We believe the facts about the benefits of high speed rail for Britain are compelling. Below is our response to the myths around the case for high speed rail. They are also available to download as a pdf here.
Myth: The national high speed network will cost each household £1,000 in taxes.
This is a massively misleading oversimplification because it doesn‟t take into account the significant financial returns that will be generated from an investment in high-speed rail. To start with, the overall costs of the proposed Y network will be offset by the fare revenues that will reduce the cost of the proposed network from around £58 billion to around £25 billion (1). The “£1,000” figure also ignores the substantial returns to the economy that high-speed rail will generate. The estimated figure currently stands at £53 billion (2). The demand forecasts have been criticized by leading specialists for being too conservative (3). The “£1,000” figure also fails to account for likely private sector investment in key parts of the network – especially for new station developments. In fact, HS2 will pay for itself over its lifetime.
Myth: Look at financial problems with HS1 – it cost £5.8 billion and has now been sold at a loss of £3 billion.
A lease for the HS1 operating concession has been sold for 30 years, following which it will be returned to Government in the same condition when it will be able to be resold again (and again) and will more than pay for itself. This first sale directly delivered over £2bn back to the public purse. HS1 has also acted as a catalyst, unlocking regeneration in investment. Original projections predicted that HS1 would unlock £500m of investment, but an independent report issued in 2009 put the value of HS1 at almost £20bn – forty times as much as the original estimate (4). This “regeneration effect” includes HS1 directly helping to deliver tens of thousands of homes and almost 100,000 jobs in the South East, particularly in Ashford, Kings Cross and Stratford (5).
Myth: It is irresponsible to spend this much money in a recession.
Investment in the high-speed network would only start in 2017, long after the recent cyclical recession, and it will be spread over almost two decades. Building work on the London-Birmingham line is expected to require average funding of around £2 billion per year, broadly similar to the level of annual expenditure on London’s current Crossrail project which, together with London‟s Thameslink upgrades, will come to a total of £20bn by 2019. This annual expenditure is only about 10% of the Department for Transport’s total yearly budget. Between 2010 and 2015, before any work would begin on HS2, the Government is already committed to spending £200bn on infrastructure projects (6). HS2 is an infrastructure project of national economic significance that will be truly transformational for the whole country rather than just London and the South East.
The country cannot afford to neglect investment in its future at a time when global competitors are building supply-side improvements that give their businesses enormous competitive advantages.
Myth: The business case relies on over-optimistic passenger forecasts (for instance, the passenger numbers for HS1 are still lower than originally projected).
The overall demand for rail travel in the UK is booming, and there seems to be no reason why it will not continue to do so over the coming years. Long-distance inter-city travel has grown at 5% a year, more than doubling between 1994/5 and 2009/10 (7). The current business case for HS2 is based on projections of an increase of passenger demand of only around 2% per year – a very conservative estimate than what recent demand would suggest.
On the West Coast Main Line, the line which will benefit most from the proposed HS2 route, passenger demand has doubled over the past six years and has now reached 28 million passengers per year (8). HS1 was a pioneering project that is able to offer HS2 significant learning and experience. Their previous data sets will be helpful in ensuring that more accurate passenger forecasts can be made for HS2. Despite lower figures than initially forecast, the number of passengers using HS1 also continues to grow rapidly. For example, Eurostar have sold 135,000 advanced tickets for travel on the Easter weekend, which is up 8% on last year (9). Now that EU rules allow operators access to national railway infrastructure across Europe, there is likely to be a significant increase in the number of international trains using HS1 in the next two or three years. Deutsche Bahn has already confirmed plans to operate services between German and Dutch cities and London in 2012 or 2013. And Eurostar has now ordered a new fleet of trains to operate additional services to destinations such as Amsterdam, Cologne, Frankfurt, Lyon and Geneva. As a result, much of the capacity on HS1 will be taken up in the near future.
Myth: The business case relies on all the time spent on trains being wasted, but this is no longer true with modern technology where business commuters can work productively on laptops.
Department for Transport’s original business case relied on a standard set of assumptions that must be rigorously proven with historic data and it did not take into account the time spent by business travellers productively working. People do value time savings, which is why so many people still fly to Scotland rather than take the train. Unfortunately, not all time on a train is productive. Overcrowding makes it more difficult to get work done. Wi-fi and mobile signals are patchy along routes – an essential part of many people‟s business.
For the same reasons it also did not take into account additional productive time that high-speed rail would release. For example, high speed-rail will ease overcrowding on existing trains as well as switch drivers and air passengers onto rail, both of which would increase the productivity levels of business commuters and increase the economic value of time spent on the high-speed network. Introducing more realistic estimates of the worth of time on trains may therefore actually improve the case for HS2 (10).
Myth: The case for high-speed rail ignores the impact of new technologies, which are reducing the demand for travel.
Although it is too early to say for certain either way, the likelihood is that new technologies, particularly when combined with the effects of globalisation, are likely to increase the demand for travel rather than decrease it. It does not automatically follow that the surge in mobile communications and IT will act as a substitute for business travel. The evidence actually suggests that the internet is increasing the demand for travel because businesses are now able to access a far broader geographical spread of clients, staff and business contacts (11). Indeed, the strongest growth in information technology currently is for mobile devices, which can be used while travelling and with expectations (not yet fully met) that trains will provide this capability. This claim is supported by research conducted by major bodies including the Committee on Climate Change, an independent advisor that the Government consult on meeting carbon budgets and on preparing for the impacts of climate change (12).
