Labour Party conference: Future of HS2 in doubt as Ed Balls warns of veto

Announcement marks a significant change of policy

Ed Balls told The Independent fringe meeting that he was not prepared to write a 'blank cheque' to fund HS2 (Susannah Ireland)

Ed Balls threw the future of the high-speed rail line into doubt on Monday night – and risked a clash with Ed Miliband – as he warned he was ready to veto the controversial £50bn scheme if Labour wins the next general election.

The shadow Chancellor told The Independent fringe meeting that he was not prepared to write a “blank cheque” to fund HS2, the biggest rail project in generations.

Promising a review of the proposals by an incoming Labour government, he said: “We’ve got to make it clear we are not going to go ahead regardless.

“For every billion we spend on HS2 is a billion pounds we cannot spend on roads, cross country rail, affordable houses, hospitals and schools.

“It is not about whether HS2 is a good project it is about whether it is the best use of resources. If it is, then we will go ahead.”

His intervention will raise questions over whether the project, conceived by the last Labour government and enthusiastically supported by David Cameron, will get the go-ahead given the need for cross-party consensus for such large schemes.

Mr Balls’s comments came days after Mr Miliband told a Sunday newspaper: “I support HS2 and I think it’s the right thing to do for the country.”

The shadow Chancellor told the packed fringe meeting, sponsored by RSA Insurance: “HS2’s costs have gone up by billions in just a few months. There are real questions whether the way it has been designed and managed adds up.”

He said the project dwarfed the 2012 London Olympics and needed to be subjected to detailed scrutiny to ensure it was “the best way to spend £50bn”.

Mr Balls admitted Labour had found it more difficult to refute claims that the party was responsible for the economic downturn because Nick Clegg and the Liberal Democrats had signed up to austerity “to buy a place in the Coalition Government”.

“It was all blamed on us,” he said. “[Liberal Democrat support for the Tories] made things tougher for us.”

But he said he had no regrets at opposing austerity in 2010 and calling for spending increases – even though the economy has now improved.

Mr Balls was asked about the revelations in Damian McBride’s book and the vitriolic briefings by senior ministers against each other when Labour were in power.

He admitted that when he worked for Mr Brown before the 1997 election neither Tony Blair or the then Shadow Chancellor showed each other their conferences speeches until 11pm on the night before they were due to deliver them.

“It turned out they both had exactly the same ending,” he said, with Mr Brown eventually having to back down and re-write his speech.

Mr Balls said he had been shown Mr Miliband’s speech two weeks ago.

The shadow Chancellor said his plans to subject Labour’s economic plans to scrutiny by the Office for Budget Responsibility would stop ministers “making accusations about the opposition that have no basis in fact.”

He said it would look “nakedly political” if George Osborne sought to resist the move.

The shadow Chancellor promised activists they would be sent a list of “credible, paid-for” Labour policy commitments by Saturday.

Earlier, in his conference address, Mr Balls warned delegates that a Labour government taking office would have to take unpalatable decisions as it imposed an “iron discipline” on tax and spending because it would inherit a £90bn deficit.

He reminded them that Labour would adopt the Coalition’s plans for 2015-16 for current spending and added: “We will have to govern with less money around. The next Labour government will have to make cuts too.”

Mr Balls made an impassioned plea for activists to defend the last Government’s record and paid tribute to Mr Miliband as “my friend, our leader and Britain’s next Prime Minister”.