Sunday, 14 February 2016

Can High Speed Railways Put The North Back On Track?

The proposed new rail service (named HS2) has got some people in Britain as frustrated as the current service it intends to replace- that is, very frustrated. Yet the government continues to claim that it will ultimately benefit people of the North, by bringing them on a more level playing field with the South and London. So, who is right?

What is HS2?
In a nutshell, HS2 is a planned new rail system that will connect the Northern cities of Leeds, Manchester and Birmingham and the capital, London, with high speed trains. Going up to expected speeds of 250mph, these trains will drastically cut travel times between the North and the South- for example, reducing the length of the Birmingham to London train journey from 1h21m to just 49 minutes.

How HS2 could bridge the regional gap...
This diagram highlights the impact of the North-South divide
in Britain. [The Sunday Times]
If you visit London, it can seem at times a country of its own, separate from the rest of England- with not just its own transport system, but crucially its own thriving economy. In 2014, Office of National Statistics data shows London's GVA (Gross Value Added, a measure of economic productivity) per capita was 42,666. This is a figure well over the national average of just over 25,000 and the North East and North West figures of 18,000 and 21,000 respectively.

There are numerous reasons for London's extraordinary economic performance, such as the presence of some of the world's biggest financial and insurance institutions in the City, but that's a whole other article. What is relevant here is that one of HS2's primary objectives is to redistribute some of this economic activity to the rest of England, especially the North. "HSR can rebalance the economy", according to the taskforce behind the project.

While London has thrived since the 1980s thanks to its blooming services sector, the North has suffered massively as a result of the outsourcing of the majority of the industrial employment that it had relied upon for the past century. Since the 1960s, industrial employment has consistently been falling in the UK- almost a third of jobs in industry were lost between 1983 and 2010 alone.

It is hoped that HS2, in connecting cities of the North with each other and London, will enable businesses to relocate or expand their activity from London to the North. With its extremely high property prices and costs of living, some businesses may seek to relocate to the cheaper but rapidly developing cities of the North if the quick, convenient transport links are in place.

According to consultancy firm KPMG, HS2 could also boost national productivity- creating an "additional output of £15bn per year for the British economy" by 2037.

...and how it could expand the gap....
While there is little debate over whether the North will economically benefit or not from HS2, there is a sizeable question mark over whether the project will effectively realise its target of reducing the regional economic inequality between North and South.

A report from the World Conference on Transport Research analysing the implementations of High Speed Railways in China and throughout Europe, concluded that the profit-orientated nature of the companies running the railway service may be to the detriment of the smaller economies currently along the railway lines from London to the North. According to Vickerman, Loo and Cheng, "the creation of profit-oriented subsidiaries to run high speed rail services may be incompatible with providing a level of service to all potential stations which can impact on their economic development". The idea is that to achieve the quick journey times, between London and Birmingham for example, the railway operators are likely to rule out smaller stations as economically unviable- thus having a negative impact on these smaller economies.

Research suggests that France's high speed rail system
has not significantly reduced regional inequality- in fact,
it may have benefit Paris disproportionately.
Furthermore, some argue that the development of high speed rail and other improved transport links between cities can further imbalance the economic growth in the country towards the city that is most economically developed- in our case, London. Evidence from France has suggested this may well be the case. The HSR rail between Paris, Lille and Lyon contributed to flight and train journeys to Paris increasing by 144%, and those in the opposite direction increasing by just 54%. This study by Daniel Albalate and Germà Bel concluded that HSR has not "promoted... economic decentralization from Paris".

Considering that costs of living are far less up North than in London, it seems reasonable that London would benefit more from an increase in workers. People who want to work in Manchester or Birmingham would be far more likely to live there already, than people who want to work in London. HS2 could open the doors to people wishing to work in London, commuting from the North, but there are very few people who would be willing to live in London and deal with the high costs of living, to commute to work in the North.

In Conclusion...
There is no academic consensus as to whether HSR can reduce regional inequalities. The Government's Sustainable Development Commission argues that "Ultimately, the fairness impacts of a HSR network will depend on the detail of implementation plans", almost acknowledging the argument that HS2 will not effectively rebalance regional inequality, but entertaining the possibility that it can succeed in doing so. However, evidence from implementations of HSR in other countries, such as in France, and the reasoning behind some of the World Conference on Transport Research's arguments suggest that while nothing is certain, in reality, High Speed Rail 2 would be more likely to tilt the game towards London and increase regional disparities within the UK. 
Mohammad Lone Editor