Monday, June 17, 2024

Axing northern leg of HS2 will stunt UK growth, says official adviser

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Axing the northern leg of High Speed 2 will stunt growth in the UK’s biggest regional cities unless alternative rail capacity is built, the government’s top infrastructure adviser has warned, as it forecast soaring demand on the route over the next two decades.

Sir John Armitt, chair of the National Infrastructure Commission, said on Thursday it was “very concerned” that ministers appeared to have no plan to address the bottleneck over the coming years.

He was speaking as the NIC published its annual update, which warned that delays in investment in infrastructure risk holding back economic growth and threatening the government’s net zero targets.

Armitt said it was “not too late” for ministers to catch up on infrastructure objectives in many areas, but warned that “the window to do so is closing”.

“Ducking big decisions over the next 12 months will put the major goals of net zero, regional economic growth and . . . environmental protection in jeopardy,” he said.

The NIC said about two-thirds of infrastructure expenditure over the next 20 years would need to be financed by the private sector but urged ministers to raise public spending in line with inflation.

Although the government is planning to increase public investment in infrastructure from about £20bn a year to £30bn between 2023 and 2025, capital spending was due to be frozen after that point, it warned.

Extra private sector financing in the energy, water and telecommunications networks would be needed over the next two decades, the NIC said, paid for by consumers through bills.

This was particularly the case in water where bill increases would be required to address sewage pollution, the NIC said, as it defended the privatised water system as delivering more “reliable” supplies.

Although the number of unplanned water outages doubled in 2022-23 compared with 2021-22 and leakage rates had increased over the past two years, customers were still five times less likely to experience unplanned supply interruptions than in the early 1990s, the NIC said.

The advisory body also reiterated its call for compulsory smart water metering to be introduced to avoid water shortages and drought.

The NIC said the government was on course to miss its goals for decarbonising heating, including its target of having 600,000 electric heat pumps installed per year by 2028.

It repeated its call for the government to rule out hydrogen as an alternative to fossil fuels in domestic boilers and said it “must begin planning to decommission or repurpose the gas grid”.

Armitt has previously been critical of Prime Minister Rishi Sunak’s decision in October to cancel the Birmingham to Manchester leg of HS2, originally intended to free up capacity between England’s two biggest regional cities.

The government has since argued that the route — part of the UK’s busiest intercity rail corridor — may be able to cope at its current capacity into the future, owing to falling rail demand since the pandemic.

But the NIC said its own analysis of central government and rail industry data for three big northern and Midlands cities showed that “over the next two decades overall passenger arrival numbers could be significantly higher than in 2019”, particularly in Birmingham.

By 2045 passenger arrivals in Britain’s second city could be up to 61 per cent above pre-pandemic levels, the NIC estimated, with increases of up to 38 per cent and 50 per cent in Manchester and Leeds.

Leeds was removed from the HS2 network by the government in 2021.

“Without uplifts in capacity, this could lead to significantly worse crowding outcomes,” said the NIC.

Armitt said “the honest answer” in relation to the knock-on effects of the northern leg’s cancellation was that the commission was “concerned”.

The NIC was not suggesting the northern leg of HS2 “has got to be reinstated”, he said, “but . . . you can’t ignore capacity constraints”.

Ministers would need to “look at different ways that capacity can be improved”, said Armitt. “Otherwise you run the risk of not achieving the benefits of economic growth and the levelling up of economic activity in the UK.”

The report on Thursday came after the House of Commons public accounts committee this week warned the UK government lacked the necessary skills and capacity to deliver on its plans to oversee £805bn in spending on infrastructure.

A spokesman for the Department for Transport said it “disagreed” with the NIC’s findings on HS2, adding the “facts changed” around the project.

“That’s why we changed our approach and are now reallocating £36bn saved from the second phase [of HS2] into transport projects that will boost economic growth and benefit more people in more places, more quickly,” they added, referring to the government’s Network North plan for alternative local transport investment. 

Responding more broadly to the NIC’s annual update, the government said it was “making sure we have the infrastructure we need to grow the economy, improve people’s lives and tackle climate change”.

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