The trickle down effect
By now most of you will probably have seen the BBC’s revelations about HS2, and how the government tried to conceal the predicted negative economic effects on areas not served by the new line. A Freedom Of Information request revealed the plan would see almost £320m a year sucked out of the Aberdeen and Dundee areas alone, with the benefit going to London (£1.5bn), Manchester (£834m) and Birmingham (£764m).
(In fairness, the document also suggested Edinburgh and Glasgow would be net winners, though we can’t for the life of us understand how. If reducing the journey time from Edinburgh to London generates more investment in Edinburgh – a dubious enough premise to start with – why does reducing the journey time from Aberdeen to London by the same amount of time have the opposite effect?)
The good news for the residents and businesses of the North-East, of course, is that Scotland’s share of the cost of HS2 is a mere £4.2bn at the latest estimates (which are of course likely to be revised dramatically upwards over time), which is only enough to double the current government investment in ScotRail for around 14 years.
Where do we sign up for this bargain?
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FOOTNOTE
We must admit the entire case for HS2 still seems like voodoo economics to us. Even including all the regional data the government tried to hide, they claim an annual net benefit to the UK of £15bn. But where does that money come from? Presumably it’s supposed to be new foreign investment, but if foreign companies want to invest in the UK by setting up within easy reach of London, why aren’t they just doing it now in, say, Milton Keynes or Didcot instead of waiting for Birmingham to get closer?
We can understand why Aberdeen and Dundee’s loss is Manchester and London’s gain. What we don’t see is where, or who, a monumental sum like £15bn a year in totally new money comes from. We’re simple folks, someone talk us through it.
There won’t be direct trains to Aberdeen and Dundee from England any more. So one change required to go on the old routes, possibly two to move onto the fast route (which will still mean longer journeys than now).
Recent estimates have put our share at closer to £8 bn than £4 bn, and this is likely to rise, as always.
A much more productive use of this cash for Scotland might be to create a superfast link between Edinburgh and Glasgow, effectively combining them into a single economic entity, while upgrading routes between the highlands & islands and the south of Scotland.
How much could an independent Scotland achieve with a budget of £8 bn on top of current spending and investment?
Here is how it works (Steal Underpants + ? = Profit)
So, here it is very clear, if Scotland votes NO, then Scottish taxpayers will be paying at least 4.2 billion pounds in taxes to build a railway line from Birmingham to London, with no benefit to Scotland, and the detrimental effect of ending express trains from London to Aberdeen.
Voting YES to independence is a real no-brainer, unless Scots want to carry on subsidising London’s grandiose schemes.
Scotland stay away from the poison of HS2 the last thing we need are more or improved links with England – we should be looking towards more aspirational horizons and global links.
Bob Duncan,
Good point. By staying under London rule, Scottish taxpayers will effectively be handing at least 4 bn and possibly 8 bn pounds away, for no good reason. When we consider the total Scottish Government budget at present is around 29 billion, it is easy to see just how valuable such a huge sum of money would be to Scottish infrastructure.
I see the estimates in the time saving on the journey have nearly doubled. A year ago it would save Bir.- Lon. 15 minutes – it’s now 30 minutes.
Funny how the time saved seems to increase with the predicted cost.
In the picture there certainly seems to be a trail of effluvium heading our way from London.
@Tattie-Boggle:
lol – yes, HS2 was probably a secondary project undertaken by the Underpant Gnomes when their first genius ‘get rich quick’ scheme didn’t work out…..
Yet another £4 billion to be saved by leaving the Union, With the other billions to be saved from Trident, our own defence, keeping our tax revenues from whisky, food, oil and other exports, all to be spent here at home and not gifted to another country. I’m sure a damn fine rail network is only one of the things we can aspire to.
The widely respected economic think-tank of north-east England, Viz comic, published this response to HS2 –
“Save govt £50bn on HS2 by arranging your business meetings in Birmingham 20 minutes later”
link to twitter.com
The trickle down effect is generally always warm, wet and smells a bit within a wee while.
