HS2 go-ahead is “shamelessly opportunistic” and pretends coronavirus will have no lasting effects.

Today, at the height of the coronavirus crisis, the Department for Transport has issued HS2 Ltd with ‘Notice to Proceed’, stating that this will provide the construction industry with certainty and secure jobs by allowing the issuing of £12bn worth of contracts.

To achieve ‘Notice to Proceed’, HS2 was meant to be able to demonstrate management capability, affordability of contracts and robustness of a revised business case. Despite this, there have been no significant changes in HS2 management since Boris Johnson labelled them as “profligate”, the contacts have never been affordable, and the new business case was written before the coronavirus outbreak, ignoring the fact that one of the certain long-term impacts of the crisis will be a drop in the demand for long distance travel, as everyone is realising how well video conferencing actually works.

Stop HS2 Campaign Manager Joe Rukin said

“Issuing HS2 with ‘Notice to Proceed’ at a time when there is next to no scrutiny taking place is not only shamelessly opportunistic, but it is pretending that coronavirus isn’t happening, and that it will not change the world. It is absolutely clear that one of the lasting impacts of coronavirus will be to reduce the need for long-distance travel in the future, so HS2 Ltd have decided to ignore this completely, because taking account of what is happening right now in the real world would absolutely destroy the already made up case for HS2 and derail their gravy train. Committing billions of pounds to white elephant to protect a handful of construction companies will absolutely come back to bite the Government, because when the dust settles following the current crisis, hundreds if not thousands of well-run firms will go to the wall for lack of funding which Government has squandered on HS2.”

“The decision today comes as no surprise, as over the last couple of months those working for HS2 have seen coronavirus as an opportunity, with consultants allegedly jacking up process, contractors blatantly ignoring social distancing rules, and men with chainsaws illegally destroying habitats, safe in the knowledge that Natural England have pulled back front line staff, and members of the pub lic are not around to be able to report wildlife crimes. HS2 is a project that comes at too great a cost to our wildlife, that ignores the ongoing climate emergency, and we are certain there will be a legal challenge to this decision.”

 Penny Gaines, chair of Stop HS2, added

“HS2 continues like the Titanic, oblivious to the changes to society that will inevitably happen due to COVID 19.   The government has spent the last decade telling us that  digital communications won’t reduce to meet in person.  But the experience of the last month has shown that all sorts of things that were thought impossible can be done online.

“HS2 is aimed at business travellers and it is entirely unknown what will happen to business travel in the future. According to the government’s own figures, if they get the expected passenger numbers, HS2 will not break even, unless they throw in all the possible benefits they can think of.  The value for money from HS2 is already ‘low’, with fewer passengers, it will fall below the cost of building it.  Rail usage has currently dropped to 3% of the pre-COVID levels, and it is entirely too early to say what the effects of this fall will be on the business case for HS2.

“The business case for HS2 must be affected by the massive changes to working practises in the last month.  And yet the government has decided to spend approximately £100 billion on HS2 even though it is increasingly likely to be outdated and unnecessary when it is finished.”

omments by Lord Berkeley on the HS2 Phase 1 Go-ahead’

‘The Government’s giving HS2 the go-ahead at a likely cost of over £50bn flor Phase 1 just a day after the OBR suggested that the UK faced the worst recession for 100 years and a forecast drop in GDP of 35% is certainly well timed to get minimal scrutiny.

‘The accompanying DfT Full Business Case claims that HS2 will help the economy by providing shovel ready work for the construction industry, but fails to acknowledge that there are more and much cheaper rail shovel ready projects which will bring greater benefit to rail users.

‘DfT has also not explained whether the main contractors have agreed to design and build Phase 1 for the latest DfT funding envelope of £45bn, especially when ministers were already saying since March 2019 that the Phase 1 spending envelope was £55bn, similar to the more credible estimate of Michael Byng of £54.5bn quoted in my HS2 Dissenting Report.

‘The Benefits are still based on 17 trains per hour for the whole scheme into Euston, in spite of evidence from around the world that no high-speed lines operate more than 12 to 14.   No prudent economist would base a business case on an operation that is not achievable in practice.   Elsewhere in the Business Case, the DfT struggles to find even more ambitious benefits to attribute to HS2, including ‘higher foreign investment into the UK’ (2.11). Is t his really dependent on HS2?

‘The DfT accepts that the Benefit Cost Ratio (BCR) will be affected by the current Corona Virus travel restrictions, but fails to quantify by how much and for how long.  However, it reduces the BCR to 0.8 for the Funding Envelope of £40bn (Table 2.4), reducing to 0.7 for 10% less demand. Surely the lower demand is very likely as a result of Corona Virus changing demand?

