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- By Katy Austin & Lora Jones
- BBC Business
Grant Shapps says the UK must consider the “balance” of how it spends its money
The former transport secretary has said it would be “crazy” not to review plans for the HS2 rail link as costs have soared.
Grant Shapps told the BBC that the Ukraine war and a spike in inflation mean any government would need to make “serious decisions” on affordability.
The BBC understands a definitive decision on HS2 could be made as soon as this week.
The government has so far refused to commit to the current plans.
HS2 is intended to link London, the Midlands and the north of England – the first part, between west London and Birmingham, is in mid-construction.
But the scheme as a whole has already faced delays, cost increases and cuts – including to the planned eastern leg between Birmingham and Leeds.
The last official estimate on HS2 costs, excluding the cancelled eastern section, added up to about £71bn.
This was in 2019 prices so it does not account for the spike in costs for materials and wages, for example, in recent months.
The numbers were given to Parliament in June and include up to £26bn for the whole of Birmingham to Manchester. They also exclude what is left of the eastern leg, and a scrapped Golborne link in Cheshire.
Speaking to Victoria Derbyshire on the BBC’s Laura Kuenssberg programme, Mr Shapps said that no decision on the project’s future had been taken as of yet.
“We do have to respond to the budgets,” he said.
“We’ve not only been hit by the coronavirus, but the war in Ukraine… any responsible government has to ask whether that sequencing still stacks up for what the country requires.”
He added that when previous commitments had been made, “no-one knew we’d be in a war in Europe right now with all of the consequences, all of the costs, and all of the inflation.”And any government that doesn’t go back and then look at it is crazy.”
The prime minister and the chancellor have been discussing the future of the Birmingham to Manchester leg of the project against the backdrop of spiralling prices.
Image source, Getty Images
The first part of HS2, between west London and Birmingham, is in mid-construction
Chancellor Jeremy Hunt said last week that costs were getting “totally out of control”.
The June statement to Parliament included figures for how much had been spent on HS2 so far, although they were not completely up to date.
It said £22.5bn had been spent on the London to Birmingham leg, which is mid-construction, while £2.3bn had been spent on preparing other sections, on measures such as buying up land.
Work has been going on for a while to try and identify cost savings as concerns have mounted.
Many in Westminster believe that almost all of the planned line from Birmingham to Manchester is likely to be axed, potentially ahead of the Conservatives’ party conference in the city on 1 October.
Former prime minister Boris Johnson has warned, however, against “mutilating” the project in a letter to Rishi Sunak.
It was under Mr Johnson’s government that HS2 was given the green light to start construction in 2020.
Cabinet minister Grant Shapps said on Sunday it would be “irresponsible” to carry on pumping money in because of cost increases and delays.
He said there was a “perfectly legitimate question” about the “sequencing” of the high-speed rail line.
Mr Shapps also suggested that HS2 was not the “be all and end all” for rail connectivity and said the government had spent £22bn on transport in the north of England since 2010.
However, he would not comment on whether or not separate plans for the Northern Powerhouse rail scheme between Leeds, Manchester and Liverpool would still go ahead if the northern section of HS2 is scrapped.
Labour has so far refused to confirm it would fund the HS2 line to Manchester if the Conservatives axe it, despite pressure from local mayors such as Greater Manchester’s Andy Burnham.
On Sunday, Darren Jones, new shadow chief secretary for the Treasury, said the Labour party would “love to build the HS2”, but said little “proper” information had been made available by the government.
“We’re only responding to leaks from the Tory party”, he said, adding that the party could not make infrastructure commitments worth tens of billions of pounds without seeing all the figures.
More than 80 companies and business leaders also sought clarity over the commitment to HS2 on Saturday.
The bosses of dozens of businesses and business groups – including Manchester Airports Group, British Land, Virgin Money, and the Northern Powerhouse – all signed a letter to the government urging renewed commitment to HS2, saying that repeated mixed signals are damaging the UK’s reputation and the wider supply chain.
In the letter, they expressed “deep concern” over “the constant uncertainty” that “plagues” the project.
HS2 is meant to create more capacity and speed up journey times.
The government has previously argued it would have economic benefits too, but critics think it is far too expensive and the money could be better used in other ways.
In March, Transport Secretary Mark Harper said there would be a two-year delay on the Birmingham to Crewe leg. Work on Euston was also paused while an “affordable” design was worked on.
However, a government spokesperson said on Friday that “our focus remains on delivering” HS2.
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