HS2 – Where has all the money gone?

 

In the two years to March 2014 HS2 Ltd has spent  £384,000,000 of grant aid from taxpayers. What is remarkable is that after such a high spend the balance sheet of the company doing all that spending shows zero net assets. The best part of £400 million has gone and the company has  nothing to show for it of more permanent value that gives us some net assets on its balance sheet.

Some will leap to its defence and say that is conservative accounting for you. In practice surely it has some intellectual property and goodwill? Others will say of course the costs of planning and designing such a big scheme are a large up front cost which you just have to work through.

The company itself helpfully explains that it cannot credit its balance sheet with any  assets as “the cost of an item of property, plant and equipment shall be recognised as an asset  if, and only if it is probable that future economic benefits associated with the item will fl0w to the entity”. Exactly. That is not yet clear.  In addition, most of the money has gone on wages and salaries, not on physical assets. All land and building  purchases ahead of works are in addition to these figures  and are made by the government, not HS2 Ltd.

Those of us who are critical of the business case for this railway are nonetheless entitled to ask where has all the money gone? What have we got for the £384 million so far? How much will it cost before any construction work commences and we start to see track and signals? The company already has 395 staff (whole time equivalents) and has already spent £35,000 on the pay off of a former staff member along with a £48,000 contractual payment, outside the normal Treasury scheme for such things.

I look forward to better cost control in future, as the Chairman promises.

 

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81 Comments

  1. Mark B
    Posted August 12, 2014 at 5:27 am | Permalink

    This is what happens when you have Government funding a project which, those running it, know it has access to the Magic Money Tree and just can keep on printing, borrowing and taxing regardless of the cost. There is no one there to say; “STOP !”

    It is also highly political. When something becomes political, it quickly loses touch with reality. Politicians, through the power of the media and pressure from the opposition, find themselves boxed in. They simply cannot have a failure like HS2 on their CV. It would ruin their careers, and we cannot have that.

    So we are caught in a vicious cycle. We have created a monster. A monster which will consume ever larger proportion of the nations wealth to perpetuate itself. The salaries, the pensions, they must all be funded to the standard that those that are setting it for themselves must have.

    Ask yourselves this question: If this was either in part, or in whole, privately funded, would we be seeing such largess ?

    After all, it is easy to Brahms and Liszt someone else’s money down the drain. Not so, when it is either your own or a very limited and/or tightly controlled pot.

    But the High Speed Gravy Train must chug along. Our leaders said so. And there is nothing we can do about it.

    • Lifelogic
      Posted August 12, 2014 at 3:23 pm | Permalink

      Not so much a monster from the state sector’s (and HS2 employees’) perspective more of a golden goose for them, a method of bleeding the productive sector to enrich themselves at other expense.

      MPs are the only protection available, to protect the public from such fleecing, but they never do. Indeed many often have a vested interest in promoting this type of absurd scam.

      Look at the history of government waste on endless pointless things:- Tram systems, misdirected defence contracts, the millennium dome, Concorde, outer space nonsense, the Olympics, electric car and green subsidies, the absurd green deal and other sporting events, the new government buildings at Westminster, Cardiff and Edinburgh, the diversion of the Jubilee line via Westminster, HS2, the PIGIS loans, the ERM…….. Lots of golden goose pensions about one assumes.

      • Bazman
        Posted August 12, 2014 at 8:18 pm | Permalink

        More anti green nonsense. Some states in a America are adding extra taxes and fees to green energy to counter demand destruction by green energy as solar energy cuts demand at peak times during the day many electricity users will reduce consumption for decades. It not real here yet, but we have seen this with more fuel efficient cars maybe electrical in the future and as electrical consumption is is replaced by alternative sources or reduced demand by more efficient equipment we may well see it here. What will you have to say about that? Impossible? You are wrong.
        Until you answer such questions do tell us why yo religiously write the same anti progress nonsense. Is it part of you conservative belief system?

        • Edward2
          Posted August 13, 2014 at 6:39 pm | Permalink

          Baz
          So you are OK with some very rich landowners getting huge sums of money just to plonk wind farms and solar panel farms on their land.
          Paid for by you and me in our taxes.
          Home owners putting panels on their roof by me and getting big subsidies from the State is another odd scheme.
          Its not very green at all if you really look into it.

          • b
            Posted August 13, 2014 at 7:55 pm | Permalink

            Neither is nuclear or fracking and I have not heard you bleat about that and their subsidies.

          • Edward2
            Posted August 14, 2014 at 6:18 am | Permalink

            The level of subsidy for wind solar and wave power is much higher and the resulting reliability and actual energy generated is far less, b.
            No bleat, just a point of view.

