What are the estimated economic benefits of the high speed two (HS2) railway and what will the impact be on the economy in the long run.

Table of contents Introduction 1 Research background 1 Research aim 1 Research objectives 2 Research questions 2 Issues 2 Literature Review Revenue 3 Employment 4 Research Design Methodology 5 Sampling and Data collection 5 Justification 5 Ethical Issues 5 Accessibility Issues 6 Time Plan 7 Conclusion 8 Reference List 9
Appendices
Appendix A - HS2 Questionnaire 11
Introduction
High speed two (HS2) is proposed to be the UK's new high speed rail network, running from London to Birmingham, Manchester and Leeds. It will be funded by grant in aid from the government. It is estimated that the HS2 project will reduce journey times by half than the current travelling times on the normal rail network. It is also argued that it will provide the greenest, safest and most efficient form of transport whilst giving a major boost to business and the economy (Direct Gov, 2015). The purpose of this research project is to investigate the HS2 rail network in order to explore the impact it will have on the economy in terms of revenue and employment in the long run.

Research Background
High speed two (HS2) Ltd was set up in January 2009 by the British government in order to consider new high speed rail services between London and Scotland, in particular looking at the feasibility and the potential for future development of high speed rail networks. Reports for this remit were published in March 2010 by HS2 Ltd, with the government announcing its preferred option of having the Y network, serving London to Birmingham, Manchester and Leeds in a single line in October 2010. HS2 Ltd was requested to prepare a detailed proposal of the business case to extend HS2 and develop route proposals in October 2010, reporting in December 2011. (Department for Transport, 2011)

Research Aim
The aim of this research proposal is to investigate what HS2 will bring to the economy in terms of revenue with regard to passenger demand and potential estimates for sale of tickets, as well as how HS2 will contribute to the economy with regard to employment in the long run (e.g. How many jobs will this project create once it is complete? Would these jobs be mainly long term or short term? How will this impact the overall job market?).

Research objectives
The two research objectives for this study are as follows;
To explore the proposed cost to date for HS2;
To look at the estimated effect on the economy in terms of jobs and revenues in the long run.

Research questions
The two research questions that follow on from the aim and objectives above are as follows;
Will the build of HS2 benefit the economy in the long run?
What effect will HS2 have on revenue and jobs in the long run?

Issues
The contemporary issues identified with HS2 are as follows, it is being funded by the government and is a sizable project, according to a BBC news article that follows the development of HS2 to date the government have the proposed budget currently standing at £42.6bn, estimating that it will take a long while to complete with the proposed date of completion in 2032-2033. The state of the economy at different points in the project will affect this in regard to the government always having sufficient funds for HS2. (British Government, 2013) The cost of fares is not known apart from the official government estimates show fare revenues of up to £34bn over a 60-year period. In terms of creating employment government Ministers claim the London-West Midlands section alone would create around 40,000 jobs, this is beneficial to the economy however, currently the individuals employed with the task of helping to build this rail network will be out of work once the project is completed, as this is not a permanent job and just until the project comes to an end. This research contributes to the business sector by looking at the economic benefits of the rail line in the long run and weather the project was a success in terms of creating significant employment income in the form of revenue from the operation of HS2.

Literature review
This build of the high speed rail network is going to affect quite a large number of people once complete and have a large effect on the economy, in regards to jobs and revenue. However not everyone sees this as a worthwhile investment, as there is some negative impacts that have to be considered and analysed as well as the positives, and whether they are outweighed by the positive proposed impact in the long run.

Revenue

HS2 Plus: A report by David Higgins
Higgins states that that even though there has been an economic downtown “Passenger and freight demand is forecast to increase by over 30% over the next decade.” (Sir David Higgins, pg5, 2014).

BBC News: High-speed rail's long journey
Revenue will be harder to estimate as there has currently been no official announcement on ticket prices, however the article states that “the government has said its proposals "assume a fares structure in line with that of the existing railway" and that HS2 could generate sufficient demand and revenues without needing to charge premium fares. It estimates fare revenues of up to £34bn over a 60-year period.” (British government, 2014).
Having made the above point if it is not known how much tickets would be sold for how can the government estimate the fare revenues over that 60 year period. The revenue estimates at this moment in time are uncertain.

Economic Case for HS2 the Y Network and London – West Midlands
This report states that the demand for travel is a key factor affecting benefit cost ratio (BCR), if the demand is higher the BCR will rise along with an increase in benefits and revenue. On the other hand it’s the opposite if the demand was lower than predicted. (Department of Transport, pg54, 2011).

Employment
Concerning jobs, the official government estimates fail to include jobs lost from HS2, these include jobs lost from businesses affected with the project that have to shut down and also jobs that would be lost from the competition of other train companies who lose business to HS2 forcing them to make job cuts. If these were included the numbers in the estimates would be quite substantial but they are rarely taken into consideration here. (British Government, 2014)
Furthermore, upon evaluating these so called positive impacts we find out that the estimated construction jobs are only temporary until the project is completed and are quite small in numbers. In regards to the jobs that supposedly would arise after completion, the government admits that these would not be new jobs as much more relocations from other locations. However, they are all not directly linked with HS2 alone they will depend more on other public and private regeneration investment.
Finally, the estimates of the jobs that would be created due to HS2 shown now are extremely lower than the initial estimates that were given at the case to allow the building of HS2 to go ahead. The cost of these jobs would be expensive in regards to the proposed costs of the build it is said that there are much better ways to spend this money that it would have a greater positive impact on the economy and jobs and growth across the whole country. On the other hand the cost of the build will be spread over the years so it will be more manageable then spending the money all at once. The annual capital investment is said to give a decent rate of return whilst stimulating economic activity and creating jobs. This is yet to be seen as the project is not yet complete and only on the second phase of the build. (British Government, 2014)

Research design
For this research proposal we will use a mixed design of qualitative and quantitative research design.