It is just more money pouring into London. It’s going to drag jobs down to London, bodies down to London.
The city of London is nothing more than a vampire parasite (or a new word …’vamparasite’). It is living off other cities and communities just to keep itself alive.
London. A bloody good reason to just vote ‘Yes’.
I’d imagine that the 15 billion would be for a house building programme in the Midlands so that lots more people could commute to and work in London.
Or something.
Get Severin on the case.
Voodoo economics is right. The way the transport economic models work is that time really does equal money, so shorter journey times are translated into an equivalent in financial benefit.
Of course, there are standard models for calculating all this, although there is an irresitable temptation to shop around to ensure that the parameters and sensitivity tests selected give them the answer they’d like to hear…
Yeah, I have the link on my pc at home to the document that says journey times to ABD and Inverness would increase. That seems to be kept awfy quiet and when I’ve told a few people they seem shocked and think it’s outrageous that we are being screwed over like that.
My understanding from friends in the W. Midlands is that the HS2 line doesn’t actually reach Birmingham centre and that there was never an intent to link it to the west coast mainline.
This is similar to the complete lack of any connection between the UK (except London/Home Counties) and the channel rail link to Greater Europe.
The transport “joined-up thinking” is totally “London centric”.
The only function of HS2 is to extend commutability to London northwards for banking people.
Time to open eyes folks,
“There won’t be direct trains to Aberdeen and Dundee from England any more.”
I don’t quite understand this. They’re not going to rip the existing lines out of the ground, are they? So why would train companies replace a fast service with a slower one, knowing it’d be likely to attract fewer passengers and therefore make them less money?
If the white paper doesnt show all the savings a YES vote provides, I will be really disappointed.
“I’d imagine that the 15 billion would be for a house building programme in the Midlands”
Every year?
But that still doesn’t explain where it comes from. £15bn has to come into the country every single year that isn’t here now. So where is it at the moment?
My understanding of HS2:
– it’s needed in any case (by England) as the West Coast Main Line is over capacity, or will be soon.
– the benefits (to England) come from improving the link between London and the west Midlands, like the M4 and faster trains did for the Reading/Slough/Bath/Bristol region.
– Everyone else has high-speed rail so it’s embarrassing that England doesn’t have this too.
– Eventually it would be extended to Scotland.
While I did subscribe to Modern Railways magazine for several years, I don’t really understand the pros and cons of HS2 that well. But I think it should go ahead. Not necessarily at Scotland’s expense though!
Its under the North Sea. It’s the only place I can think of where Westminster gets huge swathes of cash for free.
The Virgin Pendolino already does London to Birmingham in just over an hour….
@Rev Stu:
Paragraph 5 of the High Speed Rail (Preparation) Bill states that: “Aberdeen, Inverness and all stations north of Edinburgh lose all direct trains to London”
Full document here: http://www.publications.parliament.uk/pa/cm201314/cmpublic/highspeedrail/memo/hsr18.htm
Basically, if you live north of Embra or Glasgow, it will actually take LONGER to get to London because of the need to change trains. Also, it means the end of the Sleeper service from Inverness.
Rev
I was being flippant 😉
As I said, I’m sure that once Severin has got to the bottom of the Great Gleneagles Swindle he can get his sleuthing hat on for this.
JLT – yep agree with you on that.
The beneficiaries of a faster service are those travelling to get into London for 9am, the start of the work day – people travelling down for a days shopping on a Saturday afternoon couldn’t give a hoot about 20 minutes here or there.
This is all about London being too expensive for people to live and turning Birmingham and even Manchester into commuter towns.
It’s about keeping jobs in London.
Didn’t we hear this or similar pie-in-the-sky propaganda when the France-England tunnel was being sold to us?
And, now that we’ve paid – where’s the service?
