EXCLUSIVE: How the £80bn taxpayer-funded HS2 project chose Meadowhall as a destination….a Mall owned by serial tax avoider

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A doubled price tag, safety issues, engineering problems and a daft destination. HS2 remains an idea likely to overwhelmingly benefit big business. But the British taxpayer is forking out for it….and a corporate tax avoider is the big winner. The Slog investigates.

The Law approving the HS2 project was passed just over a month ago. Campaigners against HS2 said the report stage and third reading of the bill had been rushed through in less than an hour, leaving little time for amendments to be discussed and MPs to speak.

“With just 37 minutes given to debate a £56bn project, that works out at over £1.5bn per minute, rushing through spending at a phenomenal rate,” said Penny Gaines, chair of Stop HS2. Ah yes, business as usual in Britannica Democraticus.

The £56bn project is backed by both the Conservative and Labour leadership. So Labour has clearly joined the government in ignoring what most northerners want…new and faster links across the Pennines.

Several things about the project, however, already have that shambolic air one has come to associate with personal white elephants.

HS2 is now officially the EU’s biggest project. Sadly, the reason for this is a problem in and of itself: the price keeps going up.

In 2011, an ‘envelope’ was set aside by the Treasury for a cost of £42bn. We do not know whether it was a brown one…but it is filling up with smelly stuff. By 2013, Economists predicted in a major independent report that it would cost £80bn in the end. So far, their predictions are looking good: last November it was weighing in at £50bn. In the last Budget it had gone up to £55.7bn. To date, not a single inch of track has been laid. This one has Connecting for Health written all over it.

Earlier this year, serious train safety concerns emerged. In fact, they’d been around since 2012, when Camerlot commissioned (secretly) some research into derailment possibilities at 225 mph. But the findings only came to light six weeks ago. The report stated baldly that the proposed HS2 rail service speed of 225mph would ’cause significant issues with track instability.’

So the trains may well have to go, er, slower. Bit of a drawback given this is supposed to be about, um, high speed. The clue’s in the name, really.

There are also serious engineering problems that haven’t been addressed. The Sheffield destination, for example, is pencilled in by the Government as Meadowhall. That’s four miles from the city centre, whereas local business firmly believes that the obvious choice is Sheffield city centre.

Just so we’re clear about it, Meadowhall is….a shopping mall. There’s a rail service into Sheffield, but because of planning regulations there’s no taxi rank. At all. What makes Meadowhall an even odder choice is the geological problem of putting track down in the region: there’s a three-mile fault line along the route, followed by more than a mile of land sitting on a dangerous honeycomb of old mineworkings.

So why Meadowhall? Nobody seems to know. But there are clues here and there.
In 2009,the site’s original developer British Land sold a 50% stake in the Meadowhall Shopping Centre for £587.7 million….to London & Stamford Property and an unidentified partner.
In January 2013, the Meadowhall destination was announced. Perhaps not coincidentally,
six weeks ago, British Land announced a £50m refurbishment and development programme.
The CEO of British Land is Chris Grigg. Last year, he earned £6.7m in salary and bonuses. He spent twenty years at Goldman Sachs. He has been the subject of Shareholder wrath on several occasions about his ‘excessive’ pay and shares package.
But it’s hard to fault BL’s profit performance; in fact, one might even call it obscenely outstanding.
Its average gross margin over the last five years has been 83.5% (well over twice the sector average) and its net profit margin is an eye-popping 248%…seven times the sector average.
How do they do it? Take a look at the tax rates they’ve been paying:
BLtaxrates

Nice work if you can get it: last year the company paid under 1% in tax; and since the Conervatives came to power, British Land has not paid any tax at all. As such.

So to sum up, HS2 is an investment likely to cost you and me, in the end, around eighty billion quid. Given it’s rationale is commercial travel and speed of doing business, we the lucky average 19% taxpayers are subsidising the corporate sector…whose most obvious and near universal feature is tax avoidance. Whereas local Sheffield business wants the train to end in the city centre (and thus benefit employers there, while creating jobs) the Government has opted for Meadowhall – a geologically tricky region that’s a nightmare for engineers – where the owners of the site pay so little tax, their net margin is actually higher than the gross.