Methodology
This will take the form of looking at case studies on the build of HS2, which is secondary data and then for primary data there will be questionnaires to get the public’s opinion on the HS2 project and their views on the estimated benefits for the economy.

Sampling and Data collection
For this research proposal convenience sampling will be used as there is constraints on time and finances. There will be 20 questionnaires that will be collected by participants that agree to take part in the research. The way in which the data is collected is an important part of this research. The primary data will be collected through the questionnaires and the secondary data will be accessed through case studies done by credible official sources such as HS2 Ltd.

Justification
Using both primary and secondary data will give a balanced argument for our research as we will have more than one source of data collection – the case studies will give the views from an earlier period and the questionnaires will tell us the current views by the public on this project as we will have gone out and gathered the primary data ourselves.

Ethical issues
In terms of ethical issues we have to be aware of researcher bias in the case studies as there is a divide on whether the project is going to be good or bad for the economy – so they may have written the case study to side with their own personal view on the project.

Accessibility issues
Regarding the primary data of handing out questionnaires – access to participants may be limited depending on how we distribute these questionnaires and there is no guarantee we would get a response. This reduces how much our research would be representative of the sample because if we don’t get a large sample response we can’t come to a conclusion on whether HS2 is going to benefit the economy and how it will do so.

Time plan

Task | Start date | Duration | 1) Review CIR research proposal | 01/02/2016 | 7 | 2) Collect my case studies | 08/02/2016 | 7 | 3) Review the case studies | 15/02/2016 | 7 | 4) Carry out the questionnaires | 22/02/2016 | 5 | 5) Review the questionnaire | 29/02/2016 | 7 | 6) Add findings to BIP | 07/03/2016 | 14 | 7) Review BIP | 21/03/2016 | 7 | 8) Make any necessary changes | 28/03/2016 | 14 | 9) Final review of BIP | 11/04/2016 | 7 | 10) Submit BIP via turnitin | 13/04/2016 | 1 |

Conclusion

In conclusion, this research proposal is going to look at the estimated economic benefits, in the form of revenue and employment of the HS2 railway and what the impact of this will be in the long run. At this point in time, revenue has been harder to estimate as the key factor of demand is not known. Similarly, impact on employment in the long run is harder to estimate but the jobs created from the build of this project can be looked out and conclusions can be drawn. This proposal will used mixed research design. This will be in the form of analysing case studies and doing a questionnaire, giving both qualitative and quantitative data so the outcome of this research is balanced.
References
BBC News. (2014). High-speed rail's long journey [Online]. Available from: http://www.bbc.co.uk/news/uk-16473296 (Accessed 20 November 2015)
David, H. (2014). HS2 Plus: A report by David Higgins [online]. Available from: https://www.gov.uk/government/publications/hs2-plus-a-report-by-david-higgins (Accessed 14 December 2015)
Department for Transport. (2011).Economic case for HS2 [online]. Available from: assets.hs2.org.uk/sites/default/files/inserts/hs2-economic-case.pdf (Accessed 14 December 2015)
Direct Gov. (2015). High-speed Two (HS2) [online]. Available from: https://www.gov.uk/government/organisations/high-speed-two-limited (Accessed 11 November 2015)
Houses Of Parliament. (2013). Bill documents - High Speed Rail (Preparation) Act 2013 [online]. Available from: http://services.parliament.uk/bills/201314/highspeedrailpreparation/documents.html (Accessed 10 December 2015)

HS2 Ltd. (2012). HS2 cost and risk model report [online]. Available from: https://www.gov.uk/government/publications/hs2-cost-and-risk-model-report (Accessed 14 December 2015)

Louise, B. (2015). Railways HS2: Phase 1 [online]. Available from: http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN00316 (Accessed 15 November 2015)
Mike,G.(2015). HS2 and the North-South divide: The mirage of jobs and growth [Online]. Available from: https://hs2theregionalimpact.wordpress.com/ (Accessed 5 November 2015)

The National Archives. (2013). High Speed Rail (Preparation) Act 2013 [online]. Available from: http://www.legislation.gov.uk/ukpga/2013/31/contents/data.htm (Accessed 14 December 2015)

Tejvan, P. (2013). Pros and Cons of High Speed Rail HS2 [online]. Available from: http://www.economicshelp.org/blog/3088/economics/pros-and-cons-of-high-speed-rail-hs2/ (Accessed 5 November 2015)

Appendix A HS2 Questionnaire
HS2: YOUR THOUGHTS

1) How often do you use the train to commute to work? Daily Monthly Yearly 2) How do you feel about the build of HS2?
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3) Do you think HS2 will have a positive impact? Yes No
If yes, explain below
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4) What are your personal views on HS2?
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5) Do you think this project will affect you once complete? Yes No
If yes, explain how HS2 will affect you
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