Key to any will-they-won’t-they television relationship is drama and uncertainty. This was best exemplified by Ross and Rachel from the sitcom, Friends. The two characters were repeatedly drawn together and then torn apart by external obstacles and bad luck. The first kiss, the second kiss, the list, the prom video, the contested taking of breaks. Viewers could not get enough and ratings soared.
Sadly, this theory does not extend to infrastructure projects of national importance. Certainty – surrounding budgets, routes or political support – is vital. Meanwhile, delays rarely save money and shortcuts are often later regretted. And so we come to High Speed 2 (HS2) and the will-it-won’t-it come to Euston debacle.
The business case for HS2 has undoubtedly softened as its projected cost has soared, from an original £32bn to north of £100bn. At the same time, ambition has fallen. The departure of the eastern section, the delays to Manchester and now confirmation that work on the £1.2bn tunnel to Euston, scheduled to begin in 2024, has instead been paused, with the focus now on getting the line running from Birmingham to Old Oak Common.
I won’t go over old track about how HS2 is really about boosting capacity rather than speed. Or how another oft-criticised and much-delayed project, Crossrail, a line that did not exist 11 months ago, now accounts for one in six of all rail journeys in the UK. My boring view is that the connection to Euston will eventually be built.
But it will arrive later and cost more, placing a greater burden on future taxpayers. That is partly a result of inflation but also the additional costs of firing and then re-hiring workers when the project eventually recommences, the cost of scrapping and then re-leasing machinery and so on.
The distance between Old Oak Common and Euston is, as the crow flies, only about five miles. But it is a good example of why Britain has stopped growing wealthier. Cuts to capital spending are superficially attractive but are often devastating to longer-term growth rates, as we saw in the early 2010s.
The government knows all this. That’s why Jeremy Hunt’s budget attempted, at the margins, to improve Britain’s ailing growth rate, with policies to boost the labour supply and sharpen investment incentives. This led to the Office for Budget Responsibility raising its prediction of potential output by 0.2 per cent. That may sound small but it in fact represents the biggest single revision in its short history (for more, see Giles Wilkes’s excellent post-Budget analysis.)
The problem is everything – and at times, everyone – else. So that 0.2 per cent is somewhat offset by Brexit, projected to reduce long-run output by 4 per cent (20 times more!). While other growth measures pale in comparison with what other economies are doing to drive investment, most notably the US’s Inflation Reduction Act.
Policies likely to raise our productive capacity and living standards – closer alignment with the EU, reform to the planning system, further devolution to English cities, investment in skills, higher ambition on net zero and regulatory stability (not least ditching the Retained EU law bill) would be more than a strong start.
But economic growth is not as central to the Conservative coalition as it is to the average voter. A party elected on a mandate to ‘Get Brexit Done’, one whose leaders are selected by a membership disproportionately comprised of older, mortgage-free homeowners, understandably displays a diminished appetite for many of these ideas – as exemplified by an inability to commit to a five-mile tunnel across London.
In the comment pages, Business Editor Jonathan Prynn says today’s earnings figures performed the remarkable feat of being both too hot... and too cold. Nimco Ali calls for nurses and doctors to be given a pay rise. While Melanie McDonagh calls quiche a bold choice, but regrets it’s no coronation chicken.
And finally, have you heard the viral AI-generated track, made in the style of Drake and The Weeknd? Beyond the inevitable takedown requests, it is sparking an uncomfortable conversation in the music industry.
