Rishi set to axe HS2 link after ‘out of control’ cost increases by nearly £8,000,000,000

Rishi Sunak appears poised to axe the northern arm of the HS2 rail line from Birmingham to Manchester, due to spiralling costs.

The Sunday Telegraph reported the potential cost of the high-speed rail scheme – which Chancellor Jeremy Hunt has said is ‘out of control’ – had increased by £8 billion.

The Observer suggested the decision to kill off the Manchester leg of the scheme could come before the Tories host their conference in the city on October 1.

The Prime Minister and Chancellor are reported to be meeting to discuss the situation in the coming days.

A Whitehall source told the Telegraph: ‘There is a reluctance to throw good money after bad.’

It said officials expect the upper estimate of building the initial London to Birmingham stretch of the line to increase by more than £8 billion from the £45 billion figure published in June 2022.

Spiralling costs could prevent investment in other transport projects and wipe out any financial benefits from the scheme, the newspaper said.

Former prime minister Boris Johnson has labelled the scepticism around the scheme ‘total Treasury-driven nonsense’, stressing that it would make no sense to have a ‘mutilated’ HS2 and warning that announcing it before the Manchester conference would be ‘the height of insanity’.

David Cameron has also privately raised significant concerns about the prospect that the high-speed rail line could be truncated.

Dozens of business leaders signed a Times letter accusing Mr Sunak of damaging Britain’s reputation as a place to do business by allowing uncertainty to ‘plague’ the project.

Sir John Armitt, chairman of the National Infrastructure Commission, said it would be a ‘tragedy’ if the scheme was cut back.

He warned it would damage the UK’s appeal as a place to invest in major projects.

And in a letter to the Prime Minister, London Mayor Sadiq Khan said HS2 could end up being a ‘colossal waste of money’ if key elements of the plan are scrapped.

Mr Khan said it would take longer to get from Birmingham to central London on HS2 than existing trains if plans for it to terminate at Euston station are abandoned.

He said the speculation about scrapping the Birmingham-Manchester leg of the route was ‘deeply worrying’.

The Labour mayor told Mr Sunak: ‘The Government’s approach to HS2 risks squandering the huge economic opportunity that it presents and turning it instead into a colossal waste of public money.’

When the railway first opens between London and Birmingham, expected between 2029 and 2033, its terminus in the capital will be Old Oak Common, in the western suburbs.

HS2 trains are not expected to run to Euston until around 2041 at the earliest and there are now doubts the central London extension will ever go ahead.

Mr Khan said: ‘Terminating the service at Old Oak Common would be a short-sighted decision which will have long term implications, significantly downgrading the value of HS2 as a high-speed connection and leaving a ridiculous situation where a ‘high speed’ journey between Birmingham and central London could take as long as the existing route, if not longer.’

He said the ‘best case’ journey time of one hour and 22 minutes from Birmingham to Euston, changing at Old Oak Common onto the Elizabeth Line and Northern Line, was ‘already one minute longer than the existing train time’.

Mr Khan told the Prime Minister: ‘The public would rightly be dismayed were all of this time and money spent on a line that took longer to reach central London than the existing route, and was devoid of any proper connections to the north of England.’

But Labour peer Lord Berkeley, who in 2019 was deputy chairman of a government-commissioned review into HS2, suggested funding should be prioritised for rail upgrades in northern England and the Midlands.

‘Old Oak Common will do fine for this truncated railway,’ he told BBC Radio 4’s Today.

A Government spokesman said: ‘The HS2 project is already well under way with spades in the ground, and our focus remains on delivering it.’

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