Whilst proponents of HS2 have long claimed that the project would somehow ‘rebalance the economy’ geographically, this has flown in the face of the absolute fact that every single piece of international evidence and independent academic research says exactly the opposite would happen.
Well, that pile of evidence and research has got that little bit taller, as research for the London School of Economics has backed this up. Another oft-repeated line from proponents of HS2 has been “Look at France”, which is a throwaway comment, which attempts to imply without any evidential backing that HSR must have been good for France. Well, ignoring the other evidenced implications of the TGV in France, such as a massive ongoing subsidy which has seen the rest of the network starved of investment, and increases in regional unemployment, this report by French economists has shown that the TGV has led to a concentration of management jobs in Paris.
Whilst the study found that companies had made productivity gains due to the TGV, they found that these were cancelled out by the movement of management jobs from regional offices, to Parisian headquarters. They said:
“The research further investigates the precise nature of the mechanisms driving this productivity impact. It finds that the easier communication between headquarters and remote affiliates decreases the need to locate managerial functions at remote production plants, thus fostering their specialisation in purely production activities.”
“In contrast, managerial jobs tend to concentrate at headquarters, in particular those requiring high skills. This organisational rationalisation is also associated with wage adjustments because the need for skilled workers decreases at remote affiliates.”
“But in most industries these increases in production jobs are almost compensated by transfers of managerial jobs from affiliates to headquarters. This contributes to geographical job polarisation and the clustering of high-skill (managerial) jobs in the largest cities, in particular in the capital city (Paris) where a large fraction (35 per cent) of headquarters are located. The same phenomenon would most likely occur if London, in the UK, became connected via high-speed rail to the northern part of the country.”
This is of course totally at odds with the previous claim from HS2 Ltd chair Sir David Higgins that the TGV had led to decentralisation in France…….