Minister backs HS2 amid report row

Cities could lose as much as £220 million if they are not on the route of the proposed high speed rail line.

Cities could lose as much as £220 million if they are not on the route of the proposed high speed rail line.

First published in National News © by

Transport Secretary Patrick McLoughlin has defended the controversial HS2 project amid claims it could cost some cities hundreds of millions of pounds.

Mr McLoughlin insisted he had "no doubt" that the scheme would benefit the UK as a whole, describing it as "vital" for the long-term health of the economy.

The comments came after previously unreleased research listed more than 50 areas that are likely to end up worse off - including Bristol, Cambridge and Aberdeen.

In September ministers hailed the KPMG report for concluding that HS2 would boost the British economy by £15 billion a year.

But while it listed the areas that would benefit - such as Greater London by £2.8 billion and the West Midlands by £1.5 billion - it omitted details of those that would end up worse off.

The full findings were finally released in response to a Freedom of Information request, and passed to the BBC's Newsnight programme.

Among those hardest hit would be Aberdeen, losing £220 million, Cambridge, which would lose £127 million, Bristol with £101 million, and Essex south with £151 million.

Mr McLouglin said: " All these investments that we are looking at is to serve the people of the UK, to make the UK a place where we attract investment.

"It's of no doubt to me that it's beneficial to the UK. We need to make sure our cities in the north are able to compete with the rest of Europe as well."

Mr McLoughlin said the report showed HS2, which would connect London to Birmingham, Manchester and Leeds, would give a £15 billion boost to UK plc.

"HS2 is vitally important overall for the long-term future of the economy," he added.

Professor Henry Overman from the London School of Economics - formerly an expert adviser to HS2 Ltd - told Newsnight it was obvious that, as some cities, towns and regions reap the benefits of being better connected, other places away from the line will pay a price.

"When a firm is thinking of where to locate, it thinks about the relative productivity of different places, and the relative wages etc," he said.

"HS2 shifts that around."

The chief executive of HS2 Ltd, Alison Munro, said: "What this is showing is that the places that are on the high-speed network... those are the places that will benefit most from high-speed two.

"But high-speed two isn't the only investment that the Government is making. Over the next five years it is planning to spend £73 billion on transport infrastructure."

A DfT spokesman said: "These figures show that the new north south railway is vital to rebalance our economy and it boosts the north overall more than the south. Of course, the line does not serve every city and region and these figures reflect that.

"But it is wrong to take them in isolation. HS2 is part of a much bigger boost to our transport system - £73 billion in the next parliament, of which HS2 is just £17 billion. This will massively benefit places HS2 will not serve long before the line opens."

Jonathan Isaby, political director of the TaxPayers' Alliance, said: " It's utterly dishonest for the Government to have spent £250,000 of taxpayers' money on a report and then to release only cherry-picked findings.

"This is further evidence, if it were needed, that the KPMG report was a taxpayer-funded propaganda exercise. Sadly, HS2 bosses have a track record of using dodgy numbers in an attempt to justify the white elephant's hefty price tag. It's time to scrap this project before any more taxpayers' money is wasted on its construction or its expensive PR."

Scotland's Transport Minister Keith Brown said: " This information reinforces the case that the Scottish Government, business and civic Scotland have been making, which is that HS2 must include Scotland in order to realise economic benefits for our communities.

"It also amplifies the point that the business case for the project is strengthened if Scotland is included.

"That is why we are keeping the pressure on Westminster, and finalising with the UK Government the remit of a study for planning high speed rail routes linking Scotland and England."

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