(Bloomberg) -- Prime Minister Rishi Sunak and Chancellor of the Exchequer Jeremy Hunt are reviewing how to rein in the cost of the HS2 high-speed rail link between London and Manchester, a minister said, amid growing speculation the government will scrap or delay a chunk of the country’s flagship infrastructure project.
Just days before the governing Conservatives decamp to the northern city for their annual conference, Sunak faces anger from UK business leaders, politicians across the spectrum and even a major donor as he considers whether to shorten the flagship rail project whose costs are threatening to spiral beyond £100 billion ($122 billion).
“The chancellor and the prime Minister are looking at how the cost can be controlled,” Chris Philp, a home office minister, told Sky News on Tuesday, stressing that “no decisions have been taken about the remaining stages of HS2.”
At stake is a project that’s been backed by Sunak’s five immediate predecessors as prime minister and that was at the heart of the Tories’ manifesto promise to “level up” opportunities between northern communities and the more affluent south. The Tories won support from those areas away from Labour in the 2019 election, and trailing by 20 points in most national surveys, are under pressure to shore up support.
Reports in UK newspapers including the Independent and the Times that Sunak is contemplating scrapping or delaying the Birmingham to Manchester stretch of HS2, as well as ending it in a London suburb rather than taking it through to the more central Euston station have attracted opprobrium from Tory party grandees including former Prime Minister Boris Johnson, ex Deputy Prime Minster Michael Heseltine and former Chancellors George Osborne and Philip Hammond. Labour Mayor of Manchester Andy Burnham told the BBC on Monday that the decision would leave northerners with “Victorian infrastructure, probably for the rest of this century.”
Philp insisted Manchester’s residents are “definitely not” second-class citizens, as suggested by Burnham.
The government has already spent £24.7 billion on HS2 as of June, with a 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.
The chaos communicating the decision-making has been leaped on by Sunak’s political opponents, commentators and businesses concerned about the instability for planning decisions.
“This whole thing, it just makes me want to weep,” Paul Johnson, director of the Institute for Fiscal Studies, told Times Radio on Monday, adding that he wished the project had never been agreed to in the first place. Now, he said, “it rather looks like we’re going to totally waste the money on this in producing a rail at the cost of tens of billions, which will get you from Birmingham to central London less quickly than you can do at the moment.”
Even so, Sunak was offered support from one Conservative MP. Esther McVey, who represents Tatton, near Manchester, said HS2 is “sucking the life out of our local transport” in the north of England.
“Thank goodness that the prime minister is looking at HS2’s spiraling costs, because what might have been feasible at £37 billion really is not at £120 billion going northwards,” McVey told BBC radio on Tuesday, referring to earlier cost estimates. “Things have significantly changed since lockdown. People will now sooner jump on a Zoom to save time and money. So it’s the right thing to do and yes, stop it as soon as possible.”
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