Making the Case for HS2

Following the recent publication of the Strategic Case for HS2, the Department for Transport has released a two-minute film which summarises the case for HS2 and the many benefits it will bring. 

Clive Memmott, Chief Executive of Greater Manchester Chamber of Commerce, following a speech at Manchester Central on 19 November, here offers his view on why we should be backing HS2.

Why HS2 Has Our Unequivocal Support

At the Greater Manchester Chamber we have, from the outset been unequivocal, unwavering and vocal in our support of HS2. The reasons for this are many and varied, but at the heart of the argument is a recognition of the transformational effect that the scheme will have on the city region’s economy.

HS2 demonstrates to international investors and customers and the UK’s businesses that this country is ambitious and open for business. If France, Germany, Italy, Japan and China already have superb, high speed rail systems connecting their cities, why on earth shouldn’t we? It’s about our country’s competitiveness for 50 years and beyond. It’s about many more people sharing the growth that has, for too long, been disproportionately concentrated on London and the South East.

There is a clear correlation between the best performing national economies and the economic performance of the key second tier cities. The provision of top class transport links is pivotal to making this happen. The recent KPMG report estimates that HS2 could generate additional output worth £15bn a year by 2037. Over 85% of this relates to the benefits arising from improvements in connectivity created by the new line and the re-deployed current network.

Like many, we find it utterly unacceptable that the UK languishes, a lamentable 28th in the world for the quality of our infrastructure. The OECD has consistently called for improvements in our infrastructure, especially transport, as a priority to promote growth. We do not think it is acceptable that we spend around 2% of our GDP on infrastructure compared to 8% in the 70s. If we look at our international competitors 6% Japan spends around 6%, the USA spends, and the French spend 3%.

Quite rightly we also find it totally unacceptable that about 90% of current transport infrastructure spend is in London and the South East – 19 times more than the North West, 16 times more than Yorkshire and Humberside. We believe that we need to invest sensibly in our Capital but not at the cost of substantially short changing our second tier cities. The reason for this is simple: we will not rebalance the economy without proper and proportionate investment across the country.

This issue is not just about growing the economies of the midlands and north. We need to build HS2 because we are rapidly running out of capacity of our existing lines. The debate is currently raging about whether in 7 years, 10 years or 15 years, one of the busiest railway lines in Western Europe will run out of capacity for human beings and for freight, but it is beyond doubt that we will.

The statistics are pretty sobering.

Since 1995, the number of passengers on our trains has doubled and journeys to, and from, Manchester have increased by 20%.

Shamefully, hundreds, and hundreds of people have to stand on our trains in the peak hours on the West Coast Mainline.

The demand between London and Manchester is forecast to grow by a staggering 43% by 2023.

Freight growth is forecast to double by 2030.

There will be a 70% increase in the number of freight trains if we release the available track to travel on. NB: At the moment, less than 10 freight trains a day pass through Greater Manchester.

Another fact which doesn’t get much of an airing in this debate is that the average speed of a freight train from Manchester to London is a snail-like 23 miles an hour.

Our support for HS2 is pretty equally poised between embracing the opportunity and acknowledging that not delivering real increases in capacity represents an enormous threat. There is no realistic alternative. Upgrading the current line will cost nearly as much and would be hugely disruptive – 14 years of weekend closures and delays. The last upgrade cost £9bn – we can’t just make do and mend anymore. Make do and mend infrastructure that is often 150 years old, or more. Half of our tunnels are over 100 yrs old. We believe that all these issues make the case for HS2 looks very persuasive and the fact that phase one will knock 30 minutes off the journey time to Birmingham from London is a welcome, but secondary benefit.

One issue which we’ve never really been keen on with HS2 is the name. We believe it remains a huge own goal by all involved. The brand should communicate what’s on the tin and if you lead with speed it’s going to be exceptionally hard to communicate the benefits of a faster journey at a cost of £42.6bn (including a £14.4bn contingency) in the age of austerity.

This has understandably generated doubts and skepticism. The scaremongers feed on this and talk about inflated costs of £80bn – this is nonsense! They say the scheme benefits London more than the regions – it doesn’t! They say the money would be better spent on local transport projects like roads – it won’t!

Our road network is almost at capacity now and large scale expansion of road capacity is, in my opinion, undeliverable from both an economic and environmental perspective. Road congestion already costs business approx £17bn a year and is forecast to increase by 40% in just 7 years time. HS2 could take up to 1/2 million lorries off our roads each year.

This project is primarily about – Capacity, Connectivity, Relative Value for Money and Environmental benefit. Hot on the heels of this comes speed and a significant reduction in journey time is a real gain.

HS2 will free up much needed capacity on local and regional services across the north, easing overcrowding and taking pressure off motorways. It is enhanced by complementary projects like the Northern Hub. The line is critical to connecting people to jobs and promoting growth and competitiveness in the major cities of the North and Midlands. Eight of England’s largest cities will be better connected, along with their surrounding regions.

The economic benefits to our city region make pretty compelling reading too:

It will potentially provide the Greater Manchester economy with an annual boost equivalent to 1.7% of the City Regions GDP.

The development of Piccadilly Station alone will create around 30, 000 jobs.

The link to Manchester Airport is key to unlocking employment opportunities in Airport City which will also deliver significant additional jobs.

70% of all the jobs created by HS2, will be outside of London.

HS2 is currently looking at the huge pipeline of skills required by the project and we need to ensure that we develop the skills in Greater Manchester to maximise this.

The cost of HS2 must not be looked at in isolation.

Network Rail will spend £35bn in the 6yrs to 2019 on an existing programme of expansion and renewal.

There will be £73bn of transport funding (2015-2020) and 3 times more investment will be spent on roads and other projects than HS2.

Over the total construction period the UK is forecast to spend approximately £1.2 Trillion on infrastructure – HS2 will account for about 3% of this!

The project shows a good return on investment - £2.30 for every pound invested for the full Y network and £1.70 for Phase 1 only.

Viewed over a longer period with rising demand (2040/2049) this increases to £2.80 and £4.50.

The environmental benefits are also clear - reduction of road congestion, less domestic flights, less freight on the road.

To sum up: we are running out of capacity, we are running out of time, and we must better connect our key city regions. This project must happen and it’s absolutely essential that our businesses here in Greater Manchester and elsewhere give unambiguous and vocal support to this long overdue and transformational project.