HS2 phase 2 cancellation : what could/should happen now?

[LNW-GW Joint]

Moderator note: split from

Confirmed : HS2 West Midlands-Manchester line to be scrapped and replaced with other projects.

HS2 West Midlands-Manchester line to be scrapped (BBC) Rishi Sunak is to announce the scrapping of the HS2 high-speed rail line from West Midlands to Manchester on Wednesday, the BBC understands. In his conference speech, the prime minister is expected to set out a range of alternative...

www.railforums.co.uk

This is what Bernadette Kelly, the DfT permanent secretary and accounting officer for HS2, has written to the Public Accounts Committee.

https://assets.publishing.service.gov.uk/media/651da0bcbef218000e6deda8/accounting-officer-assessment-of-decision-to-complete-phase-1-of-hs2-letter-from-dft-permanent-secretary-to-public-accounts-commitee.pdf

The nub of the matter is that the residual HS2 BCR (ie after the cancellations) is between 1.2 and 1.8, so still "value for money".
However, that doesn't include sunk costs - if they did the BCR would be less than 1.

She has included the current costs of the Euston project, while noting that these are expected to reduce with scope reduction and a private sector contribution.
The following paragraph is typical civil service speak, but shows that the replacement projects still have to through business case analysis and value for money tests.

The application of these assumptions results in a BCR range for the continuation of Phase 1 between Euston and Birmingham Curzon Street (including the link via Handsacre to the West Coast Main Line) of 1.2 to 1.8
...
Finally, I also note that the VfM of the £35.9bn of alternative transport investments proposed will need to be considered separately and on a case-by-case basis, in the light of further business case analysis for those individual projects and programmes. They are not therefore considered in the attached assessment.

 

[heathrowrail]

Something that should have been done a long time ago, a massive waste of taxpayers money for little benefit. 1/4 of the HS2 budget could have been used to nationalise Flybe, so imagine what all that money could have done to local transport across the whole of the UK!

 

[Sonik]

Something that should have been done a long time ago, a massive waste of taxpayers money for little benefit. 1/4 of the HS2 budget could have been used to nationalise Flybe, so imagine what all that money could have done to local transport across the whole of the UK!

But here's the issue

HS2 would have achieved achieve a return on investment, even if it's not net-positive it mostly washes it's own face. And it would enable much more rail freight, which isn't subsidized, and is an essential element of net-zero.

Local schemes like branch lines (and especially road schemes) wont deliver any additional revenue, they will be loss making, they simply become an ongoing liability to the transport budget, spreading existing funds more thinly.

Rail is most effective where flows are highly concentrated (both on costs and environmental performance) which is exactly why HS2 was conceived and reversing Beeching makes no sense.

All this tosh from Sunak about local benefits is just cheap talk, it will never happen because most of it isn't viable.

Miriam Cates MP (no, me neither) has solved the problem of capacity for us, and it’s dead simple. Just make every train loads longer, and if they’re too long for the platforms tell people getting off to move down to the middle

Wow, I'm glad our politicos understand so much about how railways work!

 

[paul1609]

But here's the issue

HS2 would have achieved achieve a return on investment, even if it's not net-positive it mostly washes it's own face. And it would enable much more rail freight, which isn't subsidized, and is an essential element of net-zero.

Local schemes like branch lines (and especially road schemes) wont deliver any additional revenue, they will be loss making, they simply become an ongoing liability to the transport budget, spreading existing funds more thinly.

Rail is most effective where flows are highly concentrated (both on costs and environmental performance) which is exactly why HS2 was conceived and reversing Beeching makes no sense.

All this tosh from Sunak about local benefits is just cheap talk, it will never happen because most of it isn't viable.

Can you explain to me how Network Rails income from Railfreight is circa £39m a year and it is not subsidised? the cost to network rail of providing freight facilities must be in multiple £ billions pa.

 

[Sonik]

Can you explain to me how Network Rails income from Railfreight is circa £39m a year and it is not subsidised? the cost to network rail of providing freight facilities must be in multiple £ billions pa.

