On that HS2 subject again

There is a certain logical puzzle to these twin announcements:

The Telegraph revealed this month that senior rail industry figures believe that despite recent strike action, 97pc of travellers are back on the rails compared with 2019. But they are travelling less frequently and less during peak hours.

This means the post-pandemic propensity for people to work from home has blown a £2bn hole in rail industry finances – a shortfall that falls on taxpayers due to the end of franchising.

A spokesman for the Department for Transport said: “We will not be increasing fares as much as the July RPI figure and we are further delaying the increase to March 2023, freezing fares for passengers for the entirety of January and February.”

Consumer habits are changing, this is reducing the call on capacity of the railways. The finances of the railways depend, heavily, upon capacity utilisation - vast fixed costs and low variable costs will do that. So, the real price of rail travel must be reduced in order to increase capacity utilisation.

Whether we like this or not isn’t the point, we’re fine with it as a piece of logic. But this is accompanied by this:

Jeremy Hunt on Wednesday night committed to building the HS2 rail link between London and Manchester despite calls for it to be scrapped to help balance the books.

That is actually the next sentence of the report. We can grasp the logic being used here. Capacity utilisation is so high that a further £100 billion must be sprayed over the countryside in order to increase that capacity.

Whether we like this or not isn’t the point, we’re fine with it as a piece of logic.

Where our confusion appears is that politics seems to be insisting that both are true at the same time. Capacity utilisation is so low that prices must be reduced. And also that capacity utilisation is so high that capacity must be expanded. It’s true that we do have a new Queen (Consort) but that impossible combination is something we find difficult to choke down before breakfast.

It’s been said over the decades that we here at the ASI don’t understand political reality. To which our stock answer has long been but it’s politics that seems to have the problem with reality.

We must expand railway capacity because railway capacity is being underutilized. Alice and her drugs have nothing on that as logical proposition.