Business chiefs slam HS2 'folly' and call for high speed link to be scrapped - WalesOnline

The Institute of Directors (IoD) has joined those calling for high-speed rail project HS2 to be scrapped, branding the £50bn scheme "a grand folly".

Robert Lloyd Griffiths, director of the Institute of Directors in Wales said if the rail project vastly exceeded its budget it "would not send the right message" to businesses across the UK.

The results of a survey of IoD members released today found just 27% feel HS2 represents good value for money and 70% say the scheme will have no impact on the productivity of their business.

The survey also showed there was little enthusiasm for the project, even in the regions like the Midlands and Manchester where the benefits are supposed to be strongest.

Mr Lloyd Griffiths said: "At a time when all businesses are used to tightening their belts, if a hugely expensive scheme like this cannot keep within its budget it would not send the rights message to businesses everywhere. Nobody can afford to break their budgets and the Government should be no different. I would say this survey echoes what my colleagues in Wales are saying.

"No-one seems to be clamouring for it and there is concern over rising costs at a time when everyone has had to be careful on spending."

The IoD scepticism over the scheme, which will see a first, London to Birmingham phase with 225mph trains completed around 2026, follows a report last week by the Institute for Economic Affairs (IEA) which said the cost of HS2 could be as high as £80bn.

There were also reports the Treasury was working on a figure as high as £73bn for the project which cuts through Tory heartlands in the Chilterns, with a Y-shaped scheme due to take the line to north-east and north-west England around 2032/33 .

The IoD said a central part of the Government's current economic case for HS2 was that time spent on a train is unproductive. But the IoD said its research showed this assumption was "wildly inaccurate", as only 6% of directors say they never work on a train.

Also, 48% of members say they spend at least half of the journey working, 26% work for between a quarter and half the time, and 21% spend up to a quarter of the journey time working productively.

Commenting on the research, IoD director general Simon Walker said: "Businesses up and down the country know value for money when they see it, and our research shows they don't see it in the Government's case for HS2.

"We recognise some of our members are in favour of this project, and there is a plurality of opinion among the businesses community.

"But overall there appears to be little enthusiasm among IoD members, not even in the regions where the benefits are supposed to be strongest. I

"Indeed, our research shows almost every region expects London to benefit the most.

"The IoD cannot support the Government's current economic case for HS2 when so many of our members are doubtful of the benefits.

"We agree with the need for key infrastructure spending, but the business case for HS2 simply is not there.

"Investment in the West and East Coast main lines combined with a variety of other infrastructure projects would be a far more sensible option.

"Our members support increased investment in other aspects of our road and rail network, citing this as more important than investment in HS2.

"Station upgrades, inter-city improvements, tunnels, electrification and capacity improvements should all be considered alternatives.

"It's time for the Government to look at a thousand smaller projects instead of falling for one grand folly."

The IoD surveyed 1,323 members online between August 1 and 11.

Professor Stuart Cole, Emeritus Professor of Transport at the Wales Transport Research Centre, University of South Wales, urged the Government to go for a different scheme.

He said: "London to Birmingham has to have a new line and a new set of tracks. If you are going to do that, you may as well provide a high-speed line as 80% of the costs of putting down new tracks are things like purchasing land and building bridges.

"This new line should link with Heathrow Airport, there should be an intermediate station somewhere East of Oxford and instead of going north the line should extend westwards to Bristol and Cardiff.

"That would be justifiable in an economic sense, not this 'middle England, England only' operation the Government is talking about."

Prof Cole said the present HS2 could eventually have benefits for Wales if extensions were eventually built to Crewe, Glasgow, Manchester and North Wales but he said this depended "on a long string of ifs".

He said that huge expenditure on high- speed rail transport in France had led to a neglect of its Corail system – similar to Britain's InterCity network – and the same could happen in the UK.

Prof Cole said: "Our strategy has to be a high- speed London, Heathrow to Birmingham line extending to Bristol and South Wales."

The £50bn figure for HS2 includes £7.5bn for the cost of the trains, with the line costing £42.6bn.

HS2 Ltd chief executive Alison Munro said: "While we respect the right of the IOD to state its case, we believe that HS2 will provide value for money and will bring about a transformational change to the economic geography of our country through creating thousands of jobs and opportunities for regeneration in and around our core cities.

"While smaller schemes may have higher benefit cost ratios, by their very nature they only make small improvements to capacity and often just move the bottleneck elsewhere on the network."