Fair point, but I'm sure you knew what I meant is that the FOCs don't receive any direct operating subsidy

And if you want to compare, then look at taxation for trucks and the cost of the damage trucks do to roads. Trains are at least an order of magnitude more efficient in infrastructure terms.

 

[paul1609]

Fair point, but I'm sure you knew what I meant is that the FOCs don't receive any direct operating subsidy

And if you want to compare, then look at taxation for trucks and the cost of the damage trucks do to roads. Trains are at least an order of magnitude more efficient in infrastructure terms.

Surely your argument was that HS2 between the Trent Valley and Manchester (the cancelled section) would enable much more subsidy free rail freight to be carried.
I seriously doubt that it would enable very much more at all.
Down here in Kent we have 100s of miles of operational freight facilities yards and loops that were expensively paid for by the taxpayer and have never been used and are quietly rusting away because rail freight is not cost effective.

 

[Mogster]

This has dropped of the front pages very quickly. Says everything about the state of infrastructure in the UK.

 

[squizzler]

This has dropped of the front pages very quickly. Says everything about the state of infrastructure in the UK.

We are still in the "sinking in" stage, the real anger is probably yet to come.

Justine Greening (a former Minister of Transport) is adding her voice to those condemning the decision (link):

The prime minister talked of aspiration, but people want more to look forward to in life than a continuation of the £2 bus fare cap, a phased ban on smoking and the filling of potholes.

<snip>

Sunak’s risky political strategy has left the door open to Keir Starmer and Labour at their conference in Liverpool this coming week. It’s clear Britain needs more than Sunak’s scrapped or banned list.

It is telling that the appeal for common sense is not made to the leadersihip of her own party but that of the opposition:

Whatever else is on his agenda, Starmer should have the courage to reverse the prime minister’s damaging cut to the HS2 Manchester leg. There remains a cross-party consensus in parliament that includes many within the Conservative party, even if not its leadership, and by reviving the plan, Starmer would signal his bold intentions to the red wall. Labour has to show it understands the drastic need for change in the country, and only then will it prove it is ready for government.

 

[LNW-GW Joint]

This has dropped of the front pages very quickly. Says everything about the state of infrastructure in the UK.

By-election analysis and celebrity gossip is so much more fun and fact-free.
One or two journos got the HS2 issues (Chris Mason being one), but not generally.

 

[GRALISTAIR]

We are still in the "sinking in" stage, the real anger is probably yet to come.
Tipp-Ex is the new crayon.

I love it!

 

[Nicholas Lewis]

This is what Bernadette Kelly, the DfT permanent secretary and accounting officer for HS2, has written to the Public Accounts Committee.

https://assets.publishing.service.gov.uk/media/651da0bcbef218000e6deda8/accounting-officer-assessment-of-decision-to-complete-phase-1-of-hs2-letter-from-dft-permanent-secretary-to-public-accounts-commitee.pdf

The nub of the matter is that the residual HS2 BCR (ie after the cancellations) is between 1.2 and 1.8, so still "value for money".
However, that doesn't include sunk costs - if they did the BCR would be less than 1.

She has included the current costs of the Euston project, while noting that these are expected to reduce with scope reduction and a private sector contribution.
The following paragraph is typical civil service speak, but shows that the replacement projects still have to through business case analysis and value for money tests.

She also says

Not building Phases 2a and 2b reduces the benefits enabled by Phase 1 (principally up to 8 trains per hour, instead of up to 17 trains per hour) and therefore its VfM

8TPH isn't going to throw much extra burden on the WCML now and substantiates why a six platform Euston is all that is needed.

 

[Sonik]

Surely your argument was that HS2 between the Trent Valley and Manchester (the cancelled section) would enable much more subsidy free rail freight to be carried.
I seriously doubt that it would enable very much more at all.
Down here in Kent we have 100s of miles of operational freight facilities yards and loops that were expensively paid for by the taxpayer and have never been used and are quietly rusting away because rail freight is not cost effective.

The difference is that (unlike HS2) the Channel Tunnel investments were a direct government subsidy to freight with no benefit to passengers. And these only served a single market of channel tunnel freight i.e. at the edge of the network. OTOH take a look at the aggregated intermodal freight flows in the UK - WCML is, by far, the main artery, with growth already constrained by paths, so growing this market is not in any way a speculative venture.

