HS2 'losers' revealed as report shows potential impact

 
Map of the proposed HS2 route KPMG's report listed the regions that would benefit, but left out the rest

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The potential losses to some regional economies from the HS2 high-speed rail link have been revealed.

HS2 would make more than 50 places across the UK worse off - such as Aberdeen, Bristol and Cardiff - research by KPMG suggested.

The government said HS2's £17bn cost is part of a £73bn package of transport improvements in the next parliament.

It claimed the measures would benefit areas which HS2 will not serve, long before the high-speed line opens.

The 92-page KPMG report was released in September.

Hailed by the government, it said the line could boost the UK economy by £15bn a year.

It listed the regions it said would benefit, with Greater London (£2.8bn) and West Midlands (£1.5bn) the biggest winners.

But, the extent to which regions not on the proposed line would be affected was only revealed following a freedom of information request passed to BBC Two's Newsnight programme.

HS2 Ltd's chief executive has called the figures "unsurprising".

Start Quote

What this is showing is that the places that are on the high-speed network... those are the places that will benefit most from HS2”

End Quote Alison Munro Chief executive, HS2 Ltd

Economic output would be worst affected, according to the research, in:

  • Aberdeenshire, Aberdeen City and Moray (-£220m)
  • Norfolk East (-£164m)
  • Dundee and Angus (-£96m)
  • Cardiff (-£68m)
  • Norfolk West (-£56m)

James Bream, policy director of Aberdeen's Chamber of Commerce, said it was "really disappointing" that such a huge number was left out of the original report.

He added the negative impact for the whole north-east of Scotland could be "significant to say the least."

Dundee and Angus could lose as much as 2% of its annual GDP, KPMG found.

Kettering, Suffolk West and Cambridgeshire East are all listed as zones that could see a 1% drop in GDP.

The accountants used data from HS2 Ltd's assessment of the direct transport impacts of the scheme, which would connect London to Birmingham and to Manchester and Leeds.

The Department for Transport said HS2 was vital to "rebalance the economy".

A spokesman said: "These figures show it boosts the north overall more than the south.

"Of course the line does not serve every city and region and these figures reflect that."

The DfT say ultimately the line would reduce journey times to Edinburgh and Glasgow by an hour.

Graphic showing how HS2 will reduce journey times: London-Birmingham 35 minute saving; London-Nottingham 35 minute saving; London-Sheffield 46 minute saving; London-Leeds 50 minute saving; London-Manchester 60 minute saving.

KPMG said its report clearly shows the benefits of HS2 for some regions and the negative impacts it might have on others.

A spokesman said: "Maps in the report show potential productivity gains would outweigh the potential losses and the benefits to the UK economy would be far greater than the negative impacts.

"Newsnight did not contact KPMG prior to its programme.

"If they had, we could have helped them understand how the underlying data is represented in the report we have produced."

Professor Henry Overman from the London School of Economics - formerly an expert adviser to HS2 Ltd - told the BBC it was obvious that, as some cities, towns and regions reap the benefits of being better connected, other places away from the line will pay a price.

"When a firm is thinking of where to locate, it thinks about the relative productivity of different places, and the relative wages etc," he said.

"HS2 shifts that around. So if you are on the line that makes you a better place that hasn't had that productivity improvement."

'Robustness'

John Bridge, from Cambridgeshire Chamber of Commerce, says he's concerned infrastructure projects in his area may miss out because of HS2

But Newsnight's political correspondent David Grossman said there were "questions about the robustness" of the data.

The chief executive of HS2 Ltd, Alison Munro, said: "What this is showing is that the places that are on the high-speed network... those are the places that will benefit most from high-speed two.

"But high-speed two isn't the only investment that the government is making. Over the next five years it is planning to spend £73bn on transport infrastructure."

Richard Houghton, from campaign group HS2 Action Alliance, claimed the whole project is based on "voodoo economics".

He said: "If I was sitting in one of the 50 areas set to lose out to the tune of millions of pounds, I would be asking very clear questions."

PDF download HS2 FOI request[97kb]

 

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  • rate this
    +4

    Comment number 242.

    If HS2 goes ahead then it's the everyday tax payer in the UK who will be the losers for funding such a hugely over-priced and unjustified vanity project.

    And a project that will do nothing except bankrupt the nation and channel yet more of the UIK's GDP into London at the expense of the economic health of rest of the country.

  • rate this
    +1

    Comment number 241.

    Scotland should have one that connects the whole of Scotland better than then runs to Glasgow to Manchester and Edinburgh to Leeds. From Manchester to Exciter. Leeds down to Sheffield with a branch to Shrewsbury Cardiff, an the other to London. an one from Liverpool Manchester to exchange. Shrewsbury to Portsmouth or Southampton why always London.

  • rate this
    +7

    Comment number 240.

