GUEST POST - High Speed Rail 2 and it’s various effects on the Country

Today’s post is a guest post from Teny Kuti, a first-year student in Aston University’s Law School. The post discusses the various effects of the forthcoming HS2 high-speed rail link, as well as some of the potential consequences moving forward. Please follow Teny via Twitter here, and his own blog The Whole Spectrum for an interesting take on a number of different issues, ranging from politics to business.

Frequently described as the most substantial rail project ever built in the UK set to open in 2026, High speed rail 2 will form a high-speed link between Birmingham and London, reducing the travel time to 49 minutes. However, the project has never been shy of controversy. Since the HS2 received Government approval in 2012, it has seen strong opposition from those who would lose their homes on the current plans and indeed, HS2 Ltd has claimed that 1,740 buildings would be destroyed by the rail line, with nearly 900 being homes. Now with the recent developments such as the Chairman of the project resigning and claims that the cost has been vastly underestimated from £56bn to potentially £100bn, it becomes pertinent to discuss whether HS2 will have a positive or negative impact on the country.

The rail line intends to link both London and Birmingham, and then a phase 2 extension is planned to connect Leeds and Manchester to the line. This could address many long running problems such as the high house prices in London caused by a dense population living there. The ability to travel from Birmingham to London in under an hour may allow for people who work in London to seek cheaper housing in Birmingham without having to suffer a 2-hour commute. As living in Birmingham becomes a more viable option, this would reduce demand for homes in London thus causing prices to decline, theoretically. Having an easy connection to London may also result in more Businesses following in the footsteps of HSBC and relocating to Birmingham, or potentially creating smaller satellite offices in the city. However, this could result in Birmingham eventually sharing similar issues currently facing London. As seen when Deutsche Bank moved to Birmingham in 2014 the demand for homes increased by two-thirds. This far exceeded the supply of houses and thus prices went up. Should other high value firms follow Deutsche Bank and make the move to Birmingham, it may just inherit the problems they were trying to escape.

The physical construction of the rail line would result in jobs being created as the Department for Transport claims that construction of the project will create 25,000 jobs in addition to 100,000 people working at the new stations and 3,000 jobs operating the trains themselves. Naturally, these jobs would benefit the country as it allows people to earn a wage and thus spend it in the country, improving the economy. However, the construction of the line would also destroy 985 businesses that are currently on the planned route of the line and thus, the people employed there would lose their jobs. Specifically, HS2 Ltd claimed that 19,590 jobs would need to be relocated but for those who were already earning a lower income in a job that was integral to the location such as a farmhand, finding a new job may be difficult. Although, the project is creating several times more jobs than it is causing to relocate, thusly the rail line would have a positive impact on the job market, as well as the benefits of a better-connected country.

The financial cost of the project has recently been found to be much more than was previously stated, calling into question how cost effective it currently is. The rail line was approved on a budget of £56bn but it has recently been leaked that it may increase to over £100bn due to underestimating how much the contractors would need to be paid to complete the project in a timely manner. This has renewed questions of whether this money could be spent on something more effective. Many have criticised the project as being a way to circumvent the existing problems in the transport network. The money used on HS2 could also be used to fix potholes, upgrade the existing train services, or expand bike and bus services. These projects would not require the compulsory purchase of land, nor would it destroy people’s homes and businesses. HS2 Ltd has also faced numerous claims of undervaluing the land that they need to buy resulting in families and Businesses being forced to move out, but without enough compensation from the Government to relocate. Not only is this damaging to the individuals it directly affects, but it also proliferates an anti-Government sentiment which conflicts with the sense of interconnected national pride they hope to achieve with HS2.

The environmental impact is also worthy of discussion as with any train, the transport is more environmentally friendly if it is replacing transport by car given that one train can take hundreds of people. However, High Speed Rail itself is not significantly better for the Environment than a normal train. Indeed, the methods used to construct the rail line are certainly not environmentally friendly and thusly, it is possible that HS2 may do more damage to the Environment when considering the wildlife disrupted and trees cut down. Given that the primary users of HS2 would likely be using a normal train otherwise, the environmental impact of HS2 is likely to be negative but to a minimal degree, largely due to the harm done during construction.

HS2 is going to have a profound far reaching effect on the UK ranging from the country wide economy to a family of farmers in Buckinghamshire. The rail line seems to have a net positive impact on the economy if it produces the amount of jobs they expect, this should offset the amount of people who have lost their jobs or need to relocate. The rail may also relieve some of the pressure on London as the hub of the largest service firms. Should these firms choose to move to Birmingham and eventually to Leeds and Manchester, this would benefit the economies of these individual cities while decreasing the price of housing in London, but also increasing the price in these various cities. When the UK gains the benefit of this economic increase is dependent on whether the project remains on budget, though this seems unlikely and the potential for it to go over budget is supported by the resignation of its Chairman in early December. Ultimately, HS2 should have a positive effect on the economy, but a negative effect on individuals and small business owners who are an obstruction to the most substantial rail project ever built.

Keywords – HS2, Travel, Railways, UK, Business, Politics, @finregmatters