          • Bazman
            Posted August 14, 2014 at 5:11 pm | Permalink

            Remind us how much subsidy nuclear gets compared to ‘green’ energy? I mean per KWh including decommissioning costs and insurance?

  2. Gary
    Posted August 12, 2014 at 6:34 am | Permalink

    No surprise. Witness the govt, the biggest looting machine ever devised, in action.

    • Lifelogic
      Posted August 12, 2014 at 4:42 pm | Permalink

      Indeed.

      “Where has the money gone?” Into the pockets and pensions of paper pushers, lawyers, PR spin doctors and people with “good connections”, for sending out large complex documents that blight other peoples properties and cheat them for years to come.

  3. Richard1
    Posted August 12, 2014 at 6:36 am | Permalink

    HS2 is a case study in why the state is a bad allocator of economic resources and why we need constant pressure to hold down the state’s remorseless tendency to take more and more of our money for politicians’ pet projects. It is clear there is no coherent economic case for HS2. First it was green then it was about a supposed business case, saving time for traveling business people. When those were both rubbished it became about closing an imagined north-south divide. The truth is certain politicians, unfortunately including Messrs Cameron and Osborne, have decided it should happen and civil servants and consultants have been back-solving into an economic justification ever since. I’ll tell you where a good part of that £384m has gone – on those consultants and other self- interested advocates for HS2.

    • Mark B
      Posted August 12, 2014 at 8:13 am | Permalink

      Richard1

      Beautifully put.

      • Richard1
        Posted August 12, 2014 at 9:32 pm | Permalink

        Thanks

    • Lifelogic
      Posted August 12, 2014 at 7:58 pm | Permalink

      Exactly.

      Essentially just a fig leaf to justify diverting tax payers cash into certain people’s pockets and pensions. Rather like all the global warming and all the green crap agenda of which Cameron is so fond.

  4. Colin Donald
    Posted August 12, 2014 at 6:36 am | Permalink

    £384 million is apparently just frittered away without comment from the Government.
    This sort of sum would have saved Ark Royal and its aircraft. With the the terrible things happening in the Middle East, perhaps Cameron would like to tell us again that he made the right decision and the ‘savings’ were justified.
    ColinD.

  5. nigel
    Posted August 12, 2014 at 6:48 am | Permalink

    You may have a long wait.

    OTHER PEOPLE’S MONEY: it is very easy to spend.

    Here we go again, another ego boosting project. Hey ho.

  6. oldtimer
    Posted August 12, 2014 at 6:48 am | Permalink

    Good question. But will we get answers?

  7. Bernard from Bucks
    Posted August 12, 2014 at 7:03 am | Permalink

    “What have we got for the £384 million so far?” you ask.
    Lower unemployment figures I guess.

    • Lifelogic
      Posted August 12, 2014 at 9:43 am | Permalink

      Not at all. In fact higher unemployment figures and lower growth as much of the money they have wasted was taken off companies and individuals who would have invested or spent it far more wisely and productively than they did.

      • Lifelogic
        Posted August 12, 2014 at 9:43 am | Permalink

        Not a difficult task.

      • Bazman
        Posted August 12, 2014 at 8:20 pm | Permalink

        Companies sit on a £750 billion pile. What are they doing with this? Where is it at and what is it doing? Nothing. Just stashed away? Well if it is what does this tell us about your deluded ideas?

        • Edward2
          Posted August 13, 2014 at 1:56 pm | Permalink

          I think you’ve estimated all the cash that companies in the UK hold in their accounts at any one point in time Baz.
          It is a good positive indicator of their financial strength.
          Its not being hoarded, its there for future investment opportunities, aquisitions, expansion plans, possible bad debts that might unexpectedly arise etc.
          You often criticise the banks for running up debts and failing, yet now you criticise UK business for being careful and remaining strong through holding cash and not having debts.

        • Lifelogic
          Posted August 15, 2014 at 12:24 pm | Permalink

          This is a very sill line to take. The cash is in their bank accounts or being lent out and is thus being used by others or lent out by the banks to others, so it is not being wasted or doing nothing as you assert.

          The companies are no doubt looking for good things to do with it and will probably do them when they find them.

