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HS2 to boost UK economy 'by £15bn a year' says report HS2 to boost UK economy 'by £15bn a year' says report
(35 minutes later)
A new report says the HS2 rail project could boost the UK economy by £15bn a year.A new report says the HS2 rail project could boost the UK economy by £15bn a year.
Transport Secretary Patrick McLoughlin will present the findings later on Wednesday as he outlines the case for the new 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, from accountants KPMG, says 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.
Earlier this week, the Public Accounts Committee (PAC) criticised the scheme. But the economic boost would not be felt until 2037, the report said.
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review of the project the PAC said: "So far, the Department [of Transport] has made decisions based on fragile numbers, out-of-date data and assumptions which do not reflect real life." Earlier this week, the Public Accounts Committee (PAC) criticised the scheme, saying: "So far, the Department [of Transport] has made decisions based on fragile numbers, out-of-date data and assumptions which do not reflect real life."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.
But report author Richard Threlfall, KPMG's head of infrastructure, said: "What I hope this work will do is put some new evidence into the debate, because what we've seen over the last few months is an awful lot of opinions and to be honest not a lot of evidence on the ground as to what effect this will have.But report author Richard Threlfall, KPMG's head of infrastructure, said: "What I hope this work will do is put some new evidence into the debate, because what we've seen over the last few months is an awful lot of opinions and to be honest not a lot of evidence on the ground as to what effect this will have.
"And what our report shows, beyond any reasonable doubt, is that HS2 will deliver massive benefits to the UK economy.""And what our report shows, beyond any reasonable doubt, is that HS2 will deliver massive benefits to the UK economy."
'Waste of money''Waste of money'
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."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."
He argued that simply renovating existing rail lines that were "creaking at the seams" would cause "chaos".He argued that simply renovating existing rail lines that were "creaking at the seams" would cause "chaos".
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.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.""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.The government was asking UK taxpayers to take "a huge gamble on their extremely dodgy numbers", he added.
BoostsBoosts
The latest study was commissioned by HS2 Ltd, the company responsible for developing and promoting the project.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%.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%.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."
More seatsMore seats
Wednesday's report calculates the benefits of the project in a different way from previous efforts.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.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.