Any other business

Don’t believe the Tory grumbling: HS2 is on the way

Also in Any Other Business: oil prices, the remaking of Icap and the fate of the Filofax

21 May 2016

9:00 AM

21 May 2016

9:00 AM

There’s a lot of negativity around HS2, and I sniff a Brexit connection. You might think Leave campaigners whose aim is to boost British self-belief would promote the idea that we have a talent for grands projets such as the Olympic Park and Crossrail, rather than a propensity to deliver half what’s promised at double the cost. But there’s also an overlap between Tory MPs opposed to the northbound high-speed rail link, usually because it bisects their constituencies, and Tory MPs opposed to the government on the EU referendum. So I suspect that’s where the trouble lies.

The spin is that cabinet secretary Sir Jeremy Heywood is reviewing the project ‘as fears grow’ that it will bust its already inflated £55 billion budget. Among cost-paring measures, the line may not reach Manchester — or if it does, won’t stop at Manchester Airport. A station at Sheffield’s Meadowhall shopping centre may also be erased; and sections of expensive tunnel are for the axe.

But my intern mole who fetches coffees for HS2’s bosses in Canary Wharf says most of that is nonsense. Tunnelling can actually be cheaper than ploughing across premium surface property. Manchester Airport’s station is more certain to be built than most, because the airport itself will bear a chunk of the cost. Meadowhall, beside the M1, would not be a mere shopping stop but a major interchange for South Yorkshire’s conurbations. What’s more, initial contracts worth almost £12 billion are now in prospect: love it or hate it, the high-speed loco is leaving the drawing board.

The super-hub

That being so, my advice to sceptics is to train your binoculars on Old Oak Common. This urban wilderness where HS2, Crossrail (now the Elizabeth Line), Underground and Overground meet is the west London ‘super-hub’ that could also become a satellite city, with thousands of new homes, a cultural quarter and a new QPR stadium. The scheme was promoted by mayor Boris Johnson but in March its master architect, Sir Terry Farrell, said it was ‘heading for disaster’ because of lack of co-ordination and haste to complete Crossrail. A true test of British project-management skills will be whether that cock-up can be averted and the site developed to its fullest potential.

An HS2 passenger changing at Old Oak for the Elizabeth Line could be at Heathrow in 11 minutes or Bond Street in less than ten. To me that signals a different opportunity to lop the HS2 bill: why bother tunnelling from Old Oak to the ill-connected terminus that is Euston? And if £5 billion could be saved, why not spend it extending the Elizabeth Line or Crossrail 2 to Stansted airport, which should (in defiance of the Davies Commission) be encouraged to build the second runway for which it has ample scope? Then we’d really make some progress.

Back to normal?

Is oil heading back to normality? At the start of the week, the Brent Crude barrel price was close to $50 for the first time since November, prompted by supply problems in Nigeria and Venezuela. ‘Normal’ might mean a $60–80 range — at which many oil projects around the world (including US shale) become viable again, while energy-efficient industries are not unduly shocked by cost rises. But Goldman Sachs says we’re not going there yet, $50 being the top for this year — the same Goldman that foresaw $200 oil in 2008 and $20 oil last year, neither of which happened. As ever, no one really knows: all we can say is that oversupply by uncoordinated producer nations will keep energy unusually cheap for some time yet.

Spencer’s empire

I wrote recently that the reduction of a company’s name to meaningless letters usually signals trouble. So I’m intrigued to see the money-broking giant Icap (an abbreviation of ‘Intercapital’) rechristening itself ‘Nex’, which invites confusion with the retailer Next but was the winning entry in a competition for which the prize was a case of claret. What it signifies is that Icap founder Michael Spencer has decided to move out of his traditional realm of shouting brokers — whose profits have been squeezed by low rates, subdued interbank activity and currency swings — towards the sexier but uncertain territory of ‘fintech’.

