Leading article

High-speed fail

By clinging on to costly HS2, the Tories are allowing Labour to look like the prudent party

2 November 2013

9:00 AM

2 November 2013

9:00 AM

A year ago the electoral strategies of the two main parties seemed set. The Conservatives would stand as the party of prudence, claiming to have saved Britain from a Greek-style meltdown through austerity measures which, though painful at the time, had eventually borne fruit in the shape of a private sector-led recovery. Labour, meanwhile, would stand as the party for public investment, promising to repair what it saw as the damage wrought by cuts.

Since then, things have got better for the Tories than they could have imagined. Not only did a threatened triple-dip recession fail to materialise, but revisions to economic data concluded that Britain did not even suffer a double dip. While debt is running well ahead and growth is still lower than the forecasts he made in 2010, George Osborne can no longer be accused of causing a recession and can now invite the public to wonder how much larger the deficit would have been had Gordon Brown been allowed to continue trying to spend the country out of debt.

Yet a rather large fly has just landed in the Conservatives’ electoral ointment. The government’s determination to commit itself to HS2 no matter what the cost has allowed Labour to steal the mantle of prudence, while the Conservatives seem to have a wide-eyed faith in extravagant public-sector spending.

Labour appears to be wavering in its support for HS2. This week the party reiterated its commitment to the project. At the same time, however, it backtracked by adding strong caveats about the costs.

Ed Balls’s sudden scepticism is, of course, highly opportunistic. It was Gordon Brown’s government which first backed the scheme. Balls is treating the £42 billion to be saved from scrapping HS2 as if it were a windfall; by his logic we could all make ourselves rich overnight by planning to spend £1 million we don’t have, then deciding not to and counting the forgone expenditure as if it were money in the bank.

But perceptions count for a lot in politics. And what comes across at the moment is that Ed Balls and other senior Labour figures are being careful with public money, while the government says all the things about -investment and jobs that Gordon Brown used to say when frittering away our money left, right and centre. Transport Secretary Patrick McLoughlin’s accusation that, by questioning the cost of HS2, Labour is ‘playing politics with our prosperity’ is the kind of platitude that shadow cabinet ministers -produce every time the government proposes to trim a budget. It hasn’t worked for them, as the public know full well the extent of the budgetary crisis and are generally fed up with politicians asserting that they can spend our money better than we can. So why does Mr McLoughlin think he will impress the country by trying to claim we face ruin unless one of the state’s pet projects goes ahead?

The government has supported the case for HS2 with ever more preposterous estimates of the benefits of the project. But even the imaginations of HS2’s consultants have struggled to keep ahead of a £10 billion rise in estimate budget in the summer. This week, the official benefit-to-cost ratio of the project fell to 2.3:1 as the government was forced to admit that its previous estimates used the erroneous assumption that businessmen do not and cannot work on trains.

Even so, the benefit-to-cost ratio comes across as belonging to the wider realms of fantasy. The attempt to calculate the value of productive time lost on a rail journey down to the nearest penny — which it puts at £31.96 — does not boost confidence in the exercise. Pseudoscientific precision merely clouds reasoned judgment on the project. It doesn’t take too much to see that while cities directly on the route will benefit, secondary towns and cities off it will risk losing out on investment and may suffer; that is why support for HS2 among councils and businessmen in the Midlands and North is patchy, to say the least. Neither does it take too much to wonder how many other, less glamorous, transport projects that have been cancelled, postponed or never conceived as a result of the need to contain public spending would have far higher benefit-cost ratios.

Two years ago a study by the RAC Foundation and consultants Arup identified 96 new road schemes abandoned or postponed by the government, most of them with benefit-cost ratios in excess of that calculated for HS2, and several of them with a benefit-cost ratio over 10:1. If failing to support HS2 is ‘playing politics with our prosperity’ then the government is surely even more guilty of doing so over its failure to support road investment.

