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Evening Standard
Evening Standard
Business
John Dickie and Henri Murison

HS2 was meant to unite North and South. Don’t let it become a glorified Birmingham shuttle

Economists don’t always agree when it comes to how to create the conditions in which businesses can thrive. However, there is one matter on which there is complete consensus – the need for certainty.

Last week, rumours emerged that the Northern sections of HS2 could be cut in the Chancellor’s Autumn Budget. We then heard that the Prime Minister was considering terminating the line at Old Oak Common on the outskirts of London, instead of Euston as originally planned.

In February 2020, Boris Johnson promised to deliver HS2 and Northern Powerhouse Rail in full, following the independent Oakervee Review. Since then, plans to transform the country’s outdated transport infrastructure have changed countless times.

It’s a major problem. Large-scale infrastructure – which economists agree is critical for driving productivity and economic growth in the long-term - takes decades to build but the UK has fallen into a bad habit of changing its mind and this has serious consequences for business confidence and our economic ambitions.

Every alteration sends shockwaves through markets and supply chains, which quickly have to scramble to adjust to the new plan. Months or even years of work is thrown out overnight. Coming on the back of the decision to pause construction work at Euston earlier this year, people working on the project (nearly 30,000 by the most recent estimate, with many more thousands in the wider supply chain), are once again left wondering if they still have a job.

£2.3billion has already been spent on Phase 2 alone, as well as millions on Euston. The endless dither and delay add drastically to the cost, not least because it leaves us much more exposed to inflation, with the latest pauses adding almost half a billion to the final bill. Constant chopping and changing of the project’s scope also increases the cost of capital and deters investors and contractors.

There are also significant knock-on effects for other transport projects. Cancelling the HS2 Phase 2b hybrid bill would remove the most critical remaining section of Northern Powerhouse Rail between Manchester Piccadilly and Manchester Airport, which is vital for getting passengers from Liverpool across the Pennines.

This would make it impossible to improve east-west connectivity through a new rail line across the North – something the Prime Minister is reportedly offering as a trade-off for scaling back HS2. It’s a promise that’s been made before but funding was cut in the 2021 Integrated Rail Plan and the new line now stops on the outskirts of Yorkshire, failing to reach Leeds and cutting out Bradford altogether.

Moreover, the Elizabeth line would struggle to cope with the additional demand if HS2 stops at Old Oak Common, given it is already much nearer to capacity than previously expected. The planned station would have to be completely redesigned and the extra cost would offset a significant part of any savings at Euston.

It would also leave Euston as a gaping hole in the centre of London for years - a kick in the teeth for local businesses and residents who have put up with works on the promise of the huge benefit to come later down the line.

HS2 was designed to unite the North and the South, creating more capacity on our rail network so people, goods, investment could move around the country more easily and efficiently. It would improve connectivity and reliability, support net zero ambitions by taking more cars and lorries off the road, and act as a spur for regeneration.

However, what was meant to be a railway for the whole country could instead become a shuttle service from Curzon Street in Birmingham to Old Oak Common in London, of limited benefit to anyone.

The government must not again keep the business community in limbo or break yet another promise. It would leave the UK’s global reputation as an attractive place to invest in tatters.

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