Also, HS2 will decrease fares
For those who think otherwise, here's some justification for this being the case:
More seats per driver (see my previous post about how a 9 coach plus an 11 coach 390 have nearly the same number of seats combined as the HS2 trains).
Even if you were to have two guards per service this wouldn't increase your costs, however it's unlikely to be justified as the stations will be gated.
Likewise you could increase catering staff, but chances are you could have 3 on board (1 dedicated to first class, 1 to standard class and 1 to provide support to the other two). However that's still less than the 4 on the existing two services.
By reducing journey times that means that you need fewer staff to run the same number of diagrams, as rather than it taking 4 hours of traveling time to do London/Manchester it's now 2 hours (simplistically). That's not going to allow staff to run double the services, but easily 50% more. As such you've further cut the cost per passenger over the existing.
Then there's the rolling stock, by reducing journey times each train can do London Manchester, back and be ready to go again faster. This did from the current ~5 hours to do this to ~3 hours. Now this is where it isn't so straight forward as the HS2 trains are likely to have 16 coaches (25m) compared to the existing 9 or 11 coaches of the 390's.
Therefore we need to do a bit of maths. Currently 3tph running a mixture of 9+11 coach units. However for simplicity we'll go for 9+9+11. That's 29 coaches an hour, we need them to run for 5 hours before they can start over again, so that's 145 coaches.
HS2 is 16 coaches for each train, so that's 48 an hour, we need them to run for 3 hours before they can start over again, so that's 144 coaches.
Therefore we basically need the same number of coaches as we do currently, even though the trains will be longer. As such the cost of the rolling stock won't be any more than currently. However on a per passenger basis it will be lower, as each coach will be used on more services per day than currently the costs will be spread over more people.
That then means that the running costs per passenger are quite a bit lower, allowing tickets to be sold more cheaply for that element of the ticket.
Now before anyone gets excited about the big build costs, in going to cover that too. HS2 is expecting to carry 100 million passengers per year. Let's say it's going to cost £100 billion, that means that the cost per passenger in the first year is £1,000.
However HS2 isn't a scheme which will be of use for 1 year and so that cost can be spread over more people as it's going to last for a number of years.
When it's spread over 60 years the cost is £16.66 for each passenger movement (so £33.33 for a return ticket). However if you did this over a longer timeframe the costs come down.
Now clearly for someone doing London to Birmingham that's a lot compared to existing tickets, whilst for someone doing London Scotland that's hardly anything.
As such the cost would need to be spread out more on a cost per mile traveled.
Yet even that is only part of the story. Given that this is government spending they can get some of the money back through other sources.
One such source is tax receipts. If we assume that a driver will be paid £75,000 a year then they will be paying £17,500 in tax. If there's 100 drivers (just a random number with no science behind it) for HS2 services over a 60 year period that's £100 million in taxes.
However that's just for 1 job and doesn't include the extra value that pay adds to the economy when it is spent. In that those 100 drivers will then need to eat, be housed, have hair cuts, have holidays, undertake hobbies and generally be a fairly normal member of society. All that spending will pay other people who in turn will be taxed who will then spend money and so on.
That's before you consider that during construction all those workers and construction companies will be paying taxes and so directly paying back money which they've been paid to build HS2 and therefore reducing the true cash cost of HS2.