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On HS2, Labour is right to be cautious

High-speed rail alone won’t automatically solve regional inequality. We need the right accompanying policies, too.

By David Pendlebury

Editor’s note: This article was originally published on 21 September. It is being repromoted following reports that Labour leader Keir Starmer says he’s ruled out bringing HS2 to the North.

Speaking in 2013, during a flashpoint in the seemingly unending debate about HS2, Michael Heseltine made a provocative intervention which touched a nerve. In response to complex Treasury calculations that attempted to put a positive number on the benefits of the scheme, he pleaded that it was time for us to “leave the ladies and gentlemen of the slide rules” because “they know no more and no less than you and me”.

Heseltine’s point was that HS2 is a political decision and that its ultimate benefits are an article of faith, but that the cost of inaction is clearly greater than the cost of action. 

Nothing much has changed in the debate, as senior Labour politicians seemed to offer contrasting views last Sunday and Monday as to the level of tolerance within the party for the costs of the scheme. Meanwhile, the arcane calculus that goes into valuing the economic benefits of big infrastructure schemes continues to be treated with justified bemusement by the public. Journey-time savings and capacity improvements are intuitive. But turning the convenience of getting a seat, and minutes and seconds saved on a journey into pounds and pence seems much more spurious – because it is.  

So-called agglomeration economics – the idea that if we simply cluster people and business together around transport nodes, good things happen – is enticing but limited. A utopian vision of mini-Manhattans popping up across the West Coast mainline is an evocative sell, building on the King’s Cross redevelopment model in London.

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Yet the benefits of such schemes don’t always trickle down.

Canary Wharf, touted in last year’s Budget by the Chancellor, Jeremy Hunt, as a success story of regeneration, probably did ensure that many high-paying jobs and services stayed in the UK. However, just a stone’s throw away are some of the most-deprived neighbourhoods in the country. Despite the DLR, Jubilee Line extension and Crossrail arriving at Canary Wharf, major deprivation remains a stubborn feature in much of the surrounding landscape of Tower Hamlets, east London.

[See also: HS2 is a symptom of our terminal decline]

This is not to tarnish all regeneration schemes. Many clearly provide benefits, but others are often extremely limited in geographical impact, and without careful and targeted design will do little to improve economic inclusion or alleviate the complex challenges facing our most deprived communities.

Labour absolutely should be asking who stands to benefit from HS2 given its price tag. Will it be landowners around stations and in city centres? Hugely. Major firms looking for deeper labour markets? Definitely. Economic growth and employment? Probably.

But instead of pulling back, the question Labour needs to urgently answer is how we ensure that benefits from the scheme reach those who need it most. And that means having a genuine, costed plan for levelling up and reducing spatial inequality in the UK. A plan that relies solely on the delivery of one or more major infrastructure projects is no plan at all.

HS2 should go ahead, in full, along with a complete version of Northern Powerhouse Rail, but not because of the outcome of any convoluted calculus or fiscal rule. It should be delivered because it should be part of a plan and vision to come up with and implement solutions to one of the most pressing issues of our time, regional spatial inequality. But it also needs to be recognised that it is only the first step of a plan that is, in reality, yet to be drawn up.

Those of us campaigning for a better-functioning and more equitable economy, must therefore be ready to scrutinise our politicians, regardless of the party that’s in power when HS2 or any other major infrastructure project is being discussed, designed or delayed.

HS2 alone will not solve the major place-based problems in the UK. Last year, as with most years, Treasury data showed that transport spending per head in London was more than twice that in the north-west, and closer to triple that in the north-east and Yorkshire and the Humber. The second-highest region for spending per head was the south-east.

The project won’t close the gaping regional chasm that has emerged in GCSE grades this summer, or close the gap in per capita gross disposable household income, which sees the average household in Blackburn with less than half the spending power of the average household in the top 20 performing local authorities, all in London and the south-east.

HS2 won’t solve the quite shocking fact that life expectancy for a male born in Blackpool is 16 years less than in Wokingham.

Just as with the latest value engineering discussions for HS2 itself, we can’t afford to let our plans for levelling up grind to a halt at Old Oak Common, Crewe or Manchester. The country needs a comprehensive plan of place-based investments in the areas that need it most.

This large undertaking cannot be left to an article of faith, nor to arcane formulas in a spreadsheet.

[See also: The planning reform that will unlock net zero]

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