It's purely a matter of geography with WCML passing the main population centers of the South East, the North West, Scottish Central Belt and the distribution hubs of the Midlands 'Golden Triangle' as well as branch routes to/from all the major ports. Apart form a few regional hubs (e.g. Wales, North East) most intermodal and car export traffic ends up on WCML at some point in it's journey. This is exactly what's needed to displace long distance road freight, which is already happening.

Despite being a very cutthroat market with slim margins, the private sector is already making huge investments in rolling stock and rail connected terminals, so there must be a good business case.

The nub of the matter is that the residual HS2 BCR (ie after the cancellations) is between 1.2 and 1.8, so still "value for money".
However, that doesn't include sunk costs - if they did the BCR would be less than 1

Acknowledging that this is the secretary's statement (i.e. not your own view) this is a ridiculous position to state, pure politics with no bearing in financial reality. The debt of sunk costs still has to be repaid, now from a much reduced revenue base, as it's no longer physically possible to maximize return on use of the phase 1 asset (due to fewer trains and fewer paying passengers)

Essentially the argument here is 'we created the mother of all stranded assets, so we will simply ignore the costs'. It's important to be absolutely clear that the sunk costs are a real ongoing liability to the taxpayer, it doesn't disappear. Also, on this basis, if we simply ignore Phase 1 sunk costs, the BCR for phases 2a/2b would be absolutely stunning, so it's in no way a good argument for canceling the later phases.

£100Bn sounds like an awful lot of money, but in the context of e.g. the annual NHS budget of £168bn, it's really not that much to spend for a 100 year capital investment. We are investing £30bn in just one Nuclear Power Station, with a second still committed.

Being a Banker, I cannot believe for one second that Sunak does not understand all these economics. We can only conclude that he is ideologically opposed to state investment and doesn't like trains.

 

[greyman42]

This has dropped of the front pages very quickly. Says everything about the state of infrastructure in the UK.

I think it has dropped of the front pages because very few people seem to care about it been cancelled.

 

[Parjon]

I think it has dropped of the front pages because very few people seem to care about it been cancelled.

Which I think will have come as a real shock to many at the likes of the BBC et al. Who either have vested interests of different kinds, or mainly have circles so far detached from the majority - all the while presuming they are representative!

 

[21C101]

Which I think will have come as a real shock to many at the likes of the BBC et al. Who either have vested interests of different kinds, or mainly have circles so far detached from the majority - all the while presuming they are representative!

And a good few here. HS2 primarily benefitted people in 4 large cities. London, Leeds, Birmingham and Manchester.

Most politicians, journalists, captains of industry, charity executives, lawyers, accountants etc. in England live in or very close to those cities.

Most people in England don't live in or very close to those cities.

Virtually all Tory voters don't live in or very close to those cities and they resent funding what they see as a white elephant for the benefit of tbose who do live in or very close to those cities.

As I have said before, I expect something similar to 1992 or perhaps 1974, at the next election, not 1997.

 

[Agent_Squash]

And a good few here. HS2 primarily benefitted people in 4 large cities. London, Leeds, Birmingham and Manchester.

Most politicians, journalists, captains of industry, charity executives, lawyers, accountants etc. in England live in or very close to those cities.

Most people in England don't live in or very close to those cities.

Virtually all Tory voters don't live in or very close to those cities and they resent funding what they see as a white elephant for the benefit of tbose who do live in or very close to those cities.

As I have said before, I expect something similar to 1992 or perhaps 1974, at the next election, not 1997.

It isn’t just the cities that benefit from HS2 - it was the entire WCML. An hour removed on journey times to Glasgow, a dedicated service for the Lancashire stations, increased capacity for Liverpool - and so much more.

It’s just this government sees the price of everything and the value of nothing - and let HS2 be portrayed as vanity project because the Treasury despises funding public transport.

And if you think this government will get a 1992 result, you need to have a look at what’s going on in the real world!