Icap’s ‘voice-broking’ arm has been transferred to rival Tullett Prebon, in which Nex will hold 20 per cent while Nex itself focuses on electronic trading and ‘post-trade services’ such as risk management for derivatives investors; it will also explore ‘blockchain’ technology, which is the money world’s new new thing. Smart move, or sign of an empire past its zenith?

I put that question to a market veteran who reminded me that Spencer set up shop in 1986 with ‘six guys in Finsbury Circus’ and built the world’s biggest money broker, worth £3 billion. In an era of capital destruction in the City, who has matched him? Martin Gilbert’s Aberdeen Asset Management (founded 1983, market cap £3.5 billion, turbulent history) might be comparable, but it’s hard to think of others. ‘Would I be surprised to see Michael make a huge success in fintech?’ says my man. ‘Watch this space.’

Eighties icon

When Spencer and Gilbert started, they were probably equipped with the upwardly mobile 1980s executive’s must-have: the Filofax. Was there ever a consumer product more iconic of its pre-digital era than this loose-leaf ‘personal organiser’? The man who rescued it from obscurity (it was previously popular only with clergymen and army officers) was a publisher called David Collischon, who died last month; having bought the company for £10,000, he floated it for £17 million in 1987. Like so much else, it dived in the 1990s — but perhaps surprisingly, the brand and the product still exist today. And you might get £150 for your vintage ‘Winchester’ Filofax on eBay.

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  • TheDucks

    And the purpose of Manchester Airport Station is? A station 1.5 miles away from the Terminals! A station even further away than the long-term parking! A station where you will then have to get on a bus to reach the Terminals or transfer by the Worlds longest “Travelator” which will be over a mile long! A 15 – 20 min transfer time – Brilliant! And who are the passengers that will use the Station? The only connections are; Birmingham – err? They’ll use Birmingham Airport – Manchester Piccadilly – well I’ll just take the current train which gets me there in 15mins to a Station in the Terminals. At the other end there’s Glasgow – but why I would travel 2hrs to Manchester rather than fly from Glasgow Airport?
    The main challenge with HS2 is that it doesn’t connect with any existing transport infrastructure. At East Midlands it goes under (!) the runway at the airport without stopping before dropping people in the middle of nowhere – requiring them to take a tram – budget not yet included – into the centre of Nottingham or Derby or Leicester. At least with the other projects mentioned there was some purpose behind them, some interconnectivity. HS2 was a project dreamt up in isolation, dropped from a great height taking precedence over all else. Slowly its design and function is beginning to unravel.

    • God save us from Armchair Experts.

      • wibbling

        Well, he’s right. Just because you don’t like it doesn’t change the facts.

        HS2 is a pointless waste of money that we do not need or want.

        • So you don’t understand HS2 either – let me explain so you never make the same mistake again:

          HS2 is nothing to do with a faster journey (although that is a nice side effect). It is to do with capacity. Without it we will be in for decades of disruption as we upgrade existing lines and then we’d only have a system with not enough capacity.

          If we don’t do HS2:
          1. We would still have a large chunk of money to find to upgrade the existing rail network – probably billions.
          2. The decades long disruption to the network would (apart from being a pain to travellers) cost industry a lot of money in lost profits – which means fewer jobs and less tax revenue to support benefits and the NHS.
          3. At the end of the upgrade we would still have an under capacity network and so all we would have done is given the problem to our kids.

          The Government have made a call that in the long term it is cheaper to do HSx than put sticking plaster over the current network.

          Normally Government will only spend what they think will get them elected in five years. This leads to the short-term thinking that killed the nationalised ship building and steel industries. So this is actually a Government planning for the long term which is a very nice departure from the past.

          But I guess you could take the attitude that HS2 will mainly benefit our unborn children – and what have they ever done for us.

          • TheDucks

            So the point of Manchester Airport Station is?

          • SalmondFishing

            Manchester airport (the entire thing) needs rebuilding. Incorporate the train station into the scheme as seen in so many other places which I am tired of listing again.

          • John

            Or better still abandon the airport and move it to the Mersey estuary with minimal environmental impact.

