There are growing fears that the ongoing uncertainty is causing investors to pull out of the UK, after The Independent first revealed plans by Mr Sunak and chancellor Jeremy Hunt to scale back the high-speed rail line.
In an excruciating round of interviews with BBC local radio stations, Mr Sunak repeatedly refused to commit to phase 2 – and instead suggested that fixing potholes was “priority No 1” and blamed Covid for failing railways.
It came as the TUC and other trade union chiefs demanded the Sunak government convene an “emergency summit” to find a solution to the cost of the Birmingham to Manchester route as they called on the prime minister to commit to building it in full.
The heads of transport unions the TSSA, RMT and Aslef, as well as Unite and GMB, said in a joint statement: “The huge economic benefits of HS2’s northern leg must not be squandered because of ongoing Conservative incompetence.”
In a scathing message to Mr Sunak, Juergen Maier, vice-chairman of Northern Powerhouse Partnership, said: “Stop dithering – get on with it. Dithering and delay pushes up costs.”
The ex-Siemens boss told The Independent that global investors had been spooked by the lack of clarity over HS2’s future. “It’s damaging for the firms directly involved who may have to scale back, and it’s damaging confidence from investors looking where to go in the world.”
He added: “They’re looking at our lack of industrial strategy and wondering if they can make investments in the UK. Conversations are going on in every boardroom. The dither is incredibly unhelpful.”
Manchester Airports Group became the latest major business group to call on Mr Sunak to “be clear”, urging him on Thursday to commit to building the northern leg in full.
Ken O’Toole, the airports’ incoming chief executive, said the north has been “held back for too long” by the lack of an integrated transport network. He said the Sunak government “must be clear in its support for these transformative schemes”.
Business leaders were left frustrated as Mr Sunak repeatedly ducked questions on the future of HS2 during a series of awkward pre-conference interviews – blaming Covid for the failing railways.
The PM told BBC radio that the pandemic caused everyone to “stop travelling on the rail network”, which has made running train services “very difficult”.
The Tory leader said there were “spades in the ground” on phase 1, but refused to say whether he was committed to phase 2, which The Independent revealed Mr Sunak and Mr Hunt are considering scrapping or kicking into the long grass to save cash.
Henrietta Brealey, chief of the Greater Birmingham Chambers of Commerce, told Mr Sunak: “Be bold, have vision and be confident that we can do this. Don’t wobble at the key moment. It can create so much more than the initial investment.”
“The uncertainty is deeply frustrating,” she told The Independent, pointing to the 400 companies and 8,000 jobs in the West Midlands connected to the HS2 supply chain. “Businesses are demanding clarity – they can’t commit to jobs and investment for phase 2.”
With Mr Sunak not expected to set out his cost-cutting plan until next month, Chris Fletcher, policy director at Greater Manchester Chamber of Commerce, also called on Mr Sunak to end the “madness” of uncertainty and commit to the northern leg in full.
“For some strange reason successive governments, usually driven by the Treasury, have found it impossible to leave well alone and just let it get built,” he told The Independent. “The resultant delays, changes and re-scoping have added extra, unnecessary costs.”
Mark Reynolds, the boss of the firm building HS2’s new London station, also delivered a stinging message to Mr Sunak about “short-termism”, saying “we all end up worse off” if the project is scaled back.
The chief executive of the Mace Group, the firm tasked with redeveloping Euston, told The Independent that companies “need certainty”, adding: “Firms have made important decisions based on an assumption that much-needed new rail capacity will be built.”
Mr Reynolds added: “To make a short-termist decision to cut that away will leave many firms across the whole country unable to convince shareholders or investors in the future that investing in expansion or growth is the right choice – and then we all end up worse off.”
Kate Nicholls, UKHospitality boss, said pubs, clubs and restaurants were “eagerly awaiting” Mr Sunak’s decision. She said Northern Powerhouse Rail “is as important, if not more so, than HS2” for businesses because connecting northern cities would be a huge “boost”.
Meanwhile, the former chairman of HS2 fired back at the government’s cost claims – blaming “short-sighted” Tory ministers for the high-speed rail project’s spiralling price tag.
Allan Cook – who ran the project between 2018 and 2021 – accused the government of trying to duck responsibility and claimed it would be a “scandalous waste of money” if Mr Sunak and Mr Hunt were to end the line at Birmingham.
“Representatives from the Treasury and transport department sat on the HS2 board during my time as chairman,” Mr Cook told the Daily Mail. Asked about the idea executives acted like “kids with the golden credit card”, he said: “Nothing could be further from the truth.”
Mr Sunak is understood to be considering an option to quell a Tory backlash by delaying the Birmingham to Manchester line by up to seven years.
There have been indications he could announce a string of regional transport improvements in an effort to limit the political fallout – including bringing forward Northern Powerhouse Rail between Manchester and Leeds.
On Thursday, the Tees Valley Tory mayor Ben Houchen appeared to offer Mr Sunak his support for cuts by calling HS2 a “white elephant” and condemning its “ridiculous” cost.
He claimed that “if we reallocated the money we could deliver NPR, in full, and give every northern leader enough to transform local transport in their areas and still save the taxpayer £80bn”.
Senior red wall Tories in the influential Northern Research Group have signalled they are willing to accept a delay to the northern leg of HS2 – so long as the PM commits to east-west rail projects.
Labour mayor of Greater Manchester Andy Burnham has suggested he could be open to a delay – if the government commits to a section of HS2 between Manchester Airport and Manchester Piccadilly.
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