Sunak Faces HS2 Backlash as Tories, Business Try to Save Project

Prime Minister Rishi Sunak is facing a growing backlash from politicians and businesses waiting for confirmation on whether he will cancel the northern leg of the flagship HS2 high-speed rail project.

(Bloomberg) — Prime Minister Rishi Sunak is facing a growing backlash from politicians and businesses waiting for confirmation on whether he will cancel the northern leg of the flagship HS2 high-speed rail project.

The premier batted away questions during a round of broadcast interviews Tuesday, telling the BBC he would “look at the facts and take my time to get the decision right for the country.”

But with the cost of the full project potentially soaring to £100 billion ($121 billion) or more, Sunak is widely expected to cancel the Birmingham-to-Manchester leg of HS2, possibly in his speech Wednesday to the Conservative Party conference. He hinted as much in his interviews, likening his approach to his decision to water down the government’s green agenda.

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HS2 is a core plank of the Tory pledge to “level up” economic opportunities across the country, and the project has been supported by Sunak’s five immediate predecessors as premier. The issue has cast a shadow over the annual Tory gathering, which unhelpfully for the prime minister, is being held in a former railway station in Manchester.

Also in doubt is whether HS2 would be built to the originally planned terminus at Euston in central London, or stopped short at Old Oak Common in the western outskirts of the capital.

Sunak will meet with his Cabinet later on Tuesday to discuss the fate of HS2, according to a person familiar with the matter said. The timing of the meeting wasn’t immediately clear.

“It’s the biggest leveling up project the country has got,” former Tory Chancellor of the Exchequer George Osborne told Sky News on Tuesday. Cutting it short would be a “great tragedy.”

Another prominent Conservative — West Midlands Mayor Andy Street, whose remit covers Birmingham – warned late Monday that if the premier scraps the northern leg of HS2, he “will indeed be damaging our international reputation as a place to invest.”

Labour’s Greater Manchester Mayor Andy Burnham has said that if Sunak pulls the plug on the project, he’ll leave Manchester with “Victorian” infrastructure.

Business leaders have also sought to sway the prime minister, with Confederation of British Industry Director-General Rain Newton-Smith, telling Bloomberg TV on Tuesday:“We would encourage the PM to make sure we have a clear plan for HS2.”

Street said private sector companies including Siemens, EY, Mace and Arup are willing to help support the government in delivering the project. Mace Chief Executive Officer Mark Reynolds told the BBC on Monday that the government should stick to the project or risk deterring investors. 

“Foreign investors are not going to come if we do not continue to invest in our infrastructure,” Reynolds said. He said canceling the program would cost tens of thousands of jobs in Manchester, as well as thousands of projected new homes.

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To be sure, some Tory Members of Parliament including Esther McVey, who represents Tatton, near Manchester, have said they support scaling HS2 back. The project is “sucking the life out of our local transport,” McVey has said.

That comment points to the challenge facing Sunak to show northern England he’s prepared to invest in transport infrastructure regardless of his decision on HS2, including with east-west connections such as a long-sought faster link between Manchester and Leeds.

But Osborne said that’s “not a substitute for HS2,” and that the projects “should go ahead together.”

Meanwhile government minister gave a hint of Sunak might try to navigate the awkward politics of scaling back HS2. 

Asked whether axing the Manchester link would be a death knell for Conservative Party’s core promise to “level up” regions across the UK, she told Bloomberg Radio: “I don’t think you should frame HS2 as leveling up. This is one project.”

–With assistance from Lizzy Burden, Caroline Hepker and James Woolcock.

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