The Chancellors Autumn Statement: Strengthening the case for HS2 even further?

9 December, 2013

Reflecting on the Chancellor’s Autumn Statement – Jim Steer, Director, Greengauge 21 discusses the issues that could be relevant for HS2:

There are a two items tucked into the Chancellor’s Autumn Statement that don’t immediately have obvious implications for HS2. But they actually represent important opportunities for making the case for HS2 even stronger than it already is. The Chancellor made the welcome announcement of capping regulated fares in 2014 in line with the Retail Prices Index. This ends the decade of inflation busting regulated fare increases first introduced under the Labour Government.

There can be no guarantees about rail fares policies in subsequent years but increases in line with RPI will represent the ‘new normal’ and it will be politically much harder to re-invoke across-the-board real terms rail fare increases. What has that got to do with HS2? All the analysis to date on HS2 is that rail fares including those on HS2 will rise at above the level of inflation. Above inflationary fare increases of course have a suppressing impact on demand. If fares instead rise in line with inflation, this will mean higher projections of the demand for rail travel and also increase the forecast demand on HS2. That brings forward the capacity crunch on the railways and the case for action.

The Chancellor also announced there will be a study into southern rail access to Heathrow. This is in response to recommendations made by Sir Howard Davies’s Airports Commission. Greengauge 21 set out in our 2010 report, the Heathrow Opportunity, how a southern rail access can hugely improve the economics of a link into Heathrow from HS2 and the national high speed rail network. Combining a connection  from HS2 and a new southern rail access would make it possible to link high speed trains from Manchester and Leeds and the North East and Scotland through Heathrow to the South West Main Line and then onwards to places like Portsmouth and Southampton and Brighton and Bournemouth.

In effect, this would put Heathrow on to the national Cross Country network, taking advantage of the much shortened journey times of HS2. The case for the HS2 link to Heathrow would not then solely depend on Heathrow originating traffic. This proposal has similarities with the approach adopted in France (at Paris CDG Airport), in Germany (at Frankfurt Airport) and the Netherlands (at Schiphol Airport) – all rival European hub airports that are on their respective national high-speed rail networks, served by through trains.

Combined with the new western access to the Great Western Line, this would create the surface rail hub that would help ensure maximum value from Heathrow’s air connectivity for the wider nation, not just London.  And it means there could be a real alternative to ever increasing use of the M25, and M3/M4/M40/M1 motorways. And it would also mean all the more value out of HS2.

Greengauge 21’s report on the Heathrow Opportunity can be found at: http://www.greengauge21.net/publications/the-heathrow-opportunity-2/