22 May 2019

The proposed High Speed 2 rail line has become a contentious issue in the Conservative leadership race but, writes Nick Davies, there are better ways to make decisions on national infrastructure projects.

In a crowded field, three Conservative leadership contenders – Boris Johnson, Andrea Leadsom and Esther McVey – have pledged to ditch High Speed 2 (HS2), the proposed high speed railway line between London, Birmingham, Leeds and Manchester. Another four – Michael Gove, Dominic Raab, Rory Stewart and Liz Truss – have all indicated their scepticism, despite having voted in favour of the second phase of the project from Birmingham to Crewe. 

So why has this become a central issue in the race to succeed Theresa May?

The HS2 route is a political headache for the Conservatives

With any large infrastructure project, the economic benefits may be spread across the country but the disruption, including loss of homes, is felt by a few thousand people. They will be vocal in their opposition, and their local MP – who needs their votes - will likely take up their cause. The higher the profile of that MP, the more influence they wield and the more likely a project is to be delayed or scrapped. Such political challenges explain why the question of airport capacity in the South-East has been considered for over 50 years with little progress.

The three Conservative leadership candidates most vocally opposed to HS2 – Boris Johnson, Andrea Leadsom and Esther McVey – all represent constituencies that the line will run through. And the constituencies of a further two dozen Conservative MPs are affected, with many having previously voted against HS2 in Parliament.

The continued opposition along the route underlines the need for a forum for productive and structured debates on major infrastructure options. Other countries are much better at engaging the public and local communities in these decisions, with the Commission nationale du débat public in France providing a model for the Government to create a Commission for Public Engagement to involve the public in infrastructure decisions.

HS2 is a big target for candidates keen to burnish their cost-cutting credentials

HS2, which could well take longer and cost more than first planned, is also an attractive target. At £55.7bn, HS2 is more than three times the cost of Crossrail, the next biggest rail project, and almost twice as costly as decommissioning Sellafield nuclear power station – the second most expensive project which the Government is undertaking. And with public spending likely to be tight for years to come and little opportunity to make further cuts elsewhere, it is hardly surprising that politicians are wondering whether HS2 is worth the cost.

But Conservative leadership candidates shouldn’t kid themselves that cancelling HS2 would fix the public finances. The total cost of HS2 is expensive, but the time it will take to build – construction is forecast to take 16 years – means the annual saving will be far less than the headline £56bn figure suggests. The real question for transport investments, as we have argued before, is whether projects are economically valuable – not the size of the upfront cost.

The Government has not made a convincing case for why HS2 is the best way to spend £55bn

All governments must make predictions when assessing whether the benefits of a project will outweigh the costs. This is particularly challenging when a project, like HS2, is so large that it could plausibly change the structure of the economy. With this much uncertainty, it is no wonder that the economic case for HS2 has been vigorously contested.

And the Government has consistently failed to make clear the strategic case for investment in HS2. At various times it has been justified on the basis of increased capacity, shorter travel times, creating jobs and regenerating the West Midlands. All are worthwhile objectives, but without a clear priority it is hard to judge whether other investments might have been more beneficial.

In the absence of a clear national strategy for investment in infrastructure, be that railways, roads, energy generation or broadband, HS2 is hard to justify. In 2017, the Department for Transport published its first Transport Investment Strategy but it has too many objectives to guide decision making. The Government is due to publish its first National Infrastructure Strategy by July. It would be far better for the country if the future of HS2 was decided on the basis of its contribution to this strategy than on its appeal to party activists and ambitious leadership contenders.