HS2 needs rethinking, says Lords Committee

16 May 2019

The Economic Affairs Committee publishes its report Rethinking High Speed 2. The report considers the business case for High Speed 2, following up on the Committee's 2015 report The Economics of High Speed 2.

Key findings

The Committee finds that the Government has made little progress in answering the questions raised in its 2015 inquiry. In the 2015 Economics of High Speed 2 report they stated that there was a strong case for improving regional rail links in the north, but the Government had failed to consider whether such a scheme was a better investment than HS2.

The new inquiry heard evidence that Northern Powerhouse Rail—a programme of northern rail infrastructure improvements—will deliver greater benefits to northern cities. The Committee recommends that the northern section of HS2—the second phase of the project—should be combined with Northern Powerhouse Rail and treated as one programme, allowing for investment to be prioritised where it is most needed. They recommend that the funding for the Northern Powerhouse Rail Programme should be ringfenced and brought forward where possible.

The Committee finds evidence that the costs of HS2 appear to be out of control. Sir Terry Morgan, former Chairman of HS2 and Crossrail, told the Committee that "nobody knows" what the final cost will be. The Committee is concerned that if the costs of the London-Birmingham section overrun, the northern sections may not be built.

The Committee's new report concludes that a new method of appraisal is required. An appraisal method that took more account of the transformative benefits of new infrastructure would be less sensitive to small changes in journey time.

HS2 is being designed to operate initially at 360 kilometres per hour, faster than any other train in the world. The new report re-emphasises the 2015 recommendation that the Government should assess properly the cost saving that could be made by lowering the speed.

 Another recommendation the Committee made in 2015 was for a full assessment of the cost saving of terminating HS2 at Old Oak Common in west London, which will connect to central London by Crossrail, rather than Euston, which would require expensive tunnelling. Committee concludes that the redevelopment of Euston should be removed from the scope of the first phase of the project and an assessment carried out as to whether Old Oak Common could operate as the terminus for the full line.

Chairman's comments

Lord Forsyth of Drumlean, Chairman of the Economic Affairs Committee, said:

"Commuter services in the north of England are badly overcrowded and reliant on ageing trains. Rail connections between northern cities are poor. As the Committee suggested in its 2015 report, rail infrastructure in the north should be the Government's priority for investment, rather than improving north-south links which are already good. The north is being short-changed by the Government's present plans, especially as construction on HS2 is starting in the south. Any overcrowding relief from HS2 will mainly benefit London commuters."
"The plans for Northern Powerhouse Rail should be integrated with the plans for the northern section of HS2, and funding for the project ringfenced. This will allow rail investment in the north to be prioritised where it is most needed."
"The costs of HS2 do not appear to be under control. It is surprising therefore that the Government has not carried out a proper assessment of proposals to reduce the cost of HS2—such as lowering the speed of the railway or terminating in west London rather than Euston—which the Committee recommended in 2015. A new appraisal of the project is required."
"If costs overrun on the first phase of the project, there could be insufficient funding for the rest of the new railway. The northern sections of High Speed 2 must not be sacrificed to make up for overspending on the railway's southern sections."

Key recommendations

A new appraisal of the business case for High Speed 2, which takes account of the issues raised in this report, should be published urgently, and before the final decision to proceed with High Speed 2.
Northern Powerhouse Rail and High Speed 2 Phase 2b should be considered as one programme, with sections prioritised according to the needs of the rail network in the north.
Funding for the Northern Powerhouse Rail must be ringfenced and brought forward where possible.
New analysis of High Speed 2, which takes account of the transformative effects that new infrastructure can have, should be published alongside the full business case by the end of 2019.
The Government and HS2 Ltd should update and publish analysis of the cost possible saving from lowering the maximum operating speed of the railway.
Old Oak Common should serve as the London terminus for Phase One of High Speed 2. The Government should publish its analysis of the cost savings from reducing speed and terminating at Old Oak Common for the full High Speed 2 network alongside the full business case by the end of 2019.

Further information

Image credit: HS2