With almost every other form of public spending, the coalition has applied a common-sense approach: however desirable something might be, the priority lies in balancing the books and eliminating a deficit which is increasing public debt to the tune of a third of a billion pounds every day. Yet with HS2 that principle seems to be suspended. Ministers are behaving like a CEO who turns around his company with aggressive cost-cutting, only to stall when it comes to a vanity project of which he is particularly fond.

The political trouble for the Conservatives is that of all government projects, HS2 is currently just about the most high-profile. If the party is seen to be extravagant on that, it will find itself in danger of losing its reputation for prudence on everything else.

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  • Iain Hill

    For all of you No campaigners, HS2 is the Holy Grail. A means to rebalance the whole UK economy away from the SE, sort out the housing shortage, and end the Heathrow debate (for all but committed flying snobs) Build the whole line to Glasgow/Edinburgh by 2020 – the French could!

    • s_o_b

      Yawn. No, it is more poisoned chalice than Holy Grail. It’s a bloody train line that won’t even be fully operational for another 20 years, assuming it is on time. Even the government’s willing lackeys, KPMG, have been forced to admit that a) there is no statistical foundation for their claims of resulting prosperity (code for ‘they made it up’), b) benefits to connected cities will come at a cost to jobs and investment in other parts of the country.

      ‘Rebalancing the whole UK economy’….clearly and demonstrably false.

      ‘Sort out the housing shortage…..’ Eh? Really? I’d venture to suggest that 10% of the HS2 budget, if it were spent on building houses, would do rather more to fix the housing shortage than building a train line would.

  • rhys

    If it’s all about increasing seat capacity – can anyone explain why the option of upgrading the main lines / bridges / tunnels to take double – decker trains has not been properly evaluated / costed ?

    Surely it would cost only a few thousands of pounds to make that evaluation ?

    • Chris Robertson

      It HAS been evaluated, multiple times over the decades, but it’s utterly impractical – the cost and especially the disruption of replacing almost every bridge, tunnel and most overhead structures would be quite insane, for very little increase in capacity.

      Double Deck does not mean double the capacity, in fact nowhere near and our unusually high platforms and limited width trains would reduce the benefit yet further – doors would have to be between the height of the upper and lower deck, which itself would have to be quite narrow. They would also impact the time trains spend at platforms – fewer doors means more seats, but more time in platforms means fewer trains. It’s not viable, at all, as is concluded every time it’s looked at.

      • rhys

        Well if there have been so many evaluations can you please give references to where one could find a number of them?
        Specific references.

        Was such an evaluation done specifically in the preparation for the HS2 argument?

        There must be some increase in seat capacity – I note you do not give a specific figure – do any of these evaluations do so?
        i accept it would not be double – but the French must have introduced d-d trains for a reason, no ?

        In France the doors are not ‘between the height of the upper and lower deck’ – the doors from the platform lead into the lower deck and from there if you wish you can go up to the upper deck ( as with a double decker bus in fact ).

        I don’t claim it is necessarily a or the best solution – just that i would like to see genuine, independently evaluated, figures for what it would cost, and also what it would produce by way of increased seating capacity.

        • Chris Robertson

          If your interested go and look yourself, a good place to start might be the Network Rail study into alternatives published just last week.

          As for double deck stock, you can’t make direct comparisons with Europe – platforms are quite a bit lower while the ‘loading gauge’ allows trains to be both wider and taller than anything in this country outside HS1.

          While France have gone down the route of double-deck rolling stock on their high speed lines, Germany haven’t – they continue to use single-deck rolling stock for their high speed lines as the difference between say a 400m Velaro with around 850-900 seats is easily comparable with a double deck 400m EuroDuplex with around 1050 depending on seating density.

  • Jackthesmilingblack

    Suck it up, Luddites.

  • In2minds

    Cameron and HS2. As he thinks of himself as H2B then he will spend money like a demented socialist on stupid projects

  • Mark McIntyre

    NO2 HS2 – derailed by default !