            NASA, Boeing, Imperial College, etc, are doing R&D on large jet sea planes. These need no runways. On an estuary there is an abundance of ‘runways’. One large estuary airport on the Mersey and one on the Thames can eliminate all other airports in England when the two are linked via high-speed rail from all major towns and cities. There can be a few concrete runways and seaplanes on the water expanses.

            They can acts as flood prevention and electricity generation when inside a lagoon to ensure calm water.

          • SalmondFishing

            I doubt capacity will demand one large airport anywhere anytime soon. Best to connect LPL, MAN, LBA and BHX with sensible rail transport infrastructure to match STN, LGW and LHR connectivity.

          • John

            Transport experts state that England only needs two large airports. It is best to have them in estuaries where environmental impact in minimal. The Thames and Mersey both at the ends of the biggest population mass in the UK.

          • SalmondFishing

            Interesting. The Thames is of course not UK centered at all and Schipol/Paris/Frankfurt/Munich/Milan already cover the Blue Banana.

          • John

            What I write is quite clear.

          • SalmondFishing

            Liverpool is a cul-de-sac with endless spare capacity. Is that the reason for expanding it?

            MAN will hit 40m ppa before LPL hits 20m. End of.

          • John

            Maps are not your strong point. The half-way point between Liverpool and Dublin, directly west of Liverpool, is Holyhead in Wales. North Wales. Have you heard of it? Manchester airport should be phased out for a plethora of reasons.

          • SalmondFishing

            Maps are my speciality.

            Ferry Holyhead-Dublin 3h approx. £300
            Ferry Liverpool-Dublin 8h approx. £300

            Have you done either, and, what’s going on there, travel mafia-wise?

          • John

            You are on about prices not geography. Look at a map.

          • SalmondFishing

            I looked at a map and then looked at the mafia-rigged price system. Maps are my speciality.

          • James Brown

            I hear what you say, but at £55bn, there has to be more to it than capacity alone. If capacity was the only gain, I would suggest we have a better chance of success by upgrading major motorways, road tunnels and junctions than a single railway.

          • The investments the Victorians put into the rail network is still paying us huge dividends. HS2 will make the country money for hundreds of years. We have no choice but to make these investments if we want to remain the fifth largest economy in the World.

          • wibbling

            capacity we don’t need and that has been superceded. I’ll also correct you: HS2 is a political project enforced as part of TENs by the EU. It’s a trainset. It is odd that communist fascists are all obsessed by trains. The rest of us want more efficient systems, like roads and air transport.

          • “capacity we don’t need and that has been superceded.” Have you ever heard of forward strategic planning.

            “HS2 is a political project…”
            Wizard Rule 8: Just because you want something to be true that doesn’t mean it is.

            “It is odd that communist fascists are all obsessed by trains.”
            Wizard Rule 77: People that are losing an argument will often try to discredit the person they are arguing with. (In football this tactic is known as “Playing The Man”)

            “The rest of us want more efficient systems, like roads and air transport.” Sensible people want a mixed system.

    • James Brown

      I couldn’t agree more. I want to like HS2, but the travel times between train-airport or train-car (no underground parking around the stations) seems to offset any benefits. The situation at East Midlands Airport is scandalous.

    • John

      Manchester airport cannot expand. It is predicted to max out in 20-25 years. Spending billions on rail infrastructure that will not be used in the future. Swampy was right. The 2nd runways should not have been built and the whole airport moved to the large Mersey estuary, where the environmental impact of planes is minimal.

      You got it right. A train station where you have to take a bus to the terminal is buffoon planning.

      • SalmondFishing

        MAN can easily accommodate 50m passagers per annum in the existing footprint. Who is asking for more, now?

        • John

          20-30 years time it is predicted it will max out. The airport is an environmental nuisance.

          • SalmondFishing

            Of course airports are an environmental nuisance. You just campaigned to build an even larger one (!) in the sea (!) at the tip of a blue banana (!), and the only reason for that not even given by you is that this is what the Chinese once did. Smirk.

