HS2 case based on ‘absurd’ assumptions, MPs warn

By Adam Bienkov

The government's case for the £50 billion HS2 high-speed rail line is based on "absurd" assumptions that "do not reflect real life", a committee of MPs has warned.

The Commons' public accounts committee found that the costs of building the new link were spiralling up while the benefits to the public were dwindling down.

"The Department for Transport (DfT) has yet to present a convincing strategic case for High Speed 2. It has not yet demonstrated that this is the best way to spend £50 billion on rail investment in these constrained times," committee chair Margaret Hodge said.

"The pattern so far has been for costs to spiral – from more than £16 billion to £21 billion plus for phase one – and the estimated benefits to dwindle."

MPs said the economic case for HS2 was based on "fragile numbers, out-of-date data and assumptions which do not reflect real life".

The committee highlighted the DfT's "absurd" assumption that commuters do not work on trains and found that expected passenger growth was now lower than when the scheme was first conceived.

MPs found that the overall cost of the scheme had spiralled up by around £10 billion in the last year-and-a-half and said that the government had failed to allow for extra costs from further route changes.

The committee's report is the latest in a series of interventions from senior politicians, think tanks and business leaders questioning the case for HS2.

Other recent critics have included former Labour Cabinet members Peter Mandelson and Alistair Darling as well as the Institute of Directors and Institute of Economic Affairs.

The scheme is still officially backed by all three political parties although Labour have shifted their support recently, warning that there will be "no blank cheque" for the scheme.

Transport secretary Patrick McLoughlin today insisted that the case for building HS2 was still "absolutely clear" but admitted to the Today programme: "We've obviously got to keep working on our figures."

He added: "The project will free up vital space on our railways for passengers and freight, generate hundreds of thousands of jobs and deliver better connections between our towns and cities."

Campaigners against the new rail link welcomed the committee's report but said they expected the government to "plough ahead" regardless.

"We have no doubt that the government will continue to plough ahead with HS2 despite PAC's devastating criticism – that there is no convincing strategic case and out-of-date information and wrong assumptions were used which do not reflect real life," Hilary Wharf. director of HS2 Action Alliance, said.

"How much longer do they think the tax payer will listen to their protestations that this £50 billion white elephant is vital to the future of the UK's economy?"

Chancellor George Osborne said in a speech to business leaders this morning that he was still "passionately in favour" of the project.