          • Bazman
            Posted August 16, 2014 at 5:57 pm | Permalink

            Or propping up their own share prices and ensuring bonuses are paid out to senior executives and shows that further corporation cuts are unnecessary as they already have piles of cash to invest, but are instead rather than inves,t large companies are simply lending their cash to the government as they have no confidence in the prospect of economic growth whatever Osbourne says,and what do the government do in your unending mantra lifelogic? They tax and waste!
            The net consequence of that is disastrous. First, it increase the wealth gap in the UK by giving away a wholly unnecessary tax cut to big business which is largely owned by the top few percent in society. It also denies the government essential revenue that is needed to close the deficit. At the same time it increases the savings gap which we have in our current economy, where the massive growth in net savings since 2008 without any matching increase in investment is one of the major causes of our economic crisis, the rise in unemployment, and the despair that most people face.

    • lojolondon
      Posted August 12, 2014 at 11:19 am | Permalink

      Sure, proper Labour philosophy – at a million pounds per employee, I hope they are spreading the money around and not saving any, in order to get the economy growing. Joke.
      The money will have been wasted on consultations in every area, from health n safety to environmental impact. I remember seeing recently that it costs several times more to build a highway per mile than it does in Germany, mainly due to silly rules and everyone having a finger in the pie, eg. bribes to local councils where the construction company has to build something for them so they won’t object to some part of the planning, etc. Who loses out here? The taxpayer, every time. Who speaks for them? John Redwood does, the TPA, but not many others, especially if the bribe falls into the area of the representative and he can see some reason to go along with the scam, eg. contracts into his area etc.
      This is why we hate the HS2 idea so much, it is just an EU plan for UK taxpayers to waste an inordinate amount of money on a train line for high-priced tickets to a place where no-one wants to go when we already have the worst performing and most expensive railways in Europe that are crying out for investment, which will be reduced to partly fund HS2. GRRRR!

      • Bazman
        Posted August 12, 2014 at 8:22 pm | Permalink

        Imagine if the state just put road and rail wherever? What would you say then. Communism without consent? Land theft? Writes itself. Deluded nonsense.

  8. Lifelogic
    Posted August 12, 2014 at 7:16 am | Permalink

    I assumed that the main purpose of HS2 was to generate well paid jobs for those with good connections, this as no one but a completely innumerate dope could think there was any real economic case for the railway itself.

    But then perhaps I am too cynical.

    Had a competent private industry invested £384m in for example building construction, they might have expected to have a business worth say £450m after two years providing lasting jobs for perhaps as many as 40,000 staff and with many houses build. The key thing for growth is to stop Osborne and this coalition from taking other people’s money and just wasting it of nonsense like this, Cameron & Davey’s green wind/PV crap, the green deal and the countless other mad schemes.

    • Bob
      Posted August 12, 2014 at 8:43 am | Permalink

      The Indians sent a spacecraft to Mars for £45m.

      • Bazman
        Posted August 12, 2014 at 8:23 pm | Permalink

        We should get them to build the next Trident in that case.

  9. Posted August 12, 2014 at 7:26 am | Permalink

    Amazing. Such a revelation. Hallelujah.

    John Redwood does understand accounting, when it comes to HS2.

    When it comes to the State Pension and State Civil service pension amnesia sets in. Then when question, he gets angry with his constituents. Denies he ever promised at election time to publish the pension liabilities.

    Two faced springs to mind.

    Reply I have published figures for pension liabilities. More importantly the government has done so as well. Do stop spreading lies about this. The only real disagreement between us is whether the official state debt figures should include the capitalised value of all future unfunded State retirement pension liabilities. No-one is trying to conceal the fact that these future liabilities are there, just as there are large unfunded future liabilities to pay for schools and hospitals etc which you do not seem to wish to capitalise in the same way.

    • acorn
      Posted August 12, 2014 at 5:28 pm | Permalink

      Nick, JR is correct on this point. If you do the UK accounts as a PLC would do them, then the “capitalised” value of public sector pensions is £1,172 billion.

      BUT, and it is a very big BUT. The government is not a PLC and nothing like it. A PLC can’t issue its own currency, the government and its central bank can. Hence, the government can pay any bill presented to it in Pounds Stirling. The government can never go broke in its own currency.

      It has a bottomless pit full of Pounds; BUT, and its another big BUT. It can’t allow itself or its banks to spend more new Pounds into the economy, than there are goods and services available to buy in the private sector, otherwise they generate inflation. Unfortunately, the UK productive capacity (potential GDP) appears to have shrunk somewhat in the last five years. Hence, the UK can get inflation with circa 7% unemployment.

      Have a look at the WGA summary accounts https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/324910/PU1668_WGA_summary_report_revised_layout_4_page_spread_final.pdf .

    • JoeSoap
      Posted August 12, 2014 at 7:26 pm | Permalink

      Well Mr Redwood, you make a good point.

