currently estimated that the full project will cost at least £56 billion, or roundly £105 million per route-km. By comparison, the TGV line from Tours to Bordeaux currently under construction is costing £20 million/km. The much higher unit cost of HS2 is explained in part by the need for extensive tunnelling through the Chilterns Area of Outstanding Natural Beauty and by the complex plan for London Euston.

[A further reason is] the decision to design for 400 km/h, which requires a flatter and straighter route. A lower design speed, as adopted in France and Germany, would make it possible to choose a less damaging route, and at the same time reduce construction, operation and mitigation costs.

HS2 has four objectives:  increasing rail capacity, achieving greater connectivity, rebalancing the economy and enhancing sustainability.

Assessed against its four objectives:

  • HS2 does add to rail capacity, but there are much less costly and environmentally damaging ways of doing so;
  • HS2 provides only limited improvements to connectivity, and will worsen London services for several cities, as well as many cross-country journeys;
  • HS2’s wider economic benefits for the North are uncertain – investment in the North is a more certain way of providing them; and
  • HS2 contributes nothing to the objective of reducing carbon emissions from transport.

A much fuller range of policy options should have been considered to meet these objectives. These include improvements to reduce the adverse impacts of HS2, alternative high-speed routes better integrated with the classic network, lower-speed but better-connected rail enhancements, investments within the North of England, and other lower-cost interventions.

What does the WMCA ‘s Strategic Economic Plan say?

 The most recent statement of the employers’ case for HS2 is made in the WMCA’ s Strategic Economic Plan, titled Making Our Mark, published in June 2016 (referred to hereafter as the SEP) [3].

  1. Increasing rail capacity

This is not mentioned in the SEP. This could be because, as the report says, there is:

a load factor on Virgin West Coast of less than 40%. The need for additional capacity is thus based on predictions that passenger demand will continue to grow at rates similar to the recent past. Significant improvements to capacity could be achieved at a much lower cost and much more rapidly.

  1. Achieving greater connectivity

 There are two principal benefits of HS2 claimed by the WMCA and its SEP, increased connectivity and, linked to it, increased economic growth.

High quality connectivity, by rail, road and air, is a significant competitive advantage, which will be strengthened by the arrival of HS2 and the further development of Birmingham Airport as an international gateway with an increasing number of long haul flights. (SEP p6)

The UK Central growth corridor – linking Birmingham, Solihull and Coventry – is already playing a part in delivering success and HS2 will further transform connectivity in Britain with the potential to underpin the re-balancing of the British economy. With travel time from London to Solihull of just 38 minutes it will be a transformational project for the West Midlands and the WMCA will ensure that HS2’s potential is fulfilled as part of a wider transport strategy, set out in the West Midlands’ strategic transport plan “Movement for Growth”. (SEP p7)

The arrival of HS2 in 2026 and one of the area’s two new stations – Curzon Street in Birmingham city centre – will massively reinforce Birmingham’s pivotal role in the country. HS2’s national construction headquarters will be based in Birmingham, which will also host the National College for High Speed Rail. Once HS2 is operational, Canary Wharf will be less than an hour away from Birmingham International.

UK Central, Solihull. Equally significant, the interchange station and Hub at UK Central in Solihull will provide an international gateway with seamless integration between HS2, Birmingham Airport, the NEC and rail and metro services within a carefully designed and environmentally responsive development.  (SEP p16)

Connectivity for who and to where? It is clear that for the SEP the benefits are for business passengers travelling to and from London including the financial centre of Canary Wharf. As the report says, this small minority of the population will have their fares subsidised by the rest of us.

There is also the question, as the report says, of the cost of fares restricting passenger use, or alternatively, if fares are kept comparable to other routes, the under-provision of income compensated by more public subsidy:

the assumption that HS2’s fares will be competitive with fares on the conventional network implies that those investing in HS2, including taxpayers, will subsidise the minority of the population who will benefit from this new facility. Given the likelihood of price cutting and marketing activity by competing services, HS2 revenue could be lower than forecast.

What the SEP doesn’t mention are the obstacles to connectivity. As the report says:

Weak connectivity is likely to be aggravated by the plan to have an independent operator run the service, while adopting a different loading gauge renders through running more difficult.

completion of many journeys by HS2 to London Euston, Birmingham Curzon Street, Leeds or Manchester will require a change of train, often including a lengthy transfer on foot.

This is especially true of Wolverhampton and the Black Country, distant from the two HS2 stations in Solihull and Birmingham city centre.

And of course, bizarrely, HS2 doesn’t connect to HS1.

  1. Rebalancing the economy

 The report refers to the wide range of estimates of economic benefit that even the promoters of HS2 cannot agree on:

This range indicates how poorly the likely impact of HS2 on the economy is understood.

Other research suggests that the impact is likely to be small. Despite a 40-year, 2000km programme, the claim that the French TGV network has changed the relative performance of France’s regions has never been substantiated. Where economic benefits have arisen, as in Lille and Lyon, they have been principally the result of local policies to focus development close to stations. Evidence to the House of Commons Transport Select Committee suggests more generally that, in those countries that have built high speed rail lines, any regional benefits were marginal and tended to benefit the capital.

 But dramatic economic growth is the key argument for HS2 by government and by the WMCA and its SEP.

