HS2 will put Wales at a ‘competitive disadvantage’

Businesses in Wales reacted to Boris Johnson’s announcement that the controversial HS2 scheme will go ahead.

While many businesses across England welcomed the news, here the reaction was more muted.

The Prime Minister told the House of Commons yesterday that his Government had the “guts to take the decision” to deliver prosperity across the country.

However, many west of London were less enthusiastic.

Plaid Cymru said transport experts forecast HS2 would likely reduce employment growth in Wales by 21,000 jobs between 2007 and 2040. The political party said this would result in businesses moving to areas closer to HS2 stations outside of London, rather than choosing Wales, which will now be at a competitive disadvantage.

Prime Minister Boris Johnson speaking in the House of Commons in London about HS2
Prime Minister Boris Johnson speaking in the House of Commons in London about HS2
(Image: PA)

Ben Francis, the FSB Wales policy chair, said; “Whilst we recognise that the HS2 announcement is excellent news for England, when considered in the context of Wales’ transport infrastructure needs it raises some serious questions.

“For such a huge investment to be prioritised by UK Government to connect cities across England, we would urge a reconsideration of electrifying the railway to Swansea, and looking at high speed services into north Wales. While we welcome this significant investment for England, it is important to look at how decision-making has prevented us from being realise a similar benefit in Wales.

“We have said previously that we believe that the time is right for the rail network to be devolved to Wales. This would present the opportunity to empower Welsh Government to develop rail infrastructure that meets the needs of 21st century businesses.”

Prof Mark Barry, who led a major study for the Welsh Government to make the case for further investment in Wales’ rail network in 2018, also called for rail infrastructure to be fully devolved. He also said that barring some marginal wider economic benefits for the north-east of the country there are no benefits to Wales at all.

(Image: Mark Lewis)

Prof Barry said: “No transport user benefits are in the business case and using the DfT’s own figures it will damage the south Wales economy by £200m per annum.“

He added that as rail infrastructure is not devolved to Wales investment enhancement decisions have been made on an England and Wales basis for decades resulting in approximately 1% of UK Government funding for rail enhancements in Wales. Yet Wales has 5% of the UK population and approximately 10% of the UK rail network.

Ian Price, the CBI Wales director, said: “The Prime Minister’s decision to back HS2 is exactly the sort of bold, decisive action required to inject confidence in the economy. It sends the right signal around the world that the UK is open for business.

“HS2 shows the Government’s commitment to levelling-up the nations and regions of the UK. The project will bring jobs, new homes, skills and investment to the areas of the country that need them most.

“With connectivity in Wales such a pressing issue, it’s important to look at how financial benefits resulting from investment in HS2 can be used to level-up our own transport and digital infrastructure, as well as supporting other key priorities.”

Director IoD Wales Robert Lloyd Griffiths
(Image: HUW JOHN, CARDIFF)
Director of CBI Wales Ian Price
(Image: Copyright Unknown)

This was a belief echoed by Robert Lloyd Griffiths, the director of IoD Wales, who said improving the rest of the transport network across the UK and committing to infrastructure projects in Wales is just as important to IoD members and should not be forgotten.

“The M4 relief road, electrification and the hugely popular Swansea Bay Tidal Lagoon all need UK Government support,” he said.

“We acknowledge the Barnett formula consequential may well reflect this and very much hope that the forthcoming Budget will bring welcome news for Wales in terms of the projects that can unleash our economic potential.”

Mr Lloyd Griffiths added: “The HS2 saga has not been a good advert for the UK’s ability to build major infrastructure, but now the decision has been made, many businesses in the Midlands and North will just want to see the Government get on and build it.”

Professor Stuart Cole CBE, an Emeritus Professor of Transport (Economics and Policy) at the University of South Wales, says if HS2 is built to Manchester then there will be some benefit for north east Wales if the trains stop at Crewe given the short distance to Wrexham.

He added that this section would also benefit north Wales if the North Wales Mainline was electrified and the TGV/Eurostar 220 mph trains operated along that track, at 120 mph, it would reduce the journey time from Bangor to London to to 2h 30m to from 3h 10m.

Gareth Jones, the founder of TownSq, an enterprise that builds startup communities in towns across the UK with hubs in North Wales, Oxfordshire and West Sussex. said the north Wales economy could benefit from HS2. Mr Jones said the region has good links with Manchester, so any activity that leads to increased growth in these markets should contribute to additional opportunities for Welsh businesses. Likewise, he added, there are opportunities to build stronger connections to Birmingham, and hopes that if these areas become easier to access, then they can become hubs for our startups to do business with the wider regions.

Prof Cole was less optimistic for south Wales and says it is a matter of regret that the UK government did not build the HS3 route between London and Cardiff promoted by academics, businesses, and the Welsh Government in 2013 rather than upgrade the Great Western main line.

“While this investment has brought journey time benefits to south Wales, these will now be lost when Leeds, Sheffield and Manchester have far reduced times between them and London from HS2,” he said.