The towns en route still need a service, you know. It's that kind of thinking that led to the disastrous network we have now, where duplicate routes were closed with no thought for the people living in the towns actually on the routes.
Quite.
We'd be replacing a double track main line plus a single track secondary route with one double track route only. A pretty undesireable outcome in terms of capacity and resilience !
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As for Tavistock-Okehampton, I think the £500m-£700m price is for a mainline-standard route along the whole length from Exeter to Plymouth; building to branch-line standards would be much cheaper and provide almost all the benefits to locals of a full rebuild - but would not provide capacity or speed for express services. The only train I could see using the North Devon route in the case of a more typical (2-3 day) closure would be the Night Riviera. You'd be looking at coaches from Exeter for everything else anyway.
I suspect the £500 - £700 price has probably been plucked out of the air by Cllr Evans, much like his vision of the Okehampton route as some sort of "heritage line" (presumably complete with santa specials etc).
There's no reason why a single track secondary route couldn't carry diversions. They do via Yeovil.