Rishi Sunak and Jeremy Hunt are reviewing how the spiralling costs of HS2 can be “controlled”, a minister said on Tuesday, but Manchester’s mayor threatened legal action if the Government fails to link his city to Birmingham.
Home Office minister Chris Philp told Sky News: “It’s gone up a lot. It’s roughly tripled, I think since it was first conceived.
“No decisions have been taken about the remaining stages of HS2 but I do know the Chancellor and the Prime Minister are looking at how the cost can be controlled.”
Mr Sunak is reportedly alarmed by the runaway cost of HS2 as he faces a Cabinet split over the potential axing of the high-speed railway’s northern leg from Birmingham to Manchester.
Several senior Tories, including two former prime ministers and two ex-chancellors, have warned the Government against cancelling the northern route and stopping the line short of Euston in London.
Andy Burnham, Greater Manchester’s Labour mayor, refused to rule out taking the Government to court if his city loses its planned link.
“We’ve devoted hours and hours and hours of time. All of our development plans are linked to it. If they pull the plug, they are kind of ripping the heart out of the economic development plan for Greater Manchester and parts of the north,” he told GB News.
“So all options would absolutely be on the table and I’ve written to the Prime Minister.”
But former Conservative leader William Hague said the project was a “national disgrace” that had left the Government facing a “genuine dilemma” over whether to cut its losses.
“It should have been cancelled a few years ago when it was clear that the whole thing was out of control, that the costs were out of control, they wouldn’t be able to ever go to Leeds. So I would have cancelled it then,” Lord Hague told Times Radio.
“I hope that whatever is decided, Rishi Sunak will say we are managing these things totally differently in the future in this country because we’re not good at managing infrastructure,” he added.
“One person in charge and a powerful board of experts overseeing it and all the problems surfaced as soon as they come up, which is what you would do in most private companies if you are running a big project.”
Esther McVey, the Tory MP for Tatton in Cheshire, said HS2 was “sucking the life out of our local transport” in the north of England and that “we certainly don’t” need it to go to Manchester.
“Thank goodness that the Prime Minister is looking at HS2’s spiralling costs, because what might have been feasible at £37 billion really is not at £120 billion going northwards,” she told BBC Radio 4’s Today programme.
“Things have significantly changed since lockdown. People will now sooner jump on a Zoom to save time and money. So it’s the right thing to do and yes, stop it as soon as possible...”
Mr Sunak has told allies he is not prepared to watch the cost continue to rise, the Times reported, a day after he failed to quell speculation that he is preparing to either scrap or delay the northern leg.
The newspaper said he is concerned about a lack of cost controls and high salaries at the company overseeing the project after he was shown figures suggesting the overall price could top £100 billion.
Mr Sunak is also said to be considering terminating the line at Old Oak Common in west London, rather than in Euston as planned, to save money.
Tory former chancellor George Osborne and ex-Conservative deputy prime minister Lord Heseltine were among grandees warning that scrapping the Manchester route would be a “gross act of vandalism” which would mean “abandoning” the North and Midlands.
Another ex-chancellor, Lord Hammond, told The Times the project risked becoming a white elephant if it was not finished, while former transport secretary Patrick McLoughlin said that scaling it back would be “completely wrong”.
Some Cabinet ministers are also thought to be opposed, with The Independent citing a source close to government discussions on HS2 as describing Levelling Up Secretary Michael Gove and Transport Secretary Mark Harper as unhappy about the move.
A spokesperson for Mr Harper said the claim was “completely untrue”.
We’re absolutely committed to levelling up and spreading opportunity around the country, not just in the North but in the Midlands, in all other regions of our fantastic country
The Prime Minister is reportedly expected to delay a decision until after the Tory conference, being held in Manchester from Sunday.
He could announce a string of regional transport improvements in an effort to limit the political fallout over the future of HS2, including bringing forward Northern Powerhouse Rail between Manchester and Leeds, the Times and the Guardian reported.
Funding for a new underground rail station in Manchester could also be part of the package, according to the Times.
Downing Street said there is precedent to delaying aspects of the high-speed rail scheme because of “affordability pressures”, pointing towards high inflation.
Grant Shapps, recently promoted to Defence Secretary from his transport role, has said it would be “crazy” not to reconsider the project in considering spiralling costs.
But Andy Burnham, the mayor of Greater Manchester, demanded Mr Sunak does not curtail the project and argued it would be a “decision of epic proportions for our part of the world”.
The new US owners of Birmingham City football club joined a chorus of political and business criticism, warning that limiting HS2 would damage confidence in Government promises to deliver long-term plans.
The club’s chairman Tom Wagner wrote to the Prime Minister to warn that the move would hurt Birmingham’s economy and result in a “loss of investor trust”, according to the Financial Times.
Mr Sunak on Monday insisted he is “absolutely committed to levelling up”, as he refused to give any details over HS2’s future during a visit to a community centre in Hertfordshire.
He said that transport is “key” to that vision, “not just big rail projects, but also local projects, improving local bus services, fixing pot holes”.
Pressed yes or no whether it will go ahead, Mr Sunak insisted: “This kind of speculation that people are making is not right. We’ve got spades in the ground, we’re getting on and delivering.”
In October, the Government’s assessment of the cost for the Manchester leg was up to £71 billion.
Ministers said in June that £22.5 billion had been spent so far on the first leg to Birmingham, while around £2.3 billion had been spent on subsequent legs, with expenditure going towards labour as well as land.
All those figures were based on 2019 prices, so will have soared thanks to inflation alone, as the costs of materials and wages rose.
