High speed rail will boost the UK economy, improve the country’s economic geography and provide a considerable increase in tax receipts, a new study has said.
High speed rail would be cost effective and provide a good return for both the taxpayer and Treasury.The study by research and development group Greengauge 21 and management consultancy KPMG, entitled High Speed Rail in Britain: Consequences for Employment and Economic Growth.
High speed rail will boost annual economic output between £17bn and £29bn by 2040, said the study.
“In the long term the Treasury will be winners too, through substantial additional tax revenues.”
Jim Steer, Greengauge 21
Annual tax receipts could increase by between £6bn and £10bn by 2040 (on 2010 prices), the study found. A national high speed rail network could contribute between 25,000 and 42,000 additional jobs in Britain.
Greengauge 21 director Jim Steer said: “Our new analysis demonstrates that in the long term the Treasury will be winners too, through substantial additional tax revenues.”
The study also demonstrated that a comprehensive national network of high speed services could significantly improve business to business connectivity and change the economic geography of Britain.
Such a network would effectively link the major cities, creating a single national market for service sector and knowledge-based businesses. The greatest economic impacts would be in the north, with the largest gains in Yorkshire and the Humber, Scotland, the North East and North West and the East and West Midlands.
These effects could help to spread prosperity outside the most productive areas of the South East and London, and could contribute to closing the north-south divide, said the study.
New way of thinking
KPMG partner Lewis Atter said the study was an attempt to tackle the scarcity of evidence on the importance of rail to the economy and exchequer revenues. “Using evidence on how rail connectivity and economic performance are linked today, we have asked what high speed rail could do in the future,” he said.
“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 findings of the report have been endorsed by HSR\UK, the campaign coalition of 11 major cities which together generate over a quarter of Britain’s wealth.
Birmingham City Council leader Mike Whitby said the study held good news for his city. “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,” he said. “It would change the pattern of regional economic growth for the better.”
The study was commissioned by Greengauge 21 from KPMG on behalf of the HSR Public Interest Group which brings together public sector agencies and representative bodies to investigate and develop plans for high-speed rail in Britain.