You can blame it all on the Japanese. If they had not taken such good care of George Osborne when he visited seven years ago, he might not have fallen in love with the idea of a bullet train for Britain. The Chancellor praised Japan’s "maglev” train, which travels on a cushion of air via magnetic levitation. He asked, as Brits often do when abroad, why we couldn’t have this kind of thing back home. "It would virtually eliminate domestic flights,” he declared. So when Labour proposed a high-speed line linking London to the Midlands, the Tories backed it. When a cross-party consensus is struck, disaster soon follows.
The High Speed 2 project has ended up being rather less ambitious than Mr Osborne’s imaginings: it might shave 35 minutes from the journey between London and Birmingham, and reduce the Birmingham-to-Newcastle journey time to two hours from three. It is easy to see the appeal of this, but it would come at a cost. At least £35 billion – and spending on such projects traditionally doubles. Would the benefits cover the cost? Would commuters want it enough to pay the higher fare? Might the money be better spent elsewhere? As soon as you ask such questions, the case for HS2 disintegrates.
The National Audit Office is in the business of asking hard questions, and did so to fairly devastating effect yesterday. There is no evidence that HS2 will somehow bridge the North-South divide, it says, so by what alchemy does the Government reckon this will create 100,000 jobs? Do ministers intend to acknowledge, let alone remedy, the £3.3 billion black hole in their business case? And why do they rely on data that is 10 years out of date? If there was a clear commercial logic for HS2, then they might have more leverage with the 300,000 households that it threatens to disrupt. As things stand, the scheme looks like expensive madness.
There is nothing imaginary, however, about the regional inequality that Mr Osborne describes. London and its environs are booming, while life continues to be fairly grim up North. In Nottingham, disposable income is about £11,000 per household. It’s twice as much in Surrey and three times as much in west London. If London were a country, it would be as rich as Switzerland. If the North of England were independent, it would be as poor as Slovenia. These differences in wealth mean just as shocking divergences in school quality and life expectancy. Our United Kingdom is slowly coming apart, and urgent reform is required.
But it is not clear that Liverpool’s prospects would be greatly improved by cutting 24 minutes off the journey time to London. The Department for Transport claims otherwise, by counting hours spent on the train as economic dead time, whereas laptops and mobile internet have made travelling productive – sometimes more so than sitting at the office. The case for HS2 is the result of what civil servants refer to as "policy-based evidence-making” – coming up with a case to justify whatever the minister wants.
All this was predicted in 2006 by Sir Rod Eddington, the former British Airways chief who was asked by Tony Blair to produce a report on Britain’s transport needs. The idea of a high-speed rail link was floating around in the Labour Party at that time. Sir Rod tried to warn them off. "The claimed transformational impacts of such projects are rarely observed,” his report said. Ministers tend to want a shiny new railway simply "because a competitor city or country has one. The idea rapidly becomes a solution, looking for a problem. The risk is that transport policy can become the pursuit of icons.” So it was to prove.
Sir Rod pointed to the unhappy experience of Spain, but he could have looked into Britain’s own history to reveal what happens when politicians fall in love with a new form of transport. In 1922, Lloyd George’s coalition government envied Germany’s zeppelin aircraft and wanted one to move between outposts of the British Empire. The Imperial Airship Scheme saw docking stations created outside Cairo and Karachi – to receive a vehicle that crashed on its maiden voyage. The project was abandoned, its budget having almost doubled.
Concorde was conceived in the Fifties, when it was assumed that travellers would choose the fastest mode of transport. To create a supersonic passenger jet that travels faster than most fighter aircraft was an incredible feat and Concorde itself was a thing of beauty. But it was a commercial disaster. The evolution of first-class air travel on 747s meant that transatlantic commuters didn’t mind spending a few extra hours being pampered, fed well and allowed to do as much work as they liked. Concorde, one of mankind’s greatest engineering achievements, was effectively killed off by the laptop and free vodka martinis.
This is the risk hovering over HS2: it is a project for the future, justified by habits of the past. It assumes that demand for rail travel will more than double – by no means a given – when clever computers make it easier than ever to hold meetings remotely. It rather vainly assumes that London will remain a financial Mecca, when in fact Manchester’s businesswomen may be keener on better air links to China. Sir Rod’s report demonstrated that improving the roads, while deeply unfashionable, was the surest way to help regional economies. Three quarters of journeys are still taken by car, so speeding up traffic helps everyone.
David Cameron claims that HS2 "would spread wealth and prosperity”, as if railways were conduits of cash. But wealth can spring from the desert if taxes are low enough, as Dubai and Arizona demonstrate. The Prime Minister’s plans to lower corporation tax will help lure companies here – I understand, for example, that Google is considering moving its European headquarters from Dublin’s "Silicon Dock” to Britain. Shale gas could even turn Blackpool into the Dallas of the north, if ministers gave up trying to frustrate its exploitation. The surest way that Westminster can help regional economies is to stop holding them back.
It has fallen to Patrick McLoughlin, the Transport Secretary, to dismiss the National Audit Office’s report. He said, in effect: be gone, nerds, and take your "modelling” with you! If politicians confined themselves to accountancy projections, he said, much of London’s infrastructure would never have been built. The Coalition does not want HS2 "simply because the computer says yes”. It’s happening because it will make Britain "a stronger and more prosperous place”. This is a rather wonderful act of spirited defiance: so what if there is no visible business case? One may later emerge. It will improve Britain in ways yet undetectable to the spending watchdog.
Such a buccaneering spirit is admirable – in boom years. But the Government is midway through halving the budget for infrastructure, and it needs every penny. Most of the cost of HS2 will be spent in the next parliament and Mr Osborne, who has lately been converted to the case for expanding Heathrow rather than the rail network, will be highly tempted to drop it as he decides his funding priorities. It’s hard to find any advocates for the project inside government. When Cheryl Gillan quit Cameron’s Cabinet, she wrote in these pages that HS2 was a "cancer” – a view shared, privately, by many of her colleagues.
Mr Osborne had missed something, all those years ago. Britain did have a "maglev” train, in 1984 at Birmingham Airport. It was the world’s first – and an utter disaster, causing misery for thousands of holidaymakers; it was axed after too many expensive breakdowns. Since then, the temptation of a shiny new transport system is one that politicians have done well to resist. And the blunt truth is that, for the foreseeable future, Britain can only afford to fix the problems we actually have.
Fraser Nelson is editor of 'The Spectator’