Also, from the notes in the same document:
[6] The full list of places that, in HS2 Ltd’s plan, would receive fewer or slower intercity services to London and no HS2 service in recompence is : Aberdeen, Arbroath, Aviemore, Carlisle, Chesterfield, Coventry, Derby, Doncaster, Dundee, Falkirk Grahamston, Gleneagles, Inverkeithing, Inverness, Kingussie, Kircaldy, Lancaster, Leicester, Leuchars, Montrose, Nottingham (city centre station ), Oxenholme, Penrith, Perth, Pitlochry, Sheffield (city centre station), Sterling, Stockport, Stoke-on-Trent, Stonehaven, Wakefield, Wilmslow.
Forgive me for stating the obvious, but an awful lot of these places are in Scotland. :-/
So why would train companies replace a fast service with a slower one, knowing it’d be likely to attract fewer passengers and therefore make them less money?
Might have something to do with some of the passengers going between Edinburgh and England switching to the HS2 route, meaning there would be fewer people on these parts of the journey of the direct London-Aberdeen trains.
Not sure if the reports actually made that point, but sounds like turnip_ghost might be able to post them later.
The trickle-down ‘theory’ that investment at the top of society will eventually find its way down to the poorer elements of society, is generally attributed to Joseph Schumpeter, who was the Nazi Party’s chief economist until he fell out with Hitler and fled to the US. However, it was Schumpeter’s friend and fellow economist, Werner Sombart, who has more recently been credited with this honour.
A one-time Marxist who was touted by Engils as the greatest living interpreter of Marx, Sombart would also become a significant Nazi economist, though there is uncertainty regarding the depth of his Nazi beliefs. However, in his 1911 book “The Jews and Modern Capitalism”, Sombart wrote “that the chief task of Germany was to destroy the “Jewish spirit.”
Both men were friends with fellow economist, Carl Schmitt, who had joined the Nazi party on 1 May 1933, and was to become one of the leading lights in the development of neo-liberal theory.
Anyone see a pattern forming here?
The news of this wonderful London commuting train set will spread far and wide. Aliens from the planet Wonk will rush to see it, and bring £15bn worth of Wonk Dronguts with them. Simple.
The HS2 project is for the rest of the people in Britain who’ve never heard of the Edinburgh tram project.
Alternatively, with the minimum £4.2 billion cost to Scotland, we could instigate an a socially mixed house building / improvement program.
For that amount of money, we could even temporarily house some tenants in Gleneagles Hotel while the work was done.
Trickle down in action
link to upworthy.com
Got this from my daughter’s FB page – ignore the rather blousey US style headline the wee video is refreshingly calm and matter of fact.
It is not just Scotland that looses out. there was a program on the radio recently. The contributors were from the North of England. They pointed out that if a tiny fraction of the HS2 budget was spent on the trans Pennine rail link that it would be a tremendous boost their economy. Like Bob Duncan mentioned above the same could be said for a rail-link between Edinburgh and Glasgow. Makes me wonder is the eye watering cost of HS2 was spread around the UK rail network how much economic benefits there would be for all instead of it all going to London.
Lets just hope that this will soon be a fUK problem and bugger all to do with Scotland.
And was not one of the biggest cheerleaders for HS2 the former Chancellor, Mr Alistair Darling? Four years down the line, Mr Darling now says he has changed his mind about HS2. What his one time enthusiastic support for HS2 tells us that his economic assessment when he had all of the facts and figures available to him was not very sound. Add that to the fact that he was the Chancellor who, along with his pal Gordon, steered the country to the biggest economic disaster to hit this country in 80 years. Darling is consistent. He was wrong with HS2, wrong with the economy and even more wrong in his campaign against independence!
This pig in a poke offer seems to suggest that Scotland’s 2.78 million tax payers should stump up a minimum of £1,511 per head in order to reduce their country’s GDP.
Ah well, more of the same from the Westminster civil servants.
High speed trains ? In Scotland we don”t even have trunk roads to European standards. On the A82 ( our main west coast highway north ) at Loch Lomondside you have to queue at a traffic light as the road is not wide enough to allow two-way traffic. The situation is the same on the A76 between Kirkconnel and Sanquhar at Crawick bridge ( the main highway south in the west of our country ). Quite sure £4.2 bn would sort a few transport problems.
