The news that the construction of certain sections of HS2 will be delayed to save money has been described as "potentially a real body blow for the UK’s economic recovery".
The BBC first reported that the government's cuts will primarily affect the high-speed railway between Birmingham and Crewe, and between Crewe and Manchester.
Phase One of HS2 involves the railway being built between London and Birmingham, with the line extended from the West Midlands to Crewe in Phase 2a.
READ MORE: Click here to sign up to the BusinessLive North West newsletter
Phase 2b will connect both Crewe to Manchester and the West Midlands to the East Midlands.
Transport Secretary Mark Harper later confirmed that construction of HS2 between Birmingham and Crewe will be delayed by two years.
In a written ministerial statement, he said: “The government is committed to delivering HS2 Phase 2a between Birmingham and Crewe.
“We have seen significant inflationary pressure and increased project costs, and so we will rephase construction by two years, with an aim to deliver high-speed services to Crewe and the north west as soon as possible after accounting for the delay in construction.”
Stephen Marcos Jones, CEO of the Association for Consultancy and Engineering (ACE), said: "Today’s news on HS2 is potentially a real body blow for the UK’s economic recovery. I think every sensible person knows that global events have driven inflationary pressures to record highs.
"But we have already spent significant sums on the design and delivery of this transformational major project. Scaling back ambitions at this stage will mean the economic and social benefits of HS2 for communities across the UK is further watered down – and major delays like this are actually going to cost more in the longer term.
"In a nutshell, the delays announced today are, quite simply, an absolutely false economy."
In October last year, Transport Secretary Mark Harper said the forecast for when HS2’s phases would be complete remained within planned ranges.
That involved Phase One – connecting London with Birmingham – opening between 2029 and 2033.
Services will initially start and end at Old Oak Common, west London, due to delays at Euston.
Mr Harper said Phase 2a – extending the line from Birmingham to Crewe – was “on track” to be completed between 2030 and 2034.
The date range for the western leg of Phase 2b – connecting Crewe with Manchester – remained between 2035 and 2041, the Cabinet minister added.
HS2 Ltd chief executive Mark Thurston recently said the project has suffered a “significant” impact from inflation adding to the cost of building materials, labour, fuel and energy.
“We’re looking at the timing of the project, the phasing of the project, we’re looking at where we can use our supply chain to secure a lot of those things that are costing us more through inflation,” he told the BBC.
Chris Fletcher, policy director at Greater Manchester Chamber of Commerce, said: "Whilst we acknowledge the financial constraints that government finds itself in, we see the decision to delay the essential construction and further development of HS2 as a step in the wrong direction.
"We have already seen significant parts of the scheme scrapped or reduced significantly and further delays, dithering and uncertainty undermines any claim this government may have about taking levelling up seriously.
"Outside of the Southeast a combination of factors are having catastrophic impacts on current levels of rail service - hugely amplified by rail strikes. Cutting bits away of HS2 devalues the economic case as does extending the timetable with the impacts of inflation and continuing reliance on a rail system that does not work.
"These schemes are not just about transport but serve as valuable investments into the country, its economy and people that we will benefit from for decades to come. HS2 must be built in full without further delay and take its place as the backbone of transport infrastructure alongside local schemes and continued investment."
The Confederation of British Industry said the delay would hit confidence in the rail industry and could ultimately lead to higher overall costs for HS2.
John Foster, the CBI’s policy unit programme director, said: “Having been subject to significant revisions and years of uncertainty, business will at least have the clarity needed to enable them to plan effectively.
“But this news will ultimately reduce investor and contractor confidence in the rail sector.
“To mitigate further loss of confidence, it is critical that government tackles the inflationary pressures which are biting hard across the infrastructure sector.
“Delays to projects may create short-term savings, but they can ultimately lead to higher overall costs and slow down the UK’s transition to a better, faster and greener transport network”.
READ MORE:
