those of service companies.
Following this theme, initial research into the impacts of the French TGV lines focussed on the relative impacts on Paris and the provincial cities. This suggests that although such services led to a substantial growth of traffic the impact on the local economies of the cities served was much less certain. Generally such services cannot be shown to have had a major impact on the net redistribution of economic activity between Paris and the provincial cities, or on the overall rate of growth of these cities.
Finally, there is the case for regeneration, which was made for HS1 before it was built. John Preston, Adam Larbie and Graham Wall, Transportation Research Group, University of Southampton examined the impacts in a paper called "The Impact of High Speed Trains on Socio-Economic Activity: The Case of Ashford (Kent)". Their conclusion was that there were very limited economic impacts on Ashford and those that could be implied are difficult to distinguish from other factors. However, they did suggest that such benefits would be apparent in large regional cities, but that many of these are transfers from other cities in the same country.
In short, the case for saying HS2 will be an economic boost is highly questionable. The most likely impact is to shift economic activity around the country, but not from London to the regions, but from unserved regions to served regions and from the regional cities to London. It suggests the net impact to London will be positive, the net impact to major regional centres may be neutral and to unserved centres will be negative.
Oh and let's not pretend jobs building a railway are sustainable. It completely ignores the jobs created if the government spent billions elsewhere or returned it to taxpayers.
Yet all of this misses the core point. You see politicians are no better at making decisions in this sector than they are in others, like car assembly, steel, aerospace, information technology, publishing, fashion or food. In the not-to-distant past, politicians and bureaucrats all engaged in what Hayek called "the fatal conceit" of socialism, of thinking that they are capable, through central planning, of knowing what is best over the decisions of millions of individual citizens.
What the attempt to create a "business case" for a taxpayer subsidised railway actually is, is a sophisticated, but fundamentally clumsy attempt to "value benefits" to people choosing to ride a railway, putting a price on it, and deciding if it is worth taxpayers paying for people to gain those benefits. It isn't entirely clear if the private sector would invest, build, own and operate HS2, but I suspect probably not. As such, is it market failure if it does not? The private sector financed, built, owned and operated the canals and the railways in the 18th and 19th centuries, is it not telling that they would not do so today?
It is ludicrous to pretend that Ministers could pick winners in the IT sector, or pick technologies for communications. It is equally ludicrous for them to pick winners in agriculture, and it is widely accepted that it is best for government to not pick winners in heavy industry. The prolonging of British Leyland was a mistake, although the saving of Rolls Royce in the aircraft engine sector was an example of success.
The problem is that the consequences of getting this wrong lie only with taxpayers. They do not lie with this generation of voters, but with the future voters and taxpayers who will face higher taxes or lower public services to pay the debt for a project like HS2. The users will be highly unlikely to face punitively high fares to recover it, because they will simply choose other modes that don't face that. Bear in mind that coach users, car users, and airlines all provide services along the route of HS2, without net taxpayer subsidies. Why are the railways special?
Now if you wouldn't give your money willingly to someone for the sort of "investments" politicians tout, why let them take it?