An economical CBA of HS2

  • Created by: KARAMJIT
  • Created on: 06-03-14 23:07

The HS2 proposal is following the footsteps of the HS1, also known as the “Channel Tunnel Rail Link”. The HS2, “A catalyst for high speed Britain” presents a scope of opportunities for economic development considering its quite reasonable goal of opening Europe’s gateway to London. The project of around £50bn is intended to allow trains to run 225mph (326km/h) from London to Birmingham from 2026, with branches to Manchester and to Leeds via Sheffield – planned by 2032. London is a city that is strengthening year on year. It is the core of UK’s economic development and opening opportunities to visitors to London and the UK to steer economic growth. “HS2 will bring Birmingham then other British cities including Leeds, Manchester and Glasgow into the high speed network with a link to Europe”. Cities such as Birmingham, Leeds, Manchester and Glasgow are in need of a helping hand as unemployment tends to be fairly high, highest in Leeds and lowest in London. So the first phase of the HS2 will provide a new train line between Central London and Birmingham. It will include a link to HS1 (located in North London) which will enable passengers from the regions to travel to Europe without the need to change trains.

Now the HS2 will bring major advantages, looking at the economical side in greater depth however, it’s certain to be a solid opportunity for interconnecting regions and providing key European destinations for trade, commerce, leisure and tourism. This will tend towards an increase of employment opportunities, especially for the cities of high unemployment. The proposal will help bring greater sums money into the economy. The HS2 also will open doors for investors and more investments. The HS2 will too bring about advantages in improving the UK’s economy’s infrastructure. The puzzle seems to fit perfectly; the paths of the plan tend towards positive outcome of greater economic growth, as increased job opportunities would mean that unemployment rates would decrease. This would have an effect on the economy in the long term as the increased number of people employed would mean more people are capable of paying taxes, stimulating expenditure and improving the quality of life. Hence otherwise the benefits to the economy would be great. As an increased number of people employed would mean that household incomes increase alongside an increase in consumer disposable incomes. Leading to extra expenditure on goods and services, hence injecting demand into the circular flow of income. National income thus increases as there is an increased amount of injections into the economy, the consequence of this is increased economic growth and if maintained, a stable economy. The HS2 proposal therefore introduces itself to having the potential of transforming the shape of the UK. Statistics suggests with addition of HS2 to railways services the west midlands will experience an increased number of jobs as it would create 22,000 permanent jobs. Cities such as Birmingham have population greater than 750,000. It suffers from high levels of deprivation and is ranked


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