Labour to curb soaring costs of HS2 rail link

Richard Brown, Eurostar’s former chief executive, has been made deputy chairman of HS2 Ltd, the government-backed company overseeing the project

Labour plans to review the cost of the £21.2bn second phase of the widely criticised High Speed Two railway if the party wins the general election in May in a bid to bring down the project’s soaring bill.

The shadow Chancellor, Ed Balls, has previously warned that there would be “no blank cheque” for HS2 should Labour reach Downing Street, referencing a near £10bn increase in the cost of the overall project to £42.6bn, two years ago.

A member of the Shadow Cabinet said Mr Balls and the Labour leader, Ed Miliband, have reached a “settlement” that would see phase one, cutting London to Birmingham travel time to just 49 minutes, left broadly untouched. However, Mr Balls, shadow Transport Secretary, Michael Dugher, and the shadow Chief Secretary to the Treasury, Chris Leslie, could all be tasked with trying to strip costs out of the second phase.

 

The Y-shaped route would see HS2 divide into two legs from Birmingham, one going to Leeds and the other to Manchester.

“HS2 is going to be such a massive slug of our capital expenditure budget that we have to check whether due diligence has been done on this thing,” said the Shadow Cabinet source. “These types of projects have a habit of sucking the lifeblood out of other plans.

“We will look at the second phase. I think we have to keep that option open because of the sheer scale of the cost – not enough questions have been asked … we have to try and drive down the costs.”

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HS2 has received broad support across the frontbenches of the major parties so far, despite rebellions from backbenchers whose constituents are angry that the project will carve through their countryside. As well as concerns over environmental blight, campaign groups have questioned the business case for the railway, arguing that the money would be better spent on improving existing routes.

The Independent can also reveal that Richard Brown, Eurostar’s former chief executive, has been made deputy chairman of HS2 Ltd, the government-backed company overseeing the project. Mr Brown’s promotion from non-executive director arguably beefs up the Department for Transport’s oversight of HS2 Ltd’s work: he leads the DfT’s franchise advisory panel.

The deputy chairman role is powerful, as it means standing in for Sir David Higgins, who is credited with rescuing an ailing project after he was hired in 2013, when he is away.

As well as leading meetings in the chairman’s absence, Mr Brown will advise the Secretary of State for Transport, currently Patrick McLoughlin, on Sir David’s performance as part of his annual review.

Mr Brown will also be asked to help out with succession planning in the event that Sir David, who was previously chief executive at both the Olympic Delivery Authority and Network Rail, leaves HS2 Ltd.

The Bill allowing the first phase of HS2 to be built is going through Parliament. Due to cross-party agreement, the Bill will not have to be restarted after the general election.

HS2’s second phase will be looked at as part of Labour’s “zero-based review”, which will examine proposed public spending from 2016 onwards. 

A spokesman for HS2 Ltd declined to comment.

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