The Transport Select Committee are holding an inquiry into the KPMG report on HS2, which was published in September. They have asked for written submissions, (by 19th November) and will be questioning Patrick McLouglin and KPMG on 26th November, the day after the Stop HS2 Lobby Day.
Since it was published, the report has been mired in controversy, with former advisors to HS2 Ltd criticising both the methodology and the results. A FOI request showed that the report had not included the information about the places that would lose out if HS2 was built. And last week’s evidence session on HS2 by the Treasury Select Committee, which focused on the KPMG report, again showed holes in the methodology, leading the Chairman of the Treasury Select Committee, Andrew Tyrie MP, to say:
“KPMG acknowledged today that their £15 billion per annum forecast return for the project has no firm statistical foundation. A lot more work is clearly needed.”
This should be no surprise to anyone who has read the entire 96 page report, as tucked away on p83, section 6.3.38 KPMG write
“Instead, we have adopted an approach that uses the relative importance of the different variables found in the statistical analysis to apportion the overall responsiveness of productivity to connectivity. While we recognise that this approach does not have a firm statistical foundation, it enables connectivity to other business and to labour, by car and rail, to be reflected in the analysis and captures.”
The Transport Select Committee website asks for written submissions, by Tuesday 19 November, on the KPMG analysis and the strategic case for HS2, and say the submissions can be “previously published or written specifically for the Committee”, and we would suggest to our supporters that they consider taking part.
Next Tuesday is also the day of the second reading of the High Speed Rail (preparation) bill in the Lords. Because it is a “Money Bill”, the House of Lords cannot amend it, although they will be debating HS2.
However, Lord Stevenson of Balmacara has submitted a “motion to regret” to the Bill. The House of Lords business papers read:
High Speed Rail (Preparation) Bill (Money Bill) Second Reading (and remaining stages) [Baroness Kramer]
Lord Stevenson of Balmacara to move, as an amendment to the motion that the bill be now read a second time, at end to insert “but that this House regrets Her Majesty’s Government’s decision to introduce the Bill which authorises preparatory expenditure on a railway as the Bill is premature in the light of (1) the failure to settle upon a route which is consistent with the Government’s statutory duty to have regard to the conservation and enhancement of the Chilterns Area of Outstanding Natural Beauty, and (2) the failure to specify further detail on the route and a limit on expenditure”.
Another factor the committee should examine is this dimension of the promised job creation aspect,
It appears much of the jobs will be for recruited immigrant labour )what will be the real cost in terms of housing competition and house the construction workers,their spouses and children). It appears that net immigration will dilute the proposed benefits, It seems unproven that current labour pools can be trained and even if trained the spiralling costs will be reduced by the use of cheap labour..
“Overseas labour needed for infrastructure, as UK faces ‘lost opportunity’
Crossrail’s chairman has admitted the UK will need to recruit skilled labour from overseas for future infrastructure projects, but said the challenge now lies in the extent to which foreign workers will need to plug the UK skills gap.
Terry Morgan told Construction News Crossrail had not suffered from a skills shortage in London because it could “always recruit from central Europe – that’s what happens”.
A High Speed 2 report set to reveal the extent of the country’s skills shortage in rail construction and engineering is due to be published early next year.
Surely this ‘skills gap’ and need to import labour should have been honestly discussed in Parliament (not as a paper next year) as part of the promised bonanza.. The go for it brigade avoided the matter totally……….far from providing jobs for the North it looks as though the route is to suffer an influx of migrant workers who will take the jpbs during the construction phase and continue to be in the labour market thereafter.
Organic upgrading of existing lines may be a means whereby local teams of local individiuals could be trained in greater proportion. This is an aspect that needs to be properly investigated.
So the ‘newest’ fight-back PR is the ersatz ‘pin-up’ Lord Hesleltine.
His wiki entry is interesting as a starter into his financial skills.
So Heseltine is in favour or HS2 for all the ‘usual’ reasons (growth development incorrect parallels with HS1) that are at the basis of this part of the pro HS2 campaign.
Interestingly he was the Minister who supported that other white elephant CONCORDE on pretty much the same ticket.
The wiki entry states
“As Minister for Aerospace in 1973, Heseltine was responsible for persuading other governments to invest in Concorde and was accused of misleading the House of Commons when he stated that the government was still considering giving financial support to the Tracked Hovercraft when the Cabinet had already decided to withdraw funding.”
Same old, Same even older……..Heseltine championing HS2 gives me no reassurance. He got it very wrong brfore.
2 questions I’d like to ask, but I may miss the deadline. (I’m not up to speed.) If sensible and worthwhile, would someone submitting questions pick these up, please?
I gather that the new KPMG report builds on the report from Feb 2010 (Consequences for employment and economic growth).
1) How do KPMG explain their report’s forecast of net migration of jobs from London to the north (2010, Table 5), contrary to the empirical evidence collected by Tomaney et al, which shows net job migration in the opposite direction (from smaller to larger cities)? Doesn’t this imply that their computer simulation is missing some important modelling factors?
2) Where the 2010 report forecasts job losses (London, East Midlands), the new report forecasts £billion gains. How do job losses translate to economic growth?
No the report does not include property blight and monetary losses (extends to 1km from the line in rural areas)
nor the cost of disruption some of which may have long term sequelae especially to things such as tourism.
(HS2AA have a good evidence on this aspect)
Nor has there been a contigent valuation of the damage done to the AONB/SSI/ANCIENT WOODLANDS.
It would be good to know that this would be reflected to the committee and is discussed in parliament this was not odone for the paving bill. The KPMG report was discussed at the Paving Bill.
Perhaps a relatively minor point given the scale of the numbers being bandies about, but it is not clear to me wether uncompensated loss of property value is taken into account anywhere. It is, by definition, not part of the budgeted expenditure of HS2 Ltd., but should such expropriation of value not be included in a detailed economic analysis of the wider costs and benefits to the economy? Maybe I missed it among the thousands of pages published by HS2?
From what I have seen, McCloughlin lacks the equipment to deal with this kind of situation…
He will need to rely on his KPMG spinners and learn a few general-purpose rambling responses that he use to run down the clock.
If they really get into him, it might be interesting.
Yes tattyman IThink you are right if they apply pressure he will just say I am not accountant that’s why we have paid them 250 k to come up with the figures .It will be the same when the project goes over budget he and his men will hang the new boss out to dry or just blame labour for thinking up this silly idea