Economy
HS2 could cost double government estimates, warns free market thinkthank
The controversial HS2 rail project could cost significantly more than expected, according to the Institute of Economic Affairs (IEA), which claims that the government should drop the proposed route.
Measures to silence opponents of the project, such as a second tunnel, a change of route and compensation to communities affected by the railway, could add an extra £30 billion to the initial costs, says a new report by the free market thinktank.
The project was set to cost £32 billion but in June, the government announced an additional £10 billion cost, plus £7.5 billion for new trains.
In this scenario, the cost would rise to £80 billion – or £3,000 per households, according to The High-Speed Gravy Train: Special Interests, Transport Policy and Government Spending report. The study has found that the long-term cost would be even higher, because the HS2 scheme would divert funds from other high-return transport projects.
Alison Munro, chief executive of HS2, described the IEA’s analysis as “absurd“.
Richard Wellings, author of the report, said, “It’s time the government abandoned its plans to proceed with HS2. The evidence is now overwhelming that this will be unbelievably costly to the taxpayer while delivering incredibly poor value for money.
“It’s shameful that at a time of such financial difficulty for many families the government is caving in to lobbying from businesses, local councils and self-interested politicians more concerned with winning votes than governing in the national interest.”
HS2, which is set to connect London Euston to the West Midlands and the West Midlands to Manchester and Leeds, has sparked debate over the past few months, especially because of its cost and unclear economic benefits.
Campaigners have also claimed it will go through rural areas, affecting landscape and communities.
Further reading:
‘Still unclear’ if HS2 will be economically beneficial
Osborne’s championing of HS2 proves his ideological objection to renewables