My question is simple, really: why are we underwriting this?

British Land – which stands to benefit enormously from being the chosen HS2 destination – invests in capex at exactly 23% of the rate of the rest of the industry. Why have they – serial tax avoiders – been chosen to benefit, given the current climate regarding tax dodges?

This is Osborne’s “tough crackdown” on tax avoidance in his own Sovereign territory. It’s a sick joke.

And as usual, Labour just goes along with it.

Yesterday at The Slog: cue The Queue

24 thoughts on “EXCLUSIVE: How the £80bn taxpayer-funded HS2 project chose Meadowhall as a destination….a Mall owned by serial tax avoider

  1. Why do you pay tax. I do not pay tax. I don’t avoid it. I evade it like I would evade an suppurating HIV and ebola victim.

    To do anything other to me is the height of rank stupidity, given the incontrovertible facts that taxes are there to replenish criminal bankers, corrupt politicians and thieving parasitic bureaucrats troughs and to buy the votes of the stupid lazy and otherwise useless dregs not just in the UK but shower largess to the most evil dictatorial regimes on the planet to plunder at will and finally to to wage global war on Ukrainians Libyans Syrians etc etc to keep the MIC in Washington rolling in fat.

    Now given that why would anyone not evade taxes to the very best of their ability.
    Avoidance is a total utter waste of time, all that dos is leave a 10 ft deep paper trail behind you.
    Tax evasion on the other hand leaves no trail, no fingerprints and no evidence if you understand how to do it correctly.

    Then the real benefits come home, You keep more of your earned labor, and the gangsters get less, and if enough people got smart enough, then these discussions would never take place as there would never be the money to start it in the first place.

    Like most people in life I have others like family friends and those I care about to look after too. HS2 is so far down the list there are cockroaches living in my garden rank higher

    Liked by 4 people

  2. But if the line went through Sheffield city centre it would be even more expensive. It is standard practice to have high-speed lines stopping outside city centres – as you will know from your own TGV line through France.
    And I’m not clear why a new railway line that will doubtless be used by millions of people a year is a ‘white elephant’.
    Or is the truth actually that the campaign against is being led by other interests who want the billions instead and don’t want any more money than necessary being used to help the British public?

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  3. Meadowhall is the site of previously dense heavy industry.
    It enjoyed excellent rail links to serve those industries, including the depot and transfer yard at Tinsley, close by Meadowhall.
    So it doesn’t seem unreasonable that HS2 would wind its’ way there.
    The industry is long gone and the real estate snapped up by those that had the means and “foresight”.
    Geological concerns are there to be overcome.
    The key word here I believe is “foresight” and how that is defined in the English Politicians Concise Dictionary.

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  4. This says to me that HS2 is to the UK, what submarines and graft were to Greece.
    A project worth scuppering through Brexit and then re-adopting once the money grubbing bankers have been separated from their hold of the country’s throat.

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  5. Back in the days of my youth (70’s), I could run down to London and back in 5hours 10 mins on the newly electrified west coast route pulled by the great class 87 loco for a fiver. In the 80’s the base model for the Pendolino the APT did it in less than 4 hours. Over the next few years 10 billion was spent upgrading the line to get the time down , but all to no avail we are at 4hr 33 as the best time daily. Just beware of Governments promising you fast train times, usually they get cold feet and cut costs and waste the whole project , like the west coast upgrade. The only exception is if our leaders want a dirty weekend in Paris , then the job is done properly, the only chance Manchester has of getting a 225mph train is if it changes it’s name to Paris.

    Liked by 3 people

  6. High-speed drains are a wondrously efficient means of separating the effluent from the affluent, to the eternal gratitude of the latter. Stage-managed by a corrupt political elite, including a man conceived through trickery and born from a tree, in league with their bankrolling partners, what could possibly go wrong? The politics of distraction are writ large here, as is the potential to turn rolling stock into a laughing stock. Really, it isn’t funny.

    Liked by 1 person

  7. So taxpayers are helping to fund some corporate fraudster’s activities, eh?

    Now you can see why Britain was the testbed for TTIP in Europe… it seems that all is going to plan.

