Britain is paying several times more than comparable countries to build major transport infrastructure, with HS2 emerging as the most expensive high-speed railway in international comparisons.
New analysis from the Institute of Economic Affairs, the free-market think tank, estimates HS2 Phase 1 has cost around £470 million per route-kilometre.
By comparison, extensions to Japan’s Shinkansen through earthquake-prone mountainous terrain have cost between £50 million and £100 million per kilometre. The European average for comparable schemes is put at around £25 million to £32 million per kilometre.
The report argues the gap cannot simply be explained by wages, land prices or geography. Japan has similar labour costs, scarcer land and more difficult terrain but typically delivers major infrastructure in three to six years.
Britain’s Nationally Significant Infrastructure Projects can take between nine and 17 years from inception to opening.
The Institute of Economic Affairs also highlights a widening gap in urban transport.
Every French city with more than 150,000 residents has a tram, light-rail or metro system, while around 30 similarly sized British towns and cities have none. In Marseille, 87% of residents can reach the city centre by public transport within 30 minutes, compared with 38% in Leeds.
The report says delays and cancellations are imposing wider economic costs. It estimates scrapping HS2 between Birmingham and Manchester could cost Greater Manchester between £600 million and £1.3 billion a year in lost economic benefits.
Leeds is used as another example of Britain’s failure to deliver. Since 1991, more than £70 million has been spent trying to develop a mass transit system but no track has yet been laid. A new attempt is under way, with services not expected until the late 2030s.
The report also points to weak construction productivity, which fell by an average 0.6% a year between 1997 and 2019 while productivity across the wider economy rose 2.8%.
It calls for more powers and funding to be devolved to combined-authority mayors, clearer planning rules, narrower grounds for judicial review and greater international competition in procurement.
The Institute of Economic Affairs also recommends reforming compensation rules so increases in land values around new transport links can help fund infrastructure.
The analysis forms part of the think tank’s wider work on Britain’s “Great Stagnation” and its long-running productivity problem.
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