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East Midlands Chamber News

Why Eastern Leg greatest return on investment across entire HS2 project: Scott Knowles

As the High Speed Rail Group publishes the HS2 Midlands Voices report to promote the case for the entire Y-shaped HS2 network being built, East Midlands Chamber chief executive Scott Knowles argues why the Eastern Leg offers the greatest return on investment.

 

The proposed HS2 East Midlands hub station at Toton

Unlike the heavyweight names of Manchester, Birmingham and Leeds, few people in Britain will have heard of Toton before HS2, but this small suburb stands to be one of the most connected locations in the country with HS2.

Set at the heart of the network and in the centre of the country, up to 14 high-speed trains will leave the East Midlands hub station every hour. It will connect Nottingham, Derby and Leicester – three of the UK’s 20 largest cities by population and GVA – with major cities across the North and Midlands in what will be a watershed moment for the region due to the agglomeration of opportunities that this will bring.

However, while journey times like 20 minutes to Birmingham, 27 minutes to Leeds and 52 minutes to London have occupied the headlines, HS2 isn’t about speed for us – and we believe it’s been damaging that this is where all the focus has been.

This also isn’t just about passengers, but freight too – something that’s incredibly important to us in the East Midlands, where we’ve built whole industries on our ability to make things and move things. East Midlands Airport, strategically located at the midway point between the region’s three cities, is the UK’s largest pure freight airport and the site of the SEGRO Logistics Park East Midlands Gateway – a 700-acre ‘inland port’ that is already a major logistics hub for brands including Amazon, Very and Kuehne+Nagel, with more in the pipeline. HS2 frees up capacity, which is full, on other routes – something that will allow us to continue growing our economy.

High speed rail will bring a new dawn for the region because it will be the starting gun for further infrastructure investment as part of the locally-led East Midlands Development Corporation, which will be set up to maximise growth opportunities. This will be the vehicle for leaders from Derbyshire, Leicestershire and Nottinghamshire to work together in an unprecedented manner, and help spur other exciting development opportunities such as the former Chetwynd Barracks and Ratcliffe-on-Soar Power Station, which is due to close in 2025 in line with the UK’s coal phase-out.


"The wider area served by the HS2 Eastern Leg is home to 13 million people and about six million jobs, equating to 20% of the UK – and larger than the economy of Denmark. HS2 presents a once-in-a-lifetime opportunity to harness these strengths and be a lever for housing growth, social mobility and the creation of value-jobs."


Boots, Rolls-Royce and Next are just some of the internationally-renowned businesses based in the East Midlands, which has real expertise in industries ranging from advanced manufacturing and biosciences to textiles and food manufacturing. It is worth noting that the wider area served by the HS2 Eastern Leg is home to 13 million people and about six million jobs, equating to 20% of the UK – and larger than the economy of Denmark. HS2 presents a once-in-a-lifetime opportunity to harness these strengths and be a lever for housing growth, social mobility and the creation of value-jobs.

The HS2 project could have a transformational impact on areas like Toton by catalysing further infrastructure investment in the form of an innovation campus. This would create a zone of high growth right at the heart of the country that provides a focus for skills development and business competitiveness linked to the region’s other strategic regeneration sites. Bringing together universities, start-ups and established businesses, the campus will be a hotbed of technological advancement, creating up to 10,000 highly skilled jobs and a network of surrounding garden villages.

Economic benefits will not be exclusive to cities. Chesterfield, the gateway to the Peak District, will have a high speed rail stop that will be a magnet for new investment, while new connections between the hub station and towns like Loughborough, Alfreton and Mansfield – on the doorstep of another major tourist attraction in Sherwood Forest – could be equally significant drivers of growth.

Estimates suggest HS2 will create 74,000 jobs across the region and add £4bn to the economy.

The Eastern Leg has been identified as delivering the biggest return on investment for the entire project by tackling some of the labour supply problems that have stifled business growth in the past.

Transport spend per head is the lowest in the East Midlands of any region at 49% below the UK average, while it also has the lowest levels of capital investment of anywhere in the country.

Some 14% of the Eastern Leg’s working population is in transport poverty, which puts many jobs out of reach and prohibits social mobility. Unreliable and overcrowded trains are cutting off communities from good transport links, meaning productivity per head in the region is 23% below the UK average and the region is missing out on billions in potential every year. If Westminster truly wants to level up the economy, here is a good starting point because bringing productivity back up to the national level would add £28bn to the UK economy annually.

For the past few decades we’ve been tinkering about with a railway system that is essentially Victorian in construct. We’re then surprised when we experience the same old issues. We must get out of this mindset and embrace transformational investment, something that can mark us out as the kind of country we want to be in the future, regardless of everything else happening in the world at the moment.

Much has been made of a green recovery plan to jumpstart Britain out of the COVID-19 economic slump and HS2 should be a central plank of this given how it will help shift people away from mass car usage. Almost three-quarters (72%) of commuter journeys in the Eastern Leg area are made by car, with only 3.5% by rail, despite rail demand doubling in the past 20 years. In contrast, 40% of London commuting is by rail and 30% is by car. Investing in vital transport infrastructure and increasing capacity will help trigger the changes that are needed for more people in the regions to move away from cars. Again, these changes will not just happen in cities, as towns will benefit from improved local and regional services on existing tracks by moving intercity trains on to the HS2 line.

We see HS2 as an investment as opposed to a cost – investments pay back. Yes, some of the numbers being mentioned are significant, but we’re talking about a transformational step change in our infrastructure, something that we’re not used to doing as a country. And, crucially, this investment is needed right now. The East Midlands has been put on hold for too long and it has affected business confidence.

The Government needs to be brave and bold post-COVID if it’s to truly realise Prime Minister Boris Johnson’s stated aim to ‘not just bounce back, but bounce forward stronger and better’. This means delivering HS2 in full, with work on the Eastern Leg beginning urgently and ahead of schedule to fast-track these benefits for the East Midlands and, ultimately, the UK economy. It’s worth re-emphasising how the Eastern Leg has been earmarked for the greatest return on investment across the whole high speed project. As such, its development should be prioritised to usher in a new era of growth.

 

To read the full HS2 Midlands Voices report, click here.

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