The spending review – a few thoughts

David Cameron said “There is only one thing worse than spending money you don’t have and that is buying the wrong things and doing so in the wrong way”.

He said it in relation to air craft carriers, but we think it can be applied to High Speed Rail as well.  

It’s clear that developments which come out of the spending review are going to affect the demand for long-distance trains.  

Rising fares – predicted to increase by 30% over the next five years – will dampen the demand for rail travel.  

The promise, in George Osbourne’s speech, of superfast broadband to the Highlands and Islands of Scotland, North Yorkshire, Cumbria and Herefordshire will benefit more people then just the residents of those areas.  Telepresence videoconferencing will be viable, linking remote parts of the UK, with the “Great Northern cities” and the rest of the country, in a way which a trainline with a few stations could never hope to match.   

The increasing cost of travel will encourage this use of videoconferencing.  This will be especially true if combined with further improvements in technology, which may result from the Governemnt’s decision to back high-value scientific research.

Specifically on railways, George Osbourne’s speech on the spending review did not refer to HS2, or High Speed Rail at all. You had to search through press releases and 100 page documents to find their plans.

If they think HS2 is such a good thing, why did they hide it in the small print?

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