Tuesday, August 25, 2015
Tuesday, August 25, 2015
Sunday, August 16, 2015
Welcome to Matt Ridley's Blog
Matt Ridley is the author of provocative books on evolution, genetics and society. His books have sold over a million copies, been translated into thirty languages, and have won several awards.

Please note that this blog no longer accepts comments (there was too much spam coming in!). If you're reading this blog and want to respond then please use the contact form on the site.

You can also follow me on twitter.

Hadrian's wall was a marvellous mistake; so is HS2

On the opportunity costs of huge infrastructure projects

My latest column in The Times:

This is an article about a railway, but it begins with a wall; bear with me. I live not far from the line of Hadrian’s Wall and I often take visitors to marvel at its almost 1,900-year-old stones. That the Romans could build 80 miles of dressed stone fortification, 15ft high and 9ft wide, over crags and bogs with a small fort every mile, is indeed a marvel. It was one of Rome’s most expensive projects.

Yet I often ask visitors as they marvel: did it work? The answer is no. The Roman garrison was too strung out to defend the whole thing at once. Within 30 years it had been successfully attacked by the barbarians; within 40 it had been abandoned for a new wall in Scotland; when that did not work and Hadrian’s Wall became the boundary again, it was overrun by barbarians several times. Did it exclude or pacify the tribes of northern Britain? I doubt it.

Ah, say the historians and Latin teachers, but you misunderstand the purpose of the wall. It was never meant as a Maginot Line. It was a sort of extended customs zone to control the border region. Or, goes another theory, “it was simply a psychological demonstration of Roman imperial power, intended to cow the natives into submission and provide a lasting monument to Hadrian himself”.

Sorry, but we are supposed to justify one of Rome’s most expensive building projects — costing, let’s say, 50 billion denarii — on the grounds that it might have impressed a few woad-stained, hairy organic farmers? Or to manage queues at immigration while selling them duty-free otters’ tongues?

There is no getting away from the fact that Hadrian’s Wall, marvel thought it was, was probably a bureaucratic blunder. Confronted with raids, a peevish emperor naively suggested building a big wall, nobody dared to tell him it was mad, a bunch of toga-clad Sir Humphreys gave the contracts to their relatives, and the local Nimbys were brushed aside.

You can probably see where I am going. Just because we can build the new fast railway, known as HS2, to Birmingham and beyond does not make it a good idea. The size of the project seems, among its promoters almost to be justification in itself.

Large infrastructure projects are always welcome in retrospect, they point out. Francophiles are all jolly glad that the Channel Tunnel was built, after all, even if it has failed to meet its projected passenger numbers and ruined its original investors. That’s the flipside of the sunk-cost fallacy — once something’s paid for, you might as well use it.

Leave aside — as yesterday’s court ruling did — the environmental objections (online you can even find retrospective environmental objections to Hadrian’s Wall on the grounds that it caused deforestation). The economic case against HS2 hardly needs retelling. The cost has risen to more than £42.6 billion, plus trains. Big rail projects run 45 per cent over budget on average according to one study, but let’s be kind and say it will cost £50 billion.

For this we get 20 minutes off the journey time to Birmingham in 17 years’ time. Yet we already treat trains as if they were offices (I am writing this on a train), so reliability matters more than speed. Most studies suggest that HS2 will do little to revive the North, and is more likely to lure northerners south. And less than 5 per cent of British passenger travel is by rail — it just so happens that MPs (and peers such as me) are unusual in this respect, doing 40 per cent of our travel by train and an unusual proportion of that by long-distance train. So politicians live in a rail bubble.

Yet it’s the opportunity cost that is most damning. Of all the basic concepts of economics, the one that people seem to have the hardest time grasping is opportunity cost. Every time you spend £50 billion on one thing, you are not spending £50 billion on another thing. The right question is never: “Should we spend £50 billion on X?”, but “What should we spend £50 billion on?” Focusing just on transport for simplicity, here are some options.

First, potholes. The Asphalt Industry Alliance says £10.5 billion is needed to fix crumbling roads and fill potholes around the country. There’s a deal of special pleading in that, but let’s give them £5 billion.

Second, rail improvements. Last year Atkins, the engineering and project management consultancy, produced a study on upgrading the existing rail infrastructure between London and Manchester. One option it looked at, a local authority-led scheme called 51M, would spend £2.6 billion on a list of dull-sounding projects — grade separation of Ledburn Junction, construction of a fourth line between Attleborough Junction and Brinklow Junction, Northampton line speed improvements, a Stafford by-pass — the cumulative effect of which would be an extra five trains an hour out of Euston, and a slightly shorter journey time to Birmingham and Manchester.

Now here’s the startling number. Atkins calculated that 51M would have a benefit-cost ration of more than 5, meaning that its modestly reduced congestion, journey times and delays would be worth five times as much to people as the cost of the project, whereas HS2 struggles to get above one, meaning that the benefits barely exceed the costs.

Add in improvements to other rail lines and local rail networks: £10 billion on rail altogether. Add another £10 billion on speeding up road improvements, especially the bypassing of villages and making A-roads dual carriageway — not forgetting, please, the A69 that runs parallel to Hadrian’s Wall and is a vital link between Belfast and the Continent, via Tyneside.

Then add a third runway at Heathrow so we have a chance of attracting businessmen to invest here, and not make them spew CO2 while going round in circles over Buckinghamshire: cost £17 billion. Boris Johnson wants £600 million for his Vision for Cycling in the capital, and let’s round it up to £2 billion for cycle paths nationwide. We’re up to £44 billion. I’d spend the last £6 billion on souping up broadband networks, either with superfast fibre or by leapfrogging into wireless broadband, so we can work at home and don’t need to get the train anyway.

This list of projects has several advantages. It is mostly shovel-ready, so will provide work in the construction industry right away, rather than in six years’ time and start bringing benefits soon, rather than when my children are middle-aged. It would be spent mainly on concrete, steel and tarmac, rather than lawyers, consultants and bat surveys.

And it would avoid the embarrassment of building during the second quarter of the 21st century — an age of (perhaps) driverless cars, mag-lev bullet trains and near silent aircraft — a great folly to immortalise the name of Osborne alongside Offa, Hadrian and Cheops.