Shapps says HS2 cannot have ‘open-ended cheque’ as Sunak set to wield axe

The leg of HS2 from Birmingham to Manchester is in doubt because of spiralling costs.

Then transport secretary Grant Shapps visits the start of works at the HS2 site at Old Oak Common station (Stefan Rousseau/PA) (PA Archive)

It would be “irresponsible” to keep ploughing money into the HS2 project in the face of rising costs, a Cabinet minister said as Rishi Sunak considered scrapping the route from Birmingham to Manchester.

Former transport secretary Grant Shapps said the scheme risked sucking up money which could be used on other local projects as ministers considered the future of the project.

Mr Shapps said the Government could not write an “open-ended cheque” if costs were “inexorably going higher and higher”.

He suggested it would be “crazy” not to have another look at the scheme following the inflation shock triggered by the war in Ukraine and the transport shifts following the coronavirus pandemic.

“I think the sequencing of what happens next is a perfectly legitimate question,” he said.

The Sunday Telegraph reported the potential cost of the high-speed rail scheme – which Chancellor Jeremy Hunt has said is “out of control” – had increased by £8 billion.

The Observer suggested the decision to kill off the Manchester leg of the scheme could come before the Tories host their conference in the city on October 1.

But Downing Street and Treasury insiders suggested no timing had yet been fixed for any announcement on the future of the scheme.

The Prime Minister and Chancellor are reported to be meeting to discuss the situation in the coming days.

The Telegraph reported that officials expect the upper estimate of building the initial London to Birmingham stretch of the line to increase by more than £8 billion from the £45 billion figure published in June 2022.

Defence Secretary Mr Shapps told BBC’s Sunday with Laura Kuenssberg: “We have seen the costs accelerate a lot. Of course, inflation has been part of that.

“There are various different estimates and I think that’s one of the things that the Government wants to check, particularly on the costs now post the inflationary picture out of the war in Ukraine.

“I have to say that it would be irresponsible to simply spend the money, carry on as if nothing had changed, if there has been a change in that fiscal picture.”

He stressed HS2 was not the “be all and end all” for northern transport projects: “You have to make decisions about whether you’re going to invest in, for example, local transport schemes, which might be very helpful for people who are commuting.

“Obviously the large things like HS2, which I think is the biggest construction project in Europe, suck up a lot of that money. Any government has to make those decisions.”

Mr Shapps told Sky News’ Sunday Morning with Trevor Phillips a decision on HS2 would be taken “in due course” but if costs keep increasing “there has to be a point at which you say ‘hold on a minute, let’s just take a break here'”.

Andy Burnham, the Labour Mayor of Greater Manchester, said people in the north of England are treated like “second-class citizens” by facing a choice between HS2 and a cross-Pennine east-west route.

He told Sky News: “If they leave a situation where the southern half of the country is connected by modern high-speed lines, and the north of England is left with Victorian infrastructure, that is a recipe for the north-south divide to become a north-south chasm over the rest of this century.”

Labour has so far refused to confirm it would fund the line to Manchester if the Tories axe it, despite pressure from Mr Burnham.

He said: “The north of England should not be forced to choose between whether we have a good east-west line or a good north-south line.”

Shadow Treasury chief secretary Darren Jones again refused to set out Labour’s commitment to the full HS2 project, saying the party needed all the information and was waiting for the Government’s announcement.

Labour “would love to see HS2 built”, he said, “including the connection to Leeds” which was scrapped in 2021.

But he told the BBC: “We, the Labour Party, hope to be in government next year. We’re not going to make decisions about national infrastructure projects that involve tens of billions of pounds without all of the information being available.”

London Mayor Sadiq Khan has written to the Prime Minister about the fate of HS2, warning it could end up being a “colossal waste of public money” if the northern leg and the Euston terminus in central London are not completed.

When the railway first opens between London and Birmingham, expected between 2029 and 2033, its terminus in the capital will be Old Oak Common, in the western suburbs.

HS2 trains are not expected to run to Euston until around 2041 at the earliest and there are now doubts the central London extension will ever go ahead.

Mr Khan told the Prime Minister: “The public would rightly be dismayed were all of this time and money spent on a line that took longer to reach central London than the existing route, and was devoid of any proper connections to the north of England.”