HS2: We like infrastructure, we just don’t like specifics.

There’s a big gap in the argument of HS2 sceptics. What should we spend the money on instead?

“OK, then lets skip High Speed Railway”

“Melbourne-Sydney? Ah, Why can’t we have fast trains? I like fast trains. I like infrastructure. I just don’t like specifics.”

“That’s the killer, isn’t it? Announcing a big spend. That’s easy. But then what do you spend it on?”

The Hollowmen, ‘Future Fund’

Let’s say Labour decides that  High Speed Two is too much cost for too little reward. It’s an entirely respectable view. It’s a lot of money to spend. Maybe there are better things to spend it on.

So what are they?

It seems to me there’s three main possibilities for the money saved. First, you use it to reduce the deficit. Second, you use it to drive current demand directly through tax cuts or increased public budgets. Third, you spend it on some other infrastructure projects.1

Since even more rapid deficit reduction during a period of sustained cuts would be a stretch for a Labour government, I’m going to discount option one, at least in large part. There might be room for some additional debt paydown, but it’d be marginal.

Option two (current stimulus) would cut against everything Labour’s been saying about long-termism, the need for greater infrastructure spend in the UK and so on. (and, to be fair to the government, the things they’ve been saying along the same general lines)  It would look a bit odd for Labour to talk about underinvestment in the economy, and then recycle HS2 money into a tax cut or a pensions rise or something. After all, I’m not sure our argument against the current government is that they’re spending too much, too slowly.

So what else might the money be spent on? Not Heathrow, or Gatwick, I’m willing to bet. Or Boris Island or any other large increase in London’s airport capacity. Not a bunch of new roads in the South-East, even though some say they’re needed. Lots of train upgrades? Maybe, but then you’re into much the same value for money, capacity and disruption debate as you have with HS2.

Housing? Well, the money’s needed for social housing, but do we really want to spend all that money building green new Towns in the London commuter belt? That’s where they’re likely to go. The green belt was a Labour achievement, and we’re going to build on it, as the man once said. Anyway, won’t somebody please think of the Marginals? On top of that, any such programme would involve a pretty big subsidy to the private sector as a) You would need to encourage mixed use developments and b) building new transport and road links. Oh, and if you built in areas of high demand, a housing programme would do precious little for the economies of the North and Scotland.

So there are lots of options, but they too all have problems and issues. Whatever the scheme or schemes that get the nod, I’m willing to bet the project budgets will overrun, they’ll be politically controversial and annoy a hell of a lot of people.

That’s the problem you see. As a country, we like the idea of infrastructure and the long-term. We just don’t like the specifics very much.

Maybe we could just put the money in a Future fund? I like the sound of that. It sounds.. glossy.

  1. There is a fourth option, I guess: use the money to offset lost premiums from taking Rail companies back into public hands. But that would mean missing out on a big infrastructure project, unless you assumed publicly owned lines would cost significantly less to the treasury over the long term. Once you control for infrastructure spending, DOR is paying about the same premium as it’s predecessor and getting about the same subsidy, so the difference is likely marginal, so I’m not going to rely on that, though others models of train nationalisation costs may vary []

3 Responses to “HS2: We like infrastructure, we just don’t like specifics.”

  1. Alan Ji

    There’s also the problem that is really is true that the West Coast Main Line south of Rugby will soon be full.
    Electric trains will be running to Blackpool from Manchester and Liverpool by May 2016. Blackpool won’t regain direct trains from London; already in 2013 there are no train paths for the extra trains.

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  2. Dan Filson

    Simply paying off the National Debt is not constructive – we are not in sunny uplands at the moment, and so we need to spend on “infrastructure” i.e. capital projects where a lasting asset is left behind rather than revenue projects, provided the capital project does not set up demand for ongoing revenue support (like a sports centre – or several – would)

    It is not though a simple question of either / or. Juxtaposing two wildly different projects is generally not good policy-making.

    There are many indeed who would put building new homes ahead against building HS2. But we are not in a guns before butter type of debate.

    The simple fact is that if we do not build HS2 or something comparable to achieve the same effect, there will be two consequences – the West Coast mainline will cease to be able to handle the conflicting needs of passenger and goods traffic as there simply are not enough pathways. Hence the need for some of the passenger long distance traffic to be moved onto HS2.

    The other consequences is that if we do not build HS2 or something quite similar, there will never be again a major railway-building programme in the UK, and rail will wither away as increasingly obsolescent. Whereas road building continues insatiably, widening motorways to 3-, -4- and -one day – 5-lanes., and by-passes, ring-roads etc. Of course finding the routes that don’t create a NIMBY storm is not easy, especially as middle-class home-owners are acutely aware of their rights and the value of their homes.

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  3. many sweet peppers

    If you enjoy eating bananas, you’ll probably like the taste of the pawpaw. Choose green tea over coffee, but if you must, opt for a single long espresso with 2% goat milk or soy and honey instead of a fancy specialty coffee.

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