SMEs say no to the case for high speed rail line

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SMALL and medium-sized businesses in Yorkshire have delivered a resounding rejection of key Government arguments for HS2.

Damning new research shows the scale of the task facing ministers in keeping the £50bn project on track.

HS2 High Speed Rail - map of phase one and two.

HS2 High Speed Rail - map of phase one and two.

Findings reveal a lack of business appetite, a mistrust of the supposed economic benefits for the North, demand for construction to begin at both ends and desire for alternative investment in existing infrastructure.

The Yorkshire Post and law firm Nabarro launched the survey to find out the views of SMEs in a debate dominated by big business and the public sector.

Key findings include:

• 54 per cent feel negatively towards HS2

• 58 per cent do not want HS2 to happen

• 62 per cent believe that Yorkshire does not need HS2.

Respondents raised doubts over claims by consultant KPMG that the project will boost Britain’s economy by £15bn a year and that the regions will be the biggest winners.

The survey found that 59 per cent believe that HS2 will not benefit the North.

Some 63 per cent believe that HS2 is simply extending the commuter belt for London.

The lack of support for the project was underlined by findings that 88 per cent thought that cancelling HS2 would not result in economic loss for their business and 69 per cent said they did not think that the UK is at a competitive disadvantage without a dedicated high-speed line north of London.

The survey revealed that 76 per cent of businesses do not see any supply chain opportunities.

A vast majority – 84 per cent – called for the delivery company to drop the ‘cheapest tender wins’ approach to help open up benefits for the UK-based supply chain.

The survey found that 65 per cent of businesses said that construction should start at both ends.

Under the current programme, the Y-shaped lines from Birmingham to Manchester and Leeds are not expected to open until 2033.

The survey noted: “Isambard Kingdom Brunel built the 150 miles of the Great Western Railway from London to Bridgwater in six years in the 19th century, while the Chinese recently constructed 2,500 miles of track in just two years.”

Of those businesses surveyed, 48 per cent said if the 2012 Olympics could be delivered in seven years, HS2 should only take 10 years. Transport Secretary Patrick McLoughlin has argued that HS2 is vital to Britain’s future.

But 60 per cent of businesses believe that ministers should invest instead in upgrades to existing train lines.

“The journey from Leeds to Manchester is three times as long as it should be, Birmingham is a couple of hours away and Liverpool might as well be overseas,” said Jonathan Straight, chief executive of Leeds-based Straight plc.

Just over half the respondents – 51 per cent – said the £50bn would be better spent in other areas including the NHS, roads, youth unemployment, shale gas development, carbon capture, renewable energy, motorway upgrades, improved broadband and economic development grants in the North.

Commenting on the findings, Christopher Bowes, partner at Nabarro, told the Yorkshire Post: “The Government is focusing hard on the growth opportunities that will follow in the wake of HS2 but, at this stage at least, many businesses in the region remain unconvinced about what’s in it for them.

“These businesses need to engage with Government on HS2 to explain why they are sceptical and how the proposals need to change before they would see the project as an opportunity rather than a threat.”

The survey findings will be debated at a launch event in Leeds today and fed into the HS2 Growth Task Force.

In response to the survey, HS2 spokesman Ben Ruse claimed that support for the project seems to be growing.

He said: “Now the most important thing is that British business gears up to take advantage of the huge opportunities a project of this significance offers.”

Mr Ruse said he hopes that Yorkshire businesses will engage with the project as much as those from other regions.

He said HS2 has the opportunity to be a “significant catalyst” to rebalance the UK economy.

Support ‘seems to be growing’

HS2 Ltd, the state-owned company responsible for developing and promoting Britain’s new high-speed rail network, told the Yorkshire Post that support for HS2 “seems to be growing”.

Spokesman Ben Ruse said at a recent supply chain conference, the company had more than 1,600 applications for the 800 spaces available.

He said the survey contained some encouraging signs, but added “there is still a job to do for us to keep telling people about the range of benefits HS2 will bring even before it’s completed”.

These include jobs, training and skills, he said.