Osborne backs HS2 speed-up plan

Chancellor George Osborne has backed proposals to bring forward by six years the planned extension to Crewe of the HS2 high-speed rail link between London, the Midlands and the North of England.

Sir David Higgins said HS2 was 'vital for the future of the country'
Artist impression of HS2 rail line

The move, which would see the first trains running on the Birmingham-Crewe section by 2027, was a key recommendation of a report by HS2 Ltd chair Sir David Higgins.

Mr Osborne said he "welcomes and supports" the idea and asked HS2 Ltd to draw up firm proposals. And he also backed Sir David's call for a more comprehensive redevelopment of Euston station, in the borough of Camden, which will form the London terminal of the line.

But the Chancellor made clear there would be "no increases" in spending limits on the £50 billion project.

The Higgins report said a new station at Crewe in Cheshire should be completed by 2027, six years ahead of schedule, and that phase 2 - taking the line north from Birmingham in a Y-shape to north-west and north-east England, could be finished by the end of 2030 - three years earlier than planned.

In response, Mr Osborne said: "Sir David's proposals would see huge benefits delivered to the North six years sooner than planned through a new hub at Crewe, creating more growth and rebalancing the economy in line with our long-term economic plan.

"I welcome and support this, and that's why we have asked HS2 Ltd to work up firm proposals for his recommendations. I also support the proposal for significant regeneration of Camden through a proper redevelopment of Euston station, something I said recently was worth doing.

"As Sir David says, HS2 is essential to the future of this country and will help fulfil the Government's long-term plans to create a balanced and more competitive economy across the UK. But we must be conscious of the price, and there will be no increases to the overall spending envelope set for HS2 at the last spending review."

Phase one of HS2 would see a line running from London through Tory heartlands to Birmingham and is due for completion in 2026. The current whole-line cost, including contingencies, is £42.6 billion, with £7.5 billion for the trains.

Launching a report on his plans in Manchester, Sir David said reducing the amount of money set aside for contingencies - which have pushed the total cost of the project up - would be "irresponsible".

But he said cost cuts might be possible later and he laid down the gauntlet to politicians by saying the speedier the HS2 legislation, the better for cost reductions.

Shadow chancellor Ed Balls has warned that there will be "no blank cheque" for HS2 under a Labour government, and yesterday said he would support the project if Sir David showed he had got the costs down.

Following the launch of Sir David's report, shadow transport secretary Mary Creagh said Labour will support the legislation paving the way for HS2, which will be debated by MPs over the coming months but is not thought likely to complete its passage through Parliament before next year's general election.

But Ms Creagh told BBC Radio 4's The World At One: "The project has suffered from mismanagement. We want to see HS2 back on track and we will continue to ensure that the public gets value for money for this project."

Transport Secretary Patrick McLoughlin said he agreed with concerns raised by Sir David about a proposed link between the HS2 line and HS1, which joins London to the Channel Tunnel.

Mr McLoughlin announced that he was removing the HS2-HS1 link from the HS2 Bill currently going through Parliament and would look at other ways of linking HS2 with the continent.

The Transport Secretary also said he was asking HS2 Ltd and Network Rail (NR) to "develop more comprehensive proposals for the development of Euston" and look at the proposals for Crewe and phase two.

Mr McLoughlin said: "Sir David Higgins proposes to build HS2 better and bring the benefits to the North sooner. He has the Government's strong support.

"HS2 is a vital part of our long-term economic plan. It will provide the extra space we need on our rail network for trains and passengers, link our northern cities and provide jobs and skills.

"HS2 is the right project at the right price and I believe implementing the measures Sir David recommends in the right way will deliver the benefits of HS2 faster."

Sir David said that despite the potential benefits of HS2, he was "conscious of the price - financial, physical and emotional - that HS2 will demand from the country, from communities and from individuals".

Speaking in Manchester today after launching his report, Sir David said he was hoping that the HS2 Bill would get Royal Assent in 2016 so that work on phase one could start, as planned, in 2017.

Challenging the politicians to get legislation through as quickly as possible, Sir David said; "The more certainty there is about the timescale, the more possible it is to control cost through economies of scale.

"That is why getting clarity over the duration of the parliamentary process is key. The more clarity Parliament can provide the more I can reduce contingency and therefore the ultimate cost."

He went on: "This project is too big to become a political football." Parliamentary scrutiny of HS2 was important, but was also time-consuming, he said.

Sir David said that "if done right", HS2 would "address the issues of congestion in the South and lack of connectivity in the North".