6 January 2020

We’re asking the wrong questions about the HS2 billions

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The figures used to justify HS2 were “fiddled” and that the project is most unlikely to deliver value for money – that’s the verdict of Lord Berkeley, the deputy chairman of the recent review into the project. He’s right of course and not solely because he’s repeating what I argued more than a year ago.

HS2 will make the country worse off and should be stopped as soon as possible. The government can mourn the money wasted and go off and do something else. Some suggest the HS2 money should be taken and spent on northern railways. Or as Lord Berkeley himself would prefer, on commuter lines in the Midlands.

But those offering these suggestions are making a very fundamental mistake: the real question is not which project most deserves this slab of funding, but whether the state should be spending this money at all.

This is not to say government should not be involved in funding any big infrastructure – everyone except the most hardcore anarchists accepts that state involvement in the economy is sometimes appropriate. But when it does intervene, it ought to be because there is an ironcast case for the betterment of the general population. That’s equally true whether we are talking about taxing to spend money now, or borrowing on the assumption that future benefits will pay back the debt incurred.

So, where does this leave the HS2 money? At some point it was decided that spending £30 billion, £50 billion, £80 billion or now as much as £110 billion on some nice choo-choos was an idea that justified taxing the public. Now it’s clear and obvious that it isn’t. Deciding afterwards that the government must spend all those billions on something else transport-related is missing the point entirely.

Instead, we should go back to the original justification for any taxation – why should the state be taking money out of people’s pockets in the first place? What is it that justifies the plundering of private resources? The fact one project might have justified higher taxes or borrowing does not mean some similar project necessarily does.

Once this correct stance is adopted then the discussion over what to do with the HS2 piggy bank becomes obvious. Instead of a frantic scramble to get it spent on this or that pet scheme simply don’t raise the funds for it in the first place. Instead, any and every project which requires the distribution of taxpayer funds must meet that one and vital test that justifies the very existence of taxation itself. Does this, this specific and exact, use of the money justify depriving individuals of their own desired use of their own resources?

Of course, that will mean rather less public spending than the ‘tithe up the peasantry’ attitude, but that’s rather the point of it. Government isn’t entitled to some pre-set portion of our efforts, it’s just a tool to handle the bits that voluntary cooperation doesn’t quite manage.

If HS2 doesn’t work then it is not correct to ask what else the money should be spent on, instead it’s to ask why the hell government has the cash in the first place. The same is true of absolutely everything that government does. Not what else should it be doing, or doing instead, but why is the state getting involved in the first place?

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Tim Worstall works for the Continental Telegraph and the Adam Smith Institute