High speed rail will cost the nation £50 billion and add to the Treasury’s massive debts when interest payments are already sky high, an influential think tank was warned.
In a scathing report titled High Speed Fail, free-market think thank the Adam Smith Institute has slammed plans for a new high speed rail line with Birmingham at its heart.
The eventual cost of the line, which could ultimately extend to Scotland, will be £50 billion, the institute says.
Although the first phase of the 225mph service, known as High Speed Two or HS2, will link London and Birmingham, Ministers plan to extend it to Manchester and Leeds, and eventually to Glasgow and Edinburgh.
The Department for Transport will have to pay for the line by raising money on the debt markets, according to the Institute.
It warned: “This will put Department for Transport’s budget under strain, meaning there is less money available for investment elsewhere on the UK railway network.”
And the report stated: “At a macro-economic level, HS2 is being planned as the UK’s net interest payments are soaring; they are expected to exceed £66 billion in 2015-16, shortly before construction of Phase 1 of the HS2 project is about to start in earnest.”
It concluded: “Yes, HS2 may create a substantial number of construction jobs and yes, it may narrow, to a limited extent, the very wide North/South divide – but it is a very expensive way of doing so.”
The report also warned that predictions for passenger numbers were unreliable.
The Institute said: “Over-forecasting of passenger numbers has plagued previous rail projects in the UK.
‘‘London and Continental Railways forecast passenger numbers for Eurostar for 2004 as being 21.4 million. In reality, passenger numbers were a third of this figure.
“Predictions of passenger numbers and demand for High Speed 2 may also be overambitious. This would have huge repercussions for HS2’s profitability.”
A DfT spokesperson said: “Long distance rail travel has doubled in the past 15 years and today some of our key rail arteries are almost full.
‘‘Without the extra capacity that HS2 can provide passengers will soon face the very real prospect of regularly not being able to get onto trains, or if they can, always having to stand.
“HS2 would deliver over £2 in benefits for every £1 spent on it and has the potential to transform the economic map of our country, create jobs, drive regeneration and deliver the additional rail capacity we so badly need.
“The Government is currently considering responses to the recent consultation and expects to announce a decision towards the end of the year.”