Failure to Transform: High-Speed Rail and the Regeneration Myth


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New research casts serious doubt on claims HS2 will regenerate the North

·      The economic transformation of the North of England is now central to the government’s promotion of High Speed 2 (HS2). It is claimed the new line would boost employment and address the North-South divide. However, there are numerous reasons to be sceptical about these assertions.

·      Policymakers made similar regeneration claims prior to the use of High Speed 1 for fast domestic services to East Kent. Savings in travel times were considerable and not too different from those expected from HS2.

·      Since the introduction of high-speed services East Kent has performed far worse in terms of employment than the rest of the South East and the rest of Britain. From 2010-2013 the average employment rate was 5 percentage points lower than during the pre-high-speed period examined, compared with falls of 2.1 percentage points for the South East and 1.8 percentage points nationally. Some parts of the area now have similar employment rates to depressed old industrial cities in the North.

·      High-speed rail has thus far failed to transform the economy of East Kent. It would appear that the impact of the fast train services has been too small to counteract other more important economic factors.

·      Economic evidence from other towns with a fast rail link to London adds to the doubts. Doncaster, for example, has enjoyed rapid and frequent rail services to the capital for several decades but remains one of the poorest towns in the country. Travel times from London to Birmingham are similar to those HS2 would deliver to the North of England, yet the city performs worse than northern cities on key economic measures.

·      Constraints on the wider economic impact of HS2 would include the negative effects of the very large tax bill, relatively low levels of human capital in locations on the route, and a significant risk that disruptive technologies will undermine many of the purported benefits.

·      Politicians and officials risk misleading the public by claiming that HS2 will transform the North when there are strong theoretical and empirical grounds for concluding that such an outcome is highly unlikely.

The publication was featured in The Mail on SundayThe Guardian, BBC News Online and CityAM. It also recieved extensive broadcast coverage, featuring on BBC Radio Four’s Today Programme, Newsnight and BBC Radio Coventry and Warwickshire.

To read the press release, click here.

2014, Current Controversies No. 48

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Deputy Research Director & Head of Transport

Richard Wellings was formerly Deputy Research Director at the Institute of Economic Affairs. He was educated at Oxford and the London School of Economics, completing a PhD on transport and environmental policy at the latter in 2004. He joined the Institute in 2006 as Deputy Editorial Director. Richard is the author, co-author or editor of several papers, books and reports, including Towards Better Transport (Policy Exchange, 2008), A Beginner’s Guide to Liberty (Adam Smith Institute, 2009), High Speed 2: The Next Government Project Disaster? (IEA , 2011) and Which Road Ahead - Government or Market? (IEA, 2012). He is a Senior Fellow of the Cobden Centre and the Economic Policy Centre.