Benefits of new £32bn rail link 'uncertain', MPs are told

The HS2 rail link would pass through the constituencies of several senior Tories, a number of whom have indicated that they will vote against the project
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Transport wonder, or white elephant? The argument over the proposed HS2 high-speed rail link from London to Birmingham deepened yesterday when a consultants' report prepared for MPs said that the economic benefits from the £32bn hi-tech project were "uncertain".

The 140-mile new link, which the Government says will shorten journey times between the two cities, when it opens in 2026, from one hour and 24 minutes to 49 minutes, has come under fire on two fronts. It has been attacked for the environmental damage opponents of the line say will be caused in areas of outstanding natural beauty along the route such as The Chilterns, and more recently, for what some business leaders say are the project's questionable economics.

The economic doubts were reinforced yesterday when the Commons Transport Select Committee opened an enquiry into HS2, and began by publishing an independent report into the Government's case for the line, commissioned from the consultants Oxera.

It will not have made happy reading for the Transport Secretary, Philip Hammond, or even for David Cameron, as the project is currently a central plank of the Government's transport policy. Yesterday, Mr Hammond's department told the committee in written evidence that it would generate "monetised economic benefits with a net present value of around £44bn", as well as supporting the creation of more than 40,000 jobs.

The Oxera report, however, cast doubts over this. "The monetised estimates are surrounded by a degree of uncertainty," the report said, adding that "the overall balance of non-monetised impacts – which include landscape, carbon and changes in land use – is difficult to ascertain".

Oxera said the case for a high-speed rail programme seemed to depend on "whether and when the capacity is needed, the selection of the best value-for-money approach to delivering that capacity, the degree of uncertainty around the monetised benefits and costs of the preferred options, and judgments on the balance of evidence relating to non-monetised items, such as environment and regeneration impacts (which are likely to be substantive in their own right but not fully set out in the Government's assessment)."

Asking the question "Who benefits?" from HS2, the report added: "There is relatively little evidence presented on the regional and socio-economic impacts of the programme."

Oxera also said that the regeneration benefits of areas in the vicinity of high-speed rail hubs may be offset by "economic losses in other areas, including locations not served by the high-speed line". The report continued: "The London and Birmingham economies might benefit partly at the expense of areas not served by the new scheme. The precise impacts will depend on the reallocation of conventional services on the West Coast Main Line and elsewhere."

Opposition to the line has grown since the route was announced more than a year ago. It goes through the constituencies of several senior Tories, including four Cabinet ministers and the Speaker, John Bercow. A number of these MPs have indicated that they may vote against the project, including the Minister of State for Europe, David Lidington, MP for Aylesbury, and the Welsh Secretary, Cheryl Gillan, MP for Chesham and Amersham.

It is expected that trains on the proposed line will travel at 250mph. A second Y-shaped section on to Manchester and Leeds and possibly further north could be finished around 2032/33.

The committee's enquiry is running in parallel with the Government's own public consultation exercise about the scheme, which began in March and will finish at the end of next month; a decision on whether to go ahead is expected before the end of the year.

The committee will hold four more evidence sessions before mid-September, offering a public platform to both opponents and supporters of HS2.

Giving evidence to the committee yesterday, Anthony Smith, chief executive of the rail customer watchdog Passenger Focus, hoped HS2 would not be seen as "a rich man's railway". He said: "The way the line is presented and ultimately sold is very, very important. It will attract commuters travelling between London and Birmingham. How tickets are priced is going to be absolutely key to the whole project."

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