Quote of the day

“I find economics increasingly satisfactory, and I think I am rather good at it.”– John Maynard Keynes

Monday, 23 March 2015

Come on Supply-side - HS3 info:

from the Daily Telegraph:

 
 
 
  

Derelict houses, boarded-up shops, and jobseekers leaving in droves to find employment. This was Liverpool in the late 1980s and early 1990s after the city was hit by the decline in manufacturing and port logistics were modernised.
 
In more recent times, some vibrancy has returned to the centre, but it has been overshadowed as an inward investment centre by Manchester.
 
Nearly 150 miles away, Hull – also reliant on maritime trade, and playing second fiddle to the leading Yorkshire city of Leeds – suffered a similar fate, with its property sector and investment market failing to fully recover after the most recent recession.
 
Not only have these cities, along with Newcastle and Sheffield, fallen behind Manchester and Leeds economically but they are now incomparable to London and Birmingham in terms of inward investment.
 
The Government’s plans to overhaul the North’s creaking railway infrastructure and build High Speed 3, unveiled on Friday, are at the heart of its long-term programme to create a “northern powerhouse”.
 
But will the Chancellor’s overall, regional vision of a new high-speed railway across the Pennines, connecting Liverpool, Manchester, Leeds, Hull and Newcastle, address their specific needs?

READ: 140mph trains for the North as plans finally revealed
READ: Forget HS2 or HS3 we need to go back to basics to fix our infrastructure

New analysis shows that Liverpool could be the greatest beneficiary.

Research by the property group JLL found that unemployment in the 2008 European City of Culture will fall by 36pc by 2030 as a result of HS3 – the most dramatic drop of any city to be connected by the line.

The details released by the Department of Transport show that the “Transnorth” line will have sections capable of train speeds of up to 140 mph and will boast journey times as low as 20 minutes between Liverpool and Manchester.

Manchester to Sheffield and Leeds could be 30 minutes each and Leeds to Hull three-quarters of an hour.

Journey times from Manchester to Newcastle could be cut by 25pc.

This accessibility will generate extra business for companies in the North, opening up complimentary markets and helping to reduce unemployment in Leeds by 22pc over the next 15 years.

The number of jobless people in Manchester is also predicted to drop by 12pc and 3.2pc in Newcastle.


“Brain drain” has been one of the most arresting issues in cities such as Liverpool, with many people forced to relocate to gain jobs.

Herein lies the core point of HS3, according to JLL’s head of residential research, Adam Challis. “Liverpool has a high proportion of public-sector jobs, and was hit badly by the downturn and the cuts that followed. Young professionals moved away from the city because they couldn’t support their aspirations,” he said.

“HS3 will encourage employment migration, but not the population migration that has slowed Liverpool’s economic recovery.”

The city’s population is expected to grow 3.8pc according to JLL, from 472,800 to 491,000 by 2030, even without other regeneration schemes under way.

“It was one of the great cities of the world but has lost its way,” said Mr Challis. “Connecting with stronger public transport is a big part of pulling Liverpool back into the North. It’s languished because it isn’t Manchester and has been a little way off the radar in terms of economic movement in the country.”

Work has started on High Speed 2 from London to Birmingham. The Government is now preparing a hybrid bill to go through Parliament which will push through the next phase of HS2, linking Birmingham to Crewe, while simultaneously joining the cities in the North, speeding up the connections between Sheffield and Leeds, while also improving the overused M62.

The Department of Transport is in the so-called “optioneering” stage for the northern part of the project, one engineer told The Daily Telegraph, investigating the different socio-environmental and cost implications of the route.

For Nigel Wilcock, regional development director at consultancy, Mickledore, and investment adviser to Liverpool City Council, HS3 is more economically important when it comes to rebalancing the country than the controversial HS2 – which will plough through south-eastern villages and cost the country £73bn.

“There has always been the risk that HS2 could become Europe’s fastest commuter train – especially if Virgin can get journey times down to two hours from Crewe to London.
“It’s got to do far more than quicken journey times – the key to its success is the investment around each node along the line,” he said.

And the need of the North seems greater than the case for linking Birmingham to London faster.

Liverpool and Hull have faced similar fates in the modern era, Mr Wilcock said. Both port cities were hit by the “containerisation” of their docks, slashing the need for manpower, and the decline in local manufacturing.

“Liverpool has come a long way since its Objective 1 status in 1990 [a European Union ranking of cities in economic crisis] with projects under way such as the regeneration of the Albert Docks,” said Mr Wilcock. “But in order for HS3 to help the region become a northern powerhouse it must sit at the top of a supply web, not simply manufacture for non-local companies supplying to other markets.”

The strengthened link between Liverpool and Manchester should help the smaller city attract overspill investment from its dominant neighbour, as investors recognise the specialisms and value for money of Liverpool in comparison, he said.

Manchester is forecast an 11.3pc increase in population over the next 15 years as a result of HS3, the biggest increase of any city in the region.

The population of Leeds is forecast to grow by 6.3pc and Newcastle by 5.4pc.
But such a polycentric business district comprised of urban centres that are 40 miles apart is relatively untested – only really seen in the Netherlands, where the Randstad consists of Amsterdam, Rotterdam, The Hague and Utrecht.

“It’s not just about the transport itself but the whole citizen experience,” said Nathan Marsh, infrastructure expert at accountancy group, EY.

“If a transport system is to unlock the financial potential of the North it needs one Wi-Fi system, a smart ticketing system and a consistent experience across the whole of the region, currently split between multiple operators,” he said.

The Government has positioned HS3 as a solution to the North-South economic divide, but for Mr Marsh the incredible success of London shouldn’t be knocked.

“We need to use London to help us grow in the North – we need to use the gap differently.”
And as for the small question of funding, it is going to take some revolutionary structuring and unconventional sources, he said.

“We need the right funding mechanisms to get this thing off the ground, but we also need it to work in the long term. We should be positive about it,” he said. “But not complacent.”
 

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