Minister to face MPs over claim HS2 to bring in £15bn a year

Conceptual image of HS2
Conceptual image of HS2

The case for HS2 is under fresh scrutiny with MPs set to question a report claiming the HS2 project could benefit the UK by £15bn a year.

A Commons select committee has summoned Transport Minister Patrick McLoughlin and the authors of the financial analysis – KPMG – following claims its report was flawed and excluded less positive aspects of the £50bn scheme.

It was announced that a special hearing of the Transport Select Committee has been called for November 26.

The committee carried out its own inquiry on HS2 and while its report in 2011 backed the strategic case for the project it warned that for high-speed rail to realise its full potential the plans had to be accompanied by complementary regional and local strategies for transport, housing, skills and employment. It also questioned the economic emphasis on savings in journey time.

Labour MP Louise Ellman, who chairs the committee, said: “HS2 is a hugely significant and controversial investment.

“We are following up the questions we raised in our earlier report, in the light of significant new information.

“Our first report was generally supportive of HS2 but we did raise some serious issues particularly about the economic benefits of the project and how they will actually materialise.”

The one-off hearing comes after the KPMG report, produced in September, assessed the regional impact of HS2, and the Government’s strategic case for the project, which was published last month and echoed the consultancy group’s findings.

KPMG said its analysis found that HS2, which would link London with Leeds, Sheffield, Manchester and Birmingham, could benefit the country’s economy by £15bn with up to £1bn of economic benefits annually for West Yorkshire.

Mr McLoughlin used the upbeat findings of the study, which was commissioned by HS2 Ltd, in a fresh push to bolster support for the £50bn project.

But while the KPMG report listed the areas that would benefit from the construction – with the biggest winners being Greater London by £2.8bn and the West Midlands by £1.5bn – it omitted details of those that would end up worse off.

The full findings were released in response to a Freedom of Information request, showing economies in some parts of the country, such as parts of Scotland, Wales and Norfolk are actually expected to lose out as a result of the scheme. Some transport experts have also questioned the reliability of the methods used to calculate the expected benefits of HS2.

KPMG’s head of infrastructure, building and construction, Richard Threlfall, has rejected suggestions his employer ‘cherry picked’ the most positive aspects of the research.

He said the firm had “gone out of our way to be as transparent as possible” and said there had been no pressure from HS2 Ltd over the way the report was published.

He was answering questions at another parliamentary examination of the analysis, last week, by the Commons Treasury select committee.

Lewis Atter, a partner in KPMG’s global infrastructure and projects group, told the MPs that if anything the £15bn figure was ‘a little low’.