‘The High Speed Gravy Train’: HS2 will cost £80bn, report claims

Before and after: View of HS2 looking towards Wendover Dean
Before and after: View of HS2 looking towards Wendover Dean
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There are growing calls for the controversial HS2 project to be cancelled after a new report predicted it will cost taxpayers double the current estimate.

The Institute of Economic Affairs says lobbying from local authorities for new links to HS2 stations and changes to the route to keep voters happy are likely to add around £30 billion to the overall cost, which currently has a £43bn budget (which itself rose from £33bn earlier this year).

HS2

HS2

According to Dr Richard Wellings’ report ‘The High Speed Gravy Train’, new trains will cost £7.5bn, taking the overall price-tag to £80bn.

The Department for Transport said the report is ‘extremely speculative and completely lacking in concrete facts’, while the government-owned company behind the high speed line, HS2 Ltd, says it is focused on keeping the project within the current budget.

Dr Wellings’ report says the scheme ‘defies economic logic’ and recommends the government cancel HS2 and use the money to reduce taxes or build other infrastructure projects.

Dr Wellings said: “The evidence is now overwhelming that this will be unbelievably costly to the taxpayer while delivering incredibly poor value for money.

“It’s shameful that at a time of such financial difficulty for many families the government is caving in to lobbying from businesses, local councils and self-interested politicians more concerned with winning votes than governing in the national interest.”

The Institute of Economic Affairs said the extra £30bn would be spent on:

> New rail links, tram lines and road upgrades to cope with the pressure on infrastructure along the HS2 route

> Design changes such as extra tunnelling to ‘buy off’ opposition

> Regeneration schemes around new stations and in towns bypassed by the line

The report said HS2 and the ‘add-on’ transport schemes will be heavily loss-making and that the decision to build it is partly the result of lobbying by special interests.

It claims this lobbying has taken a number of forms, including sponsoring high profile events with policy makers, one-to-one briefings and the commissioning of opinion research.

The institute also believes there are political reasons for the Conservatives to pursue the project.

It said: “Its support for HS2 appears to have been closely related to its decision to stop the expansion of Heathrow Airport.

“It is unlikely to simply be a coincidence that this policy happened to coincide with the party’s electoral interests.

“It is also possible the policy was partly a response to poor electoral performance in the north of England in recent elections.”

A Department for Transport spokesman said: “The headline £80bn figure appears to have been arrived at by lumping together transport schemes that are not part of HS2 and in some cases are many miles from the line.

“The report claims a theoretical and unsourced cost of £30bn for these projects, although elsewhere admits many will never be built.

“The IEA also fail to show how a myriad of piecemeal incremental transport schemes would address the capacity and connectivity issues that we face or how they would even come close to providing the opportunities that HS2 as an engine for growth will bring to the national economy.

“The fact is HS2 is absolutely vital for this country.

“Without it the key rail routes connecting London, the Midlands and the North will be overwhelmed.

“This report does nothing to challenge these undeniable facts.”

A HS2 Ltd spokesman said: “Whilst we respect the right of the IEA to state its case their approach has clearly been designed to suit their aims and those of their funders to dismiss any major government project, something that they have consistently done over recent years.

“HS2 is an engine for growth that provides significant value for money and will create a transformational national economic asset from which the whole of the UK will benefit for years to come.”