    Liked by 2 people

  8. RouterAl: Ah I “classed” my 87s after fastidiously standing on Crewe station noting down the numbers. I remember seeing an APT at Crewe Works Open Day – didn’t they swing to one side like a sicky ship?

    Yes I am that sad. And I did like Class 40s, even Class 55 Deltics.

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  9. @ peter c. Graft associated with submarines can also be found closer to home than Greece surely? Or maybe the saga of type 45 destroyer motors will do.
    @ j stocks. Napier Deltic engines miraculous things though surely better in minesweepers etc. Napier Sabre / Nomad. Think Napier eventually disappeared in wreckage of Gec/Gec Marconi / Bae murkiness.

    Liked by 1 person

  10. The H2S white elephant is just another means by Cameron and his sidekick Osborne, of shovelling public money to his banking friends and land speculators.
    Cameron and Osbornes’ bribe/repayment will be in the form of well remunerated Directorships in the City Banks on their retirement from politics.
    Just delayed graft and bribery.
    Nothing new here as the looting of the public purse continues under the Tory Govt.

    Liked by 3 people

  11. Router Al

    I did suggest a bit of ‘carriage segmentation’ for HS2 to include ‘super first class’ ‘King Size Shagpiles’ designed for the rich politicians to have a dirty return train journey to Manchester and back in the company of their wife/mistress/hooker/Rebekah Brooks/insert name as necessary. Basically, anyone who will fork out £1000 for the time of a high class London ‘escort’ plus whatever HS2 decide to charge them for the carriage (probably another £250 – 500 for a 2.5hr return journey). With 6 to 8 round trips a day per train, if you got sell-out bookings you could make a tidy profit…I’m sure the PFA and the investment bankers could set up a website together for bookings…..

    I did also suggest having the odd ‘third class carriage’ for ‘the great unwashed’ where they could travel without seats or tables sat with their rucsac/small wheelie-case for some suitably small fee, packed in like sardines. You know, so poor working class boys from London or Manchester could go to London or Manchester for Uni and still go home and see mum and dad several times a year. Oh, and dope-smoking back packers could travel Europe for a song so they could spend whatever dosh they had on a stash of hash rather than expensive train tickets. Carriages could be kitted out to the lowest specs imaginable as it would be de rigeur not to require facilities on a 1hr journey.

    Then I suggested ‘family carriages’ designed for children to make a racket in without adults/business-folk being driven close to insanity to appease the family caucus.

    Then I suggested a few carriages with small rooms for business meetings, as well as your standard 1st class, business class and second class with carriages with standard tables etc.

    No doubt lots of better ideas on these lines could be proposed, but bums on seats is the only justification for railways – finding the appropriate segmentation patterns is what it is all about.

    As for why not a bit of track has yet been laid, it’s called ‘the British Planning System’ allied to the realities of how you actually build a railway line. The whole of the SE of England has been up in arms about this one, causing delays for years and years and of course with a project like this there are huge amounts of surveying to do, designs to check and recheck, modify upon appeal etc etc. NW London has just commissioned work which apparently shows that you can tunnel from Euston to outside the M25 for no greater cost than having the line causing ‘blight’, noise pollution etc etc with the overground proposal. Then you have to flatten all the land, do all the cuttings, build all the tunnels, all the other ground works necessary before you actually lay down any tracks. That bit will take very little time at all.

    As for ‘where to put stations, well it partially depends on where’s most convenient for users. In London they are having Euston (for reasons I can’t fathom) as the terminus station and a ‘London Parkway’ station at Old Oak Common, mainly as a link to Crossrail but also because a huge regeneration project can take place there with new business premises, huge housing developments etc etc. Birmingham’s ‘Parkway station’ is at the NEC/Birmingham airport, nicely on the M42, then on to Crewe (where the current station is), Manchester Airport for connectivity and then tunnelling into a terminus at Piccadilly (which should logically be tunnelled right under the city to ensure you can continue on up to Scotland at some stage, but isn’t being). The Eastern fork is less logical, with Toton for the East Midlands being rather in the middle of nowhere, Sheffield not being in the City Centre and the Leeds Terminus not initially being particularly close to the mainline station in Leeds (which is hardly great for connectivity with all the rest of the West Yorkshire conurbation). Birmingham’s terminus is also well away from New Street, but again you kind of suspect that developers will do well out of it. Quite a few northern groupings are trying to make the station locations more economically cogent…..see http://www.greengauge21.net/blog/getting-the-right-strategic-choice-for-hs2-in-sheffield/ for a recent discussion about this from some railway industry professionals…..on a website which has many interesting discussions about HSR and more conventional rail projects also….

