Rishi Sunak is said to be alarmed by the runaway cost of HS2 as he considers how much to axe of the rail project’s northern leg, after The Independentfirst revealed plans to scrap it.
The prime minister has reportedly told close allies he is not prepared to watch the cost continue to rise, amid claims that HS2 executives have acted like “kids with the golden credit card”.
It comes as the US owners of Birmingham City football club – in which NFL star Tom Brady holds a minority stake – warned Mr Sunak he will damage investor trust if he abandons the Birmingham to Manchester route.
Former transport Patrick McLoughlin became the latest senior Tory to warn axing phase 2 would be “completely wrong”, but ex-cabinet minister Esther McVey said HS2 was “sucking the life out of our local transport”.
Mr Sunak 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 £100bn, according to The Times.
A source familiar with the PM’s thinking told the newspaper that HS2’s finances were “far worse than anyone knows” and he was unwilling to “sit back and watch this balloon”.
They said: “The whole project has been over-specced. It seems that the mantra of HS2 bosses has been to massively overspend all along to make it too big to kill ... From the start they were like kids with the golden credit card.”
The Independent first revealed that Mr Sunak and his chancellor Jeremy Hunt were discussing ways to axe phase 2 under the codename Project Redwood. But the pair are not now expected to delay a decision until the autumn statement mini-Budget in late November.
They are understood to be considering an option to quell a Tory backlash by kicking the Birmingham to Manchester route into the long grass by delayed it by up to seven years.
Jeremy Hunt and Rishi Sunak considering how much of HS2 can be scrapped or delayed— (PA)
Northern Tory MPs are still hopeful parts of the project can be rescued, and are pushing the PM and the chancellor to consider accelerating a section of HS2 between Manchester Piccadilly and Manchester Airport.
A source close to government discussions on HS2 told The Independent: “The PM and chancellor have opened up a big rift in the Tory party. There are significant figures in cabinet who are opposed [to ditching HS2]. Michael Gove and Mark Harper are very unhappy.”
The source added: “They’ve bottled any announcement for the moment. The backlash has been so big they are not ready to cancel. They are having to consider how to rephase it. [Sunak] is going to have a very challenging conference in Manchester.”
A source close to Mr Gove said they did not “recognise” the idea of a cabinet rift. Mr Harper declined to comment.
Tom Wagner, chair of Birmingham City FC, wrote to Mr Sunak and urged the government to “honour its commitment” to deliver on HS2 in full.
In a letter reported by the Financial Times, the football chief warned: “Any deviation could result in a loss of investor trust and this would have a considerable negative impact on the UK. The ambitious HS2 project falls into this category.”
Tory grandees have attacked prospect of HS2’s northern leg being shelved— (Getty/PA)
Mr McLoughlin, the ex-transport secretary, joined a chorus of senior Tories – including Boris Johnson, David Cameron and former chancellors George Osborne and Philip Hammond – in calling on the prime minister to build the project in full.
But several top Tories believe costs have gotten out of control. Former leader William Hague said that HS2 has been “terribly badly managed” and is a “national disgrace”.
He told Times Radio: “It should have been cancelled a few years ago when it was clear that the whole thing was out of control.” But now that so much has been built he said there is a “genuine dilemma” over whether it should go ahead “to at least complete and make sense of the parts that we can still do”.
Ms McVey told BBC Radio 4’s Today programme that “we certainly don’t” need the high-speed rail project to go to Manchester. She said: “Thank goodness that the prime minister is looking at HS2’s spiralling cost.”
Tory minister Chris Philp told Sky News on Tuesday that Mr Sunak is reviewing how the cost of HS2 can be “controlled”, as he warned the price tag of the rail project has “roughly tripled” since its conception.
But the junior Home Office minister insisted that no decision has been made on whether to axe or delay the rail project’s northern leg.
Mr Philp insisted the people of the North are “definitely not” second-class citizens, as Greater Manchester mayor Andy Burnham claims they are being treated. “The commitment to the Midlands, the north, the levelling up agenda is absolutely undimmed,” Mr Philp said.
