HS2’s growing bill
[Re: HS2 rubbishes claim that costs could hit £80bn, Monday]
The conclusion that the decision to proceed with High Speed 2 risks imposing significant additional costs on taxpayers is not, as HS2 Ltd claims, based on ideology. Our HS2 report provides hard evidence that the project is being shaped by interest group politics rather than economic considerations, and that this has worrying implications for government spending. First, it suggests that politicians will be further incentivised to “buy off” opposition along the route by increasing the amount of tunnelling or making other design changes. Secondly, there is clear evidence that HS2 is providing opportunities for local authorities and transport bureaucracies to lobby for the construction of additional loss-making, taxpayer-funded infrastructure linking to the new stations. This is partly driven by the additional strain HS2 will put on existing networks, for example at Euston. Finally, it is almost certain that large regeneration subsidies will be provided to areas along the route and to compensate towns that have been bypassed. Some of these schemes are already at the planning stage. The history of big government projects also indicates that taxpayers will face a substantial additional bill.
Dr Richard Wellings, head of transport, Institute of Economic Affairs
BEST OF TWITTER
The situation in Egypt is actually worse than before the “revolution”. That takes some doing.
Short-term UK growth momentum gathering, but we need more rebalancing to trade and investment.
Sign of the London bubble. House asking prices up by 10.2 per cent year-on-year in August.
What should the UK do about Egypt? Directly, nothing. Don’t give the Cairo junta legitimacy.