    Where the price tag is concerned, David Higgins, head honcho of the project, has been at pains to highlight the cost of delay, which no-one in the South East cares about as they won’t benefit from it, just as 95% of the country won’t benefit from Crossrail I or II. But that’s different, because the SE population are superior beings…….they are getting Crossrail II already and the airports developments will benefit the SE users without considering whether the rest of the country needs good access to a single point of departure for many international destinations. Oh but the general populace could understand that some projects don’t benefit them but benefit others………and that Londoners would acknowledge that the national infrastructure budgets have been rigged for decades to favour them at the expense of everyone in the North of England.

    I’ve never seen any cogent argument as to why HS2 was not designed to go to St Pancras looping round the southern arm of the M25 with stations at Heathrow, Gatwick before having loops on to HS1 to go to Paris or London near Ebbsfleet. The cost would have been hugely less than tunnelling into Euston and would be entirely connected to the wider HSR network. Presumably the odd property developer wouldn’t have made the odd billion?? And the current design has no ability for HS2 services to continue onto HS1, which is nonsense of the first degree, being deliberately designed in by Londoners to retain a competitive advantage over the rest of the country., which has always been their aim from start to finish.

    Liked by 1 person

  12. What I’d like to know would be the cost of a ticket. Nobody will tell you this.Suspect beyond my means, the project is so costly.I don’t believe the project can be in any way financially viable.

    Liked by 2 people

  13. @H ARMITAGE

    I think a trip on this shiny new turd will only make sense, both financially and in any time saving capacity, if you get it from somewhere far away, like Paris, or Brussels.

    WTF is going to get it from New Street ie the Bullring shopping centre, to Meadowhall?

    It would be like you never moved.

    Liked by 2 people

  14. If I recall correctly J Corbyn did moot the idea that upgraded cross pennine scheme should take precedence over crossrail 2 ? Sadiq K wasn’t amused.
    Of course any infrastructure upgrade is primarily a pretext for “regeneration” viz Land Securities’ antics around London Victoria Stn.

    Liked by 1 person

  15. This is probably where The Pensions of we 1950s women have gone….and whilst this piece of Rampant Insanity continues, we’re living in Penury, spiralling into HELL…Osborne is insane, in my view..and this poxy, evil, vile, brutal regime, DARING to call itself a democratic government, should be left in the hands of The Descendants of Guy Fawkes! A POX upon them ALL!

    Liked by 1 person

  16. Just one example of why a supposedly small state party cannot reduce government spending – because it needs to repay its sponsors. Other examples include MoD spending, rent rebates and the pensions crisis being created by ZIRP.

    Liked by 1 person

  17. And another thing, why oh why will HS2 not be connected to HS1 so that you can get a high speed train from Shefield to Paris without having to walk between two stations in the middle? London isn’t always the start or finish of every journey.

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  18. Land owners/developers/banksters and shysters will all benefit if they have properties sited along the route of H2S especially if close to stations or termini. Yet this will be funded by we taxpayers most of whom will not be able to afford a ticket to ride.
    This is why Land Value Tax should be introduced as land cannot be hidden away in offshore tax havens. Thus any increase in Land Value due to public investment can be recouped for the common weal. I believe Winston Churchill had something to say on this matter.

    Liked by 2 people

  19. Anyone know if you can get a plane to London from anywhere at the northern end of the proposed route ? And if so how much slower it would be than the train ???

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  20. HS2 is one of the few policies that tries to address the imbalances in the UK’s land values. In effect it will extend London’s commuter belt. Any property within reasonable distance will see a rise in it’s land value. (This is exactly what happened to properties near the Jubilee line extension). Thus, it is a good thing for many ordinary people, a good thing for the towns and cities along its route.

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