Fears for the UK economy over HS2 costs says outspoken peer

The rising cost of Britain’s HS2 project jeopardises other rail-related development. It even undermines the key government policy of ‘Levelling Up’ the regional economies of the UK. That is the stark warning from Lord Tony Berkley, the outspoken campaigner and British politician who remains active within the railway industry across Europe.

Despite the huge civil engineering project underway at locations along most of the 100-mile (160km) route, a leading peer has remained resolute in calling for its cancellation. Lord Tony Berkley, who holds a life peerage in the UK House of Lords, and is a director of AllRail, the European non-profit association of independent passenger rail companies, claims that the cost of HS2, at today’s prices, has risen to an exceptional 155.52bn pounds sterling (over 185 billion euro). He puts the net cost of cancellation and repurposing at eight billion pounds (over 9.5 billion euros).

More expensive than the entire Integrated Rail Plan

Lord Berkeley has been an outspoken critic of HS2 throughout the duration of the project. Despite his full knowledge of the freight benefits during the construction phase, he remains unconvinced as to the long-term benefits for the industry and is certainly critical of the drain on resources for the prospect of connectivity between northern cities in Britain and the regeneration of the rest of the UK. Berkeley speaks with relevant experience from retired positions as a director of the European Rail Freight Association and as chair of the Rail Freight Group, the industry representative body in the UK.

Berkeley says that allowing for inflation and using the indices published by the officially recognised Office for National Statistics (ONS), the cost at today’s prices is 155.52bn pounds. “The total cost of the [Integrated Rail Plan published by the UK government] was 96.4bn pounds, so HS2, as planned, absorbs all the monies allocated to it, leaving nothing for regional schemes, and jeopardises the Levelling Up fund”, he says.

Estimated cost of the HS2 Project

Berkeley, who has tabled many questions in the Lords, the upper house of the UK parliament, argues that the estimated cost of the HS2 Project, as described in the Integrated Rail Plan, published in November 2019, is 136.1bn pounds (162 billion euro), at Q4 2019 prices. “The estimate covers phase one of the project, from London to the West Midlands; from the West Midlands to Crewe and Manchester; and the West Midlands to the East Midlands. There are no connections to Liverpool or to Leeds and Sheffield”, he says.

HS2 Limited, the company formed to build the high-speed line, has still to identify solutions to rebuilding London Euston Station and for the tunnel required from Euston to Old Oak Common, says Berkeley. Admittedly, HS2 say they are still assessing options at Euston, although work is underway on a huge site adjacent to that London terminal. “Even six years after it promised Parliament it would find affordable, safe and deliverable solutions, the company has failed to do so”, claims Berkeley. The outspoken peer suggests that the line will, at least initially, terminate in west London, on former industrial land once occupied by a maintenance depot. “If Old Oak Common is to become the southern terminus from HS2, a connecting station off the Great Western Main Line is required”, he says, noting the Great Western line to London Paddington runs within a few metres of the construction site.

Put money to far better use in the north

Berkeley trashes the claims that the HS2 project will create more capacity for freight on the railway. Berkeley says that is not supported by evidence. “Freight capacity is required for east-to-west traffic, connecting the country’s major container ports”, he says. “HS2’s north-to-south access offers no help. “The former Chairman of HS2 Limited claims [in a letter to the Times of London newspaper on 3 October] that the cancellation of the project will endanger jobs and infrastructure development,” Berkeley says it will do neither. “The monies saved by cancelling the project can be put to far better use in the North of England, improving connectivity between Liverpool, Manchester, Bradford, Leeds, Sheffield and Hull. Such regional schemes would enhance these major cities encouraging local enterprise and development, neither of which is dependent on a new line to London.”

Although open to contention, the works already started can be absorbed into the existing railway network, argues Berkeley. He says assets such as land could be sold back into the market to recoup costs. “Based on the progress to date, compared with the budgets given by the Permanent Secretary to the Department for Transport to the Public Accounts Committee, approximately fifteen billion pounds [17.9bn euro] has been spent or committed to the project [to] date.” According to figures obtained by Berkeley, repurposing the project and selling back surplus acquired land reduces the monies lost to eight billion pounds [15.2bn euro], saving the taxpayer 147 billion [176 billion euro] overall.

“The Government and [the political parties in] opposition must make difficult choices in these financially straightened times”, says Berkeley. “Wake up the financial elephant in the room: the HS2 project. Repurpose it and put what monies are available into regional rail and rail freight schemes to level up the economy.”

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