HS2 is key to boosting economic performance in our regions

HS2 will relieve the ‘overheated’ south east

Rail passenger figures pointed to end of double-dip recession — and need for HS2 to reduce London’s economic dominance

Railnews editorial director Alan Marshall takes a timely look at HS2 and our regions

SO, technically, one of Britain’s worst double-dip recessions has come to an end.  But that shouldn’t be a surprise to rail managers and rail economists, as the evidence was clearly presented by the Office of Rail Regulation in its last quarterly passenger journey statistics published more than a month ago, on 13 September.

The ORR’s figures for April-June this year — before any anomalies were created by surging passenger numbers due to the Olympic and Paralympic Games — clearly showed a significant growth (5.4 per cent) in London and South East passenger numbers compared with the spring quarter in 2011.

London-based recovery

But economic commentators are already saying that the latest recovery is London-based, not UK-wide. Again, the rail passenger statistics support this view — with passenger journey numbers on regional services outside London and the South East increasing by only 0.4 per cent in April-June, compared to 5.4 per cent in the former Network South East area.

On long-distance services, which with the exception of CrossCountry are focused on London terminals, passenger numbers were up by 4.1 per cent compared with the spring quarter last year.

So all the signs are that, once again, there is a significant difference in economic performance between London and the South East and the rest of the country.  Yet it is generally agreed — whether, domestically, by the present Coalition Government, or internationally by the Organisation of Economic Cooperation and Development (OECD) — that the British economy must become less reliant on London and the South East, with its concentration on the financial services sector that caused the economic crisis that began in 2008.

As reported in a special feature in Railnews in September 2011, “the Northern Hub, Trans-Pennine electrification and High Speed Rail can be the catalysts for an economic transformation which, according to a leading economist at the OECD, needs to be driven by northern cities so that the country’s development does not again rely too much on London-based financial services.”

Northern hub

Since then, the Government has given the go-ahead for the full Northern Hub project and electrification of the North Trans-Pennine route, between Manchester, Leeds and York — not to mention electrification of the Midland Main Line as far north as Sheffield, as well.

And, earlier this month, the latest Transport Secretary, Patrick McLoughlin, stressed his desire to press on with the Parliamentary bill to enable construction of the first stage of Hugh Speed Two as soon as possible.

HS2 – the need is ever more paramount

Now the latest economic figures suggest that the need for HS2 is ever more paramount.

As I wrote in a previous blog, Greg Clark MP, the Financial Secretary to The Treasury, recently pointed out that seven of Britain’s Core Cities  — Birmingham, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield — under-perform economically compared with London … even though, together with the eighth, Bristol, they already contribute 27 per cent of Britain’s GDP compared with London’s 22.5 per cent.

And all seven of the ‘under performers’ — Birmingham, Leeds, Manchester and Sheffield — would be served directly or indirectly — Liverpool, Newcastle and Nottingham — by HS2.

According to last year’s report for the Core Cities by Arup and Volterra: “The Core Cities are the main drivers of the country’s economy outside of London and the South East and need to continue to be productive city centres, achieving the highest levels of future growth possible and closing the gap in performance between the South East and the rest of the country.

“In 2009 the Midlands, Northern and South West regions together contributed £510bn, or 41 per cent, of total GVA (gross value added), to the UK economy. Scotland and Wales contributed a further £147bn, or 12 per cent.

HS2 and the Core Cities

“The Core Cities Local Economic Partnerships (LEPs) contributed an estimated 24 per cent of England’s GDP, compared to 18 per cent in London. Whilst, the primary urban areas of the Core Cities contribute 27 per cent, London contributes 22.5 per cent.

“Investment in transport infrastructure is a key factor in their continued ability to grow and prosper.”

Thus, it seems to me, the latest British economic developments strengthen even further the need to get on with building HS2 — and, if at all possible, to extend it to Manchester and Leeds at the same time the present phase one is intended to reach the West Midlands, by 2026.

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