HS2: Where are we going, and why are we going there? – Part 2

Commentary on the legislative and construction progress of High Speed 2

See part 1 for an overview and history of HS2 and where we are now. Here, in part 2 of this commentary, we focus on what happens next.

No-one, certainly no-one that commutes via train to work in the morning, denies that the UK rail system is fast approaching full capacity. Merely upgrading the existing rail system would involve years of disruptions and delays for limited benefits, as the government has concluded, and few are denying this claim. However, it remains uncertain whether high-speed rail systems provide the economic benefits promised. There remains no expert consensus from studying countries with an implemented high-speed rail system whether such systems help or hinder deprived regions. And that’s not all…

The WCMR isn’t the only rail-line nearing capacity. It doesn’t take much research to get an impression for the amount of stress the northern rail infrastructure is under. Indeed, there exists a plan for another high-speed railway to be built in the north (proposed cost of £39 bn), as part of the Northern Powerhouse project to improve northern rail infrastructure. However, with HS2 being prioritised until now, its progress in legislation (let alone infrastructure) has been slow. A common argument from HS2’s critics is that HS2 is merely presented as a project to boost economy in the north, veiling a multi-billion-pound investment in allowing more of London’s workers to live outside the city. While this is only speculation, what is clear is that HS2’s phase one, in giving long-range commuters better access to London, is almost certain to have the effect of drawing more of the country’s workers and economy towards the capital, a process known as centralisation. The UK’s economy is already more centralised that most of its economic rivals – the reasons for this are (unsurprisingly) unclear and complicated, however popular opinions mention local council budget cuts and deregulation of financial services in 1970s and 80s. The UK currently has one of the widest levels of regional disparity across the EU, with GDP per capita in London being 8.6 times higher than in west Wales and the valleys, according to an EU analysis. Whether this be a direct result of the UK’s economic centralisation is debated, but it seems naïve to argue no link exists.

Decentralisation (the process of moving the economy away from London and boosting it in other cities and regions, especially in the north) of the UK is the oft heard alternative for HS2. The process is, again, not straightforward, contains a lot of nuances, and its outcomes are fiercely debated – this article barely scratches the surface. Essentially, HS2’s critics claim that the UK economy would benefit as much, if not more, from increasing the economy in northern cities (by boosting infrastructure there) rather than in London. Theoretically, this would decrease demand for travel to London as more workers and businesses set up shop in cities like Leeds and Manchester, address the issue of the UK’s regional GDP disparity, and allow for resources to be focused on boosting infrastructure that is at full capacity now (rather than in 2025, as the WCMR is predicted to be) and hasn’t received attention in years. And the claim isn’t baseless – the International Monetary Fund stated, “decentralisation of [UK] governance arrangements could improve the responsiveness of policy to local economic conditions.” What is more, there exists strong evidence that productivity in the north has the capacity to increase dramatically, with it having grown at twice the rate of London’s productivity in 2016. Prioritisation of the development of northern infrastructure has therefore been demanded, especially between cities such as Leeds and Manchester.

What to make of all this? Where do we go from here? Who’s right? It’s simply unclear. Strong arguments exist both for and against the construction of HS2. As it stands, much of the country’s economy is in London, and for London’s metropolitan economy (the world’s 5th largest) to continue to grow, access to the capital needs to keep up with demand. It seems upgrades to existing, conventional services simply won’t be cost effective or provide the capacity increase required.  But HS2 has come with a whole host of environmental problems, become a legislative nightmare, and dragged with it an ever-inflating price-tag. The case for boosting non-London related infrastructure exists, beginning the process of decentralising the economy. But getting there would take time, money and a lot of uncertainty – much like HS2.

Written by Valentin Theil, Communications Officer at SWM