The WMCA’s vision is to fully maximise the benefits of the largest infrastructure project in Europe in order to drive economic growth across the Midlands and secure:

  • 104,000 new or safeguarded jobs, 10% of which will be filled by residents currently unemployed
  • an additional £14bn GVA
  • an increase in skills, with 36% of the local population qualified to level 4+ and 2000 apprenticeships
  • support for 2000 businesses
  • improved accessibility, with over 2million people connected to HS2. (SEP p46)

Maximise benefits of HS2 to deliver 104k jobs, additional £14bn GVA (SEP p31)

The first thing to notice is that these claims for 104,000 jobs and an additional £14billion Gross Value Added by 2030 apply “across the Midlands”, not just to the WMCA area. This refers to the so-called “Midlands Engine”, a government fabrication like the Northern Powerhouse with little basis in reality which stretches from the Welsh border to the North Sea in Lincolnshire. Also notice that these are not all new jobs, they are “new or safeguarded” (meaning and number unspecified).

The benefits for the WMCA area itself are more modest: £6bn GVA not £14bn, and 25,000 jobs not 104,000:

Impact by 2030 from baseline:

+ £6bn GVA

+ 25k jobs

+ 4,000 NVQ4+

– 16,000 no quals

(SEP p46)

It is unclear on what evidence the claims for how HS2 will have such an enormous impact on education and skill levels are based. There will be training and qualifications provided by the National College for High Speed Rail, to be sited in Birmingham.

HS2 will certainly create jobs in the West Midlands for the construction industry – indeed it will be a bonanza for them, including for businesses in the West Midlands which can win contracts in the “supply chain” for construction, and this too may result in an increase in apprenticeships:

HS2 presents an unprecedented opportunity to establish the West Midlands as a world-class business location. It will transform connectivity advantages, provide significant supply chain opportunities for leading engineering and construction businesses and provide a focus in driving up skill levels. (SEP p7)

The combined authority will develop an implementation plan setting out how it intends to deliver the HS2 Growth Strategy. It will work closely with the government and HS2 Ltd in developing the plan. Supply chain opportunities presented by HS2 will be used to demonstrate to SMEs the value of investment in R&D and innovation.(SEP p46)

Accelerate: skills for the supply chain. Activity to enable prospective HS2 contractors to develop their workforce to be HS2 ready by amalgamating demand for skills, delivering workforce development, boosting apprenticeships and exploiting the delivery of the National College for High Speed Rail as a beacon for rail industry skills. (SEP p46)

Of course increases in apprenticeships, skills development and well-paid jobs are to be welcomed. But what we need is realistic evidence-based information we can trust, not the sales-pitch boosterism that the WMCA is engaging in.

There is one final point to make about the claims for economic growth and connectivity. The report states that “there is a real danger that HS2 will benefit London rather than the North…”. The same could apply to Birmingham. It goes on to say “while Leeds and Manchester would benefit at the expense of smaller centres such as Bradford and Rochdale.” This could also apply to those urban areas in the West Midlands that are furthest removed from the two principal growth centres around the HS2 stations: Birmingham city centre and the business developments around the UK Central hub. Could HS2 increase regional inequality, and even promote decline, at the expense of Wolverhampton and the Black Country?

  1. Enhancing sustainability.

 This is the fourth of HS2’s supposed objectives, but there is no mention of it by the WMCA and its SEP. This is what the report says:

Environmental sustainability involves two issues: CO2 emissions and local terrestrial effects. Originally the government claimed that HS2 was an integral part of its low-carbon transport strategy and that HS2’s role is to provide a facility to which road and air traffic could be diverted. However, according to the latest cost-benefit analysis, HS2 would make virtually no difference to carbon emissions from transport. The claim cannot be reconciled with the forecast that only 4% of HS2 journeys would be diverted from road and 1% from air. 69% would be diverted from conventional rail, a far less carbon-intensive mode, and 26% would be new journeys which, by definition, will add to transport emissions.

Elsewhere the SEP does make the general environmental claim that by 2030 “Carbon dioxide (CO2e) produced from direct emissions by transport, businesses and housing based on 2010 baseline will be 40% less. (p13). What it doesn’t say is whether HS2 will aid this or run counter to it. But the report points out that “the decision to operate at speeds in excess of 300km/h [higher than France or Germany] will add significantly to HS2’s greenhouse gas emissions”.

The need for union and user representatives on the WMCA

To challenge the hype and make the case for social justice in the WMCA’s transport policy it is vital that trade unions take up the places allocated to them on the HS2 Delivery Programme Board and the Transport Delivery Committee, and that there are places opened up for representatives of the users of these services as well, currently ignored by the WMCA.

Richard Hatcher

References

  1. http://centreofenterprise.com/wp-content/uploads/2015/07/Midlands-HS2-Growth-Strategy.pdf
  2. HS2 and the railway network : the case for a review by Tony May and Jonathan Tyler, published 23 May 2016. http://www.passengertransportnetworks.co.uk/HS2%20-%20the%20case%20for%20a%20review.pdf . It is based on “a Workshop at which some 40 professionals with widely differing views debated the case for HS2 and its alternatives.” See also Simon Jenkins’ critique of HS2 in the Guardian 7 June 2016: https://www.theguardian.com/uk-news/2016/jun/07/hs2-the-zombie-train-that-refuses-to-die
  3. https://westmidlandscombinedauthority.org.uk/about/strategic-economic-plan/

 

 

 

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