Sunday, April 18, 2021

Who stands to benefit from HS2?

There has been a long and continuing debate as to the proposed benefits of HS2. The government vows that the high-speed rail network will drive prosperity and economic growth outside of London.

The plans include an approved line from London Euston to Birmingham and the West Midlands and further plans, yet to be confirmed, linking the West Midlands to Manchester, Leeds and beyond.

Other voices argue that HS2 will do the opposite and will further exacerbate the north-south divide that has shaped the country. The main issues from this perspective are environmental, socio-economic and concerns that London will feel more benefit than the rest of the country. So, the question remains, who will really benefit from HS2?

London is and was always going to benefit

The government definitely have an eye on driving economic growth outside of London, but London will significantly benefit from this new rail network. A high-speed transport link into the centre of London will only increase the range of the commuter belt that has already expanded far beyond London. This increases the talent pool for the capital and will ultimately drive business into the city, benefitting the order books of London’s serviced apartments, hotels and wider hospitality industry.

What will travel the other way?

Yes, London will benefit, but prosperity should travel out of London over time. With the expanding commuter belt and increased connectivity of major cities, local economies should see more demand for local housing and amenities. Ever increasing overheads in the capital may also encourage more companies to relocate to the fast-growing cities of the Midlands and North, where operating costs are far cheaper.

It is a fair argument that HS2 will likely cater to the higher socio-economic classes and business travellers. This is likely to mean that the initial benefit of the high-speed rail network will only be felt by those who are able to use it, with prosperity trickling down over years or decades, if at all.

What does the East Midlands stand to gain?

Approval of the route connecting Birmingham to the East Midlands and beyond would bring companies and local authorities a sense of confidence in the government’s actual desire to level-up the country.

Whether the high-speed network would actually drive significant prosperity and economic growth in the East Midlands is another matter. There would certainly be the benefit of better transport links and capacity to and from the region, which could have a knock-on effect to local businesses. However, any real impact would surely take decades to show.

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