Chancellor Jeremy Hunt has given the clearest signal yet that he is ready to axe HS2’s northern leg as he attacked some of the high-speed rail project’s “totally unacceptable” costs.
The chancellor is under mounting pressure to spell out the future of the HS2 after The Independent revealed that he and Rishi Sunak were in talks to scrap the Birmingham to Manchester route.
Reports suggest Mr Hunt has already signed off on “reallocating” money for HS2’s northern leg to other transport projects – but Mr Sunak is yet to approve the radical move.
Mr Hunt indicated that he want to cut costs, telling BBC Radio 4’s Today programme. “As chancellor, I do have to answer the question as to why it costs 10 times more to build a railway in this country than just across the Channel in France.”
The chancellor told LBC: “I need to have an answer why it costs 10 times more to build high speed rail in this country than it does across the Channel in France. Some of that spend you’ve been talking about [on public relation costs] is totally unacceptable.”
It followed a report in The Sun that 167 staff in HS2’s PR department costing £8m a year. Project Redwood talks involving PM and chancellor have eyed £34bn in saving from shelving the northern phase, The Independent revealed last month.
Mr Hunt teased an announcement on scaling back HS2 – telling the BBC that when it was made “you will see that we remain very committed to making sure we have the right economic infrastructure”.
Some red wall Tories in the influential Northern Research Group have signalled they are willing to accept a delay to the northern leg of HS2 – so long as Mr Hunt and Mr Sunak commit to east-west rail projects known as Northern Powerhouse Rail.
Jeremy Hunt and Rishi Sunak expected to axe northern leg
But some senior Tories and top business leaders behind HS2 want the government to commit to both. Former levelling up minister Dehenna Davison and ex-chairman Jake Berry became the latest senior Tories to call on the government to “crack on” with phase 2 in the north.
Earlier on Monday, ITV’s Robert Peston claimed Treasury had “signed off package of reallocating” HS2 money to transport priorities. “But the PM has not yet given his approval (or not!),” he tweeted.
The Treasury did not deny the claim, but insisted no final decisions had been taken.
The row over The Independent’s revelation that HS2 will be cut back boiled over at Tory conference on Monday morning.
The Northern Powerhouse Partnership chief Henri Murrison – who represents businesses across the north – accused Mr Sunak and government officials of “lying” about the effect of cancelling the project.
“Why on earth will the government not be more honest about the fact that if you cut HS2 between Birmingham and Manchester you would have to put £15bn back in the Northern Powerhouse Rail [NPR] budget to avoid cancelling NPR as well,” he told the event.
“Stop claiming that if you cut HS2 it has nothing to do with Northern Powerhouse Rail. I’m happy to have a policy debate, but I’m sick of being lied to and people being dishonest in the media.”
Mr Murison was speaking at the same event Huw Merriman – the Tory minister for rail – who promised “things will become clearer”. He claimed HS2 was “crowding out other opportunities to deliver more across the country” because of its rising costs.
“The problem with HS2 of course, is well documented. It has gone over budget and it has gone over time,” the minister said. “It’s a project that has been beset with difficulties. If all the rail budget goes on HS2 and increases in cost on HS2 then it gets lost on other parts that HS2 is not going to.”
Mr Sunak and Mr Hunt wer understood to be considering an option to quell a Tory backlash by delaying the Birmingham to Manchester line by up to seven years.
Mr Hunt also admitted that he flew to Manchester for the Tory conference rather than taking the train. He blamed strike action for choosing the carbon-intensive mode of transport.
On his return journey, the senior Cabinet minister said: “I’ll probably be driving home because I think there’s another train strike on Wednesday.”