@HandandShrimp
There was one of these infographics done for the UK too.
link to inequalitybriefing.org
To re-iterate the point of my earlier post.
There is no intent to connect HS2 to the west coast mainline.
There is to be a “Birmingham Interchange” at Solihull.
link to en.wikipedia.org
No direct rail connection. The M42 motorway is in between.
Rev Stu, I’m sure the 15bn calculation is based entirely on the time is money hypothesis. Commuters shaving minutes off their journey times will spend more time in productive work… blah blah blah.
In actual fact said commuters are more likely to spend an extra 15 minutes in their scratchers every morning and leave for work a bit later.
Didn’t our FM say that there has never been an economic recovery,anywhere,any time that hasn’t been led by major construction activity.
Westminster following his advice AGAIN.
‘ we can’t for the life of us understand how.’
Yeah well thats a Unionist document for ya
@Jimsie
Work on the A82 at Pulpit Rock is actually in process – they are having to put the road on pillars going slightly into Loch Lomond to achieve it (they couldn’t cut into the rock face because the railway above it would fall down). So those traffic lights of which you speak will be gone in six months (probably less).
And well placed sources tell me that work is already underway on option selection for a high speed rail link between Glasgow and Edinbugh (and probably Carstairs as well).
Fact is the SNP Scottish Government has done and is doing a massive amount for roads and public transport in Scotland, Barnett Formula permitting of course.
£4.2 bn would pay for the Glasgow/Edinburgh to Inverness/Aberdeen rail lines to be rebuilt to 250kph standard giving Inverness – Perth’s 118 miles in an hour, Aberdeen – Edinburgh in less than 2 hours.
Its our choice; we can subsidise the HS2 extension to London’s commuter network or we can vote Yes
This reminded me of a story in The Onion from a little while back…
link to theonion.com
We should maybe have a Scottish version called The Ingin.
Cheers Chani
Just imagine the isolated places that could benefit from a railway line if Scotland’s share of the HS2 money was spent here. Communities in Galloway that often feel forgotten about could be linked up. Communities in the north east could benefit from a line connecting Inverness to Aberdeen via Banff/Fraserburgh/Peterhead etc. It would mean less traffic on these often dangerous roads and cut down traveling times.
The man to ask to explain all this stuff is Cardonald lad Professor Dan Graham. He’s the guy who created the algorithm that is used to work it all out. It’s called the WEB (wider economic benefit) algorithm for metro and transport system.
http://www.imperial.ac.uk/AP/faces/pages/read/Home.jsp?person=d.j.graham&_adf.ctrl-state=17dch0azhk_3&_afrRedirect=1312187475727794
Forget HS2 ever coming to Scotland, while they may have done surveys for it to go from Birmingham up to Manchester, Leeds etc, and you will hear Westminster mumble it will then go up to Edinburgh & Glasgow dont believe it. As far as I know they have not done one survey for it to come to Scotland todate. You may as well stand in the street and shout we are going to put in a High Speed Line between Keith & Huntly for 2050 and have as much chance of it happening.
HS2 is for the benefit of London & Boris only, the rest of us don’t matter.
@Rev
I lived in the West Midlands until a few months ago and the talk about this new speed train, was that the Coalition had proposed new laws that enabled people to be rehoused from London into the big (half empty) estates in B/Ham.
The bedroom tax was seen as a way to ensure that a large number of people could be ‘kicked out’ of London and ‘rehoused’ In B/ham.
The fact that people could hop on this high speed train and be in London in no time, meant that these poor folk could not use the fact that they would become isolated as a reason to remain in London.
The thinking was that a lot of incoming people have the ‘right’ to be rehoused in an area that has a lot of their own ethnic peoples, so Indians would be rehoused in areas with big Indian populations and Pakistanis, Poles,….etc.
