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HS2 and long distance commuting

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Whatever former Network Rail chairman (and current HS2 Ltd boss) David Higgins may think, building high speed rail to Manchester and Leeds is not a way to ‘save’ the metropolitan green belt. Very few people would be willing or able to do such long commutes, and the resulting increase in the size of the London labour market would not be noticeable.

Commuting around London (2011), ONS

In its report Building Homes Where We Need Them the Centre for Cities — whose funders include Network Rail and the Department for Transport — is openly advocating building on the green belt in the south of England.

The Centre for Cities advocates building on the green belt

The Centre for Cities advocates building on the green belt

[‘Building Homes Where We Need Them’, Edward Clarke, Nada Nohrová & Elli Thomas, Centre for Cities, Oct 31, 2014]

Expensive housing makes it difficult for businesses to set up and trade from the most successful cities and makes it more challenging for firms to access the workforce they need. Therefore workers find it harder to find the jobs that best match their skills. The London Chamber of Commerce now highlights housing costs as the biggest threat to economic competitiveness.

More than half of London businesses say the cost of and access to housing is impairing recruitment, particularly for entry level roles (this is also the case in Bristol and Oxford).

Housing costs also affect the amount of money people have to spend in those cities. Businesses must pay higher wages to keep their workers, reflecting their cost of living. For individuals, even though incomes may be higher in those cities, those who can afford to live there are forced to spend a much larger amount of that income on housing, rather than in local restaurants, shops or services.

In contrast, areas which allow for more house-building – like Milton Keynes – have lower living costs, which frees up more income for expenditure on things other than housing.

A worker in Milton Keynes earns on average £28,600 whilst the average house price is £209,600. While a worker in London earns a significantly higher average wage, £33,000, the average cost of a house is more than double, £458,400.

Therefore a Londoner moving to Milton Keynes will – despite taking a 14 per cent pay cut – likely enjoy a higher disposable income.

[“Changing direction”, The Economist, Oct 28th 2014]

[…] if British politicians are to think strategically about the railway network as a whole, and where investment is most needed in pure transport terms, they will also need to think about where most people will be travelling in the next 20 years or so. As Tony Travers, an academic at the London School of Economics, points out, this will be in London and the south-east, where the population is expected to increase by 2.28m, to 25.22m, by 2022. In contrast, population growth in the North is predicted to be a mere 600,000 people.

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Written by beleben

November 1, 2014 at 9:37 am

Posted in High speed rail, HS2

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