Prime Minister Rishi Sunak is mulling whether to further pare back the UK’s flagship HS2 high-speed railway line amid concerns about the spiraling costs of the project, according to a person familiar with the matter.
The premier and his Chancellor of the Exchequer Jeremy Hunt are in talks about which major infrastructure projects can be scaled back ahead of a fiscal statement in the fall, the person said, asking not to be named commenting on government discussions.
The Independent newspaper earlier reported ministers are considering shelving the northern phase of the project between Birmingham and Manchester, amid concerns about costs and severe delays. In that scenario, the London-Birmingham link would go ahead, likely triggering a political backlash by fueling the perception that northern England is being overlooked.
When asked about the report, Sunak’s spokesman, Max Blain, refused to guarantee that HS2 would run to Manchester as planned, saying only that “spades are already in the ground” and that the government is committed to the project. “We are, as you know, looking at the re-phasing of the work in the best interests of passengers and taxpayers.”
HS2 has long been a political football in the UK, with members of Sunak’s ruling Conservative Party strongly opposed to the project where it involves major disruption in their districts. The cost is also controversial during a cost-of-living crisis and as Hunt tries to repair the country’s public finances — many Tories want him to build room to allow for tax cuts ahead of general election expected next year.
The government has already spent £24.7 billion pounds ($30.7 billion) on HS2 as of June, with a total budget for the first phase of the project from London to Birmingham of as much as £45 billion. Beyond that the numbers are more opaque; the official cost of the whole project is £71 billion — though the government’s own review said it could exceed £100 billion.
Yet there’s also huge political pressure for the project to go ahead, as it forms a key part of the Conservative Party’s manifesto pledge to “level-up” areas of northern England. HS2 has already been scaled back, with a planned spur to Leeds scrapped in 2021.
Henri Murison, chief executive of the Northern Powerhouse Partnership think tank, told Times Radio he would be “very, very angry” if the Birmingham to Manchester section was cut. “I don’t think the amount of money that’s been invested already in phase one could in any way be justified by that.”
Scaling back HS2 would also be a blow for suppliers. Work on the project has been led by a range of UK and European engineering companies, including Balfour Beatty Plc, Vinci SA, Ferrovial SE, Eiffage SA and Kier Group Plc. More than 3,000 businesses have done work on the project, which supports 3,000 jobs, according to HS2.
Delays have compounded the UK construction industry’s woes as soaring inflation in building materials hits building works. One prominent HS2 contractor, Buckingham Group Contracting, went out of business last month.