March 17, 2014.




HS2 Action Alliance, Britain’s largest anti-HS2 national campaign group, responded today to Sir David Higgins’ misleading claim that he had reduced the overall HS2 budget from £50 billion.


Richard Houghton, a director of HS2 Action Alliance, said:


“We now know what ‘HS2-Plus’ means: it refers to the billions of pounds of cost that will be added to the project that have been omitted at this, the fifth re-launch.


“We have genuine rail industry experts on our team, and, analysing the figures presented today, even if we take into account the budget savings announced by HS2 Ltd today, the real cost of building HS2 is still well over £70 billion.

“HS2 Ltd continues to misrepresent the costs, omitting some and underestimating others.  We’re glad that they are dropping the pretence that HS2 connects the Midlands and North to Europe, but it would be even better if they were honest about the real costs and the lack of benefits.


“HS2 has left out some big costs: firstly, money isn’t free. Financing a £50bn debt will cost at least £2 billion a year in interest payments, a sum that could be used to pay for a £1,000 increase in everyone’s  personal tax threshold or help introduce a 10% tax rate. The current HS2 budget makes no allowance for the cost of capital whatsoever.  It’s an astonishing omission, and shows the British people the true extent of this Grand Canyon-like black hole they are being asked to fund.”


“Secondly, the cost of building Crossrail 2 is not included in their budget.  This will be essential to deal with the massive increase in passengers wishing to use the London underground.  The Victoria Line is already operating at capacity at Euston station during peak time.  The cost of Crossrail 2 will add about £14 billion.


“Thirdly, they haven’t counted the loss in value for properties along its route.  The true cost of property blight caused by HS2 is £12 billion, not, as HS2 Ltd include, £2.5 billion.  This means there is a £9.5 billion shortfall in HS2’s costing.

“Fourthly, HS2 Ltd treat increases in costs differently from increases in benefits. Several cost items (salaries, maintenance costs and electricity) stop increasing at or before 2036, while the benefits keep growing until 2093. For example train staff salaries stop rising at 2036 while average earnings (used to assess the benefits) keep growing to become 3 times their 2036 level by 2093.  No one would want a career on the railways. Rectifying these omissions adds 30% (£6.6 billion) to the operating costs.


“Fifthly, the forecast revenue is too high, the relentlessly-increasing passenger numbers forecast disregards that intercity rail travel has plateaued, and UK business travel is declining. A modest 20% shortfall in extra demand that HS2 is forecast to induce would cut revenues (by £6.2 billion) and mean HS2 would make an operating loss, not profit – requiring an annual subsidy. “




Notes to Editors:

  1. For more detailed background information please see the attached ‘Additional Costs for HS2 not included in the current budget’ paper.


  1. For further information please contact:

John Read, Midlands Campaign Director, on 07774-476391 – john.read@readdillon.com


Iain Macauley, Northern Campaign Director, on 07788-978800 – im@pressrelations.co.uk