City AM features IEA research and quotes Richard Wellings on HS2

New report claims line will boost UK’s economy by £15bn …but critics remain unconvinced.

Ministers will today launch a fightback in support of the High Speed 2 (HS2) railway project – as a government-commissioned KPMG report claims the project would boost the UK economy by £15bn a year.

Transport secretary Patrick McLoughlin will use a major speech to insist that the proposed £50bn railway from London to the midlands and the north is required to unblock the “clogged arteries” of Britain’s existing railway network.

The Institute for Economic Affairs (IEA) recently said the HS2 project could cost up to £80bn because it would prompt the construction of many other expensive transport schemes.

Yesterday the IEA’s Richard Wellings told City A.M. that KPMG’s £15bn GDP boost is “heavily distorted by the impact of London”.

“Many of the regional benefits from improved connectivity are contingent on freed up capacity on non-HS2 lines – which, if it means more services in practice means more rail subsidies, and the various associated losses from tax funding.”

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