High Speed 2 Nowhere
Plus: The latest edition of Economic Affairs & our upcoming events
In today’s newsletter:
What is going on with HS2?
The latest edition of Economic Affairs
Upcoming events
Can we use wind power?
This week the government announced that HS2 will not meet its already much-delayed target opening date of 2033. This is hardly a surprise, as this massive scheme has consistently failed to meet targets – especially in spending, where the cost has always risen way beyond its successively extended budgets.
For those of us who’ve been around the IEA for a while, there is a temptation to say ‘told you so’ very loudly.
Even before the scheme was officially approved in 2012, Kyn Aizlewood and our former transport specialist Richard Wellings had put out an IEA paper High Speed 2 - the next government project disaster which concluded that there was ‘a significant risk’ that HS2 would become ‘the latest in a long series of government big-project disasters with higher-than-forecast costs and lower-than-forecast benefits’.
Two years later Richard wrote another paper, The High Speed Gravy Train, which documented how HS2 decisions had been taken on political rather than economic grounds – with special interests such as engineering firms, other business groups and local authorities pressuring the Conservative government of the time. He forecast that the total costs of the scheme would exceed £80 billion, far in excess of the figures proposed to Parliament. Government spokespeople and other HS2 fans dismissed this at the time as crazy talk, but the costs are now likely to exceed £100 billion for a much-truncated scheme without the links to Manchester and Leeds.
The rationale for HS2 shifted over time. One reason it was first mooted under the Gordon Brown government was as a greener substitute for an extra Heathrow runway (yes, I know). With three routes from London to Birmingham already available, the only advantage was greater speed – and time saved was an important element in cost-benefit analysis in those far-off days when nobody could work on trains and Zoom meetings were unheard of. ‘Levelling up’ by improving access to the North was also touted, though it was never clear how this would work – and of course that possibility was lost with the decision to cut out the Manchester and Leeds routes.
The only enduring benefit from a completed HS2 would be relief of the overcrowded and notoriously poorly-performing West Coast main line, not least to allow the expansion of successful and privately-funded freight and Open Access services, which are currently held back by capacity constraints. But that depends on a northern link back to the WCML which is as yet unplanned for or funded. It also requires our nationalised Great British Railways doing some proper strategic thinking. However there appear to be lengthy delays on that particular line. Must be the wrong kind of snow.
What will happen? Some argue that HS2 should be abandoned and the track paved over and turned into a motorway to relieve the M1 and M6. That doesn’t seem to me to be a starter. 27 miles of the route are in tunnels, while the impressive two-mile-long Colne Valley Viaduct, designed for two rail tracks, would find it difficult to carry a six-lane motorway.
Perhaps the scheme will just end up being abandoned, left to decay and vandalism. Like a modern-day Ozymandias, it could serve to remind us of the hubris of twenty-first-century British governments.
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Economic Affairs, the academic journal published by the IEA and the University of Buckingham, has considerably improved its ranking among economic journals, and its ‘impact factor’ – one of those metrics to which we all have to pay attention these days. But I learnt this week of an unusual impact factor. Last autumn we published an article by an Italian classical liberal author, Giovanni Patriarca, whom I had the pleasure of meeting a few days ago. The article was about an obscure pamphlet, anticipating later developments in monetary theory, written by the Spanish author Juan de Mariana in the early 17th century.
Giovanni told me that prior to the publication of the article, copies of the pamphlet changed hands at $600 a time. But that rose to $3000 following our publication. That’s what I call an impact… of course, post hoc doesn’t necessarily mean propter hoc, but as they used to say at The Sun during Kelvin MacKenzie’s glory days, it’s too good to check.
Len Shackleton
Editorial and Research Fellow
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IEA Podcast: Executive Director Tom Clougherty, Editorial Director Kristian Niemietz, and Managing Editor Daniel Freeman discuss HS2, the meaning of ‘liberal’, and the ‘One Big Beautiful Bill’, IEA YouTube
Economic Affairs (45.2)
Articles published in the latest issue of Economic Affairs include…
EDITORIAL
ANNOUNCEMENT
ORIGINAL ARTICLES
Adam Smith’s hopes for a liberal America, by Daniel B Klein
Milton Friedman’s spending matrix revisited: ‘Spending efficiency’ and ‘preference compatibility’ across different economic systems, by Ali Zeytoon-Nejad
DISCUSSION
Rethinking monetary policy: The case for nominal GDP targeting, by Damian Pudner
REVIEW ARTICLE
Misreading Mises, by Christopher Snowdon
BOOK REVIEW
By Matt Goodwin. Bad education: Why our universities are broken and how we can fix them, by J R Shackleton
News and Views
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2025 Vinson Centre Conference in the Classical Liberal Tradition
Welcome to the 2025 Vinson Centre Annual Conference! Join us at the Vinson Centre for the Public Understanding of Economics and Entrepreneurship for a day filled with insightful discussions, networking opportunities, and engaging sessions.
