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2 April 2001

The New Statesman Special Report – Coming soon: the Dome on wheels

Stephen Plowden argues that the Channel Tunnel rail link will be a colossal waste of public money an

By Stephen Plowden

The journey from Waterloo to the Gare du Nord takes three hours. The service is frequent and reliable; the trains are comfortable and never crowded; 97 per cent of Eurostar’s passengers say they would recommend it. One might conclude that this was one element of Britain’s transport system that could be left to look after itself.

The government, however, takes a different view. Work is now in progress on a new railway line from the Channel Tunnel to St Pancras, which will reduce the journey time to Paris by just 40 minutes. The line does colossal damage to the environment and a certain amount of harm to the economy as well. If this were a purely private sector venture, these would be good grounds for refusing planning permission. Yet the government proposes subsidies to the tune of £2.74bn (at 2001 prices) – a figure that, given this country’s recent experience of major transport infrastructure projects, including the Jubilee Line extension and the Channel Tunnel itself, seems almost certain to be exceeded. This is a much greater folly than the Dome.

The government claims that the line will bring to the nation economic benefits about 50 per cent higher than the subsidy. But what are these alleged benefits? By far the most important, amounting to £2.54bn, is the consumer surplus to Eurostar passengers. Consumer surplus is the difference between what someone has to pay for a product and the maximum he would be willing to pay for it. So if I buy a carton of freshly squeezed orange juice for £1.40, but would, if necessary, have paid £1.60, my consumer surplus is 20p.

In the context of the Channel Tunnel rail link, this is a most peculiar calculation. Sales of goods and services always give rise to a consumer surplus, but firms do not take this item into account when appraising investment proposals. They consider their own surplus, or profit (which will not be made without satisfying their customers), but not consumer surplus. Nor, until now, has consumer surplus figured in the appraisal of railway schemes of a kind comparable to the fast line to the Channel Tunnel. Rural railway lines have been subsidised for social reasons. But intercity services have been supposed to run on commercial lines. Neglect of basic maintenance may now have reduced them to a state that only public money can put right, but no such argument applies to Eurostar. There is no principle of public policy that could justify a huge present from the taxpayer to a relatively small number of people, drawn overwhelmingly from the richest section of society and the most prosperous part of the country.

According to the government, passengers on domestic rail services that would share the high-speed track with Eurostar would enjoy a consumer surplus of £850m. The great majority of these passengers would be commuters to London. Long-distance commuting, by any mode of transport, is economically, environmentally and socially undesirable. The policy of the Tory government was to phase out subsidies to rail commuter services, and John Prescott has said that people should live near where they work.

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Even if this benefit were legitimate, it seems to have been wrongly calculated. Under the rescue package announced by Prescott in June 1998, the construction of the line was split into two stages. The first section of the line, which is now under construction, runs from the Channel Tunnel to Fawkham Junction in north Kent. When that section is open, Eurostar trains will travel from Fawkham Junction to the existing terminal at Waterloo. Construction of the second section, which involves crossing the Thames and bringing the line through Stratford to St Pancras, is due to start this summer and to finish by the end of 2007. Only when it is complete will commuters enjoy an improved service; while only the first section is open, the service is likely to be worse because of the difficulty of accommodating both Eurostar and the existing commuter services on an already crowded track. But, as far as can be told from the scanty information supplied, the calculations of benefit still relate to the previous plan for construction in a single stage. A further problem is that in order for domestic services to share the line with Eurostar, they will have to be equipped with expensive new rolling stock, which, at present, there are no plans to provide.

The regeneration of the areas round Ebbsfleet (in Kent), Stratford and St Pancras is predicted to produce £710m of benefit. Although the government has not broken down this total, we know from another study that the St Pancras area accounts for the bulk of it. But this is already the best-connected area in Britain, and does not need new transport links. Without the blight and uncertainty caused by the prospect of the new line, it would have been redeveloped years ago. There is a further, unresolved problem of how passengers arriving at St Pancras will get to their final destinations on central London’s crowded transport system. The claimed benefit is really a sizeable non-benefit.

Another adverse effect of this high-speed line on the British economy is omitted altogether from the calculations. In the absence of the line, many people, mostly those travelling for leisure, would not go to Paris or Brussels at all. No doubt, some of them would make another foreign trip, perhaps to Barcelona rather than to Paris, if the line were not built, but others would stay in Britain and spend their money at home. The effect of the line is to suck spending power out of Britain.

It is claimed that the new line will bring £170m of “environmental and decongestion benefits”, arising from the transfer of freight (£128m) and passenger (£42m) traffic from road to rail. The line will not take freight trains itself, but it is claimed that, without it, the section of the existing line between Ashford and the Channel would become so congested that it would be unable to accommodate the rail freight predicted for the future. The details of this prediction have not been given. The passenger traffic consists of people abandoning cars for improved domestic train services. No account seems to have been taken of the congestion caused by Eurostar passengers driving to the railway stations. It is planned to build a car park for 9,000 cars at Ebbsfleet; if this is even moderately well used it will attract a substantial amount of traffic. And any small relief of road congestion that the new line might produce would soon be negated again, in this crowded corner of south-east England, by local traffic generated by the eased conditions.