      An accurate model for this would see school and education costs as “up-front” investment. On a per-capita basis, on average, a child is educated by taxpayers and is probably in debt to the state until late 20s-early 30s?, then the state is in debt to them, as a fund to pay for their hospital care later. So a Country which is growing older demographically should be building up a nest egg from the contributions of its older population to pay for the needs of old age. We are growing older, but are increasing state debt, which is due to the feckless nature of both the Coalition and Messrs Brown & Co. So older folk are going to lose the contributions they made to the state, whether by paying for private care to avoid the National Death Service, going into private care homes at their own expense, or losing their state pension rights. There is no escaping this – it has to happen.

      • JoeSoap
        Posted August 12, 2014 at 7:32 pm | Permalink

        The point is, if an insurance company acted like this, it would be acting fraudulently. Yet the government continues to brazenly carry on in this way.

  10. Brian Tomkinson
    Posted August 12, 2014 at 7:45 am | Permalink

    JR: “I look forward to better cost control in future, as the Chairman promises.”
    Dream on!

    • Lifelogic
      Posted August 12, 2014 at 9:45 am | Permalink

      Indeed I would not hold your breath waiting for this.

  11. alan jutson,
    Posted August 12, 2014 at 8:00 am | Permalink

    Thanks for the info.

    Why am I not surprised.

    Like you, surprised absolutely no assets listed, but probably more on going liabilities not listed, should it ever be wound up.
    Redundancy payments, pension entitlements. lease runoffs, termination of signed contracts, etc etc.

    Has anyone else picked this up or was this an answer to one of your written questions.

    Worth a question in Parliament in order to bring it to everyones attention.?

  12. ian wragg
    Posted August 12, 2014 at 8:08 am | Permalink

    Is there any wonder that we are nearly bankrupt as a nation. Now you intend to sting us for death duties whilst still breathing. The “C” in conservative now stands for Communist as Gideon believes everything belongs to the state.
    With a GE due it is worth reminding ourselves :-
    Less foreign criminals deported
    Immigration gross still 500,000 p.a.
    deficit still over £100 billion
    Waiting lists at a 6 year high
    Foreign aid £11 billion and rising
    Tax receipts down although 5 million more in the country

    and on and on and on.
    You don’t have a snowball in hell’s chance of re-elecvtion and still CMD won’t say what he is going to do vis a vis the EU.

    • Lifelogic
      Posted August 12, 2014 at 8:03 pm | Permalink

      I thought they had decided to do virtually nothing and just pretend they were renegotiating.

  13. Anonymous
    Posted August 12, 2014 at 8:17 am | Permalink

    No wonder tax raids under the Tories have surpassed Labour’s. With profligacy such as this (and fake austerity) there is no choice but to fleece the middle classes – the lowest hanging fruit:

    http://www.dailymail.co.uk/debate/article-2722432/The-Taxman-s-control-Mr-Osborne-cost-election.html

    “Oh – but that’s just the Daily Mail.” A pity for the Tory party that such large numbers of their supporters read it. Where is the ‘choice’ in our political parties ? I remember ‘choice’ being such a big word under the last majority Tory government. All we get these days is slightly different shades of Blairism.

  14. Ex-expat Colin
    Posted August 12, 2014 at 8:22 am | Permalink

    HS2 – Where has all the money gone?

    What was the deliverable(s)….? Silly thing to ask?

    Don’t say hot air/C02 expulsion please.

  15. Tony Harrison
    Posted August 12, 2014 at 8:28 am | Permalink

    £384M buys an awful lot of beer & skittles for someone.

  16. Atlas
    Posted August 12, 2014 at 8:31 am | Permalink

    “the cost of an item of property, plant and equipment shall be recognised as an asset if, and only if it is probable that future economic benefits associated with the item will fl0w to the entity”…

    Well if that is the case then the balance sheet will stay at zero for ever.

    Cameron’s sacred cow eh?

  17. Bill
    Posted August 12, 2014 at 8:43 am | Permalink

    I don’t understand much of this but only know that the more money that is spent, the less likely it is that the project will be modified or cancelled.

  18. formula57
    Posted August 12, 2014 at 8:58 am | Permalink

    So far so bad with HS2 spending but let us look to much better news in future when we can rejoice that: –

    – the £384 million of initial costs can be quoted as a tiny, tiny percentage of the overall bill, thereby proving what a modest figure it was, and

    – there will be unanticipated gains as some of the £384 million cost write-off can be written back to record assets as the project proceeds and those items bought with the £384 million can be said in accounting terms to yield future economic benefits.