I’ve been writing for years to successive governments suggesting we concrete over all tracks! They are access to the very centre of all towns and cities. Railways are centuries old and Britain is small. We need relief from road users and railways are a gift to put all busses lorry’s and vans on. To take people and goods directly into town centres. And leave the cars on our present roads. Of course HS2 was a disaster waiting to happen. But no one could stop Cameron and Boris Johnson from promoting it. I have no doubt it was a way to spread money to the elite. It’s all gone somewhere and it is a failure as a result. I’m glad there is a fraud investigation. Just having one shows its true colours as a ‘gravy train’ (pun intended). That said, I again come back to the same overriding issue, money!… yes, if we had known a war in Ukraine, COVID, Brexit and Trump’s terms were going to happen we probably would have thought twice. And if we want pensioners and the disabled to pay for more waste NO! Of course not. But instead of looking for cuts or choosing NOT to finish because the tax take is insufficient should stop and start looking at ways to increase tax revenue to cover all needs and costs without damaging our economy! Upto now, every government has been inept at thinking this way. The look the same because they all act the same. Even Reform will be found out as you can’t cut enough to run a Country with the tax take we have! They will all keep doing it wrong because they are all unable to square the circle of making more tax revenue without increasing taxes that will kill the goose that lays the golden egg!… well, I can! I too have written to many successive governments giving them the blue print to make more tax revenue by lowering taxes! Yes, it’s possible. It’s widely misrepresented that tax is triggered by earning! It isn’t! Tax is triggered only by SPENDING or money having to move. For example money has to move to pay Council Tax. And income tax is paid by employers! Not by employees!! It’s calculated on income but it’s paid when employers have to SPEND on wages. And conversely if money is NOT spent it incurs no tax, NONE!!! So as the tax system is based on spending to trigger tax income to the exchequer then you have to appreciate to increase tax revenue you need to promote SPENDING and increase it and make that SPENDING faster! Now for centuries that’s been impossible to monitor but, now we have digital payments and accounts we have at last a way to make sure people spend! The problem is we don’t make them!!!! We still choose to allow the rich to get richer while we all get poorer. That’s immoral and undemocratic. If everyone had to spend their earnings, it would produce a tsunami of money into the exchequer we could pay for HS2 and anything else! So much so that we could reduce all taxation and just have VAT. Let people earn as much as they can, enjoy spending it and give tax take sufficient for all our needs. Be rich on stuff not on the money itself! It’s a real way to make it work. Spend it in the same time frame say a month, or have it taken by the exchequer. Spend it or lose it. Keep all money inside our country. If we need to sell abroad let the goods flow but not the money. They need to spend their income in our country too to make it equal and fair. Like blood in veins you can’t dam off blood in one arm so the rest of the body fails! We can’t allow money to be stagnant and unused for years on end. That’s why we have a stagnant economy. We’re not short of money per say but we don’t have it being spent enough in a month! It’s that simple!! It’s similar to an idiot billionaire holding our money and putting only £1 in fuel in their car, and wondering why they keep breaking down and getting towed in to fill up when it stops! It’s ridiculous to not see what is needed.
Clearly, whoever wrote the Introduction on HS2 had not bothered to read my June 9th Insider piece on the subject.
https://1drv.ms/b/c/1c2b9de965e5c0bf/EemRMiDUGHJHrlWAWm82xg4B-V3HoHMgEz9q6j4G-4XxOQ?e=hMrCPZ
There one will see that there are a number of alternative uses for the right of way that currently exists. A highway is one of them, not a six lane motorway but a more modest specification; and tunnels are not an obvious problem either, the longest of which is about two-thirds of a current Norwegian road tunnel connecting Bergen and Oslo.