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  • Writer's pictureMike Spicer

Why HS2 was so important to the UK’s economic development

Updated: Feb 29

During his keynote address to the Conservative Party Conference in Manchester, UK Prime Minister Rishi Sunak confirmed that Phases 2a and 2b of the high speed railway from Birmingham to Manchester via Crewe would no longer go ahead. In this episode of LEDC, David and Mike revisit the economic development implications of high speed rail: what it is, why it matters, and how its absence in much of the country will leave opportunities for economic growth unrealised in Britain.


Abandoned railway junction

What is high speed rail and why is it fundamentally different to existing rail connections between London and the cities of the midlands and northern England?


In economic development terms, high speed railways (HSRs) are to rail what motorways are to road-based transport. The design of motorways is optimised for conveying the largest number of motor vehicles between places in the shortest time. Motorways revolutionised the UK’s economy from the late 1950s through to the mid-1970s when much of the present-day network was built. Coincidentally, this was the period when the UK and other developed countries experienced their highest trend rate of productivity growth recorded in the post-war era (listen to our episode with Danny Dorling that covers the post-1970s slowdown).


It’s hard to imagine the country, or indeed any developed economy, without motorways. Our modern world is, literally, built around them. If we had to live with motorways permanently closed, it would mean many journeys that support economic activity wouldn’t happen; those that do happen would take much longer and/or would be pushed onto other transport modes; freight would be carried less efficiently in smaller vehicles; businesses would re-evaluate their locations, many choosing to relocate. For all these reasons there is no doubt at all that the UK’s motorway network impacts the country’s economic geography and its overall level of productivity. And the same would be true of a high speed rail network.


HSRs are optimised for carrying large numbers of people between major urban centres in the shortest time possible. Like motorways, they achieve this through a combination of (i) clever design and engineering that supports high speeds; and (ii) limiting the traffic they carry to ‘express’ services - high-capacity passenger trains that stop only at major city locations. HSRs don’t carry freight services, ‘stopper’ or ‘suburban’ rail services. Focusing on a single type of journey, with all trains travelling at similar speeds, allows for enormous capacity that isn’t possible on any other kind of inter-city railway.


The original plans for HS2 had 18 trains per hour travelling in each direction between London and Manchester via Birmingham. That’s equivalent to nearly 20,000 people every hour in both directions. As of today, there are around 12 trains per hour in both directions - a mix of express and stopper services that between them carry just over 13,000 passengers an hour each way.


Building HS2 in full would open a dedicated route for express travel between England’s largest cities and release capacity for more local services and freight trains on existing railways. In its original form (with both western and eastern legs from Birmingham), and with reallocating express services from existing rail lines, HS2 was expected to increase the passenger capacity of the UK rail network by a whopping 25% overall. By contrast, the highly disruptive upgrades to the existing East and West Coast mainlines in the 1990s and 2000s increased passenger numbers on the UK rail network by just 10%, with only incremental improvements to further increase capacity now possible.


Similarly, the Department for Transport estimates that 144 additional freight services a day would be possible under an ‘HS2 in full’ scenario on the existing network at greater reliability, opening new possibilities for manufactured goods exports by rail to ports on the east and west coasts.


And there’s more…HS2 in full was expected to remove 180 million journeys from the UK’s road network per year, and put a dent in the domestic aviation market and its associated emissions. There were nearly 8,000 flights between Manchester and London in 2022.


Why do local leaders in the midlands and north believe HS2 Phase 2 is crucial to local economic development and levelling up?


Much of the political commentary in the media has focused on the present-day unreliability of existing rail connections between and across the north and midlands – and how HS2 was a solution for these challenges. But beyond transport improvements in the number and quality of services, de-clogging roads and reducing emissions, the growth plans of places across the original proposed HS2 network (and beyond) depend on the increase in rail activity that this infrastructure would have supported.


This includes the city-centre regeneration plans of the cities on the route, like the huge increase in office capacity needed to accommodate the professional services jobs made possible by the further agglomeration of economic activity. Look today, for instance, at commercial developments around Brindley Place in Birmingham and the inward investment that anticipates the coming of HS2 to the city. It includes new commercial and housing developments in the hinterlands of the stops, such as in Cheshire. And according to the Rail Freight Group, it can be seen in the ‘strategic interchanges, construction terminals and rolling stock to support growth, expecting that capacity for freight services would be available.’


HS2 Phase 2 also formed part of the proposed Northern Powerhouse Rail network: 80km of shared track with a new line stretching coast to coast from Liverpool to Hull and Leeds. Without HS2 – the business case and planning for east-west connectivity is undermined, putting its delivery into further doubt despite assurances from government.


What does the cancellation of HS2 Phase 2 say about infrastructure development in the UK?


In the episode David and I focus on three likely wider impacts of this decision for UK infrastructure. First, the decision to cancel Phase 2, taken by the Prime Minister, without a formal consultation or appeal process sets a new precedent for how such decisions are taken. Investors and suppliers will surely seek to mitigate such risks in future contracts. Future UK government ability to part fund infrastructure with private investment is reduced in total, and costs are highly likely to increase.


Second, we touch on what this says about the effectiveness of the infrastructure sector in making the case for new projects. In full, HS2 delivered a large range and scale of benefits critical to local economic development and prosperity. And yet, right up to the point it was cancelled, leading politicians, influential commentators and even public opinion showed little evidence of being aware of HS2’s wider rationales, instead focusing on the narrow benefit of time savings over existing rail.


Finally, we asked where this leaves local powers and resources for infrastructure-anchored LED and placemaking. Unable to rely on central government policies and programmes and with relatively modest local buttons and levers for transformational change, the HS2 story has become a compelling case study for why fundamental system change is necessary in the UK nationally, regionally and locally.


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