The Government’s decision on HS2


The Government has announced its decision on HS2:

The Government has decided to proceed with the development and delivery of a new national high speed rail network to provide the capacity that Britain needs to compete and grow.

I just left the Chamber after listening to the oral statement and a good number of colleagues’ questions. The mood is overwhelmingly in favour, on both sides of the House. I remain convinced of the point of view I put to the FT:

Steve Baker, MP for Wycombe, said he was unconvinced that the huge cost of the scheme was justified. “The maths doesn’t add up; this is just sinking capital into a lossmaking project. If you’re going to use the power of the state to do that, then you shouldn’t be surprised that this country is getting poorer.”

Since people often ask me and since I have asked so many questions already, I asked the Secretary of State if she had considered tunnelling the width of the Chilterns. She had: it would cost £1.2bn, which was considered unaffordable.

So the project goes ahead. In the meantime, I’m reading a brief which sets out the tale of woe which is the failure of high speed rail projects in Portugal, Spain, France, Poland, The Netherlands, Norway, Taiwan, China, the USA and  Brazil…

In 1953, the economist Ludwig von Mises wrote:

In a capitalist country the railroads and the telegraph and telephone companies pay considerable taxes. In the countries of the mixed economy, the yearly losses of these public enterprises are a heavy drain upon the nation’s purse. They are not taxpayers, but tax-eaters.

Perhaps little changes, but I should prefer value-creating infrastructure, not infrastructure which makes us poorer.

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Comments & Responses

6 Responses so far.

  1. Ian says:

    I believe this government will make the right economic decision, one day. Not today. The trains are already too expensive, and travel at 40 mph. They use infrastructure that cost two gallons of cider a mile, not £100 million. And, who wants to travel at such speeds that will make their iPad obsolete anyway?

  2. Bastiat will be spinning in his grave.

  3. M. Ainscough says:

    Greening made much of creating jobs. Jobs are a ‘cost’ not a ‘benefit’ See Samizdata: http://www.samizdata.net/blog/archives/2012/01/getting_the_sig.html

  4. Nick says:

    If they MUST spend money on infrastucture projects surely the best way to improve journey times is in onward connections/transport integration? It takes me 2h08m to go from Liverpool to London, however door-to-door journey times are more like 4h. Although it sounds like a cliche, improving the existing infrastructure really would have massive benefits, I still can’t believe the line between Liverpool and Manchester isn’t electrified, which is a major commuter route both ways.

    • Trouble is there is no ‘price signal’ under the current subsidise and spend railway funding system. If we stopped doing that and made it all properly commercial we’d soon find out what was truly viable.

    • Gary says:

      Nick ….once the first stage of HS2 is complete, Liverpool to London will see a time of around 90 minutes. Also, Liverpool to Manchester is being electrified right now, and is in fact part of a bigger project called Northern Hub. The existing infrastructure has seen record amounts spent on it since the Hatfield accident, and we can see the benefits today of record numbers of passengers despite above inflation fare increases in that period.

      Steve Farral…..to some extent I agree with you, levels of operating subsidy cannot continue at todays rate. Some tough decisions are going to have to be made in relation to operating costs, which is a well known fact highlighted by the Mcnulty report.