The national interest?
The government asserts that high speed rail (HSR) is in the national interest. What this means is not entirely clear. Transport Secretary Philip Hammond says the high speed rail network will “change the social and economic geography of Britain; connecting our great population centres and international gateways”.
Hammond further suggests that linking England’s main cities via high speed rail, with further links to Scotland, could help break down the north-south divide. “Bringing those economies in closer reach of London, allowing them to benefit from London’s magnet effect in the world, is going to help solve some of the most intractable postwar social and economic problems Britain has faced.”
This echoes a number of influential public and private voices, especially the pro-HSR group Greengauge 21. They argue that high speed rail will create jobs, improve the competitiveness of regional economies and promote regeneration.
What is the basis for such claims?
Research by KPMG for Greengauge 21suggests HSR could create 25-42,000 new jobs and higher wages with most impact in the North and Midlands, especially in the core cities. The government itself in the High Speed Rail Command Paper said there would be substantial economic benefits to the major city regions of the North and Midlands. This may be influenced by the data from KPMG. Business lobbies in the regions are also quoting that data.
Unfortunately this data appears to be highly unreliable. It projects benefits over very long periods, beyond most reputable economic forecasting horizon. They also run counter to much research, as summarised, for example, in the Eddington Transport Study undertaken for government , in the Leeds University Institute of Transport Studies’ recent review for The Northern Way, or in expert academic evidence to the recent Transport Select Committee hearings. This strongly suggests that:
• There is no firm evidence basis for claims about the potential impact of infrastructural investment on regional economies and regeneration.
• Transport investment on its own is not a sufficient condition for economic development and there are other more cost effective ways of promoting economic development than investing in transport.
Deceiving the regions?
Research also tells us that:
• While the new ‘connectivity’ between cities which High Speed Rail might bring is likely to create little new development, it may have a substantial impact in redistributing existing economic activity and jobs. This is a clear conclusion of the KPMG study for Greengauge 21.
• But this redistributive effect is likely to benefit the biggest and strongest cities and regions most. The biggest beneficiary of HS2 and the wider HSR network is likely to be London and the South East – not the Midlands, North and Scotland.
• Other places which may gain are the nodes around the small number of proposed stations. Thus in the Midlands, Birmingham might benefit, but many other cities, towns and rural areas away from the very few stations could lose out. In the North West, Manchester might see some benefits, but these could be at the expense of the rest of the region.
Thus, some claims for the impact of HSR on jobs and regeneration could possibly mislead many in the regions who so far may have taken them at face value.
National interest or narrow interest?
Claims that HS2 and the wider proposed HSR network are in the national interest appear to be unproven. The beneficiaries could be limited to London and nodes around the very few stations. Another beneficiary would be businesses involved in construction and operation, and in developments around the ‘station nodes’. However this might still exaggerate the benefits of HSR, because other forms of transport investment, could be frozen out by the vast outlay of public investment on High Speed Rail. Such alternative investment could also create jobs and also spread the benefits more widely.
HS2 and High Speed Rail may thus serve only narrow geographical and sectoral interests, and accentuate, not break down, the North-South divide.