Heseltine: establish development corporations to cut HS2 costs

The government should 'immediately' establish urban development corporations in areas earmarked for stations for the proposed High Speed Two (HS2) rail link in order to cut the costs of the project, former deputy prime minister Lord Heseltine is due to say in a speech in which he will fiercely defend the controversial scheme.

Lord Heseltine
Lord Heseltine

In the annual Royal Town Planning Institute Nathaniel Lichfield Lecture due to be delivered tonight, Heseltine will draw parallels with his experiences in the regeneration of London’s Docklands in the late 1970s.

He will say: "I start where my interest in regeneration began all those years ago in 1979. I was staring at 6,000 acres of derelict land. London’s former docklands. I had a plan for regeneration.

"My senior cabinet colleagues, the permanent secretary of my department, and all the leaders of the London boroughs involved were opposed. I appealed over their heads to the Prime Minister who backed me".

Heseltine will say that if he had predicted the scale of the economic "renaissance" of east London flowing from developments such as Canary Wharf he would have been "carried off by men in white coats".

He will say that in order for the Docklands regeneration to happen, he had "faced down very similar arguments used against HS2 today".

"They gave me a Docklands Light Railway – a toy town railway - in 1981. It fitted the penny pinching approach that characterises so much of Britain’s attitude to long term competitiveness and infrastructure," he will say.

Heseltine will say that HS2 is about "so many more people sharing growth that has, for too long, been concentrated on London and the South East. It’s all about drawing together our economy as a whole as well as improving our access to the enlarged, and enlarging, home market of Europe".

On completion of the project, two-thirds of the population of northern England will be within two hours of London, Heseltine will say, but the scheme will also be needed to meet growing capacity problems on the rail network. "Any responsible judgement must urge government to act now", he will say.

With regards to financing, Heseltine will say that costs on the public purse can be brought down by private sector involvement.

"What possible case is there for the public purse to carry the cost of the stations? The property development involved can only be imagined by a quick glance at today’s Kings Cross and St Pancras, with plans for 35,000 jobs and nearly 2,000 new homes

"The government should immediately declare urban development corporations in the appropriate areas thus not only capturing the planning gain for the taxpayer in order to further reduce the cost but also to transfer the costs of stations to the private sector".

Heseltine will say that costs need to be kept down "but we must also consider carefully the cost of not acting. The cost of dither, doubt and delay. The cost of standing still while our competitors move ahead.

"If we hadn't built Canary Wharf, how many of the jobs there would be in Frankfurt instead? I find it incredible that we are solemnly judging HS2 without any calculation of the potential investment that might flow as a consequence of its construction. And with no fear of how that investment would flow elsewhere if we were to lose our nerve and abandon it. But that is the basis on which the debate is being consulted".

He will conclude: "Not many of those in power to make decisions will be around to judge the world of the HS2 but others of younger generations will judge us. Will they look around and praise our vision, the investment we made, the competitiveness they intended or will they make a harsher, less charitable judgement. Are we the generation that slipped behind and let it happen?".

Lord Heseltine is chairman of the board of Haymarket Media Group which publishes Planning magazine.

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