Evaluating HS2

Fortunately, we don’t in fact need to go far in order to evaluate HS2. From one of the gents in charge of trying to build the thing out:

Demetriou’s tone changes as the conversation shifts to HS2 and whether he understands the frustration among critics. “Of course we do,” he says sheepishly. “[But] it takes investment to get there.”

He says the project is about much more than the economic benefits, a key piece of the argument that critics are missing.

“When we ask the question about investment, it’s not just the typical economic investment of: ‘we’re gonna invest billions of dollars here, what's the return?’,” he says.

“It’s also what's the social value? Is it driving equality? Is it driving the needs of the people to connect and to a well being and health and well being and the communities.”

It’s not necessary to answer the questions in that last paragraph. For the mere fact that they are being proffered as an explanation is proof that the answer to the question in the penultimate paragraph - “Is this a good investment ?“ - is “No”.

After all, why would anyone at all offer the excuse about equality if the new train set made sense on its own terms as a new train set?

There are plenty of projects that could be done which do make sense on purely fiscal grounds. That they will produce more output than the costs of their inputs. Given that we’re in a world of scarce resources those are the ones we should do therefore. That is also the proof we require to know that we shouldn't be doing this one.

It may not be the most rigorous of investment analysis techniques but it is one that gives us a true and valid answer - by their excuses shall we know them.