Business leaders condemn HS2 ‘dithering’

HS2 construction site - not in the North West anytime soon

Business leaders have reacted with anger and resignation at confirmation from the government that HS2 to the North West will be delayed for two years.

On Thursday (9 March) Transport Secretary Mark Harper said: “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 North West as soon as possible after accounting for the delay in construction.”

Commenting on the decision to delay parts of HS2, Chris Fletcher, Policy Director at Greater Manchester Chamber of Commerce, said: “Whilst we acknowledge the financial constraints that government finds itself in, we see the decision to delay the essential construction and further development of HS2 as a step in the wrong direction. We have already seen significant parts of the scheme scrapped or reduced significantly and further delays, dithering and uncertainty undermines any claim this government may have about taking levelling up seriously.

“Outside of the Southeast a combination of factors are having catastrophic impacts on current levels of rail service – hugely amplified by rail strikes. Cutting bits away of HS2 devalues the economic case as does extending the timetable with the impacts of inflation and continuing reliance on a rail system that does not work.

“These schemes are not just about transport but serve as valuable investments into the country, its economy and people that we will benefit from for decades to come. HS2 must be built in full without further delay and take its place as the backbone of transport infrastructure alongside local schemes and continued investment.”

Work was due to start in 2030. The delay to construction will affect the North West section of HS2, from Birmingham to Crewe, and then from Crewe to Manchester. The window for construction has moved from 2032 to 2036 while services will now not extend to Manchester until the 2040s.

Responding to the announcement that the Birmingham to Crewe leg of HS2 will be delayed by two years, former Tory minister Lord McLoughlin, chair of Transport for the North, said:

“This is a disappointing announcement. But I was reassured by the Transport Secretary that we are still getting HS2 to Manchester, and the recommitment to NPR is welcome.

“However, it needs to be understood whether or not these cost savings can be realised while still achieving the same desired outcome and conditional outputs. The government needs to avoid being penny wise and pound foolish, as delays don’t necessarily lead to savings, and in fact can drive costs upwards.

“Nevertheless, the political leaders of the North who sit on our Board have made their collective position very clear – we must transform the North by building both HS2 and NPR in full.

“Taken together, both projects unlock the North’s economy from the existing position of poor infrastructure that has held it back. It is the communities and businesses across the North of England who are suffering most by any delay or inaction in delivering on these schemes.”

Henri Murison, chief executive of the Northern Powerhouse Partnership, said: “While this decision to delay is a disappointing one for the country, we are relieved that the most northerly section of the route between Crewe and Manchester will be protected as the section makes it way towards Parliamentary approval.

“HS2 is an investment in our future prosperity, which is why it’s a mistake for the Treasury to put capital projects in the same category as day-to-day spending on items like welfare benefits. The Shadow Chancellor has a different proposed way of treating borrowing for investment – which could have avoided forcing this decision on the current Transport Secretary.”

He added: “Delaying projects – whether it’s train lines or hospitals – doesn’t make them cheaper, it only holds back economic benefits and increases the overall scheme costs further in the long run.

“We’re paying a huge price for the endless dithering during Boris Johnson’s premiership, and the wider damage done by cancelling the leg to Leeds, with still no plan for how to get services to Yorkshire and beyond.”

Federation of Small Businesses development manager for Greater Manchester, Robert Downes, said: “Small firms have been banking on the delivery of HS2 that could help drive the UK’s growth and levelling-up agenda.

“The Government should provide clarity on the progress of this important project and the scale of impact on specific local areas arising from possible construction delay. Other crucial infrastructure projects must not suffer the same fate, as we have already seen downgrades of electrification, Northern Powerhouse Rail, and other infrastructure delivery that small businesses were calling for in regions and localities across the UK.”

He said: “Contracting directly with more small businesses would help cut costs on this crucial infrastructure project and help the Government achieve its target of spending one-third of procurement funds on small businesses.

“We hope the benefits of HS2 will be delivered as promised – allowing a greater number of both passenger and freight services, taking lorries off congested roads, and helping to improve connectivity across the Midlands and North of England.”

Stephen Marcos Jones, CEO of the Association for Consultancy and Engineering (ACE), which represents the companies which design, deliver and manage the UK’s national infrastructure and built environment, said: “Today’s news on HS2 is potentially a real body blow for the UK’s economic recovery. I think every sensible person knows that global events have driven inflationary pressures to record highs.

“But we have already spent significant sums on the design and delivery of this transformational major project. Scaling back ambitions at this stage will mean the economic and social benefits of HS2 for communities across the UK is further watered down – and major delays like this are actually going to cost more in the longer term.

“In a nutshell, the delays announced today are, quite simply, an absolutely false economy.”