HS2 will give businesses in the North of England and Midlands the vital infrastructure links required to mount a challenge on London’s economy, according to a new report into the UK’s high speed rail network.
After collecting evidence from local authorities, universities and over 100 employers, the study, produced by HS2 Ltd, aimed to demonstrate how HS2 would connect Britain’s major business hubs and “enable a greater pooling of people and capital around the regions of the UK”.
HS2, the report claimed, would enable companies in the North and the Midlands to gain access to new markets and investments, as well as making them more “globally attractive”.
It outlined access to skills as a significant barrier to business growth to small firms in the North, with almost one in three Manchester-based employers citing a skills shortage as a major limitation.
Another key pillar of the study was how the professional services sector could benefit from the lower costs of doing business outside of the capital, with office costs up to 80 per cent cheaper in the North, and salaries up to 40 per cent lower.
To demonstrate this, it claimed the relocation of a 50 person skilled legal office from the City of London to Liverpool would achieve annual savings of £1m.
Championing the potential of HS2 in driving growth outside of London, David Higgins, chairman of HS2 Ltd, said the rail network was a “once in a generation” opportunity to connect the UK’s regional economies.
“By improving the connectivity between our major population centres, HS2will give businesses access to the skills, labour and services they need to change the economic geography of the country,” Higgins added.
Commenting on the paper, Chris Grayling MP, government transport secretary, said it proved transport investment was “crucial to a strong and resilient economy”.
“As Britain’s new railway, HS2 will deliver vital links between some of our country’s biggest cities, driving economic growth and productivity and helping to deliver the government’s Industrial Strategy,” Grayling said.
Representing the so-called “Midlands Engine”, Sir John Peace, chairman of Midlands Engine and Midlands Connect, said high speed rail would create a “thriving environment” for the region’s strong manufacturing base to flourish.
He added: “HS2 is arguably the greatest business opportunity to hit the midlands in decades, benefitting both the East and West Midlands and collectively we need to be HS2-ready.”
According to the government, HS2 will serve around 30m people and directly serve 25 different stations.
“HS2 does not address the needs of modern northern business”
Despite the government’s pledge to equip regional firms with vital infrastructure for the future, not all firms are convinced.
Tim Holt, director of Macclesfield-based manufacturer Plastic Card Services (PCS), told Business Advice that he isn’t alone in doubting the impact promised by HS2 Ltd.
“PCS, like many businesses within the area, expect to see little benefit from the proposed HS2 railway,” he told us.
A particular concern, Holt explained, is that in focusing on the “major” business hubs, such as Manchester, Leeds and Birmingham, HS2 threatens to actually reduce the number of trains stopping at smaller stations such as Macclesfield.
“Government commitment to the north-south HS2 project, in contrast to plans for the east-west HS3, demonstrates yet again a failure to understand the needs of Northern businesses. The linking up of Northern cities is of far greater importance than the London centric model currently proposed for the initial stage of HS2.
“Moreover, HS2 does not address the needs of modern northern business. We fully support IPPR North’s call for a ‘North First’ approach to investment – engaging with the region, rather than imposing what looks already to be a white elephant upon it. Investment within northern education, cities and vast economic assets must be prioritised in a region worth over £300bn to the British economy.
“However, we believe HS2 is a questionable use of such a vast amount of taxpayer’s money, which could be invested across the Northern economy for a far greater return.”
Do you believe HS2 will boost business growth outside of London, or will it fail to support firms outside of major cities? Get in touch with us at email@example.com and let us know.
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