Outside the marginals

A commentary on the politics that followed the UK 2010, 2015 & 2017 elections (and THAT referendum)

HS2: Labour surprise

Labour is questioning whether the HS2 rail project is “the best way to spend £50bn for the future of our country”.

Shadow chancellor Ed Balls told the party conference they still backed the idea of a new north-south rail link, but there could be no blank cheque.
BBC News website 23 September 2013 Labour ready to cancel HS2 ‘if costs rise’

Well, there’s a surprise!

Well it is; compared to the Conservative Transport Secretary’s evasions (see previous post: HS2: Fiscal Irresponsibility? Political Avoidance) it is a surprise that a politician says that an expensive project needs to continue to prove that it is “value for money” and that there is no blank cheque. It’s a surprise because that is such an obviously sensible stance!

Mr Balls added: “Labour will not take this irresponsible approach. So let me be clear, in tough times – when there is less money around and a big deficit to get down – there will be no blank cheque from me as a Labour chancellor for this project or for any project.

“Because the question is – not just whether a new high-speed line is a good idea or a bad idea, but whether it is the best way to spend £50bn for the future of our country.” ibid

I find it strange that journalists are portraying this as a “major shift”; I can only presume that those same journalists have inside information that the previous consensus was for a “blank cheque” for HS2 – which I find just a little worrying.

I have a slight problem over the “whether it is the best way to spend £50bn” element of his comments. These projects probably require debt financing, so there is a need to ensure that it is a “good investment”. However, constantly pulling this plant up by the roots to see if it is “the best” (rather than remaining a “good”) investment, will damage the project. Often looking for the “optimum” investment decision can distract you from finding and committing to some very good but slightly sub-optimum investment opportunities.

Perhaps Mr Balls is raising the question “given that investment in the railways is required, what is the “best way to go about it?”. Maybe he is coming round to a Leeds-Manchester-Liverpool initial phase (what I have called HS62) or even doing the Leeds-Birmingham and Manchester-Birmingham routes (The V of the Y) first (as advocated by Institute for Public Policy Research).

HS2 North Alternative

Actually UK Midlands?

Some may say that the V is illogical – which implies that the expectation that people from Leeds and Manchester would want to go to Birmingham is wrong; but is it any more wrong than the expectation that they would want to go to London? It also makes the lack of a link between at least Leeds and Manchester more illogical.

The drain from Birmingham Leeds and Manchester to London

The drain from Birmingham Leeds and Manchester to London

The other issue of course is “why, if the project is so good, do they not build both phases simultaneously?” Presumably the North Midlands (Manchester and Leeds see previous post HS2 Northern Section – TBA) can wait almost a further decade – or is there a benefit in “foregoing these benefits”? (see previous post HS2 – throwing away the benefits?)

Related Posts

HS2 Northern Section – TBA

HS2 – throwing away the benefits?

HS2: This service is running late or cancelled

HS2: Fiscal Irresponsibility? Political Avoidance


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One thought on “HS2: Labour surprise

  1. Peter Lanky on said:

    It’s interesting how the pro HS2 lobby keeps telling us that HS2 is good for the North and Midlands, but fails to tell us HOW and WHY it will be good. I’m still waiting.

    Another relevant point that fails to ever get mentioned is one relating to capacity. We are constantly told that HS2 will increase capacity, but please somebody try to explain to me why so many people need to be travelling to and from London in the first place. What are they doing? With so much technology, the journey for many should not be necessary, but then why does there need to be any connection at all? It’s as if some businesses are obsessed with having some presence there, but really it is not at all necessary, and done out of habit rather than any valid business need.

    Cut out the unnecessary business trips to London, and then the capacity issue will be academic. We can then spend money on the under funded railways north of Birmingham (HS62 as described in the article), and at the same time vastly increase the rail capacity from all major cities in the North and Midlands to Manchester Airport, which should in turn stop the south continually whining about their overcrowded skies, which is also completely unnecessary.

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