Why the case for HS2 is falling apart
by Tim Worstall | 16th, May 2013
HS2 is, as you know, this idea that we should build a great big train set to go through the middle of England. Politicians love train sets so all the politicians are in favour of it.
Unfortunately they’ve been lying about the numbers. Yes, lying is the correct word here. The problem is that they’ve been using 1960s figures not 00’s figures to justify it. And many people have told them that what they’re doing is wrong, misleading, lying. But they’ve carried on regardless:
The Labour MP added that transport bosses had ‘belatedly identified errors in their calculations that have wiped £12billion off the expected benefits’ and left themselves ‘no room for mistakes’.
The problem is quite simple. When you try and work out whether to build a train set of not (or indeed, embark on any other project) you do what is called a cost benefit analysis. If the costs are higher than the benefits then it’s a bad thing to do: benefits higher than costs then go for it.
When you’re talking about transport projects one of the benefits is of course that people will spend less time travelling. More time actually at places doing things and less time getting to places. Excellent.
So, what’s the value of that time saved? Standard practice is to look at what people get paid per hour. If they’re at work, or somewhere, then we assume that they’re doing work that justifies the amount they get paid. OK, it’s a little rough and ready but it is the way this is done and it’s probably the best we can do. We also assume that while they’re travelling they’re not doing anything and thus the time they spend travelling to get somewhere to do something has a negative value: equal, of curse, to the positive value of what they get paid when they are somewhere.
So, cut travel time and we increase the amount of time spent in places, with that positive value, and reduce the amount of time spent in travel with that negative value.
No, really, this is how it’s done.
And in the 1960s it was fair enough too. However, it’s not fair enough in the 00s. These laptops, mobile internet, mobile phones: we can all work now while we’re on a train. So the value of time spent travelling is not negative: it might, possibly, be even higher than the time spent being somewhere. Because you can just get on with things without continually being interrupted.
And if that’s true then all the calculations based upon zero value of time spent travelling are bollocks. And that’s what’s wrong with the HS2 numbers: that’s where that £12 billion hole appears.
The costs of HS2 are now higher than the benefits: because the benefits of faster travel are now smaller than they were.
So we shouldn’t build it. QED.
Photo: File photo dated 07/02/13 of a sign opposing the HS2 railway in Church Fenton, North Yorkshire as the Government consultations on compensating those affected by the proposed HS2 high-speed rail scheme were today ruled unlawful by the High Court.
Tim Worstall
Posted: 16th, May 2013 | In: Money Comment
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