Flaccid economics, says the Economist

Thursday’s Economist has an interesting article about UK’s infrastructure, and HS2 in particular.

They say it is good that the government is encouraging investment on Britain’s infrastructure.  However they warn that big multinational companies can choose whether to invest in Briatin, or places like China, where there are few impediments.

The Economist comments that HS2 will generate a much lower rate of return (two pounds for every pound spent) then the road projects which the Government will pay for – these have a rate of return of around six pounds for each pound spent.  They also point out that HS1 in Kent has not attracted as many passengers as hoped for.

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