Paxo stuffing, part 7

(… continued from Paxo stuffing, part 6, posted on 5 Jul 2015).

My discussion of the letter sent by Sir David Higgins to the Financial Times has reached the sixth sentence.

Sir David says:

“That is why HSBC is moving its UK headquarters to Birmingham by 2018 and why, elected, local authority leaders across the Midlands and the North, as well as an overwhelming majority of MPs support the scheme.”

I say:

Attributing the decision to move the headquarters of the UK retail banking division of HSBC to Birmingham as having been taken because of the improved transport link to London that HS2 will provide is a total distortion of the facts of the case as I have been able to determine them. I have read a number of newspaper articles reporting on the decision and none of them refer to HS2 having been a factor.

The plain facts behind the decision, as I have gleaned them from these articles, are:

  • HSBC’s decision to move some of its activities was stimulated by the legal requirement to ring-fence its retail, banking business by 2019.
  • The bank has historic links with Birmingham, as its retail arm is descended from the Birmingham and Midland Bank, founded in 1836.
  • The bank already has 2,500 employees based in Birmingham.
  • Birmingham is a location that is more centrally positioned than London, making it a more convenient point from which to control a nationally-distributed retail operation.
  • HSBC already has headquarters located outside of London, for First Direct (Leeds) and M&S Bank (Chester).
  • Greater Birmingham is the UK’s leading centre for financial services outside London, with more than 21,000 companies employing some 220,000 people in the region.

There is also the minor detail that the move is set to be completed by January 2018, at least eight years before HS2 is scheduled to be serving Birmingham.

With his claim about the support for HS2 from local authority leaders across the Midlands and the North we have at last reached an assertion for which Sir David can claim reasonable substantiation. Two metropolitan council leaders in particular, representing Birmingham and Manchester, have given almost fervent backing to the project. I don’t find this at all surprising however; after all, what council leader worth his salt would turn down investment in transport infrastructure serving his city? The prospect of significantly reduced travel times to London, and a few other cities, is also undeniably an appealing one.

Regular readers of my blogs will expect, however, that I am not given to making admissions of this kind without expressing the odd caveat, or two. In this case my work has been done for me by Frank Dobson in what I believe was his last speech in a Commons debate on HS2 before he retired his Holborn and St Pancras seat (see footnote 1):

“… if that £50 billion [cost for HS2] were split between those cities, giving them £10 billion each, and the people of, say, Manchester and Sheffield were asked in a referendum what they would do with their £10 billion, the chances are that they would not say that the first thing they needed to do was to club together for a high-speed railway. That would be pretty unlikely.”

I suspect that even the council leaders most strongly in favour of HS2 would find the cash a tempting option, although of course the offer of cash instead of HS2 is not one that would ever be made.

I also have to concede that Sir David is right about the position of MPs, at least as far as the voting figures on Second Reading of the Phase 1 hybrid Bill bear testament. The Ayes definitely had it on that occasion, 452 MPs supporting Second Reading and 41 voting against. However, the Noes vote achieved was significant in view of the three-line whip imposed by both government parties and the main opposition one.

It is a sad fact of the way that our democracy is organised that for an MP not actively involved in a debate – and for most debates only a small proportion do get involved – voting with the whip requires no real contribution from the cerebral cortex. The legs are the chief bodily parts that come into play; they carry the Member from whatever part of the Westminster estate he or she is in to the voting lobby that has been indicated by his or her whip. After voting, the Member will generally return to previous business without much thought for what he or she has just done; it is not even really necessary for the Member to know anything about the matter on which he or she has just cast their vote, or even what the question was.

Sir David also needs to reflect that things can change dramatically in politics. We have a new House of Commons with many new Members, a new leader of the Labour Party will be elected in the autumn, and the opportunity cost of HS2 has been brought in sharp focus at the start of this parliamentary session by the publishing of the MPA reports on HS2 and the announcement of the “pausing” of modernisation projects planned for Network Rail. The House of Commons Library, usually a shrewd judge of the parliamentary temperature, has issued words of warning for those who might regard HS2 as a “done deal” (see footnote 2):

“Despite the cross-party support, further cost increases might yet tempt the Government into writing-off spending to date and cancelling HS2.”

What Sir David neglects to mention in his letter is that those forming the most important body of opinion, the citizens who will ultimately have to pick up the tab, are far from convinced that they want HS2. A poll carried out just before the general election, commissioned from ComRes by the AGAHST federation of action groups, reveals that support for HS2 is 25 per cent and those against amount to 35 per cent. The proportion of those opposing rises to 42 per cent, however, when respondents are reminded of the £50 billion price tag for HS2.

More significantly, the ComRes poll shows that support for HS2 would fall markedly if the cost increases; support falls to 7 per cent, and opposition to 61 per cent, at £100 billion. Also only 1 per cent of those polled by ComRes placed HS2 as their top priority for government spending and 7 per cent put it in their top four priorities. 43 per cent ranked HS2 as the lowest spending priority of ten options tested.

(To be concluded …)

Footnotes:

  1. See column 496 of the House of Commons Official Report for Friday 23rdJanuary 2015.
  2. See page 167 of the Library’s publication Key issues for the 2015 Parliament.
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