‘The benefits to passengers from the high-speed link are overstated … there is an assumption that all the time that business travellers spend on a train is wasted … this is a somewhat questionable proposition.’
Financial Times, January 11
So the High Speed Two rail link was approved?
It was indeed. The London-Birmingham link will be ready as early as 2026. Then there may be an extension linking Birmingham to Manchester and Leeds. We’ll only have to wait until 2033 for that.
The cost-benefit analysis says the project is good value for money.
Yes, according to HS2 Ltd, a company that was established to make the business case for high-speed rail. Of course, other things might be better value for money. HS2 Ltd, using Treasury assumptions, discounts future costs and benefits at a discount rate of 3.5 per cent for 30 years, and then 3 per cent. If the government borrowed £10bn at the current 10-year interest rate of about 2.1 per cent and kept rolling it over before paying it back in 60 years, the eventual repayment would be almost £35bn. But the present discounted cost would be just £150m – a massive benefit/cost ratio. If playing by the cost-benefit analysis rules, just borrowing cash and doing nothing is a winning strategy.
You’re just messing around with the numbers.
I am, and you can mess around with a lot of numbers if you are making these calculations over a 60-year timescale. I wouldn’t pay too much attention to HS2 Ltd’s forecasts, or those of their opponents.
But it’s not just about forecasts – it’s about the value of time saved because of a faster journey, right?
That’s true. The high-speed link would save about 40 minutes on a journey from London to Birmingham. How much that is worth is an interesting question.
If you have a morning meeting it might mean an extra 40 minutes in bed.
It might indeed, which is priceless. HS2 Ltd told me that they use numbers from the Department for Transport. The DfT apparently values leisure time at about £6 an hour – this, intriguingly, implies that the UK government’s official position is that anyone under the age of 21 is wasting their time earning the young person’s minimum wage and would be wise to chillax in front of the Nintendo.
What about business travel?
Well, business travel is valued at £50 an hour. Unless the business travel in question is commuting, in which case it’s £7 an hour.
Doesn’t make a bit of sense to me, either. Perhaps the idea is that commuting is eating into your leisure time, which is almost valueless apparently, whereas business travel is eating into your employer’s time, which is precious indeed. Complain to the DfT if you don’t like it.
And surely business travellers will often be able to work on trains, with laptops and smartphones.
Personally I find I often get more done on the train than anywhere else – bar an aeroplane, of course – because I’m not distracted by Twitter or videos of amusing cat antics.
That rather implies that you don’t otherwise make good use of your time.
It’s not clear any of us are that good at managing our time. Economist Alan Krueger and psychologist Daniel Kahneman studied people’s emotions while participating in various activities. Their subjects – women in Texas, in this case – most enjoyed praying and “intimate relations”, but these activities were not chiefly how they spent their days.
I’m confused. Are you implying that users of High Speed Two should be having sex on the train?
Who is to say what social mores will govern our behaviour by the time the line is finished? But I think we can agree that if rail travellers occupied themselves in this fashion then shorter journey times would not necessarily be a tremendous boon.
I’m not sure this is a helpful line of inquiry. What did Kahneman and Krueger discover about how people feel while on business travel?
Business travel wasn’t a category that was reported, but the morning commute, it turns out, is the most miserable of all commonly reported uses of time. You might think that shortening commutes would be very valuable, then – but the DfT hasn’t received that memo.
And how much of this column did you write on the train?
All of it.
Also published at ft.com.