Published: 15th Sep 2014
Investing in broadband improvements would have a greater impact on the UK economy than the High Speed Rail 2 (HS2) project.
This is according to Gabriel Ahlfeldt, an economic professor at the London School of Economics, who has discussed the issue with cable.co.uk.
He claimed that when the relative cost and benefits of both projects are assessed, broadband provides a more worthwhile investment.
Some £1.7 billion has been devoted to improving connectivity in the UK, while the HS2 project has been allocated close to £43 billion.
"With the investment into superfast broadband the government seems to be on more solid economic grounds," Prof Ahlfeldt said.
"There is decent evidence suggesting that the economic benefits will exceed the costs for all but the 20 per cent of most rural areas in the country.
“The case for HS2 is less clear, mainly because the costs are so large,” the economics expert added.
HS2 is not expected to be fully operational until 2026 and Prof Ahlfeldt said it could then take many years before the economic benefits of the project, which will provide faster rail services between London, Birmingham and major northern cities, are felt.
Spokesperson for HS2 Richard Pain responded to Prof Ahlfeldt's claims by telling Cable the scheme has the potential to boost the UK's economy by as much as £15 billion per year.
He claimed rail travel has doubled since the 1990s, which shows the development of new communications technology has not reduced the need for inter-city travel. Mr Pain claimed HS2 and super-fast broadband should not be seen as competitors, as it is "not a question of one or the other".
Comparisons between the amount of money being spent on HS2 and broadband have been commonplace over the past year or so, with a number of commentators saying the government should invest more in connectivity instead of rail travel.
A survey commissioned by the Institution of Engineering and Technology last year revealed 43 per cent of people thought the UK economy would benefit from better broadband, while only 16 per cent felt the same about HS2.
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