Myth: The UK is too small to gain much advantage from a high-speed rail network. They work better over longer distances, as found abroad.
This is quite wrong. The most successful high-speed lines in other countries have been between cities at similar distances to those that are being proposed in the UK. The proposed network will extend beyond Birmingham in a Y-shape to Manchester and Leeds, and eventually to Scotland. The distances between these cities also have similar equivalents in other European countries, such as France, Spain and Germany, and further afield including Japan (13). For instance, the most successful high-speed service in Germany is between Frankfurt and Cologne. This is around 110 miles – of comparable proportions to the distance that separates London and Birmingham (14). The distance between Edinburgh and London is similar to one of the most successful of the world‟s high-speed services – the line that runs between Tokyo and Osaka in Japan (15).
Myth: We already have an extensive fast-rail network, with journey times between our major cities faster than other European competitors.
It is misleading to refer as “high speed” frequently-stopping trains that periodically reach a top speed of 125mph on congested mixed-use tracks but average much lower speeds for end-to-end journeys. On the Continent, high-speed lines are being built for speeds of 200mph or faster and in Japan the newest parts of the network can reach up to 190mph (16). Some Chinese trains are even faster. Journey times across the UK‟s rail system are slower today than they were 15 years ago – average speeds today for inter-city journeys are often little more than 80mph in Britain, and they are continuing to slow as the network attempts to juggle competing demands (17). At the moment, only a few fast trains can run each day because of local and freight services that share the track. And the fastest non-stop services are very limited, often to one or two per day. Only a dedicated high-speed line with ambitious policies to increase the speed of the UK‟s rail services will bring Britain into line with international high-speed services. In any case, a new high-speed rail network is needed to increase capacity to meet demand (not just speed up journeys). In 1994 rail passengers travelled fewer than 18 billion miles, in 2009 this rose to almost 32 billion miles (18). This trend is expected to continue. The best way to manage an increase in capacity to meet this need is to create a new network dedicated to high-speed, inter-city travel. Up-grading the existing lines is expensive, creates disruption and cannot meet the demand. For instance, the 1998 – 2009 upgrade of the West Coast Main Line demonstrated the difficulties of upgrading a busy “live” rail line. The upgrade took over a decade, cost £9bn and caused disruptions for the passengers that use the line (19).
Myth: The limited regional benefits will be sucked to the few stations directly on the high-speed line itself.
The idea that an investment in a high-speed rail network simply benefits residents in a few city centres is quite wrong and misunderstands the importance of upgrading Britain‟s rail capacity. The additional rail capacity that will be released on the existing rail network means that towns up and down the country will get better service. Tamworth, Burton, Derby, Telford, Shrewsbury, Stafford, Stoke, Bromsgrove, Droitwich, Worcester, Leicester will be able to benefit from hugely improved rail access through the West Midlands and into Birmingham – and improved connectivity means better business. Additional trains will also be able to serve places such as Lichfield, Nuneaton, Coventry, Rugby, Northampton and Milton Keynes on the West Coast Main Line. As the Y network expands, to relieve along the Midland and East Coast Main Lines towns and cities such as Leicester, Market Harborough, Kettering, Wellingborough, Bedford, Luton, and Doncaster, Retford, Newark, Grantham, Peterborough, Sheffield and Stevenage. Therefore, the benefits will be felt widely. A report published by KPMG in 2010 that analysed the benefits of high-speed rail concluded that HS2 alone would generate economic benefits worth £600m and 10,000 new jobs for the West Midlands region (20). Nor do these figures take into account currently proposed local and regional rail improvements. Once these are considered, the original figures more than double – generating £1.5bn and the creation of 22,000 more jobs in the West Midlands alone (21). Regional benefits will not be limited to those towns and cities with stops along the high-speed route.
Myth: Fares are going to be so high that is will end up being a rail line that only the rich can afford.
Economic logic suggests that a massive new investment in capacity will drive down prices for all operators. Look what happened to airline prices in the last twenty years – increased capacity has led to airline travel becoming more and more affordable. If HS2 is built and crowding increases on Britain‟s railways, there is a risk that average fares are set to increase as price-rationing sees passengers priced off peak services. High-speed rail will release extra capacity (for instance, trebling the capacity between London to Birmingham). The laws of supply and demand suggest this will, at worst, stabilise prices. At best, it will increase competition, for instance with services on the West Coast Main Line. Logic suggests this will benefit passengers‟ pockets. This is supported by evidence from rail experts who have demonstrated that fares on a high-speed rail need not be any higher than they are currently. They project that average prices could remain at around £40-45 for a long distance journey such as London-Birmingham, with fares available as low as £20 (all at today‟s prices) (22). The experience of the airline industry suggests that an increase in capacity will put pressure on prices. Current rail services are used by those on low incomes as well as wealthier people and, if fares are comparable as experts believe, then there is no reason to think that high-speed rail will be any different. Rail travel is certainly a better option for those on a lower income compared to road travel where people are currently facing soaring petrol prices, road taxes and vehicle insurance.
The Campaign for High-Speed Rail’s myth busting document 10 Myths: Bringing balance to the debate about high-speed rail can be downloaded as a pdf here.