 

[Arkeeos]

£100Bn sounds like an awful lot of money, but in the context of e.g. the annual NHS budget of £168bn, it's really not that much to spend for a 100 year capital investment. We are investing £30bn in just one Nuclear Power Station, with a second still committed.

And it’s £100bn on a project that takes 30years to complete, 3.3bn per year suddenly doesn’t sound so impossible, and it’s a project that will be around in 150years.

The idea that this is some impossibly high sum of money is false, the idea that HS2 costs are “spiralling” is false.

And if you think this government will get a 1992 result, you need to have a look at what’s going on in the real world!

People despise this government, questioning their basic competency to even produce documents without spelling mistakes.

There is no way on earth they can turn this around.

 

[paul1609]

It isn’t just the cities that benefit from HS2 - it was the entire WCML. An hour removed on journey times to Glasgow,

I find it hard to believe that Handsworth to Golborne the bit that's been cancelled reduced Glasgow journey times by an hour.

 

[Parjon]

increased capacity for Liverpool - and so much more.

Actually, it would have been static, or a net reduction for us. Two tph has long been lobbied for, and finally arriving after years of need and pressure.

In fact, indicative of the sinister political goings on in keeping opposition to HS2 under control, 2tph Liverpool-London should have been able to be delivered by 2019 (with procurement etc needing to start several years earlier).

Being that 2tph was the only "benefit" on offer to Liverpool by HS2, this need was studiously denied and thwarted from being taken forward. Only being allowed to proceed when it became clear that even the first phase of HS2 couldn't possibly be delivered in time to avoid it.

Further, it has long been a bone of contention that HS2 did nothing to allow extra freight capacity from Liverpool and, in fact, worsened it. The then HS2 team were early on humiliated at a meeting in Mann Island when they tried to claim this, and had to concede that in fact the reality was very different. Perhaps the late added Warrington stub may do something for this. I have to confess HS2 rather waned in my interest, with it having done so much damage to our economy already.

I would add that £12bn has been set aside for Liverpool and Manchester authorities to agree improved high speed links. So finally something sensible may be agreed.

 

[JamesT]

I find it hard to believe that Handsworth to Golborne the bit that's been cancelled reduced Glasgow journey times by an hour.

It wouldn’t.
The reduction from the full scheme was claimed to be 49 minutes for Euston to Glasgow. But Phase 1 saves 14 minutes for Manchester trains, so presumably would do the same for Glasgow. Which implies Handsacre to Golborne saves 35 minutes.

 

[Xenophon PCDGS]

It isn’t just the cities that benefit from HS2 - it was the entire WCML. An hour removed on journey times to Glasgow, a dedicated service for the Lancashire stations, increased capacity for Liverpool - and so much more.

Two questions:-
1)...What is the referred-to dedicated service for the Lancashire stations and which stations are they?
2)...After the recent upgrading of Liverpool Lime Street station, is it not at full capacity utilisation?

 

[Parjon]

It wouldn’t.
The reduction from the full scheme was claimed to be 49 minutes for Euston to Glasgow. But Phase 1 saves 14 minutes for Manchester trains, so presumably would do the same for Glasgow. Which implies Handsacre to Golborne saves 35 minutes.

Depends on how fast the trains can go on ordinary track... If they are faster than the current trains, or slower!!!

Two questions:-
1)...What is the referred-to dedicated service for the Lancashire stations and which stations are they?
2)...After the recent upgrading of Liverpool Lime Street station, is it not at full capacity utilisation?

It's not a dedicated service, it's a Liverpool 400m service which splits at Crewe... because the city can't handle 400m trains. Lancaster, Preston, Wigan.

Yes, when normal timetable if established and 2tph Liverpool-London starts, the station will just about have capacity left for a half hourly Chester/Wrexham service, and that's it.

 

[LNW-GW Joint]

Yes, when normal timetable if established and 2tph Liverpool-London starts, the station will just about have capacity left for a half hourly Chester/Wrexham service, and that's it.

TfW is only allowed 1tph Liverpool-Chester (and Manchester-Chester), by DfT decree.
I suppose Northern could add its own Chester service, as it did with the Leeds-Chester service via Man Vic (but the usage isn't there).