The flip side is that this would free up a lot of housing in London for all the rich Russians and Chinese Billionaires to do up and move into, as well as free up housing for the rich money market people in the South of London.
The whole thing is being done for the benefit of the wealthy Money-men/women in London and the Labour Party are backing this 100%.
Disgusting but not surprising.
Old News
link to news.bbc.co.uk
In the world of better together economics the £40 – £80 billion spent on HS2 is an investment. An asset.
On the other hand £1.5 trillion of north sea oil is a risky liability.
You can see why things went horribly wrong when Alistair Darling was in charge of the kitty.
Westminster is preparing for a possibility of the total breakup of the UK, and see greater London and the South east as a separate entity over time. They are preparing the ground work now.
To be fair, getting the train from Aberdeen to London makes no sense as there are a) plenty of flights between the two places and b) flights are quicker and cheaper. Only reason to do so in my opinion is to experience a sleeper train service.
“megsmaw06” you are right, the building of a new line from Aberdeen to Ellon, Mintlaw, Peterhead & Fraserburgh (broch) would service the three towns and a multitude of villages both large and small. The amount of traffic it would clear off the A90 -A952 would be enormous and would finally clear the worst traffic jams trying to get into Aberdeen.
HS2 is simply about increasing the Lebensraum for Londoners. Turn Birmingham into a suburb of London because it’s taking too long for people on the outskirts of London to get into the City. So it has a detrimental effect on the economies of every town and city north of Edinburgh? Meh, who cares – by the time the dumb Jocks find out, they’ll have voted No and we’ll do whatever we like to them.
Unless someone puts in an FOI request…
We could get a rail link between Fort William and Inverness that does not go via Glasgow and Perth
To be fair, getting the train from Aberdeen to London makes no sense
Certainly, if you work in upstream oil and gas, London is way down the list of important destinations. Better direct air links from Scotland to Norway, the middle east, the USA, South America and Africa are far more important.
Scottish independence would make London even more of an irrelevance in the industry as many operator corporate HQ’s would transfer to Edinburgh.
We could get a rail link between Fort William and Inverness that does not go via Glasgow and Perth
And a rail link from Dumfries to Stranraer that does not go via Kilmarnock or Glasgow.
I followed the link to Inequality Briefing and noticed an article on it. The article states that the average FTSE 100 CEO earned 4.2 million last year, even if they worked 12 hours a day for 7 days a week that works out at £1,000.00 per hour.
Now just think for a moment, if you are earning that kind of money what would you spend it on? A new house? Probably already got one or two of those. You could buy a new Rolls Royce (a subsidiary of BMW) or a Bentley or two (subsidiary of VW) I suspect “none of the above” Either way that would hardly make a dent in the bank account.
No it would be “invested”. Unlike myself who gets by on a little over £1,000.00 a month. I can assure you that every single penny of my £!,000.00 is spent. Trickle down effect my arce!
Perhaps that is £15bn per year of what could be public money, and therefore not profit, going into private hands, assuming HS2 will be, or already is, private
HS2 seems like a great idea, forty years ago. Today? Not so much.
Video/phone conferencing and stuff like Cisco Webex are not as good as f2f meetings, but they are good enough. And the technology will only get better. (Already it is nearly too good. No, I bloody well do not want Webex to broadcast video of me! In that case I’d have to shave and wear something business casual – fairly sure my jammies do not qualify – for meetings with customers.)
I see. Basically the economic argument being proposed is to get rid of the 1200hrs KX trains that go straight through to Inverness via Stirling and the London to Aberdeen trains because – if they leave them in place, there won’t be enough passengers on the HS2 to make it an economic success.
As someone who spent 6 months weekly commuting to London; it’s a real shame because the London to Stirling train is 30 mins faster than getting the plane – once travel to LHR and EDI airports is taken into account. Also, you can work on the train and have internet connectivity so i used to leave at lunchtime on a Friday and be home in time for tea.
