High-speed rail link will cost Westcountry 50,000 jobs

The South West will lose almost 50,000 jobs as a result of the Government's proposed £32 billion high-speed rail link between London and the North, campaigners claim.

A House of Commons inquiry yesterday heard how plans for 250mph trains to Birmingham, Leeds and Manchester "ignore" the Westcountry.

A dossier submitted to the powerful Transport Select Committee, a cross-party group of MPs, states there will be 48,000 fewer jobs in the greater South West by 2040 if ministers go ahead with the proposal.

The figure, calculated by accountancy giant KMPG, underlines fears that the Westcountry's economy will suffer at the expense of an increase in jobs elsewhere in the country.

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In the evidence session, Exeter-based airline Flybe, one of the biggest private sector employers in the far South West, also hit out at the so-called HS2 scheme.

While backing state investment in transport, the carrier said the controversial plans were a "further example of London being put before the rest of the country".

The KMPG figures, used in evidence put forward by a group of disgruntled Welsh business leaders, who will also lose out under the HS2 plans, show how other regions will reap huge benefits. They indicate 49,000 jobs will be created in Yorkshire and the Humber by 2040.

Mark Barry, of the Cardiff Business Partnership, told MPs yesterday the negative impact on the South West and Wales was the "elephant in the room".

"We are uncomfortable with the narrowness of the Government approach," he said, adding that the massive investment in rail was a "missed opportunity".

HS2 has been hailed by David Cameron as central to "re-balancing" the British economy by creating jobs outside of London.

The Department for Transport estimates the first phase of the scheme – shaving 20 minutes off the journey time from the capital to Birmingham – will create more than 40,000 jobs.

The Government argues HS2, which could be operational from 2025, would improve travel in a way unmatched since the building of motorways in the 1960s and 1970s.

But a little-heralded study carried out by rail consultants Greengauge 21 and KPMG last year pointed to huge disparities in terms of benefits.

It claims that, without the HS2 investment, there would be 2.937 million jobs in the greater South West by 2040, an increase of 700,000 from 2007.

But if the £32 billion splurge presses ahead, there would be just 2.889 million jobs in the region by the same time – 48,000 fewer than if the high-speed connection did not happen.

The report also suggests wages would fall in the South West.

By contrast, the North East, North West, Scotland, West Midlands, and Yorkshire and the Humber would witness a surge in new jobs.

Appearing before the committee, Flybe's Niall Duffy told MPs: "Our fear as the biggest domestic airline is that the economic benefit may not be enough to justify tens of billions of pounds being directed at the South East."

Exeter City Council has previously warned of unintended economic "imbalances".

Liberal Democrat MP for Torbay Adrian Sanders said: "It's an enormous sum of money pumped into creating a bigger divide between the Westcountry and the rest of the country. Only a fraction of that investment would enable us to compete on a more level playing field."