One of the major challenges facing the UK is that of challenging the ‘north-south divide’ — so that the continuing output gap between the north and the south can be narrowed. We need to improve the economic performance of the midlands and the north while at the same time managing economic growth in the wider south-east without further increasing congestion and pressure on our public services.

Experience in other countries has demonstrated the significant effect that high speed rail can have on regional economic development. The Greengauge21 research report by Reg Harman on High Speed Trains and the Development and Regeneration of Cities looked across Europe and concluded that high speed rail services can serve as a major factor in the development of city economies, supporting city development plans and the regeneration of run-down areas by:

• Bringing cities closer to each other in time, especially by bringing major regional centres closer to the capital — boosting business activity in regional cities and promoting leisure travel to more destinations
• Integrating high speed rail services closely with city-centre service-sector development plans
• Facilitating movement within and beyond cities by integrating local and regional transport networks with high speed rail.

This is supported by academic research into regional productivity differentials: Boddy, Hudson, Plumridge and Webber demonstrated in 2005 that travel time from London is crucial in determining regional productivity and competitiveness.

High speed rail lines from London and Heathrow airport to Scotland and the north of England therefore have the potential to spread economic development more evenly across the country. Businesses will not feel that they have to locate in the south to gain the advantages of the London World City economy and the international links that Heathrow offers.

The potential wider economic benefits of a north-south high speed rail network were estimated at more than £10 billion in a study carried out by Steer Davies Gleave for the Northern Way. The report notes the importance of additional capacity for north-south links and also the additional productivity benefits that quicker journeys will bring to the north.