Expert Insights

Expert Insights

“No Business Case” in Scotland: Is HS2 becoming an “England Only” Project?

It has been reported that HS2 Ltd have decided that there is “no business case” for the planned extension of HS2 into Scotland.  This follows on from HS2’s chairman, Sir David Higgins’ comments in November 2014 that “enhancements” to existing lines might be “more realistic” in Scotland.

For many English based observers, it might come as a surprise to learn that Scotland was ever on the cards at all in HS2 terms.  There has certainly been overwhelming media emphasis on the project’s impact on links between London, Birmingham, Leeds and Manchester and the general effect it might have on rural England but less coverage (in the English press at least) of the plans for Scotland.

However, it is important to remember that, as originally planned, HS2 had the ultimate aim of improving London’s connectivity with Glasgow and Edinburgh rather than just with Northern English cities.  In his speech to the Labour Party Conference in 2009, Lord Adonis (considered by many as chief architect of the project), described HS2 as “the union railway, uniting England and Scotland, north and south, richer and poorer parts of our country, sharing wealth and opportunity, pioneering a fundamentally better Britain.”

It is perhaps understandable then if Scotland feels aggrieved at the thought of there being no high speed rail North of the border, especially given that the Scottish taxpayer will pay anywhere between £3 and 5 billion for the HS2 project, depending on which newspaper you read.  Drew Hendry MP, the SNP’s Westminster Transport Spokesman (who defeated Danny Alexander at the General Election), has reacted angrily sayingIt would be outrageous if the UK Government planned to snub Scotland on HS2” and that there is an “undeniable economic case” for the development of a new railway linking London with Scottish cities.

HS2 Ltd board minutes indicate that the “enhancement of the existing route” in Scotland – and the North East of England for that matter – is being given serious consideration.  There obviously remains a desire to increase Anglo-Scottish rail connectivity but perhaps, with the increased focus on the overall cost of the project (especially following the recent House of Lords report as summarised in our previous post), HS2 Ltd may be considering how best to trim expenditure.  Many will see this as a common sense approach, particularly considering the “topographical and geographical challenges” to rail development in Scotland, as outlined in HS2 Ltd’s board minutes.  Others will ask why the “enhancement” option cannot be considered (at least in part) in England – one of the Lords’ recommendations was that funds could perhaps be more usefully directed towards improving existing rail links such as the West Coast Main Line.  Mr Hendry sees it as the Westminster establishment’s commitment to “keeping Scotland in the slow lane”.  The slender victory of the No campaign in the independence referendum, followed by the overwhelming dominance in Scotland of the SNP at the General Election has left the Anglo-Scottish relationship in a delicate position which will not be helped by a perceived mistreatment in relation to HS2 – a project designed with increased unification in mind.

Unlike Scotland, HS2 was never planned to stretch into Wales and, unsurprisingly, there has long been disquiet over the burden on the Welsh taxpayer.  Plaid Cymru MP, Jonathan Edwards, has been one of the most vocal in expressing the view that “Welsh taxpayers should not be forced to foot the bill for a development set to be built entirely in England and to the detriment of the Welsh economy”.  He points to a report published by KPMG which he states predicted that HS2 would cost the South-Wales economy tens of millions of pounds each year.  Mr Edwards said that HS2 Ltd’s apparent decision not to extend into Scotland was conclusive proof that HS2 was an “England only project”.

Increased rail capacity and the rebalancing of the Northern and Southern economies are two core aims on which the HS2 project is based.  However, if, as a result of decisions such as this, the opinion that any positive impact of the project will be restricted to England begins to take hold, the Government will find HS2 increasingly difficult to justify to the millions of people who will feel it will yield them no obvious benefit.

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