China builds ‘bullets’, Britain fires blanks

This is my comment from this week’s Fund Strategy.

Headlines about a proposed high-speed rail network linking London and Scotland tell a tale of ambitious investment in transport infrastructure. The details tell a different story.

It is hard not to get excited about a train that would travel at 250 miles per hour and link Britain’s main cities. At £30 billion it also sounds like a huge project.

But hold on. Construction will not start until 2017 and the first stage, linking London and Birmingham, will not be completed until 2026. A drawn-out consultation process, environmentalist opposition and changes of government could push it even further back or block it entirely.

It is also worth remembering that the rail scheme is being promoted as an alternative to travel by air or car. Rail is the government’s favoured form of transport apart from perhaps cycling. It has invested little in road building, while Heathrow’s third runway is likely to take years to build if it happens at all. The government also refused to commit itself to building a station at Heathrow as part of the high-speed rail scheme.

So the government has a poor record of building infrastructure, while its plans, even assuming they are implemented, will take many years to complete.

Compare this with a country that has genuine ambition in its infrastructure programme: China. The Asian giant–which it should be remembered is much poorer than Britain–already has the world’s fastest bullet train by average speed. It covers the 664 miles from Guangzhou to Wuhan – further than from Land’s End to John O’Groats – in about three hours. It is planning to extend its high-speed railway network to up to 17 countries within 10-15 years. Eventually it would like to link London to Singapore by rail. While Britain is proposing spending tens of billions of dollars, the Chinese are spending hundreds of billions.

Critics may claim that China’s lack of democracy makes it easier to implement large-scale projects. This is a strange criticism when Britain’s plans were announced by Lord Adonis, Britain’s transport minister, who is as unelected as any Chinese mandarin.