Explain two possible external benefits of HS2.

External benefits are positive spillover effects on third parties. Two possible external benefits of HS2 are: 1. Reduced road congestion. By providing a fast and efficient alternative to driving, HS2 could encourage people to switch from using cars to using the train, especially for long-distance journeys between major cities. This would lead to fewer cars on motorways like the M1 and M6. The external benefit is enjoyed by the remaining road users (third parties), who would experience less traffic, faster journey times, and potentially fewer accidents. This benefit is not captured in the ticket price paid by the train passenger. 2. Economic regeneration in areas around new stations. The construction of new HS2 stations in cities like Birmingham and Manchester can act as a catalyst for wider urban regeneration. This can attract new businesses, shops, and hotels to the area, creating jobs and improving the local environment. The benefits of this regeneration are enjoyed by local residents and businesses (third parties), not just the HS2 company or its passengers. This can lead to an increase in property values and local economic growth.