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HS2 'losers' revealed as report shows potential impact

  • 19 October 2013
  • From the section UK
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Map of the proposed HS2 route
KPMG's report listed the regions that would benefit, but left out the rest

The potential losses to some regional economies from the HS2 high-speed rail link have been revealed.

HS2 would make more than 50 places across the UK worse off - such as Aberdeen, Bristol and Cardiff - research by KPMG suggested.

The government said HS2's £17bn cost is part of a £73bn package of transport improvements in the next parliament.

It claimed the measures would benefit areas which HS2 will not serve, long before the high-speed line opens.

The 92-page KPMG report was released in September.

Hailed by the government, it said the line could boost the UK economy by £15bn a year.

It listed the regions it said would benefit, with Greater London (£2.8bn) and West Midlands (£1.5bn) the biggest winners.

But, the extent to which regions not on the proposed line would be affected was only revealed following a freedom of information request passed to BBC Two's Newsnight programme.

HS2 Ltd's chief executive has called the figures "unsurprising".

Economic output would be worst affected, according to the research, in:

  • Aberdeenshire, Aberdeen City and Moray (-£220m)
  • Norfolk East (-£164m)
  • Dundee and Angus (-£96m)
  • Cardiff (-£68m)
  • Norfolk West (-£56m)

James Bream, policy director of Aberdeen's Chamber of Commerce, said it was "really disappointing" that such a huge number was left out of the original report.

He added the negative impact for the whole north-east of Scotland could be "significant to say the least."

Dundee and Angus could lose as much as 2% of its annual GDP, KPMG found.

Kettering, Suffolk West and Cambridgeshire East are all listed as zones that could see a 1% drop in GDP.

The accountants used data from HS2 Ltd's assessment of the direct transport impacts of the scheme, which would connect London to Birmingham and to Manchester and Leeds.

The Department for Transport said HS2 was vital to "rebalance the economy".

A spokesman said: "These figures show it boosts the north overall more than the south.

"Of course the line does not serve every city and region and these figures reflect that."

The DfT say ultimately the line would reduce journey times to Edinburgh and Glasgow by an hour.

KPMG said its report clearly shows the benefits of HS2 for some regions and the negative impacts it might have on others.

A spokesman said: "Maps in the report show potential productivity gains would outweigh the potential losses and the benefits to the UK economy would be far greater than the negative impacts.

"Newsnight did not contact KPMG prior to its programme.

"If they had, we could have helped them understand how the underlying data is represented in the report we have produced."

Professor Henry Overman from the London School of Economics - formerly an expert adviser to HS2 Ltd - told the BBC it was obvious that, as some cities, towns and regions reap the benefits of being better connected, other places away from the line will pay a price.

"When a firm is thinking of where to locate, it thinks about the relative productivity of different places, and the relative wages etc," he said.

"HS2 shifts that around. So if you are on the line that makes you a better place that hasn't had that productivity improvement."

'Robustness'

But Newsnight's political correspondent David Grossman said there were "questions about the robustness" of the data.

The chief executive of HS2 Ltd, Alison Munro, said: "What this is showing is that the places that are on the high-speed network... those are the places that will benefit most from high-speed two.

"But high-speed two isn't the only investment that the government is making. Over the next five years it is planning to spend £73bn on transport infrastructure."

Richard Houghton, from campaign group HS2 Action Alliance, claimed the whole project is based on "voodoo economics".

He said: "If I was sitting in one of the 50 areas set to lose out to the tune of millions of pounds, I would be asking very clear questions."

HS2 FOI request [97kb]

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