This article originally appeared in our Elevenses newsletter.
‘Reneging Rishi’ has moved to create dividing lines with Labour ahead of a likely general election next year by backtracking on all of the things his party promised in 2019 and sugarcoating it with inheritance tax cuts that will hit public services and probably lead to tax rises elsewhere. The feeble move means that the climate will be put on the back burner because the Tories won Uxbridge and South Ruislip by a slender margin and the 3.76 per cent of people who actually pay IHT will be given a welcomed if unwarranted reprieve, most notably the prime minister himself, by the way, whose family stands to be £300 million better off if Labour analysis is to be believed.
One move that seems to have really stuck in people’s craw is the (potential) decision to scale back the HS2 railway, which has got two of Sunak’s three predecessors (are we still counting Liz Truss?) riled as well as one of the party’s biggest donors, who says it “seriously calls into question” whether they can continue to “support people who don’t do what they say they’d do”. The railway line was originally meant to connect northern cities with London and Europe, cutting journey times from Manchester to the capital to just over an hour and trebling the number of passengers to 15,000 per hour, but could now run from a little-known suburb near Ealing and terminate in Birmingham, which is already reachable in good time from a central London terminus. Andy Street, Tory mayor of the West Midlands, said scrapping the main line of the project would create the “most expensive white elephant in UK history” and “be a disaster for the country”, while Commons Health Committee chairman Steve Brine said it was “odd” to float the idea now given that the party will descend on Manchester for its annual conference this week.
At the heart of the debate is the project’s cost, which has trebled since it was first priced at £32 billion in 2009 and is becoming increasingly hard to finance in a world where tax cuts for the super-rich clearly take precedence. FT analysis suggests the cost per mile of track has ballooned to £262 million in Britain, which compared to £92 million per mile in Japan, £74 million per mile in Italy and £34 million per mile in Germany demonstrates neatly why we have a unique inability to build anything new. Crucially, new spending estimates put the project below the point at which it is considered value for money by the government, which means we are now ploughing money into something that will have a negative return on investment. By shaving off the central London component and putting buffers on the line at Birmingham, the government hopes to change that.
Of course, that all depends on how you look at it. An open any-time return to Manchester from London currently costs £369.40 (or £510 if you want to travel first class) and trundles along Victorian infrastructure that is congested, slow and prone to faults. Not only would a new line cut journey times in half, it would reduce fares, take more lorries off the road and distribute congestion wielding enormous environmental and consumer benefits. HS2 might look like a ginormous money pit right now, which is partly the government’s own doing, but its benefits extend far beyond simple ROI. In fact, it is precisely because we still measure things in pounds and pence that we can never seem to have anything nice.
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