So, would a yes vote immediately unlock Scotland from a £4.2bn bill for England’s new trainset? £4.2bn, even if the figure doesn’t go up that’ll be £750 per person in Scotland saved.
Strange how the English look down on everybody else,it suprises me they havent went it alone yet.Well all them Taffs, Paddys and jocks dragging them down they could only blossem without us LOL
So the plan is to give away between £5 and 10 billion Scottish taxpayers money, as our share of the costs, on a project that will leave Aberdeen and Dundee several hundred millions a year worse off? Of course, if Scotland votes YES we could always keep this money and invest it in Scottish infrastructure to actually support our economy, so that places like Aberdeen and Dundee are better off and better connected to Edinburgh and Glasgow. Could this be a game changing moment in north east Scotland? I’m trying to be reasonable and look for a rational argument about why we would be ‘better together’ but it’s got me beat.
When the IC125s are retired after DafTs IEPs take over, the Scottish Gov.t should buy 15 or so of the 125s. Knock off a couple of carriages so the engines are less busy and, boy, the comfort of travel in them rather than a 158 or 170 would increase the passengers to the North by 1000s.
To be fair, getting the train from Aberdeen to London makes no sense.
It’s not just about journeys to and from London – but cutting these trains could mean no direct routes between Aberdeen, Dundee, Fife, Perth, Stirling, etc. and York, Newcastle, and other places in England. Many people are put off by making connections on train journeys, which could effect tourism north of Edinburgh, for example.
It’s possible there could be repercussions for the west coast route as well – perhaps fewer direct trains from Glasgow to London.
I’ve had a career bellyfill of air travel, I enjoy and prefer travelling by train to motoring. Consider then the scenery of Scotland that can be enjoyed whilst sitting comfortably in a train.There surely is a tourism potential in developing Scotland’s rural network for visitors and for domestic tourists?
As expressed well by others HS2 is to facilitate worker bees from dormitories in the Midlands to work in London.It is insulting to the people of Manchester, Birmingham and elsewhere that they are viewed as no more than drone bees.Their quality of life? Family life? Pah!
As someone who regularly travels from Edinburgh to Dublin it amazes me how bad the rail service is, and the road is barely any better. You would think that this would be a priority route between capital cities. Let’s hope that after independence that more prioritty is put on this.
The business case for the HS2 is flawed. Without (EU imitation – peaked will decline) the population will decline. The ‘baby boomers’ will pass on. In nearly every industrialised democracies (in Europe) the populations are in decline – replacement level 1.4
The passenger base for the HS2 will likely decline. Ie it will not have the passenger’s base to pay for the service, without high (comparative) prices or subsidised from all taxpayers, even those who do no use the service (as happens now). Just to cut the journey 20mins.
The rail line from the central belt of Scotland to the North has no been electrified, putting 30/60 mins on the journey with second rate rolling stock. Another North/south divide.
Many people in the North of England want a better link between the Northern cities.
If they must build the ‘white’ elephant start it in the North of England (they need the jobs) and use Scottish taxpayers monies to fund it. Scottish tax payers money should be used to improve the vastly inferior (by comparison) rail links in Scotland.
* Without (EU immigration – which has peaked and likely will decline), the population (of UK/EU) will decline.
The £40/80 Billion will be spent over 20years? It will take 20 years? to build by that time the passenger base will have likely declined. So the fares will have to be very expensive (by comparision to other forms of transport) or subsidised, even by the taxpayers who don’t use the service.
* Do not use Scottish taxpayers monies to fund the ‘White elephant’. Spend Scottish taxpayers monies to improve Scottish rail service to boost the Scottish economy. Scottish rail services are inferior by comparison because of less (pro rata) funding.
Having a good NHS and education system with access to all, encourages firms to locate/relocate. Firms consider the quality of life for their staff. The standard of living their staff will experience/ along with training facilities etc. This influences business decisions. Welfare and well being of their staff is an increasing consideration of good business practice. Happier workers are better workers and contribute to the success of business. Including gender, employment equality.
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