Out-Law News 2 min. read

Convincing case for HS2 not yet made, says House of Lords committee


The UK government has still not made a convincing case for spending £50 billion on the construction of a high speed railway line connecting London with the North of England, according to a House of Lords select committee.

The Economic Affairs Committee said that there were "less expensive options" which would increase capacity on the railways; and that construction of the line, dubbed HS2, was not the most effective means of meeting the government's stated objective to rebalance the national economy away from London.

It has asked that the government provide "detailed answers" to the questions raised by the report before enabling legislation for the first phase of the line reaches Royal Assent, which is currently expected by the end of 2016.

Infrastructure law expert Richard Laudy of Pinsent Masons, the law firm behind Out-Law.com, said that the report was "yet another example of further potential impediments which are such a disincentive to the many overseas investors who would welcome the opportunity to invest in our market".

"The risk to the UK of this report is that this urgently-needed project is further delayed as yet more evidence is sought," he said. "Our infrastructure is languishing at 27th in the world and increased connectivity between the capital and the rest of the country is urgently needed if we are to improve on this and deliver the growth that our strongly performing economy deserves."

The High Speed Rail (London to West Midlands) Bill ('hybrid bill') is expected to be introduced to the House of Lords early in the next parliament. Once the bill completes its parliamentary passage, it will give the government powers to construct and operate the first phase of the proposed line, between London and Birmingham. This is currently due for completion in 2026. A future second phase is planned to connect the line to Crewe and then onwards to Manchester and Leeds by 2033, although this may be accelerated.

The combined cost of both phases of the project is currently estimated at £46.2bn at 2011 values, with an additional £7.5bn for rolling stock. Around £14.56bn of the estimated budget is contingency. In its report, the committee said that this meant a cost per mile of up to nine times higher than the cost of constructing similar lines in France, and that the estimated £31.5bn 'public subsidy' to the project conflicted with "the government's declared objective of making rail less dependent on public subsidy".

The report made a number of suggestions to bring down the cost of the line, including building it for high speed trains running at 200mph as is the case elsewhere in Europe, rather than 250mph. It also suggested terminating the line at Old Oak Common instead of the proposed Euston terminus. The committee also said that up to date evidence was needed to conduct a current cost-benefit analysis for the line, and that this should be provided before the hybrid bill completed its parliamentary passage.

The committee also questioned the government's findings on the need for capacity improvements, noting that full information had not been made publicly available on the grounds of "commercial sensitivity". However, its evidence suggested that overcrowding was largely a problem confined to London-bound commuter trains and to Friday evenings and weekends on long-distance trains. In addition, the evidence suggested that London itself, rather than the regions, would be the biggest beneficiary of the project despite its justification on the grounds of rebalancing the economy.

"The committee are supportive of investment in rail infrastructure, but are not convinced that HS2 as currently proposed is the best way to deliver that investment," said committee chair Lord Hollick. "We have set out a number of important questions on HS2 that the government must now provide detailed answers to. Parliament should not approve the enabling legislation that will allow HS2 work to begin until we have satisfactory answers to these key questions."

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