High-speed rail will 'boost economy'
High-speed rail (HSR) in Britain will enhance economic performance and boost annual economic output by between £17bn and £29bn by 2040.
These are claims in a new study by Greengauge 21, a not-for-profit organisation that aims to research and develop the concept of an HSR network and promote its implementation.
The study, entitled ’High-Speed Rail in Britain: Consequences for Employment and Economic Growth’, was undertaken by management consultant KPMG.
Lewis Atter, a KPMG partner, said: ‘Evidence on the importance of rail to the economy and thus exchequer revenues is scarce. Our work for Greengauge is an attempt to put that right.
‘Using evidence on how rail connectivity and economic performance are linked today, we have asked what HSR could do in the future. This is a new way of thinking about the economic returns to transport investment, focused on its impact on the supply side of the economy.
‘The questions it poses about the long-term returns to different kinds of investment will become increasingly important as the country faces up to the decisions necessary to reduce the deficit while also promoting longer-term growth,’ he added.
Annual economic impacts could increase annual tax receipts by between £6bn and £10bn by 2040 at 2010 prices.
Similarly, KPMG estimates that a national HSR network could contribute between 25,000 and 42,000 additional jobs in Britain, as more productive businesses offer higher wages and attract more people into the labour market.
The report explains that a comprehensive national network of high-speed services could provide a step-change in business-to-business connectivity and effectively link the major cities, creating a single national market for service-sector and knowledge-based businesses.
HSR could have substantial impacts on Great Britain’s economic geography, tending to concentrate activity in the centre of the core cities served as well as changing the future pattern of regional economic growth.
The greater economic impacts are in the north of the country, with the largest gains in Yorkshire and the Humber, Scotland, the north east and the north west and the East and West Midlands. According to the study, HSR has the potential to spread prosperity outside the most productive areas of the south east and London and could contribute to closing the so-called north-south divide.
The findings of the report have been endorsed by HSR\UK, the campaign coalition of 11 major cities that together generate more than a quarter of Britain’s wealth.
Councillor Mike Whitby, leader of Birmingham City Council, a member of the HSR\UK campaign group, said: ‘The report makes clear that a high-speed line would be a catalyst for economic growth for the whole country and would generate new jobs in those regions where a skilled workforce exists. It would increase national economic output and would change the pattern of regional economic growth for the better.’