HS2 is an outdated idea. Ditch it

The economic case for HS2, if there ever was one, is long since dead. The costs have shot up and the benefits have declined. What keeps this wretched project alive is ego, fear and deception. A National Audit Office report appears to show that HS2 Ltd has reduced the cost of some agreements with private contractors in the short-term by agreeing to carry the liability for future cost increases in the long-run. It looks like a clever trick – shaving off a little now at the risk of greater cost later – and is reminiscent of the gamble of PFI contracts.

The price of HS2 is already astronomical. It started out at around £30 billion, it is now believed to be around £106 billion, and who really believes that it will not end up costing even more than that? Its defenders are making a series of errors of logic. They state correctly that Britain needs more infrastructure, but then leap to the incorrect conclusion that this means HS2 must be the right project, partly because it is the only one that is shovel-ready – Alice-in-Wonderland reasoning that even a child could see through. If you are doing something wrong that is costing you a fortune, stop. Don’t go “all-in”. One of the most basic lessons of economics is called the fallacy of the sunk cost, the irrational view that, having wasted money on something in the past, one has to continue wasting money in the future.

Then there is the investment of pride: for a generation of Blair and Cameron advisers, this was their pet vision, their “baby”, the grand projet by which their otherwise inadequate careers would be remembered.

Boris Johnson has no need for any of this: Brexit and his project to reform our state and society are so gigantic that, if executed properly, they will guarantee him a major place in the history books. He does not need to squander roughly 5 per cent of GDP on a white elephant. He should look closely at who is backing this scheme and why: they tend to be Remainers and people who have opposed him on everything else.

The Tories did well in northern towns and there is a palpable desire to pull the country closer together. But at the heart of HS2 is a Londoner’s idea of what One Nation looks like – a country in which the direction of travel is towards the capital, and in which the provinces have little identity beyond being turned into commuter towns for those working in London. HS2 is very much a pre-Brexit idea, completely out of touch with the change in our politics. Mr Johnson must ditch it.