There's still Chat Moss route capacity, without the Warrington BQ stopper and the services that used the Golborne-Parkside curve.

 

[Noddy]

And a good few here. HS2 primarily benefitted people in 4 large cities. London, Leeds, Birmingham and Manchester.

You say that but I lived in Bradford for 10 years and it would definitely have benefited me if it had existed, as a regular traveller to the midlands and south-west.

I would add that £12bn has been set aside for Liverpool and Manchester authorities to agree improved high speed links. So finally something sensible may be agreed.

You keep say you are going to get ‘high speed’ links with this mythical £12 billion. You are living in a reality distortion field. There may be some upgrades to existing lines, marginally reduced journey times etc over the next 10-20 years but it won’t resemble anything like a high speed railway.

 

[Sonik]

TfW is only allowed 1tph Liverpool-Chester (and Manchester-Chester), by DfT decree.
I suppose Northern could add its own Chester service, as it did with the Leeds-Chester service via Man Vic (but the usage isn't there).

There's still Chat Moss route capacity, without the Warrington BQ stopper and the services that used the Golborne-Parkside curve.

The key problem that HS2 & NPR was intended to solve, is congestion in central Manchester. This was studied at length and half baked solutions won't fix it

You keep say you are going to get ‘high speed’ links with this mythical £12 billion. You are living in a reality distortion field. There may be some upgrades to existing lines, marginally reduced journey times etc over the next 10-20 years but it won’t resemble anything like a high speed railway.

The other issue is that devolved decisions will tend favor tinkering with local issues, often without due regard for wider connectivity. The Ordsal chord/Castlefeild widening plans are a good example here, which is why we ended up with NPR as a solution.

Designing networks is strategic and it needs to primarily be considered at the national level. With local input, obviously.

 

[Llandudno]

Can’t see TfW providing a half hourly Halton Curve service…

 

[Xenophon PCDGS]

Can’t see TfW providing a half hourly Halton Curve service…

Do they even have spare rolling stock to provide such a service with the combination of the two types of units that have had to be cobbled together in the hope of running the Borderlands Line service?

 

[MarkWi72]

I’m confused regarding Handsacre. Presumably Euston - Manchester services will run as now. Then if you have northbound HS2 OOC -Manchester services , will they all be pathed via Stoke? Is there capacity? Also the Handsacre-Colwich section capacity. They can’t go through Shugborough and via Stafford can they? Double track will bottleneck traffic?

 

[Noddy]

The other issue is that devolved decisions will tend favor tinkering with local issues, often without due regard for wider connectivity. The Ordsal chord/Castlefeild widening plans are a good example here, which is why we ended up with NPR as a solution.

Designing networks is strategic and it needs to primarily be considered at the national level. With local input, obviously.

To some degree it’s not even that. The £12 billion is simply a political gesture because they knew Liverpool-Manchester NPR improvements required HS2. Removing HS2 has destroyed this so they had to offer something else instead. £12 billion for a high speed rail between Liverpool-Manchester makes a nice soundbite, but that is all it is. It’s never going to make any sense unless the issues around Manchester are sorted and it’s never going to makes sense from a BCR perspective (unless tagged on to another scheme).

But I agree about the devolution issue. Which is why I’m not in favour of combined authorities (that’s another story). Sunak is ‘giving’ it to the combined authorities as part of a divide and conquer strategy so in the end noone will get anything and it’ll be diverted to road schemes managed centrally by Highways England.

 

[Nottingham59]

Phase 1 connections with the classic network around Birmingham, towards New St and Derby.

Depending on how much of the junction gets built as part of phase 1, there's a good case for a curve onto the Birmingham - Derby line around Kingsbury. To avoid building a second bridge over the M42, the curve would have to be quite tight and slow.

Fitting around existing flows might require using the outer tracks at Burton as passing loops, and/or faster stock than 170s for the Cardiff-Nottingham traffic. And electrifying Water Orton to Derby, of course.

Would it speed up Sheffield to London going that way? Certainly would relieve the southern MML by having fewer long distance non-stop trains.