    With such good news to come, I would be in favour of early and generous distribution of at least CBE’s to those involved.

  19. Leslie Singleton
    Posted August 12, 2014 at 8:58 am | Permalink

    Dear John–Goodwill, did I hear you say? Not a chance. As I remember, Goodwill only arises after a purchase and who is going to purchase HS2? All that is needed is a Taxpayers’ Money Down The Drain Account which would be the main item in an Expenditure (No Income) Account. No Balance Sheet necessary other than to reflect the corresponding Credit to Borrowings from the Government. At least it was millions and not billions.

    • Brian Tomkinson
      Posted August 12, 2014 at 1:40 pm | Permalink

      Leslie,
      “At least it was millions and not billions.”
      Not long before it will be billions, as we have 3 major parties in Westminster hooked on tax, borrow, spend and waste. Our host may complain but he keeps supporting the rotten crew who call themselves Conservatives.

  20. David
    Posted August 12, 2014 at 9:07 am | Permalink

    “I look forward to better cost control in future, as the Chairman promises.”

    John, you know as well as I do that costs will exceed budgets and the project will overrun by a large amount. We do not do succeed with large projects like this – they are much better left to the Chinese (eg. Hong Kong airport).

    What is amazing is how your colleagues are allowed to get away with such poor decision making by going ahead with HS2. To what do you attribute this lack of poor decisions?

  21. Mark
    Posted August 12, 2014 at 9:27 am | Permalink

    The best cost control would be to cancel the project forthwith.

  22. Leslie Singleton
    Posted August 12, 2014 at 9:27 am | Permalink

    Postscript–Or what could HS2 have bought involving a payment for Goodwill? One cannot just Credit Cash (on baloney) and Debit Goodwill.

  23. Simon Stephenson
    Posted August 12, 2014 at 9:35 am | Permalink

    £384 million? To do the preparatory work prior to (possibly) building 100 miles of railway line?

    So how much of this is genuine value received, and how much is resource siphoned off by rent-seekers who fly behind the “flag of convenience” claim that the value of their inputs can be equated, by definition, to the amounts that they have been paid to to supply them. (Yet who, of course, would not accept such a claim if it was made by anyone who was supplying them, personally, with services)

  24. stred
    Posted August 12, 2014 at 9:53 am | Permalink

    How much more will they waste before someone on the high speed gravy train admits it is on the wrong route, to the wrong station and at the at the wrong speed.

    • Lifelogic
      Posted August 15, 2014 at 12:27 pm | Permalink

      Soon after it has been finished.

  25. A different Simon
    Posted August 12, 2014 at 10:13 am | Permalink

    John ,

    Did you do know that the big landowners are submitting planning applications for almost town sized areas of rented accommodation in the anticipation for claiming compensation for loss of earnings if HS2 goes through it ?

    Some of these are proposed to be eco dwellings in order to attract the maximum grants from the UK and EU .

    The legal industry is going to make billions out of this .

    I’m feeling discriminated against that none of this public money is coming my way (infact it’s going the other way) .

    • A different Simon
      Posted August 12, 2014 at 10:16 am | Permalink

      What do you think the cost blowout on this will be ?

      A factor of X5 , a factor of X10 ?

  26. Posted August 12, 2014 at 10:26 am | Permalink

    I am absolutely gobsmacked at the HS2 expenditure figure so far ; as you say – ” there ought to be something to show for this “. Purchase of land and property could at least be configured at cost with some depreciation allowed to cover any subsequent ” resale ” . The project should never have gone ahead in the first place ; existing routes were capable of modification to achieve the same outcome . In any business a rapid response would be required from those in charge to show their shareholders how the financial position would be corrected , and , as part of the electorate , I expect the same standard of reassurance from the Government . The controversy of this project will not go away and those responsible and in charge will have to come forward with something more than the usual fudge .

  27. boffin
    Posted August 12, 2014 at 10:38 am | Permalink

    Perhaps the Company’s failure to value its efforts as “Work in Progress” for accounting purposes is some indication of its collective intellectual ability (or gall?).

    What is so much more alarming is Parliament’s collective lack of intellectual application, so many Members voting sheep-like for HS2.

    Flashback a century or so to the infamous Sir Joseph Porter (KCB) who, on his own admission, ‘always voted at my party’s call, and thought very little for myself, at all’!

    Plus ça change …. all that is new is the sheer enormity of the amount of our money which Parliament is set to waste, so unthinkingly, upon this folly.