            MAN can double capacity without even blinking. You said MAN cannot expand. You, John, are an amateur.

          • John

            Planes that fly over water have a far reduced environmental impact. Safety is also higher as they drop on water not built up areas. And if most planes are only flying, landing or taking off over water in two massive airports we all benefit.

            Manchester is going to max out and when its business rises before saturating, the environmental impact increases greatly along with it. The 2nd runway should never have been built. It was irresponsible to allow such expansion when a perfectly low impact alternative is available 30 miles away. High-speed rail and water-based airports should mesh together to primarily reduce the environmental impact.

          • SalmondFishing

            Manchester isn’t even at half its capacity. The Chinese are investing in Airport City not Wirral Waters. Chin up, John 🙂

  • davidshort10

    I recently bought a Filofax and love it. Electronic personal organisers are just too complicated for the their purpose. And you don’t need to charge a Filofax. Returning to them after 30 years was a welcome change.

    • justejudexultionis

      Thank you for your pertinent and highly interesting post.

  • John

    The cheapest way into Manchester was via the Mersey Valley corridor. They diverted the line in a circuitous manner past Manchester airport at a greater cost. But the Airport and others would have to pay for the station, which not exactly on the doorstep of the airport terminal building and does not connect with the existing station. So, the airport station is being funded by the taxpayer. It is not certain if the funding for the airport station is in place – it is a bad investment. To cut costs the Treasury could take the cheaper Mersey Valley route.

    The west to east Mersey Valley can also be a part of the Liverpool to Hull HS3, killing two birds with one stone and giving Liverpool a link to HS2.

  • John

    Sir Jeremy Heywood is conducting a review of HS2 to cut costs. HS2 Ltd in the meantime act as if nothing is happening, they have to. The heavy rumours are that HS2 will only be one line from London to the Crewe Junction via Birmingham. To Scotland, Liverpool and Manchester the high-speed trains will run on existing classic lines from Crewe. To Manchester it will be only about 12 minutes slower than using a full dedicated HS2 line into the city once bottlenecks are removed from the existing direct classic line. Using the new Hitachi 140mph trains Leeds is accessed on existing ‘straight’ ‘direct’ lines, again about 12 minutes slower than HS2. So the eastern leg of the HS2 ‘Y’ can be abandoned cutting great costs.

    HS3, the proposed west to east Liverpool to Hull line via Manchester & Leeds/Sheffield determines the top end design of HS2. This part of HS2 has not been finalised nor has HS3. To link the two HS lines would mean a HS2 redesign at Manchester and Leeds. More likely HS3 will not be ‘high-speed’ but just a fast line using some new long tunnels and viaducts over the Pennines. It may then branch into the existing north-south classic lines and run into HS2 high-speed to London on the west side from Crewe onwards.

    At the London end terminating at Old Oak Common, or running HS2 trains into Crossrail makes lots of sense. Take passengers nearer to their end destinations. Most passengers at Euston take an underground train to their eventual destinations. So terminating at Old Oak Common and taking Crossrail or having HS2 running into Crossrail makes perfect sense. Leave Euston alone.

    – HS2 only need run to Crewe via Birmingham.
    – The existing lines to Manchester and Liverpool from Crewe can have the bottlenecks ironed out to increase speed and safety.
    – The existing lines to Leeds and Sheffield can also have the bottlenecks ironed and full 140mph trains run on the lines.
    – The WCML line just north of Kendall can be run in a new bored tunnel to remove the dogleg from the line improving times to Scotland.

    • Pretty_Polly

      Thank you for confirming that HS2 is a stupid, wasteful and pointless project.

    • andrew needham

      Wormwood Scrubs to a Field Outside Crewe: The Potential of HS2.

