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HS2: New government effort to boost case for scheme HS2 to boost UK economy 'by £15bn a year' says report
(about 1 hour later)
The government is set to present fresh evidence to support the HS2 rail project. A new report says the HS2 rail project could boost the UK economy by £15bn a year.
Transport Secretary Patrick McLoughlin will highlight a report which says the UK economy will receive a £15bn annual boost from the rail line. Transport Secretary Patrick McLoughlin will present the findings later on Wednesday as he outlines the case for the new rail line.
The report also concludes that regions outside London will be the biggest beneficiaries of the new service. The report, from accountants KPMG, says that regions outside London will be the biggest beneficiaries of the new service.
His speech will counter harsh criticism of the project earlier this week by the Public Accounts Committee. Earlier this week, the Public Accounts Committee (PAC) criticised the scheme.
In its review of the project the Committee said: "So far the Department (of Transport) has made decisions based on fragile numbers, out of date data and assumptions which do not reflect real life." In its review of the project the PAC said: "So far, the Department [of Transport] has made decisions based on fragile numbers, out-of-date data and assumptions which do not reflect real life."
The committee also said there was no evidence the line would help the growth of regional cities and would instead draw even more business to London.The committee also said there was no evidence the line would help the growth of regional cities and would instead draw even more business to London.
The latest study has been conducted by the accountants KPMG and commissioned by HS2 Ltd, the company responsible for developing and promoting the project. 'Waste of money'
It says Birmingham's economy could see a boost worth between 2.1% and 4.2% of the city's total economy. But John Longworth, director general of the British Chambers of Commerce, told the BBC: "Businesses up and down the country are absolutely convinced that this is a really important infrastructure project. It is one of the key infrastructure projects for the UK."
For Manchester the benefit would be between 0.8% and 1.7%. He argued that simply renovating existing rail lines that were "creaking at the seams" would cause "chaos".
For Leeds the boost would be 1.6% and London 0.5%. In response, Mark Littlewood, director general of the Institute of Economic Affairs, said: "Any private investor would consider this to be a colossal waste of money.
"That is not to say that we don't need to improve capacity. Rail is an extraordinarily expensive way of doing that."
The government was asking UK taxpayers to take "a huge gamble on their extremely dodgy numbers", he added.
Boosts
The latest study was commissioned by HS2 Ltd, the company responsible for developing and promoting the project.
It says Birmingham's economy could be boosted between 2.1% and 4.2% a year, while Manchester would benefit between 0.8% and 1.7%.
For Leeds, the boost would be 1.6% and London 0.5%.
In a speech later, Transport Secretary Patrick McLoughlin will say: "'High Speed Two will make Liverpool stronger. Manchester stronger. Leeds stronger. Britain stronger.In a speech later, Transport Secretary Patrick McLoughlin will say: "'High Speed Two will make Liverpool stronger. Manchester stronger. Leeds stronger. Britain stronger.
"A £15bn annual boost to the economy. With the north and midlands gaining at least double the benefit of the south." "A £15bn annual boost to the economy. With the North and Midlands gaining at least double the benefit of the south."
Wednesday's report calculates the benefits of the project in a different way to previous efforts. More seats
Time saved is a less important part of the calculation - instead the report includes the benefits of extra seats, which means passengers will be able to work while travelling. Wednesday's report calculates the benefits of the project in a different way from previous efforts.
Time saved is a less important part of the calculation. Instead, the report includes the benefits of extra seats, which means passengers will be able to work while travelling.
It also takes into account the reduction in congestion elsewhere on the network.It also takes into account the reduction in congestion elsewhere on the network.
In his speech Mr McLoughlin will say that "speed is not the main reason for building the railway". In his speech, Mr McLoughlin will say that "speed is not the main reason for building the railway".
"The point about High Speed Two is that you won't have to travel on it to gain from the better transport system and economic growth it will support.""The point about High Speed Two is that you won't have to travel on it to gain from the better transport system and economic growth it will support."
The high-speed line would run between London and Birmingham from 2026 before being extended to Manchester and Leeds from 2033.The high-speed line would run between London and Birmingham from 2026 before being extended to Manchester and Leeds from 2033.