Project Redwood: Proof PM did plan to scrap new HS2 line

Exclusive: Secret documents drawn up to cost the closure of northern rail route have been given special codename and presented to Rishi Sunak and Jeremy Hunt

Adam Forrest
Political Correspondent
,Jon Stone
Monday 18 September 2023 18:09 BST
George Osborne says abandoning second leg of HS2 would be ‘real tragedy’

The government is in disarray as the row over scrapping the northern extension of HS2 continues to grow – sparking fears in No10 that the backlash to The Independent’s revelations could cost them votes at the general election.

Proposals to axe the second phase of HS2, which the Independent can reveal has been given its own special codename “Project Redwood”, could now be reconsidered following furious reaction from northern mayors, leaders and Tory MPs.

Secret documents outlining the cost benefit of ditching the rail project’s Birmingham to Manchester leg were drawn up for a face-to-face meeting between Rishi Sunak and Jeremy Hunt last week.

Although £2.3bn has already been spent on the second phase on construction, the Redwood solution suggested £34bn would be saved by abandoning any future plans.

But insiders say doubts over the scrapping of the multibillion-pound project could now be growing inside No10 after the government was ‘spooked’ by claims the north was being left behind in the run up to the general election.

When asked repeatedly by MPs to clarify rumours that the Manchester leg is being scrapped, transport minister Richard Holden MP refused to say if HS2 will now only go to Birmingham and was criticised for his evasiveness from both Tory and opposition MPs.

Meanwhile, Labour has committed to building the high-speed rail lines in full if they win the next general election, despite confusion about the party’s position.

The Independent understands both prime minister and chancellor were in favour of abandoning the plans as Mr Hunt battles to find savings ahead of his mini-Budget autumn statement in November.

But a source close to the discussions said the pair had got “cold feet” after the furious reaction – with northern mayors, business leaders and Tory MPs warning that it would cost the party votes at the general election.

“There’s a degree of listening going on after the backlash,” another source close to the delivery of HS2 told The Independent. “They’re engaging with concerns. They have to know it doesn’t make any political sense, and full cancellation looks difficult to pull off.”

Rishi Sunak and Jeremy Hunt have been in talks about ditching the northern leg of HS2 (Downing Street)

The Independent understands that several Tory MPs have made their frustration clear with the Tory whips. “It’s not just the usual suspects. There are loyal MPs who have concerns,” said one source.

A senior Tory MP, whose constituency is in the north of England, said: “There will be uproar if it doesn’t go ahead in full to Manchester. We can’t afford another issue in which the opposition and others are up in arms.”

However, some Tories in southern seats are not opposed to ditching the rest of HS2. And some on the Tory right – such as John Redwood – are keen to axe it to create headroom for tax cuts. However,The Independent understands that ‘‘Project Redwood’’ was not named after the MP.

No 10 and the Treasury would still not be drawn on decisions, but The Independent understands that the two are holding further talks over whether to scrap Phase 2.

While such a major decision would usually be made before party conference, some Tories believe they may want to “test the feeling” in Manchester next month before coming to a final decision at the mini-Budget on 22 November.

Former Tory chancellor George Osborne has said scrapping the northern leg would be a “tragedy”, while Labour mayor of Greater Manchester Andy Burnham accused the government of leaving the north with “Victorian infrastructure, adding: “Levelling up my a***.”

Henri Murison, the chief executive of the Northern Powerhouse Partnership – who is pushing for HS2 to be finished in full – said: “The government making changes to such a major project is bad for the UK’s standing in the world when it comes to investors.”

He added: “There will be damage done to investment just by considering scrapping it – the idea should be put back in the cereal box it came in.”

HS2 has been subject to cost overruns and painful inflation (PA Archive)

Some Tory MPs have told Mr Hunt to slow down the project and stagger costs to save money in the next couple of years before “stepping on the accelerator” if still in government after the election.

But rail industry figures have emphasised delays will just make HS2 more expensive, and that the opportunity to save money by pushing back work has gone. “Any deferral of spending now just makes the overall cost go up,” said a source close to the project.

The row came as Labour moved to quash the idea that it could also back out of a promise to complete the project, after frontbencher Pat McFadden refused to commit to its completion to Manchester on the BBC on Sunday.

But Keir Starmer told the Financial Times the party “remains committed” to the high-speed rail project in the north, and shadow transport secretary Louise Haigh said it was “committed to delivering HS2 in full and maximising its economic benefits”.

Labour shadow minister Nick Thomas-Symonds went further, however, telling BBC Radio 4’s PM programme that Labour will build HS2 to Leeds as well as Manchester – the eastern leg scrapped in 2021.  “It’s both to Manchester and indeed the eastern leg... to Leeds.”

A Labour spokesperson later said: “Labour supports the government’s promise to deliver HS2 in full, and wishes to see it reach Leeds.”

In the Commons, Ms Haigh claimed that HS2 would provide a slower journey between London and Birmingham than current services if the northern leg – and a link between Old Oak Common and Euston in central London – was slashed.

“What started out as a modern infrastructure plan left by the last Labour government … after 13 years of Tory incompetence, waste and broken promises will have turned into a humiliating Conservative failure – a great rail betrayal,” she said.

Keir Starmer has insisted Labour will build HS2 in full (PA)

Tory transport minister Richard Holden would not confirm whether HS2 would run to Manchester or not, and attacked Labour instead. “You can’t trust a word they say on transport spending,” he said.

But Iain Stewart MP, the Tory chair of the Commons transport committee, shared his frustration and said that it would be a false economy to ditch the northern leg. “Either do it properly or don’t do it at all,” he told the minister.

HS2’s costs have risen from £37bn to over £70bn due to overruns and inflation – with some estimates putting the eventual price tag at over £100bn.

Mr Sunak’s official spokesman – who last week could not commit to building HS2 in full to Manchester – said on Monday that the PM had to look at costs of all “large-scale infrastructure projects”.

Grilled on whether cuts were being considered, the No 10 official told reporters: “There’s lots of speculation but for our part, we are committed to HS2.”

He added: “I’m not going to get into the spending review, I never would. All I would say is that there is ongoing work on HS2 and the chancellor, for his part, will always look at all delivery of all large-scale infrastructure projects, I think this is no different.”

The Treasury directed The Independent to Mr Hunt’s comments last week, in which he said: “You would expect the prime minister and the chancellor to be having discussions as to how to manage those cost overruns.”

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