Fresh light on a key issue: why it’s worth saving time for business travellers

10 March, 2011

A common refrain from the anti-HS2 camp has been the objection that it’s not worth shortening the time business travellers spend on trains because these days, with laptops and other mobile devices, they are able to use their travel time productively. We have pointed out why this assertion is unsound before; now the economists at the Department for Transport have confirmed why we were right to do so.

In December last year, we released HS2 – why the critics are wrong, acknowledging that ”Productive use of travel time is almost certainly treated in too simple a fashion in current appraisal methodologies.”

Of course, for those high-speed rail passengers who would, in its absence, use a slower rail service, it is true that their productive travel time will be shortened by HS2. This won’t be an economic loss if the quicker journey allows more time at the office for work. But some of the time freed up will no doubt be used for leisure, and this is an un-scored economic loss.

Against this, we argued, there are forecast to be many high-speed train users who will be able to work and use their time productively on high-speed trains but who would not be able do so without high-speed rail. These are the people would otherwise drive or travel by air. – The additional productive time available to these ‘mode switchers’ because they choose to travel by high-speed rail is not taken into account in the appraisal.

So the simplification works both ways in terms of the investment case.

The Economic Case for HS2, published by DfT on February 28th, makes clear that there is another important factor.  DfT points out that it is not only the productivity benefit from modal transfer that is understated in the appraisal of HS2. There is also the effect of relieving overcrowding. While the discomfort of travelling in crowded conditions is reflected in the business case appraisal, the effect on productivity, for example of being able to work whilst seated rather than standing, is not. Sensitivity tests now reported by DfT actually show the overall impact of all these factors, if included in the appraisal, would improve the HS2 business case, not worsen it.

And the reduction in overcrowding that HS2 brings is very significant, freeing up space not only for longer distance rail travellers who will otherwise be standing during peak periods, but also for hard-pressed commuters on routes into London, Birmingham, Milton Keynes and so on. Commuters benefit in this way because of the capacity freed up on the West Coast Main Line for more local and regional services once the long distance non-stopping services have transferred to HS2. As we show below, productivity is a factor for commuters as well as business travellers.

The DfT document concludes as follows:

What really matters is not time spent working, but overall productivity. Business people are likely to make choices to maximise their overall productivity […]. The choices they make […] are reflected in our model and show that business passengers do value time savings on trains, and that if anything, they place a slightly higher value on this than is recommended by the Department for Transport.

And there’s more. Interestingly, research shows that it is not only business travellers who make productive use of their time spent travelling by rail. Research conducted as part of the Autumn 2004 National Passenger Survey looked at passenger activity while travelling. This work showed that commuters and leisure travellers also spend time working or studying when travelling by train: while around half of business travellers work/study en route, so too do over a quarter of commuters, even 10% of leisure travellers.

So if HS2 reduces the level of crowding on rail services and improves travelling conditions on the existing network, it therefore has the potential to improve the productivity of a very wide group of passengers.

In conclusion: there is no reason to believe that the appraisal of HS2 is over-estimated because of the simplified treatment of the fact that people can use their time productively while travelling by train. There are two factors – the reduction in overcrowding and the transfer from other travel modes where it is difficult or impossible to work – that suggest the benefits of HS2 are underestimated.