Yesterday (8th September 2016) Lord Hollick, the Chair of the Lords Economic Affairs Committee, reminded Chancellor Philip Hammond MP that his committee found the case for HS2 has not been made, and that the Department for Transport are ‘marking their own homework’ in respect to the evaluation of the project.
This happened the same day that the Adam Smith Institute produced a report saying that HS2 was an “economically irresponsible” project.
At the end of a session in which Mr Hammond revealed he would produce his Autumn Statement on 23rd November, Lord Hollick asked the Chancellor to put the brakes on HS2, saying:
“When we conducted our investigation into HS2 where we concluded the case was not made. Perhaps you’ll consider hitting reset, the pause button on that as you’ve done on Hinckley. One of our concerns was that the process within Government to evaluate these sorts of projects left much to be desired.”
Lord Hollick wanted the Infrastructure Commission, announced by previous Chancellor George Osborne, to have a statutory requirement to look at projects like HS2, but Mr Hammond dismissed this, saying that the Department for Transport has a good project evaluation team, to which Lord Hollick replied:
“I always got rather higher marks when I marked my own homework as well.”
Earlier in the session, former Chancellor Lord Darling asked if small infrastructure projects that can be delivered quickly would be better than HS2 at producing an economic stimulus. In reply, Mr Hammond said that he is a great believer in the ‘Eddington Principle’, that often it is modest rapidly deliverable projects that have the most impact.
The ‘Eddington Principle’ comes from a transport study commissioned by the Department for Transport in 2006, carried out by Sir Rod Eddington to advise the Government on the long-term links between transport and the UK’s economic productivity, growth and stability, within the context of the Government’s commitment to sustainable development. It was odd Mr Hammond cited Eddington, as regarding HS2 his report concluded:
“It is critical that the government enforces a strong, strategic approach to option generation, so that it can avoid momentum building up behind particular solutions and the UK can avoid costly mistakes which will not be the most effective way of delivering on its strategic priorities.”
“The risk is that transport policy can become the pursuit of icons. Almost invariably such projects – ‘grands projets’ – develop real momentum, driven by strong lobbying. The momentum can make such projects difficult – and unpopular – to stop, even when the benefit/cost equation does not stack up, or the environmental and landscape impacts are unacceptable.”
“The approach taken to the development of some very high-speed rail line options has been the opposite of the approach advocated in this study. That is, the challenge to be tackled has not been fully understood before a solution has been generated. Alternative options do not, therefore, appear to have been fully explored so it is not clear what the highest return solution to a problem would be; nor indeed is the challenge clear.”
Stop HS2 Campaign Manager Joe Rukin responded:
“Given the immense cost, it makes absolutely no sense that HS2 seems to be immune to any scrutiny whatsoever. The Lords Economic Affairs Committee and the Adam Smith Institute are just two in a long list of independent bodies which have found there is no case for HS2, and with the Chancellor himself admitting that it is unlikely to provide a quick fiscal stimulus, there is even less justification for going ahead with this white elephant.”
“As Lord Hollick said, the DfT have been ‘marking their own homework’ when it comes to HS2 from the start, as it is the only way they can make up a justification for the project. If Philip Hammond is such a fan of the Eddington Report, he should really read the bit which warned HS2 was being pushed ahead without any good reasoning behind it.”
Penny Gaines, chair of Stop HS2 said
“Philip Hammond showed little enthusiasm for HS2 at the Lords Economic Affairs Committee. This is a huge contrast to George Osborne who seemed to think HS2 was the solution to every economic woe going when he was Chancellor. Even though HS2 was brought up several times, Hammond had nothing positive to say about it.”