  28. Martin
    Posted August 12, 2014 at 10:46 am | Permalink

    WOW – A third of a Billion and the thing hasn’t even reached Watford!

    Perhaps some should have campaigned for the Heathrow third runway!

    Build a runway? Get somebody in to spend a fortune writing a report for five years. A half decent undergraduate thesis would have the same outcomes for next to no cost.

    The whole thing just shows the do nothing culture that we have.

  29. Observer
    Posted August 12, 2014 at 10:48 am | Permalink

    conservative accounting or Conservative accounting?

  30. Kenneth R Moore
    Posted August 12, 2014 at 11:38 am | Permalink

    So 395 full time employees at an average cost of £80,000 each per annum would cost the taxpayer £63 million pounds over two years.

    Mr Redwood you say that most of the money has gone on salaries – but that leaves £321 million pounds left over. Lets allow say a generous £20 million for office rent and equipment …that still leaves us with £300 million to play with. Allow another £10 million for pay of senior executives…still nowhere near…

    As you say no land or building purchases have been made ….so where has the £300 million pounds gone at a time of ‘austerity’. Perhaps you could request a copy of the companies accounts as the numbers don’t stack up?.

    • Denis Cooper
      Posted August 12, 2014 at 1:05 pm | Permalink

      Perhaps the main role of the 395 employees is to organise the out-sourcing of most of the work to various contractors? Here a study on the possible effects on the breeding of endangered newts, there a computer model to check the possible effects on the level of the sea around the Maldives, it all adds up.

  31. Kenneth R Moore
    Posted August 12, 2014 at 11:43 am | Permalink

    It seems that what HS2 Ltd are saying is that…allow the project to go ahead or a vast amount of money will have been wasted ie the ‘assets’ that needed a ludicrously bloated army of nearly 400 people to accrue will be worthless.
    If this project ever goes ahead the 1/3 billion already wasted will be just a drop in the ocean.

  32. Kenneth R Moore
    Posted August 12, 2014 at 11:57 am | Permalink

    http://www.cjajobs.com/hs2/jobs-2/

    Despite having an army of staff of almost 400, HS2 Ltd. still requires an additional NINE project ‘Directors’!. Not people to actually do anything useful..just ‘manage’ the activities of people that do the work that matters . (ie Engineers, surveyors).

    It’s just a top heavy bloated company run for the benefit of the staff – a government funded gravy train.

    Noted the jobs are heavily biased in favour of leadership/management style roles. No Engineering vacancies are advertised.. just jobs requiring the right face who can talk ‘management babble ie interfacing with stakeholders. blah blah blah.

    ‘Specifically, this leadership role will include interfacing with multiple stakeholders to design, develop and manage critical route wide strategies. You will also lead on the supply chain management for construction and manage our interface with National Rail’s national supply chain’.

    Typical ad for a government non job that could have been lifted from the Guardian jobs pages.

    Professor Redwood please please stop this nonsense!

    • Brian Tomkinson
      Posted August 12, 2014 at 1:59 pm | Permalink

      Kenneth,
      “Professor Redwood please please stop this nonsense!”
      If only he would, but ultimately party comes before country.

      Reply I voted against HS2. Your lies are as unfriendly as they are silly.

      • Brian Tomkinson
        Posted August 12, 2014 at 5:00 pm | Permalink

        Reply to reply,
        Very well, I look forward to you putting a “stop to this nonsense”.

      • Kenneth R Moore
        Posted August 13, 2014 at 5:57 pm | Permalink

        In fairness to Lord Redwood he has voted and spoken critically of Hs2. I’m sure many here would appreciate him pressing the directors of Hs2 Ltd. for an explanation of why they have spent so much money but he does more than most Mp’s. David Cameron is on holiday again!.. while Mr Redwood has been writing articles and lectures ..chalk and cheese!.

    • Simon Stephenson
      Posted August 12, 2014 at 2:43 pm | Permalink

      The difficulty, for our society, is that these very same people, working in exactly the same way, would have been being paid, somewhere in the public infrastructure, even if HS2 had never been put in motion. Somehow, they would have created, usually out of nothing, a demand for their services from which they could draw eye-watering amounts of money – and these services, if the people had been occupied elsewhere, would never have been dreamed of being worth doing.

      It’s as though we have a sort of freelance public-sector work-creating class, whose principal skills lie in convincing those who hold the purse-strings (a) that they have something valuable to contribute to solving an identified “problem” and, later on, (b) that what they have done has in reality contributed to solving this “problem”.

