The Prime Minister and the Chancellor of the Exchequer are reportedly holding talks about axing the second phase of the severely delayed HS2 rail project, as costs spiral.
Documents seen by a national newspaper suggest that the government has already spent £2.3bn on the northern stage of the high-speed railway. However, ditching the plan to connect Manchester and Birmingham – and the first stage of HS2, which united London and the West Midland, would save up to £34bn.
The cost estimates, which were reportedly discussed at a Number 10 meeting on Tuesday, apparently suggest that the £2.3bn already spent would not be recoverable even if the Northern link is scrapped.
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The reports come as Jeremy Hunt faces growing pressure from Conservative MPs to offer tax cuts before the next election. Axing HS2 Phase 2 could give the Chancellor some breathing space in his budget.
And, back in July, the Government’s own watchdog, the Infrastructure and Projects Authority (IPA) warned that “successful delivery” of Phase 2 “appears to be unachievable.”
An IPA’s annual report on major projects said of HS2 Phase 2: “There are major issues with project definition, schedule, budget, quality and/or benefits delivery, which at this stage do not appear to be manageable or resolvable. The project may need re-scoping and/or its overall viability reassessed.”
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It would be a further blow to the HS2 project, which has already been curtailed north of Birmingham. A planned eastern spur, which was going to go to Leeds, will now stop in the East Midlands.
On a meeting between Hunt and Rishi Sunak about HS2 – which was referred to in documents caught on camera by press photographers outside The Treasury – a government spokesperson told The Independent: “You would expect No 10 and the Treasury to regularly discuss large infrastructure projects.
“Spades are already in the ground on the HS2 programme, and we remain focused on delivering that.”
However, in PMQs on Wednesday, Michael Fabricant -branding HS2 as “the most dysfunctional organisation I’ve ever had to deal with” called for the project to be halted at the end of Phase 1, in Lichfield, to prevent disruption to people in other constituencies.
Lichfield, at the northern end of Phase 1, would be the southern point of Phase 2a, which is planned to link the West Midlands with Crewe in Cheshire.
Sunak acknowledged the “frustration” HS2 was causing Fabricant’s constituents in Lichfield and said he had been told HS2 Litd “is prioritising the completion of works underway to keep disruption to a minimum”. However, Sunak did not directly respond to Farbricant’s calls for the project to be halted at Phase 1, neither confirming nor denying that Phase 2 would go ahead.
The legislative bill for phase 2a of the project has already received royal assent in parliament. The government’s legislation for phase 2b into Manchester is currently in the report stage.
And, last week, Treasury Minister John Glen told the Commons the government remains “fully committed to delivering HS2 and the integrated rail plan”.
He said: “This is a long-term investment that will bring our biggest cities closer to each other. It will boost productivity, and will provide a low-carbon alternative to cars and planes for many decades to come.”
However, Fabricant said: “HS2 is a dysfunctional company unable to control its own budget. Its design is already out of date. Lichfield and other areas have already suffered economic damage as roads are closed and businesses are disrupted.
“This nonsense can’t be allowed to continue. The costs to our nation are way too high. It’s time to call an end to this failed project. It should end with phase one.”
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