    HS2 is a waste of money we need power stations and investment in housing not a railway line so the likes of overpaid executives bbc presenters and politicians have an extra 20 minutes at home in north London to stop and have a latte at the coffee shop

  • rate this
    -2

    Comment number 239.

    I agree with government plans to build HS2. France has had national high-speed rail for the best part of 20 years which has opened up the country to many more people, whether they be tourists or French nationals, and those destinations have benefited financially from the increased demand due to TGV. In terms of mass transit we're still in the dark ages.

  • rate this
    +4

    Comment number 238.

    201. Gabriel Oaks

    "HS2 keeps getting championed about the time savings to Birmingham when in reality it is there to address the future lack of rail capacity to the north".

    Lack of capacity due to numerous short term decisions e.g. dig up all the extra parallel railway lines that carried freight

    As for use "old lines" if possible but I bet the land was sold and built on

    HS2 waste of money

  • rate this
    +3

    Comment number 237.

    So surprise surprise , Scotland after paying 10% of the total cost of this madness is going to suffer to the tune of £500 million pounds . The new claim that Glasgow and Edinburgh would benefit with an hours saving on journey times to London is a total joke . Here's a novel suggestion if its so good start the route in Aberdeen and build it southwards finishing in our great capital city Laandaan

  • rate this
    +5

    Comment number 236.

    What about the biggest losers - taxpayers? It is an expensive toy for the rich whilst the rest of us have to put up with declining living standards and a crumbling health service - that seems reasonable.

  • rate this
    +27

    Comment number 235.

    This project might have its virtues but at this time of austerity its the last thing the public find acceptable. The money proposed should come from business subscription as it is apparently for their benefit. There has been no info on who will own or run the track so it is logical to assume it will be the business that use it. Let business pay for it. Leave the tax payer out of it.

  • rate this
    +7

    Comment number 234.

    The time saved on train journeys is miniscule. The cost is unjustified and I agree, it would be better if they are going to spend such an offensive amount of our tax money, that it would be better invested in other ways in the areas concerned. This amount of spending is ill-conceived at best and irresponsible at the worst.

  • rate this
    +5

    Comment number 233.

    It should come as no surprise that the KPMG report only included the positives and left out all the negatives.

    It was commissioned by HS2 Ltd!!

    Page 1 of the KPMG report sums it up: "This document is issued for the party which commissioned it .....It should not be relied upon by any other party or used for any other purpose".

    What we need is an INDEPENDENT report.

  • rate this
    0

    Comment number 232.

    Why do some think this is a party political issue?

    HS1 was built under Labour, and High Speed Two Limited (HS2 Ltd) was created in Jan 2009 by Labour.

    So like the majority of their ideas it's a VERY bad idea & I think we've established that 90%+ of posters don't want it.

  • rate this
    -1

    Comment number 231.

    @111 today's prices are not high, they are less than 70% of the 2011 high. And Brown didn't sell at the bottom to bribe voters, he did it to rescue the bullion banks from insolvency, as the unwinding of the yen carry trade threatened their short positions.

  • rate this
    +2

    Comment number 230.

    Why in hell's name are we entrusting banks to advise on major projects and sell offs?
    Did we learn nothing from the exposure of their corruption and incompetence?
    Just wondering...given the obviously underpriced RM shares and Goldman Sachs role.

  • rate this
    +4

    Comment number 229.

    "Begin with the END in MIND" - Stephen Covey

    Why are they building HS2 - to bring more business to the North.

    Wouldn't it be better to INVEST this money in businesses and industries in the first place? Isn't that a BETTER use of the money?

    This 'white elephant' is an WASTE of money and will only LINE the pockets of the companies who no doubt are liked to our corrupt political establishment.

  • Comment number 228.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +9

    Comment number 227.

    Apparently it's completely logical to spend billions on something most people don't appear to want at the same time as slashing budgets on many essential services and not giving public workers a pay rise for years in the name of austerity.
    I'm sure it's not just me that thinks this is a bit weird?

  • rate this
    +3

    Comment number 226.

    Cross Rail - the most costly rail investment per mile in the UK. Yet no one (Londoners ?) seem bothered - how strange, must have something to do with self interest.

  • rate this
    +2

    Comment number 225.

    In the near future communication technology will be so far advanced people will be able to communicate without leaving their permanent place of work.

  • rate this
    +4

    Comment number 224.

    The HS2 scheme will not address the difficulties and time delays in crossing London from say, Kent, Surrey, Sussex or Europe (HS1).

    This is because Euston isn't served by Thameslink and passengers will be faced with the inconvenient gap between Euston & St Pancras.

    ... these are basic issues before an HS2 train leaves London!

    There must be many others along the route which need addressing!

  • rate this
    +3

    Comment number 223.

    Surely a better investment would be super fast internet connection across the whole of the UK.

 

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