Repost: Scotland set to be an official loser from HS2

This was originally posted in May this year.

While many in the SNP are up in arms at the revelation yesterday that there are no plans to extend HS2 to Scotland, what might have been missed is that although ‘classic compatible’ trains were always planned to run there on existing tracks after leaving the HS2 line north of Manchester shaving about half an hour off the travel time from London to Glasgow and Edinburgh, is that even with that, many parts of Scotland were due to lose out economically as a result of HS2 being built.

Towards the end of 2013, the Government paid quarter of a million pounds to KPMG to produce a report which claimed that HS2 would mean £15bn per year to the UK economy. Like every piece of paper produced to support the case for HS2, this report was widely trashed by independent economists as it relied on the ‘fact’ that the only factor influencing business location is connectivity to labour markets.

While Professor Henry Overman told the Treasury Select Committee that the report was “essentially made up“, even Lewis Atter, one of the authors of the report which neglected to remember that Northern Ireland is part of the UK, admitted his analysis did not assume any increase in employment, and relied on the idea that business and people would move as a result of HS2.

The best analysis of the flakiness came from an internal report from the Department for Transport themselves:

“There is no evidence that the direction of causation claimed in the model —between an increase in rail connectivity and an increase in productivity, employment density and GVA — has been established. There is no explanation provided for the impact of the transport proposal on other geographical areas, i.e. winners and losers … no explanation is given of the original locations of those jobs that shift [as a result of high-speed rail].”

However, even with all the smoke and mirrors which could be employed to try and bolster the case for HS2, the report still managed to admit some areas would be big economic losers if HS2 happened. Of course they didn’t want to tell anyone that, and it was only because of a freedom of information request that anyone found out.

Given that it’s now clear the Government does not want to extend HS2 to Scotland, it’s worth reminding people that some of the biggest losers in a report which tried it’s best to invent economic benefits from nowhere were Aberdeen (£220m/yr), Dundee (£96m/yr) and Glasgow (£77m/yr). A full list can be found here.

It also wouldn’t be a surprise if the first thing Alex Salmond MP now does when he is next in Westminster, is to seek out his Plaid Cymru counterpart Jonathan Edwards MP and sound him out about getting money under the Barnett Formula, as the SNP might well now change their stance to argue that HS2 is an ‘England Only’ project.

However, Plaid have been told there is no Barnett money for them, because people could get a train from Wrexham to change on HS2 at Crewe. With Scotland having trains running on from Crewe and supposed time savings from the Central Belt to London, their chances of getting a payout under the Barnett formula are even smaller.

This is how Newsnight reported it at the time.

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