Transport

Post Carillion, now is the time for HS2 to hit the buffers

BY Gerald Warner   /  17 January 2018

In the annals of British governmental folly – and that is a multi-volume chronicle – one would be hard pressed to find an aberration so extravagant as HS2. The totemic (to the political class and its crony capitalists) High Speed Rail Link from London to Birmingham is a project of majestic fatuity: it ranks alongside such iconic debacles of the past as the Darien Scheme, the South Sea Bubble and the Groundnuts Scheme.

Now, following the collapse of Carillion, we have a providential opportunity to end this farce and save billions of pounds, at a critical moment for our public finances, by consigning this absurd vanity project to oblivion, as it so richly deserves. HS2 is the Charge of the Light Brigade on rails; only politicians would be stupid and stubborn enough to continue it.

Consider its history. HS2 has been with us, conceptually and fiscally, for just over a decade, although not a foot of rail has been laid. During that paper existence its projected cost has escalated from £7.1bn to £63bn. You could almost get the EU to talk to you about trade for that kind of money. Factor that rate of cost growth into the years between now and 2033, when HS2 is scheduled to complete (and what public project ever met its completion date?), and you are confronting a limitless drain on the taxpayers at the height of a period of Brexit uncertainties.

HS2 first materialized in 2007 as a proposal by Greengauge 21, a transport industry lobby group, with an estimated cost of £7.1bn. In 2009 Gordon Brown’s government announced the creation of HS2 Ltd to develop this vanity project. It was intended to be a virility symbol, so it required brutalist characteristics; these were supplied by devising an environmentally destructive route through the Chilterns, increasing the cost to £30bn.

When Gordon, Saviour of the World, was displaced by Dave the Open-Necked the Coalition government scrapped the proposed spur to Heathrow, but otherwise endorsed this blueprint from the asylum. When the admitted cost hit £42.6bn in 2013 one of its original sponsors Lord Mandelson, in a rare moment of realism, jumped train, denouncing HS2 as an “expensive mistake”. When a New Labour grandee abandons a vanity project you know it must be a real disaster.

In May 2013 the National Audit Office declared the benefits of HS2 were “unclear” and the timetable “over-ambitious”. Simultaneously, the Major Projects Authority graded HS2 “amber-red” – at serious risk of failure. Translate that situation into stock market terms: after such warnings, would you be screaming, “Buy! Buy!” at your broker down the telephone? By 2015 the estimated cost had risen to £55.7bn. Then, in March 2016, research revealed the track could fracture and trains derail at the projected speeds, the highest in the world.

That merely intensified the virility symbolism of the project, in the eyes of MPs, who responded by passing the HS2 Bill. The Taxpayers’ Alliance published a report entitled “Rich man’s toy: The case for scrapping HS2” which claimed turning Birmingham into an outpost of London was a bad idea, that technological developments would make HS2 obsolete before it opened and that the projected costs were likely to reach almost £90bn. That last claim smacked of delusory optimism.

The central thesis was completely valid. Where is the “benefit” in delivering London businessmen to Birmingham twenty minutes faster – presuming they want to go there and the train does not derail en route – at a price of more than £100bn, for by 2033 that will almost certainly be a fraction of the cost? By 2033 will Birmingham be a commercial hub? With laptops, tablets and Internet connection on trains, businessmen do more serious work now while travelling than in the jaw-jaw environment of meetings.

In fact, the consequence of HS2 would be to suck Birmingham enterprise down into London. The real need is for better rail connections between northern towns and cities. Back in 2014 the National Audit Office scathingly denounced the miscalculations by the Department for Transport (DfT) in its projections, blaming a lack of common sense; it had overstated the business case for HS2 by 86 per cent. The DfT admitted to having double counted many supposed benefits.

HS2 has always been obsessed with speed – again, because it is a political virility symbol – at the expense of capacity and connectivity. In May 2016, HS2 failed a review due to concerns about costs and schedules. It had already been stated that HS2 Ltd must pass “Review Point 1” before it would be permitted to begin its tendering process. It failed and the response by the DfT and the Treasury was to nod it through to begin the tendering procedure.

That typified the indulgence extended towards HS2 throughout its history of failure. The National Audit Office expresses scepticism, the Major Projects Authority grades it high risk, the project fails a review and the Government response is “We’ll take that as a yes, then.”

Such immunity has clearly influenced the conduct of HS2 Ltd, with the arrogance of the overall project translating into a culture of entitlement within the company. Late last year an audit of HS2 conducted by the Government Internal Audit Agency was made public on an “exceptional basis” because of the seriousness of the findings. HS2, which boasted 35 executives earning more than the Prime Minister, had made redundancy payments in the previous financial year of £2.76m, of which £1.76m represented “unapproved enhancements” which had been forbidden by then Transport Secretary Chris Grayling.

Today, the collapse of Carillion will provoke inquiries into the award of an HS2 contract to the company when it was already clearly suffering major difficulties. Joe Rukin, manager of the Stop HS2 campaign, said last Monday: “It was clear at the time of the award that Carillion were in serious trouble, so we were amazed that they won, and many saw the award of the HS2 contract at the time simply as an attempt to prop up an ailing Conservative donor.” If Jeremy Lenin and his merry men do not scent blood in the water there, they might as well retire from politics.

It is striking that the three companies involved in the HS2 contract – the others being Kier and the French firm Eiffage – were required to guarantee that if one of them failed the others would complete the project, which suggests a certain lack of confidence in Carillion at the time. Now, if Kier and Eiffage fail to deliver, future HS2 passengers face the prospect of disembarking from Britain’s bullet train at Aylesbury and being bussed the 50-mile stretch to Royal Leamington Spa, which may slightly blunt the high-speed element of the scheme.

This politicians’ vanity project represents a toll of real human misery, with homes being bulldozed, communities disrupted and landscapes vandalized. It cuts into Britain – the real, angry, Brexit-voting Britain – where it lives. Theresa May has a ministerial history of cancelling projects. She should grasp this providential opportunity to abolish HS2, gaining unaccustomed popularity and implementing a sensible fiscal retrenchment before the likely expense of Brexit bites.