Peston Fails To Understand HS2

Another day, another report on the HS2 project, with the assembled punditry piling in behind to spin it for their particular interest. This time, it is KPMG doing the reporting, and asserting that HS2 will bring benefits such as more economic growth, and the ability for workers and managers to get around more easily. The report, to give the appropriate health warning, was commissioned by HS2 Limited.

May look something like this. Perhaps

So far, so straightforward, but now there has been a further intervention by the BBC’s uniquely spoken Business Editor Robert Peston, who has titled his piece “What KPMG ignored when arguing for HS2”. But what he is arguing about was not really ignored: the KPMG study did not go into the detail at a fine enough level, and so an assumption was made, and spelt out.

Here it is: “The methodology employed makes the implicit assumption that transport connectivity is the only supply-side constraint to business location. In practice, there could be other constraints that could inhibit the potential location effects, such as the availability of skilled labour and land in a given location”. Fair enough, and most of the locations on the HS2 map should have land and labour available.

Peston takes exception to this: “it has taken no account of whether those regions actually contain available land to site new or bigger companies or have people with relevant skills to employ ... which, some would say, is a flaw the size of Greater Manchester in its analysis”. Bloody hell Pesto, and I thought that the right-leaning press and lobby groups were over-dramatic.

In any case, Peston “ignored” the same thing as he accuses KPMG of ignoring: he makes a general assertion about land and labour, which he fails to stand up. My impression – not that I’m “ignoring” this, you understand – is that both are not a problem in the East and West Midlands, the North West and North East. Bentley and Jaguar Land Rover aren’t having any problems recruiting.

So I can only conclude that Peston is chasing a red herring, and, moreover, really is ignoring something, and that something is, once again, the C-Word. Yes, Capacity: the underlying reason for HS2, as it was for the first LGV and AVE. And once again I make no apologies for wheeling out the Rail Freight Group’s (RFG) forecast for the excess of demand over capacity come 2030.

And that is just freight demand: what the case may be by that time with passenger demand is not known (the RFG assumes no change to the number of passenger trains). If that freight, and any excess of passenger demand, is not satisfied by the railways, it will inevitably go by road. So is Peston in favour of a few hundred kilometres’ more new Motorway construction? How would he square the circle?

This is a question nobody should be allowed to duck. And especially not the BBC.