Britain’s high speed rail link may end in a London suburb rather than running into the city centre to Euston, Chancellor Rachel Reeves signalled on Tuesday.
Cabinet Office minister Pat McFadden on Monday said the HS2 route would be re-examined as part of moves to save billions of pounds.
Asked on LBC Radio if the line would run all the way to Euston, Ms Reeves said: “We are reviewing a whole range of transport projects.
“We will look at the details of all of the projects that we have inherited.”
Pressed on Monday about reports that the high speed line could end at Old Oak Common, west London, rather than run to Euston, Mr McFadden had told Times Radio: “We have inherited a very difficult situation on HS2.
“The previous government chopped it bit by bit so we are left with the bit that we have got left.
“We will have to examine that like all the other projects.
“But people can be assured that in the difficult decisions that we have to take we will prioritise things that will contribute to growth.”
It was not clear from his comment if any delay to the Euston project, if it happened, would be temporary or more long term, of if the terminal might just be scaled down in size.
As Prime Minister, Rishi Sunak last autumn scrapped the second leg of HS2 from Birmingham to Manchester and said the Euston development would have to be funded by far more private investment.
Ms Reeves on Monday announced immediate steps to cut costs as she told of a blackhole in the nation’s accounts of £22billion, including axing winter fuel payments for some ten million pensioners, according to economists.
The reviewing of the HS2 scheme is part of what any new Government would do to major infrastructure projects rather than being part of Ms Reeves’ announcement on Monday.
She said that a Treasury spending audit she commissioned shows that the previous government overspent this year’s budgets by billions of pounds after making a series of unfunded promises.
She accused the previous Conservative government of “covering up the true state of the public finances”.
Mr McFadden claimed, for example, that the real cost of the Tories failed Rwanda scheme was £700million, not £400million.
Independent economists, though, say while there may have been some underfunding discovered, the broad picture of dire public finances was known before the July 4 election.
Any blackhole would have to be filled through borrowing more, tweaking fiscal rules, tax increases or further cuts to public spending.
Labour has ruled out lifting income tax, VAT, national insurance and corporation tax, potentially leaving changes to pensions relief and capital gains and inheritance levies on the table.
The Chancellor was expected to approve above-inflation pay rises for millions of public sector workers in response to the recommendations of independent pay review bodies.
Public sector workers including teachers and some 1.3 million NHS staff are getting inflation-busting pay rises, costing £9.4 billion.
But the Conservatives said the Government is trying to set a narrative to pave the way for tax rises.
Helen Whately, shadow transport secretary, said Ms Reeves “would have known about the state of the public finances” while serving in opposition because of the Office for Budget Responsibility.
She added: “Actually while Labour is going out there and trying to tell everybody that it is all so difficult for them, this is just them setting a narrative for tax rises that they want to bring in later on.
“But actually they took over an economy that had the fastest growth in the G7, that had the deficit halved compared to when we took over in 2010, that had historic low unemployment and that had inflation back down at two per cent.
“So, really good fundamentals for them to build on in Government.”
