The Treasury Select Committee has today published its report, including conclusions and recommendations, following the inquiry we held into the 2013 Spending Round.
My focus, on behalf of my constituents who are horrified by the project’s ever-increasing costs, was on the collapsing economic case for HS2. As I highlighted at the time we took oral evidence, I took the opportunity to question representatives from the CBI and the Centre for Economics and Business Research, as well as the Chief Secretary to the Treasury, about whether HS2 represents value for taxpayer money and if the project can deliver on its objectives.
I entirely agree with the comments of our Chairman, Andrew Tyrie, who has said that there appear to be serious shortcomings in the current cost benefit analysis for HS2, and that the economic case must be looked at again.
The Bill should not proceed until this work has been done and the project has been formally reassessed by the Government. At £42.6bn, including a large contingency reserve, the construction cost of the project has increased by 17 percent even before it has started. It is a huge infrastructure project, and a more convincing economic case for the project is needed. The Treasury Select Committee needs reassurance that HS2 can deliver the benefits intended and that these benefits are greater than those of other transport schemes – whether in the Department’s project pipeline or not.
A more detailed analysis of the economic case for HS2 can be found on pages 33 through 37 of our Spending Round report. HS2 Ltd has recently published a further report, produced by KPMG, entitled HS2 Regional Economic Impacts and I would anticipate that the TSC will consider this in due course.