New research by Oxford Economics, which was commissioned by the Railway Industry Association (RIA), has studied the railway’s economic “footprint” to conclude that the economic benefit of investing in the near £100bn project outstrips the returns.
According to the study, £2.50 is generated for the wider economy for every £1 spent on British railways.
This compares with a predicted return of between £1.30 and £1.50 for every pound invested in HS2, further to a governmental paper published by Doug Oakervee.
Darren Caplan, chief executive of the RIA, said that the new findings emphasise the “crucial” importance of the railways for both economic growth and job creation.
In a statement, he said: “This report by Oxford Economics shows a burgeoning rail sector before the pandemic and how rail can provide more economic growth in the future.
“As passengers now return to the network we should be optimistic about rail’s ability to help with the recovery. With the right Government policy and support, UK rail can continue to be the economic powerhouse the UK will need in the months and years to come.”
However, Sir John Armitt, chairman of the National Infrastructure Commission that advises the Prime Minister on large building projects, said that such calculation estimates are “notoriously speculative”.
In a statement, he said: “Calculation of the amount of money specific schemes will pay back over time is notoriously speculative, but on a broad assessment of economic benefits, improving regional links – especially east to west such as between Leeds, Manchester and Liverpool – is likely to make the biggest difference.”
The news comes amid speculation that the eastern branch of HS2 between Birmingham and Leeds could be mothballed due to Treasury concerns over costs.
The future of HS2 is set to be confirmed as part of the Chancellor’s comprehensive spending review, which will be announced on 27 October.
A Department for Transport spokeswoman said: “The Integrated Rail Plan will soon outline exactly how major rail projects, including HS2 phase 2b and other transformational projects such as Northern Powerhouse Rail, will work together to deliver the reliable train services that passengers across the North and Midlands need and deserve.”