  33. Denis Cooper
    Posted August 12, 2014 at 12:55 pm | Permalink

    I suspect that chopping £0.4 billion off business taxes in the north would have done more to encourage private investment in the north and so help to close that notorious north-south divide. Not a lot, it would need to be on a much larger scale than that, but it would probably have been a better idea.

  34. Denis Cooper
    Posted August 12, 2014 at 1:32 pm | Permalink

    Oh, but hasn’t the EU drawn one of those lines on the map to show where it wants its functionaries to be able speed around the territory of Union getting the gen first hand and handing out their instructions to the locals? OK, so the British government is not under any legal compulsion to put a high speed railway along that line, but no doubt it would like to oblige to demonstrate that it has a true European vocation?

    And didn’t those learned judges at Luxembourg decide to second guess whether the government of Portugal should allow lower taxes in the Azores as part of its regional development strategy? We wouldn’t want our government to be hauled up before that court if it dared to adopt a more sensible policy than building a high speed railway just because the EU wanted it.

  35. Posted August 12, 2014 at 3:02 pm | Permalink

    Proponents of HS2 often point to the huge potential economic benefits of the project. In my book, if there are economic benefits – particularly those related to time savings – they can be converted to financial gain by generating fares revenue, simply by charging enough.

    So I will repeat the two simple questions about HS2 that I have asked many times:
    (1) If you generously write off the entire capital cost of construction and rolling stock, will annual revenue exceed annual O&M costs?
    (2) Will annual revenue exceed annual O&M costs plus annual rolling stock depreciation costs? i.e. is replacing rolling stock eventually budgeted for?

    Perhaps Mr Redwood can answer these questions? If not, can he point me towards a Minister in the Department of Transport who might answer these simple questions truthfully and accurately, without deluging me with the usual left wing economics and transport planning jargon that the Department’s officials are likely to deploy?

    Reply I suspect it will run at a loss even after writing off the starting capital. There are forecasts, but it all depends on how many train seats you think you can fill.

    • stred
      Posted August 13, 2014 at 9:59 am | Permalink

      A quick search reveals that Prof Andrew McNaughton, chief engineer for HS2 was vice chair of the EU Transport Advisory Committee, no doubt advising on how EU TGVs could integrate. He thinks that designing the train to run at 250mph, rather than the slow French speed will attract more customers and revenue. A train running at 250 mph over 100 miles would take 24 mins. A train at 186 mph 32 minutes, saving 8 minutes. Of course the HS2 has already had the top speed reduced for technical reasons and would never be able to average the top design speed, reducing time saving further. For trains linked to the continent and continuing past St Pancras, passengers will have to get off, probly go through customs and lug their cases to Euston, then wait for the next train to Birmingham. The delay may well be as much as the whole journey.

      We now are carrying out detail design for a track with straighter bends and inclines for the high design speed, with more tunnels in order to reduce noise and having to slow down the trains in them. The journey times from the continent will be much longer than would have been, and the time savings within the UK will be a few minutes. This is all because they think it will bing in more revenue. In the meantime energy costs are being increased rapidly to cover conversion to renewable and nuclear generation. The increase in energy consumption of the faster train will be less likely to be covered by increased revenue.

      The route through the Cotswolds will create maximum planning blight and compensation. How much more sensible it would have been to have a station in East London, for continental passengers to sty on the train and a route alongside the main transport links to the North.

      But at least the British engineers will have a train set that goes faster than the other boys on the committee.

      • stred
        Posted August 13, 2014 at 10:02 am | Permalink

        Scuse typos. No American spellcheck on this computer.

  36. bigneil
    Posted August 12, 2014 at 3:49 pm | Permalink

    Is there anyone in parliament who is actually in contact with “Real World Ltd” – the place where unfortunately WE have to live?

  37. Posted August 12, 2014 at 3:55 pm | Permalink

    Nearly everyone has focused on the amount of money which has been spent with very little to show for it as a result. Of course anyone who understands how the Government issues money into the economy knows that money is just an IOU of government which is issued at will.

    But does this mean that it’s OK to waste money? No, of course not. But, the real waste is not so much in the money as the waste of effort and resources which could have been used productively. The waste of effort and resources is still tiny though, compared with the total waste of resources in the UK economy. Nearly all businesses are working at a just fraction of their potential.

    The waste is not making stuff that we are otherwise capable of making, not using machines and not employing people that we should , and not creating profits, savings and increased economies of scale we should be getting, but aren’t.

    • Kenneth R Moore
      Posted August 13, 2014 at 9:59 am | Permalink

      I agree that there is the cost of the wasted human effort in HS2..an army of managers and directors in supervisory roles (and yet more managers overseeing the actions of these managers) sitting in smart offices making slick power point presentations and Gannt charts etc…. without actually doing anything useful or simply duplicating the work of others.

