by Richard Wellings
Institute of Economic Affairs
April 30, 2014
The economic transformation of the North of England is central to the government’s promotion of the High Speed 2 rail line (HS2). It claims that the new line would boost employment and address the North-South divide, but there is reason for skepticism. Policymakers made similar claims prior to the use of High Speed 1 for fast domestic services to East Kent. Yet, since the introduction of high-speed services, East Kent has performed far worse in terms of employment than the rest of the South East and Britain. Some parts of the area now have similar employment rates to depressed old northern industrial cities. It would appear that the impact has been too small to counteract other more important economic factors, including the very large tax bill, relatively low levels of human capital in locations on the route, and a risk that disruptive technologies will undermine many of the purported benefits.



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