‘Putting all these together, I believe that the BCR quoted in my Dissenting Report of 0.6 is much more realistic.  Fig 2.1 reminds us that a BCR of over 2.0 is ‘good’ and below 1.0 is ‘poor’.

‘At a time of the Corona Virus health and business costs well exceeding those of HS2, it is surprising that ministers are still throwing more good money, our money, after bad.     The NHS could clearly benefit from the £billions that could be saved for investments in the NHS and other parts of the UK economy by scrapping HS2, whilst still potentially investing in alternative and much better targeted rail projects listed on www.tonyberkeley.co.uk.

Ministers seem to be keeping their collective heads well in the sand, whilst hoping that the lack of scrutiny due to the Coronal Virus will mean that, by the time they surface with the full knowledge of the UK’s financial situation, it will be too late to stop this unnecessary drain into what remains a massive vanity project.’

Lord Berkeley, who has just retired as the chair of the Rail Freight Group responded:

‘The Government’s giving HS2 the go-ahead at a likely cost of over £50bn flor Phase 1 just a day after the OBR suggested that the UK faced the worst recession for 100 years and a forecast drop in GDP of 35% is certainly well timed to get minimal scrutiny.

‘The accompanying DfT Full Business Case claims that HS2 will help the economy by providing shovel ready work for the construction industry, but fails to acknowledge that there are more and much cheaper rail shovel ready projects which will bring greater benefit to rail users. 

‘DfT has also not explained whether the main contractors have agreed to design and build Phase 1 for the latest DfT funding envelope of £45bn, especially when ministers were already saying since March 2019 that the Phase 1 spending envelope was £55bn, similar to the more credible estimate of Michael Byng of £54.5bn quoted in my HS2 Dissenting Report.

‘The Benefits are still based on 17 trains per hour for the whole scheme into Euston, in spite of evidence from around the world that no high-speed lines operate more than 12 to 14.   No prudent economist would base a business case on an operation that is not achievable in practice.   Elsewhere in the Business Case, the DfT struggles to find even more ambitious benefits to attribute to HS2, including ‘higher foreign investment into the UK’ (2.11). Is t his really dependent on HS2?

‘The DfT accepts that the Benefit Cost Ratio (BCR) will be affected by the current Corona Virus travel restrictions, but fails to quantify by how much and for how long.  However, it reduces the BCR to 0.8 for the Funding Envelope of £40bn (Table 2.4), reducing to 0.7 for 10% less demand. Surely the lower demand is very likely as a result of Corona Virus changing demand?  

‘Putting all these together, I believe that the BCR quoted in my Dissenting Report of 0.6 is much more realistic.  Fig 2.1 reminds us that a BCR of over 2.0 is ‘good’ and below 1.0 is ‘poor’.   

‘At a time of the Corona Virus health and business costs well exceeding those of HS2, it is surprising that ministers are still throwing more good money, our money, after bad.     The NHS could clearly benefit from the £billions that could be saved for investments in the NHS and other parts of the UK economy by scrapping HS2, whilst still potentially investing in alternative and much better targeted rail projects listed on www.tonyberkeley.co.uk.

Ministers seem to be keeping their collective heads well in the sand, whilst hoping that the lack of scrutiny due to the Coronal Virus will mean that, by the time they surface with the full knowledge of the UK’s financial situation, it will be too late to stop this unnecessary drain into what remains a massive vanity project.’

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4 comments to “HS2 go-ahead is “shamelessly opportunistic” and pretends coronavirus will have no lasting effects.”
  1. Hiya.
    Thank you for your amazing work.
    I was so incensed by recent events, that I started a campaign online & quoted your site for people to gain more info. Hope that was ok? I don’t have many social media platforms to get the petition out & wondered, if you may be able to add it to your site? Many thanks.

    http://chng.it/pxrYzBSn5Z

  2. It’s difficult to find words that adequately describe the tragedy that is HS2.
    Immoral, environmentally damaging, disgraceful, destructive,and unbelievably extravagant, above all illogical at this time when it’s now fairly clear that long distance travel is going to reduce forever.
    However, as has been observed elsewhere by the Adam Smith Institute and the Institute of Economic Affairs, the decision to proceed is “tone deaf” & “the economic case for HS2 was always weak….with the country in the midst of an economic downturn, the cost is simply unjustifiable” These sensible comments are just dismissed out of hand by this arrogant Govt. which clearly simply does not care.

  3. Unfortunately, no big surprise. Typical tactic: get things ‘on the way’ so that it will cost even more than already estimated to Cancel, will have done so much damage that cancelling won’t save much. They are ripping the heart from the Heart of England – and, as people are Locked Down, no-one will be able to witness the devastation.

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