Rishi Sunak’s government has delayed some sections of the ambitious HS2 railway project in a bid to save money, it has been announced.
Transport secretary Mark Harper said construction of the high-speed rail line between Birmingham and Crewe will be delayed by two years.
Mr Harper also revealed setbacks to key road projects as he blamed the pressures of soaring inflation for the cost-saving measures that threaten to deliver a blow to “levelling up” plans.
In a written ministerial statement, he said: “The government is committed to delivering HS2 Phase 2a between Birmingham and Crewe.
“We have seen significant inflationary pressure and increased project costs, and so we will rephase construction by two years, with an aim to deliver high-speed services to Crewe and the northwest as soon as possible after accounting for the delay in construction.”
HS2 has been dogged by criticism over its finances, with costs ballooning far beyond the initial estimates set out during David Cameron’s Conservative government.
The whole project, aimed at creating a high-speed rail line being built from London to the northwest, was given a budget of £55.7bn in 2015.
But the overall target cost, excluding the eastern leg of Phase 2b from the west Midlands to the east Midlands, has ballooned to between £53bn and £71bn.
Labour said the latest delay to the HS2 high-speed rail link meant the north of England was again having to “pay the price” for Tory government failures.
Shadow transport secretary Louise Haigh MP said: “Conservative chaos and chronic indecision is holding back jobs, growth and costing the taxpayer.”
She added: “This is the biggest project in Europe and delays pile costs up in the long run – ministers now need to come clean on precisely how much their indecision will cost taxpayers and the north.”
Henri Murison, chief executive of the Northern Powerhouse Partnership, said the decision was “disappointing” but said he was “relieved” that the most northerly section of the route between Crewe and Manchester will be protected.
Mr Murison said delaying projects “doesn’t make them cheaper, it only holds back economic benefits and increases the overall scheme costs further in the long-run”, adding: “We’re paying a huge price for the endless dithering during Boris Johnson’s premiership”.
The Confederation of British Industry (CBI) also condemned the decision, saying the delay would hit confidence in the rail industry and could ultimately lead to higher overall costs for HS2.
But senior Tory MP Simon Clarke, the former chief secretary to the Treasury under Liz Truss, described delaying the project as a “sensible decision”.
“Having observed HS2’s progress as chief secretary, I have serious doubts as to value for money and cost control,” he said.
Michael Fabricant, also a Tory MP, said he will ask the government whether the delay “marks the end of HS2 north of Birmingham” and if the “damage” done in southern Staffordshire – including to his Lichfield constituency – will be repaired.
“Covid has encouraged remote working and even now regular rail commutes are down by 40 per cent on pre-Covid levels,” he said. “The government are well aware this makes the business case for HS2 even less convincing than it was in the first place.”
But Birmingham City Council leader Ian Ward said the decision was “another betrayal of the Midlands and the north, making a mockery of the government’s empty promises to level up the UK economy”.
HS2 Ltd chief executive Mark Thurston recently said the project has suffered a “significant” impact from inflation adding to the cost of building materials, labour, fuel and energy. “We’re looking at where we can use our supply chain to secure a lot of those things that are costing us more through inflation,” he told the BBC.
Andy Bagnall, chief executive for rail industry lobby group Rail Partners, said recent inflationary pressures had made infrastructure projects “more challenging”, but insisted HS2 was worth pushing forward.
“It is critical for Britain’s economy and meeting net zero targets that large sections of HS2 are not delayed, which will ultimately increase the overall cost,” he said.
Mr Harper also set out delays for services running to Euston in central London, as he instead focuses on initial services to Old Oak Common in the capital’s western suburbs.
The high-speed line was due for extension between Birmingham and Crewe between 2030 and 2034 to help boost transport in the north of England.