The chancellor’s “HS3” proposal won’t woo impatient businesses

While most businesses appreciate the sort of ambitious thinking George Osborne has demonstrated today, they would be far more impressed if existing infrastructure commitments were delivered as a matter of priority.

By Adam Marshall

(Photo By Businesses would rather see HS2 delivered than new, unplanned infrastructure proposals. Photo: Getty)

Britain has more than one connectivity problem, as the UK’s national wish-list of infrastructure projects makes all too clear.

So George Osborne is right to be talking about connectivity in the north of England – where businesspeople have long complained about getting from east to west.

A new “HS3” would be a bold investment in the North of England, far eclipsing the welcome but incremental “Northern Hub” project that will deliver significant improvements to the existing network by the end of this decade. By Network Rail’s own admission, the rail network connecting northern cities has been starved of proper investment for a generation, and many observers think that the Northern Hub project will only bring the northern rail network up to where it should have been a decade ago.

Yet although the chancellor is making the right noises by proposing HS3, business has some important questions that still need answers.

First, what sort of connectivity would HS3 deliver? Simply linking Manchester and Leeds would leave out a string of other important economic areas, including Merseyside and the North East. An “HS3” that did not deliver connections across the North would be a missed opportunity.

Second, what are the costs and benefits? We won’t know if today’s HS3 proposals are the answer to northern England’s connectivity problems until we see a detailed plan from ministers. But if a strong economic and business case for this type of investment does exist, there is no reason why it should not proceed.

Third, where does HS3 fit with HS2? The chancellor may be getting a bit ahead of himself. Detailed planning for HS3 could realistically only take place once HS2 is firmly underway. At present, HS2 hasn’t even made it on to the statute books, let alone into construction. Diverting attention away from the business-critical North-South project would do Britain no favours given that the three main lines will all reach their effective capacity in the next fifteen years. Yet if HS2 is placed on a firm footing, and its implementation accelerated, HS3 then becomes a far more attractive prospect.

And fourth, where would HS3 sit on a prioritised list of infrastructure projects? Businesses are, understandably, impatient for the various road, rail, energy and digital infrastructure projects already announced by ministers to materialise on the ground. In far too many cases – such as the A14 in the East of England, the A303 to the South West or rail electrification in Wales – those business face a long and on-going wait. I need not even mention the vexed question of airport expansion.

While most businesses appreciate the sort of ambitious thinking that the chancellor has demonstrated by kicking off a debate on HS3, they would be far more impressed if the government’s existing list of infrastructure commitments is delivered as a matter of priority.

George Osborne and Danny Alexander have both shown a personal commitment to infrastructure issues during their time in the Treasury. The question on businesses’ lips remains whether that commitment will translate into visible action on the ground – so that UK companies can, in the chancellor’s own words, “take on the world”.

Dr Adam Marshall is executive director of policy at the British Chambers of Commerce (www.britishchambers.org.uk).