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HS2 poses a real danger to the government that could do more for its opponents than the North's economy

An official report reportedly warns that the second phase of the project could see the costs surging well above £100bn 

James Moore
Chief Business Commentator
Monday 20 January 2020 11:40 GMT
A proposed design of a HS2 train
A proposed design of a HS2 train (PA)

The Oakervee report into HS2, leaked to the FT, reportedly warns of costs ballooning to £106bn and measly economic returns of as low as 60p in the pound.

Longstanding concerns about the environmental impact, just as important, have come back to the fore in recent days.

The benefits it will provide to the North have also been called into question.

HS2 might ultimately do more for the South. Untroubled by a commute? Even with house prices outside London taking off, Leafy Didsbury is still a lot cheaper than leafy Dulwich.

But here’s the thing: none of that is really relevant. Despite the antipathy of parts of the Tory Party to the project, and the doubts expressed by Boris Johnson, the signal almost has to read “go”.

This is a project whose symbolism trumps any metrics, or evidence based analysis, and this is a government that ought to be well aware of the power of that.

It is, after all, powered by an even bigger folly, Brexit. All the metrics, all the evidence based analysis suggest that the cost of that will make even a worst case scenario HS2 look like a rounding error.

Johnson will probably never be as powerful as he is today. He has a huge majority and faces a weak and divided opposition. A hollowed out Tory Party has been reshaped in his image and is in his thrall.

And yet HS2 represents a rare danger to him, a project that has the potential to undermine his credibility in a part of the country which only queasily placed its faith in him and his party when it handed him the majority he craved.

The project has broad, cross party support in the north. Were it to be canned, the message could be said to be get Brexit done but after that nothing changes, you’re back in your box. We might come up here and hold the occasional session of Parliament for show but that’s your lot.

Just imagine if high speed rail were to stop at Birmingham, if the creaky conventional network took over from there, even with improvements. It's a terrible look.

The smart money, then, is that HS2 gets the go ahead, warts and all, which is basically what Oakervee says should “probably” happen in its lukewarm conclusions.

The imperative then becomes how to limit the damage to the public purse, and extract the maximum value from a project that is once again exposing Britain’s rotten record when it comes to the delivery of big infrastructure projects.

Maybe a delay (one suggestion) is worth considering with that aim in mind, although delays usually only end up adding to costs. One option that should be binned right away is any question of more private sector involvement to “spread” the cost, of the stations for example.

History shows that never ends well, but there’s a real danger of this government falling into the trap and ending up making the situation worse.

Regardless, there should be ample food here for its opponents to dine upon, if only they could get their tables set.

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