      So the reality now is that what is seriously being considered a the final limit of the ‘high speed rail network’ on the western side of the county would be to provide a dedicated 250mph railway line from Wormwood Scrubs to just short of Crewe, via a station on the opposite side of the M42 from Birmingham Airport, with a spur off the a station in Birmingham, which is not New Street

      • John

        The HS2 line is to merge with the WCML just before Crewe station. Crewe will remain as it is. Higgins wants the ‘Crewe Hub’ built. This will take high-speed trains off the HS2 track and onto classic tracks fast by-passing the station. If HS2 is cut back to Crewe only, then at least this hub should be built. It makes matters safer as well.

    • SalmondFishing

      There is only one reason for ‘ending’ HS2 at Crewe. To kill the project.
      The HS line ought to run North-South through the entire country ending in a hub in Scotland.

      • John

        There is the Pennies right through the spine of England, hence one side or the other or both. End at Crewe Junction (six classic lines radiate from Crewe) make the most sense with Birmingham accessed via classic lines into New St.

        HS3 makes more sense and will benefit far more people.

        • SalmondFishing

          You’re ahead on visions for aviation and pull back on rail. That does not sound coordinated/right to me. It’s naturally the other way round.

          • John

            Two large airports:
            1. at Mersey Estuary catering for future seaplanes.
            2. at Thames Estuary catering for future seaplanes.
            3. Interlink the major towns and cities with fast/high-speed rail.
            4. Connect both airports to major towns and cities with fast/high-speed rail.
            5. Remove all other passengers airports in England/southern Scotland.

            Simple. That should be the long term aim and gradually worked towards.

          • SalmondFishing


          • John

            You may laugh. Those with no vision tend to laugh at anything outside of their narrow scope. Top transport experts are looking this way, which all makes sense.

          • SalmondFishing

            I was quite clear when expressing my vision.

    • John

      It has been recommended that the top speed of HS2 trains be dropped from 240mph to 190 mph for safety and environmental reasons.

      Using the new Hitachi 140mph trains on the Leeds and Sheffield runs on existing classic lines, the difference in times between the 140mph trains and HS2 190mph is not worth taking into consideration. The HS2 time from London to Birmingham will be only 3 minutes slower running at 190mph. From London to Liverpool and Manchester using HS2 to the Crewe junction and classic lines into the cities the difference is minimal to a full HS2 from London to Manchester.

      HS2 only needs to be from London to Crewe via Birmingham. No more. All facts point against it.

  • Pretty_Polly

    The High Speed Train.

    NHS reductions,

    No ifs, no buts,

    Reducing our nursing,

    Ward closures and cuts.

    No money to pay

    for new drugs that cure pain,

    But Dave’s still buying

    The High Speed Train.

    Reduced education,

    No money for schools,

    A deprived generation,

    Fewer masters, more fools.

    Less colleges, less uni’

    less for students to gain,

    But Dave’s still buying

    The High Speed Train.

    Battered old railways’

    And crumbling old roads,

    The lifeblood of commerce

    that carries the loads.

    The potholes and diverts

    from fast to slow lane,

    But Dave’s still buying

    The High Speed Train.

    Making people work longer

    Until they retire

    Reducing their pensions

    For an old age so dire.

    Making petty cost cuts

    When no savings remain,

    But Dave’s still buying

    The High Speed Train.

    Less Airforce, less Navy,

    and even less Army

    Cutting everything sacred,

    doing things that are barmy.

    Sacked soldiers that have served us,

    through trauma and pain,

    But Dave’s still buying

    The High Speed Train.

    Neglect of our country,

    Abuse of his duty,

    Allowing destruction

    of the countryside’s beauty.

    Never learning a lesson

    Wrong, time and again,

    Yes, Dave’s still buying

    The High Speed Train.

  • terence patrick hewett

    Sadly current technology renders rail lines no longer necessary to guide a vehicle to its destination: companies such as Hitachi know this full well. Not only do they get to sell billons of money in redundent technology: when it all has to ripped up in a few decades time they get to sell more billions in rail-less and driverless. Nice if you can get it.

  • gunnerbear

    Given the photograph at the top of the article, I wonder if part of the issue with Crossrail & HS2 costs getting ever higher…….is that no chaps seem to be working on the project…… 🙂