HS2 is only one part of what is needed to rebalance the economy

Joe Wright, 25 March 2015

HS2 is in danger of losing its consensus. The project has already come under heavy fire, with the Department for Transport being attacked by the Public Accounts Committee in 2013 for using ‘fragile numbers, out of date data and assumptions that do not reflect real life’. The House of Lords Economic Committee has now published similarly damaging claims that the case for HS2 is far from closed. The Committee believe the £50 billion could be far better spent on smaller projects around the UK, particularly in the North, and they criticised the government for not being transparent, particularly where passenger usage of current lines is concerned.

They argued that ‘in terms of rebalancing, London is likely to be the main beneficiary from HS2.’ This last accusation is the most damaging. HS2 was sold on the promise that economic regeneration of the deinsdustrialised regions would be at the heart of the project, that it would help to create a more stable and diverse economy across the UK.

It is now a common perception that London’s economic success has come at the expense of everywhere else, that it has long claimed an unfair share of investment and young people. Such were the numbers flocking from Liverpool into London to find work during the unemployment spike of the 1980s that Liverpudlians called the train south the Tebbit Express in recognition of the Secretary of State for Employment’s ‘success’. Today, little has changed as graduates flock to London to find work in the glass towers of Canary Wharf or the tech start-ups of Old Street.

Lord Hollick, Chair of the Lords’ Committee, claims that every similar example of major transport project in ‘France and other major European cities’ has benefited the cities most, that HS2 will do the same and reinforce London’s hold.

The claim is slightly misleading, however, as it suggests HS2 alone was meant to be a silver bullet. Better transport is about rebalancing, but it was always only a part of the solution. There needs to be investment in education and skills, plus schemes to ensure finance is available for new businesses (such as regional banking). Greater devolution of spending to the regions is also important. Without these, yes, HS2 will likely change little. Infrastructure is an enabler and meant to compliment these policies.

There is always an element of uncertainty with major infrastructure works in so far that it is hard to predict the shape of any economy more than a year down the line. How HS2 helps to shape the UK is far from certain. What we do know is that better transport links, better infrastructure, always has a positive effect on economies. It acts an enabler.