Even if all the government’s estimates of costs and benefits were correct, would anyone say that the net benefit justified the huge and permanent environmental damage? According to Michael Meacher, the minister for the environment, parliament made just this judgement when it passed the Channel Tunnel Rail Link Bill in 1996. “It was parliament,” he said in a letter to me last year, “that decided that the wider benefits of the . . . link justified its obvious and significant impact on the environment.”

Unfortunately for this argument, the benefits that MPs expected in 1996 were much greater than even the government is claiming now. The biggest attraction of the new line was that it would be linked to the rest of the railway system to allow direct passenger services between the Continent and each British region. There was never the faintest chance that such services could be viable. It will always be cheaper and quicker to fly from Scotland and the north of England to Paris or Brussels than to go by train. In any case, demand is concentrated in the south-east: even if the railways were to get all the passengers now travelling from the north-west to Paris and Belgium by air, that would not justify even a daily service from Manchester.

Nevertheless, as late as January 1999, the Commons committee on environment, transport and regional affairs was still calling for regional Eurostar services to be introduced, with a government subsidy if necessary. According to the committee, MPs would not have supported the Channel Tunnel itself, back in 1987, if they had not believed that these services would be provided. And it was the desire for a link to the Midlands and the north that persuaded Michael Heseltine, in 1991, that the rail link should enter London from the east, not the south as previously planned.

Heseltine’s other major consideration was to regenerate the Stratford area of east London, and this, too, has always been important to MPs. But once the construction phase is over, the benefits that the line will bring to east London and the Thames gateway is likely to be small, and it is probable that most of the construction workers will come from outside the area.

In 1996, it was also widely believed that the high-speed line would bring substantial relief both on the roads and in the air. This is apparently why the Treasury dropped its opposition to subsidy. In the Independent in February 1994, Rupert Darwall, a former special adviser to the Treasury, wrote: “It would be difficult to justify a £2.5bn investment for the sake of 30 minutes off London-to-Paris journey times. It is about creating extra capacity to relieve pressure on London’s airports and Kent’s roads.” The idea that the new line would make a significant difference at Heathrow, or reduce the nuisance of aircraft noise, as many environmentalists hoped, has now been dropped. And even if the claims still made for relieving pressure on the roads were correct, that benefit would cover only a tiny fraction of the cost of the line.

Furthermore, all the benefits predicted in 1996 depended on unrealistically high passenger forecasts. The Conservative government must have known that the forecasts were untrustworthy before Sir George Young, then the secretary of state for transport, announced the winner of the competition to build the new line, at the end of February 1996, and MPs should have known it, too. By that time, the results of the first year of Eurostar operations were available and the actual figures were only about one-third of the predictions. In January 1996, Sir Alastair Morton, then the chairman of Eurotunnel, told the Observer that if the figures had been correctly forecast in 1987, the Channel Tunnel would not have been dug. Yet the gross errors in the forecasting model, and in the inputs to it, had been pointed out in some detail in 1987 and many times since.

The construction of the Dome did at least involve the partial cleansing of contaminated land. The rail link, as well as wasting much greater sums of public money, is a huge, permanent environmental disaster. As well as the obvious visible damage, trains on the high-speed track would consume far more energy, and so contribute far more to global warming, than do the Eurostar trains at present. Energy consumption rises sharply with speed; in addition, the new line has some difficult gradients, and much of the second section is in fairly tightly fitting tunnels. My rough calculations suggest that trains on the new line might consume twice as much energy as trains on the present line through Kent. But the true figure must be known to Eurotunnel, and should be published.

Plans for the second section of the line and the monstrous car park at Ebbsfleet should be scrapped immediately. Work on the first section should be suspended pending an inquiry into the relative costs of completing it or demolishing it, restoring it and paying penalties to the contractors.

But this whole, self-inflicted disaster raises deeper questions about the way we are governed. Rather than admit a mistake, governments have used any arguments, however spurious, to support their decisions. Year after year, parliament has swallowed implausible claims and figures, apparently without seeing any need to scrutinise them. If MPs were duped, it was with their consent.

This saga is not an aberration, but is of a piece with the rest of transport policy-making in Britain. The arguments that sustained the road programme year after year have been just as bad; the idea that the same number of motorised journeys would be made, between the same origins and destinations, whether new roads were built or not is only the most notorious of these fallacies.

While follies have been pursued, sensible alternatives such as traffic restraint, traffic calming and planning for pedestrians and cyclists have been neglected. In urban transport especially, Britain lags so far behind the best Continental practice that even ministers have acknowledged the gap. Yet there is as much environmental concern in Britain as in any other country. It is not apathy but the faults in our governmental system that hold us back.

Stephen Plowden is the author of numerous books on transport

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