Business leaders react to government’s derailing of HS2

Empty railway tracks

Reaction was mixed on Rishi Sunak’s decision to formally announce the cancellation of the planned HS2 rail link from Birmingham to Manchester,

The Prime Minster told the Tory Party conference the government would invest the estimated £36bn saved in other transport projects across the whole country – including a number of road schemes.

Costs for the project had overrun and the plans as they stood no longer made economic sense, he said, adding: “The facts have changed, and the right thing to do when the facts change is to have the courage to change direction.”

Speaking shortly afterwards, Martin McTague the FSB’s National Chair, cautioned that major multi-year, multi-Government projects such as the Net Zero transition or HS2 require a long-term, cross-party, multi-government approach, “much like when the UK hosted the Olympic Games in 2012”.

He said: “This is the only way to cope with the UK’s four- or five-year electoral cycle, or at times when the Government changes more quickly.

“Improving east-west links across the North of England and the Midlands is absolutely vital, but so is connecting them into the national network, as would have happened by connecting Northern Powerhouse rail to HS2.

It neither makes sense economically nor politically. Once again, the north has been promised the earth but all it seems we’ll get is scorched earth

“The new or improved projects need to be assessed for benefits on capacity and connectivity for both passengers and freight, to set them against what has been lost from HS2 today. Ultimately, the responsibility is now on the Government to prove that these new decisions will deliver value for money for taxpayers and make life easier for small business.”

Greater Manchester Chamber of Commerce’s Policy Director, Chris Fletcher, said: “To many people that have followed HS2 since its inception they will be aware that for some strange reason successive governments, usually driven by the Treasury, have found it impossible to leave it well alone and just let it get built.”

He described it as madness that the government could even think about scrapping the northern leg and found it difficult to comprehend the logic behind it.

“It neither makes sense economically nor politically,” he said. “Once again, the north has been promised the earth but all it seems we’ll get is scorched earth.”

But Mark Littlewood, Director General of the free market think tank, the Institute of Economic Affairs, described the “derailing of HS2 as a victory for common sense”.

He added: “It never made sense to spend over £100 billion for slightly faster trips between London and Manchester. Commuter transport, linking people to work and family, delivers far better value for money. Though it is deeply disappointing not a single penny of the savings will be returned to taxpayers.”