      But the money does not come for free. If the government issues more IOU’s it erodes the value of the money already in circulation so we all pay for HS2 through the devaluation of the pound in our pocket.

      In the grand scheme of things the sums are tiny but Hs2 is typical of the way government money is allocated. Unchecked (as hS2 has been) it reinforces the culture of the money tree.

  38. APL
    Posted August 12, 2014 at 5:10 pm | Permalink

    JR: “What have we got for the £384 million so far?”

    395 extremely rich members of staff.

    If you’re gonna get in on a ponzi scheme, be among the first to do so.

    • Kenneth R Moore
      Posted August 13, 2014 at 6:21 pm | Permalink

      395 staff in comfortable jobs and lots of lucrative contracts for anyone else that wants to get on the gravy train….

      The $384 million includes such necessities as a ‘Community engagement vehicle’.
      I must congratulate the Directors of Hs2 in their creativity in wasting our money.

      Why if Hs2 is such a splendid idea is a motorised propaganda/’engagement’ vehicle needed ?

      How did the architects of the Great Western railway ever manage without a ‘community engagement vehicle’.

      ” The supplier will provide a fully managed service, including, but not limited too, sourcing, converting (if needed), wrapping/branding & maintaining the vehicle, providing drivers, delivering to each event and storing between events”.

      So of the 394 HS2 staff not one..not one was able to use a photocopier and computer to make a few posters and charts.

      So no expense spared then!. Somebody needs to ask some awkward questions at the highest level!

  39. Roger Landells
    Posted August 12, 2014 at 7:32 pm | Permalink

    The democratic process has disappeared in this country over the past seventeen years. Weay think that we ate a nation of 65(ish) million with universal suffrage affording around 40 million some voting rights of which maybe 60% take up this opportunity once every five years. These elections may deliver 650 “good men and true” to apparently represent us, and to hold whichever government we end up with to account, although their success on this regard becomes more doubtful by the day.
    But, in reality, the real power surely lies in the hands of, maybe a hundred, PR it could be just 65, SPADS whose lives and progression are governed only by their ability to dream up more and more ridiculous schemes to massage their masters’ egos.
    65 million population, 65 SPADS.
    Gives a whole new meaning to “he’s one in a million doesn’t it”?
    Until the people regain control of the process these kingdom of excesses will proliferate.

  40. Posted August 13, 2014 at 7:02 am | Permalink

    John

    I’ve been in favour of High Speed Rail for the UK, not necessarily the planned routes of HS2 and now HS3.

    Clearly Costs need to be kept under control. What figure would be regarded as acceptable at this juncture ?

    Startup Costs will be steep regardless of however the projects are organised if we are to keep up with our foreign competitors.

    To show no realisable assets on the Balance Sheet does need to be questioned. Parliament needs to get busy to see that value for Tax Payers is being achieved.

    But the bottom line in my view is that we need to upgrade our “Victorian” Infrastructure within reasonable parameters.

    Brian Curnow

  41. mop
    Posted August 13, 2014 at 7:15 am | Permalink

    When MPs blindly voted for HS2 they were signing a blank cheque. This is outrageous, particularly as HS2 ltd and the Government have been so reluctant to listen to public opinion regarding the project. Government have failed to properly engage with public over the initial concept of HS2 and the design that will significantly affect the environment and local communities along the line. To me HS2 is an industry led lobbyist trophy, not a national interest project. Government haven’t been transparent from the start with HS2 so why would they start now? Stop HS2

  42. margaret brandreth-j
    Posted August 13, 2014 at 9:25 am | Permalink

    There must be a lot of legal fees in that lot and a lot of agitation to cause those legal fees!

  43. Robert Taggart
    Posted August 15, 2014 at 11:07 am | Permalink

    NO2 HS2 – guessing much money has been spent defending this vanity project against its opponents ?
    The opponents include several councils – all power to their ‘counsel’ !

  44. Martin Hommel
    Posted September 30, 2014 at 12:52 pm | Permalink

    No surprise to me at all. Why don’t you oppose this disastrous project more vociferously? The government’s penny-pinching on benefits all in the name of reducing the deficit, but throwing away money hand over fist without any accountability. Looks like Tories looking after their mates in the construction industry.

  • About John Redwood

    John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College, and has a DPhil from All Souls, Oxford. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.
    Published and promoted by Thomas Puddy for John Redwood, both of 30 Rose Street Wokingham RG40 1XU
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