Further projects may be required if the full regional benefits of High Speed 2 (HS2) are to be delivered, a study commissioned by the £50bn rail link’s promoter has warned.
KPMG’s HS2 Regional Economic Impact Report, published last week, concludes that the rapid link between London and the North could add up to £15bn per year to the UK economy.
It said the West Midlands could gain by up to £3.1bn a year; the East Midlands by as much as £2.2bn; and Greater Manchester by up to £1.3bn.
But it admits that these figures assume that lack of transport links is the only supply-side barrier to businesses locating in the regions.
“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,” concedes the study.
“In order to realise the potential forecast impacts on business location across Britain, there may be a need for complementary changes to create an environment in which businesses can develop.”
The report said almost half of the overall benefit to the UK economy from HS2 could come from regions not directly served by the high speed line.
This is mainly due to the addition of extra capacity on, and investment in, other rail services.
Transport minister Patrick McLoughlin said the report showed HS2 would create jobs and growth in the North and Midlands “where they are needed most”.
“High Speed 2 will make Liverpool stronger, Leeds stronger; Sheffield stronger, Birmingham stronger, Manchester stronger, Britain stronger,” he said.
“A £15bn annual boost to the economy. With the North and Midlands gaining at least double the benefit of the South.”
He added that the Growth Taskforce was working to maximise the benefits of the rail link.
“We will squeeze every penny of economic advantage out of HS2 and Britain will be richer because of it,” he insisted.
Oakervee injury scare
Project promoter HS2 Ltd chairman Doug Oakervee was back at his desk on Monday, scotching reports that he faced three months off while he recovered from a calf strain.
Oakervee has resumed full duties, which include facing down critics of the scheme at a NCE-backed Batting for the West Midlands HS2 awareness-raising event next month.
Several national newspapers had reported last Thursday that Oakervee would be taking three months off to recover from a torn calf muscle.
Oakervee’s leadership and experience are considered crucial at what is now a key juncture for the project. By the end of the year HS2 Ltd must introduce to Parliament the biggest hybrid bill in legislative history. Oakervee, 72, was selected to chair the body because he successfully steered the hybrid bill for London’s Crossrail project through Parliament under the last Labour government.