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Government warned scrapping HS2 ‘would cost 27,000 jobs’

Government warned scrapping HS2 ‘would cost 27,000 jobs’

🕔19.Sep 2016

Scrapping the HS2 high speed rail project would cost nearly 27,000 jobs by the end of the decade, it was claimed today.

Responding to repeated attacks on the value of the £50 billion scheme, the High Speed Rail Industry Leaders’ group quoted research showing that by 2020 HS2 contractors will employ 26,650 workers including thousands of apprentices who will begin their working lives at the HS2 College in Birmingham.

Albion Economics, a transport consultancy that provided figures for the leaders’ group, estimates that about 18,000 of the 26,650 jobs will be in construction, with the rest in design and project management.

HS2 Ltd, the Government body overseeing the project, employs about 1,000 people in Birmingham and London and it is reported that costs of £2 billion have already been incurred.

The Department for Transport estimates the cost of the entire project, including phase 2 from Birmingham to Manchester and Leeds, will be £50 billion at 2011 prices, made up of £42.6 billion for construction costs and £7.5 billion for the trains.

Consortia are bidding for phase 1 contracts in several packages, including almost £3 billion for the section of the route from Long Itchington in Warwickshire to Birmingham city centre.

Royal Assent to the HS2 bill before parliament is expected by the end of the year, allowing construction work to begin on the first phase between Euston and Birmingham Curzon Street.

This month has been notable for a number of attacks on HS2 by MPs and other organisations.

Andrew Tyrie, the chair of the Commons Treasury Select Committee, became the latest critic to write to the Transport Secretary, saying that the economic case for HS2 is not supported by the numbers when it comes to capacity and speed, and that out of all the projects proposed by Government, HS2 is the weakest.

His comments come during a challenging week in which the right-wing Adam Smith Institute labelled the project economically irresponsible, the Lords Economic Affairs Committee reminded the Chancellor that they concluded the case for HS2 has not been made, the Public Accounts Committee reported that the costs of HS2 are volatile, the timescales unrealistic, that there is no money for regeneration and no plan for how it will effect existing trains, and the Chief Executive of HS2 Ltd, Simon Kirby, quit his job to join Rolls-Royce.

In his letter to Transport Secretary Chris Grayling, Mr Tyrie said:

In your speech in Derby on 21 July, you made clear your support for the project, justifying HS2’s economic case on the basis of both capacity and speed. But the numbers do not support such an argument, as the Treasury Committee found when it took evidence from KPMG and a panel of academics in November 2013.

HS2 has the weakest economic case of all the projects within the infrastructure programme, yet it is being pushed through with the most enthusiasm.

The question of whether it is possible to improve capacity at lower speed and, consequently, at a lower cost, has not been comprehensively examined. In its strategic case for HS2, the Department for Transport asserts that the nine per cent cost savings attributable to the construction of a new conventional railway — along the proposed high speed route— would be outweighed by the economic benefits to be gained from reducing journey times and improving connectivity between our main cities.

As the Lords Economic Affairs Committee and the Institute of Transport Studies at the University of Leeds have concluded, the evidence behind these benefits was unclear. The Lords Committee recommended that ‘the Government review opportunities to reduce the cost of constructing HS2 through a change in the design of the scheme to one with a lower maximum speed’.

The case for providing sufficient detail to enable other ways of improving rail capacity — including at lower speed – to be fully assessed, remains very strong.

Stop HS2 Campaign Manager Joe Rukin said:

In Andrew Tyrie, we have yet another person representing a group which has no axe to grind apart from making sure public money is not wasted, who is saying HS2 will be a waste of money, and the case to support the project has basically made up.

When the chair of the Treasury Select Committee says HS2 is the weakest of all the projects proposed by Government, any rational person might think something would be done, but sadly there is nothing rational about HS2.

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