Rishi Sunak has been accused of the “biggest and most damaging U-turn in the history of UK infrastructure” by scrapping the northern leg of HS2, with a promise to divert £36bn into transport in the Midlands and north.
Critics said the prime minister’s “Network North” plan included schemes already under way or where funding was expected, as well as projects paused or cancelled under Sunak as chancellor or prime minister. Money due to be spent on HS2 will now be going into road schemes frozen just six months ago.
Sunak said the “facts have changed” and it was time to ditch the high-speed rail project between Birmingham and Manchester in the face of increasing costs, insisting the regions would benefit from equal or more spending on local transport projects under the Network North scheme.
He confirmed that, contrary to some fears, the HS2 line would continue into central London, ending at a scaled-down Euston station.
He promised £9.6bn would be reinvested in the Midlands, including the Midlands rail hub project, and an extra £1bn in funding for the West Midlands city region, whose Conservative mayor, Andy Street, had earlier indicated he might quit the party if HS2 was culled.
About £3bn of the £19.8bn for the north from scrapping the second phases of HS2 would be spent on electrifying rail lines, with £2bn going on a new station and rail link in Bradford, and £2.5bn for West Yorkshire, including the Leeds tram.
He promised an additional £12bn in funding to allow rail links to still be built between Manchester and Liverpool – part of the scrapped HS2 plan – which would allow a Northern Powerhouse rail to go ahead, but said the government would ask local leaders if that was how they wished to spend the money.
Sunak said the government would also fund the extension of the £2 single bus fare cap until the end of 2024.
The new direction comes less than two years after the government, with Sunak as chancellor, announced the integrated rail plan, which overturned northern transport authorities’ designs for an east-west line straddling the Pennines and removed a station at Bradford.
Scrapping the HS2 scheme, which had passed through parliament with overwhelming cross-party support under previous Conservative prime ministers, Sunak said: “I say to those who backed the project in the first place, the facts have changed. The right thing to do when the facts change is to have the courage to change direction.”
Sunak said costs had “more than doubled”, while Covid had reduced rail travel.
He said that while the line would continue to Euston, £6.5bn would be saved – more than the current budget – and diverted into local transport projects outside the capital. Fewer platforms would be built, limiting the services that could be run. He said the station scheme would be taken away from HS2 Ltd because of “mismanagement”, with private investors invited to contribute in the manner of the redevelopment of London’s Battersea power station.
A recent public accounts committee report on Euston blamed government indecision for the escalating forecast budget of £4.8bn to build the station, where construction is yet to start, after the Department for Transport ripped up original designs.
Downing St said the £36bn would be spent in the same 2029-40 period as HS2’s cancelled construction.
Labour called it a “staggering Tory fiasco”. Louise Haigh, shadow transport secretary, said: “Is there anything more emblematic of 13 years of dismal failure by this broken government than their flagship levelling up project that fails to even reach the north?”
The High Speed Rail group, representing firms working on HS2, said the decision was “a devastating blow to our industry and our whole economy”. Spokesman Chris Rumfitt said: “The principal cause of any real-term cost increases lies in the chopping and changing of the project’s scope, with today’s news being the fourth major change by government in just three years.”
While the government said building phase one would still allow high-speed trains to joint the current west coast mainline and cut journey times, the rail group said the plan would “create a huge bottleneck” and reduce connections between the Midlands and north.
John Armitt, chair of the National Infrastructure Commission, said the decision was “deeply disappointing”, adding: “HS2 was part of a long-term strategy with clear objectives to link up some of the country’s largest cities. It had been planned for almost 15 years and under construction since 2017… It’s not yet clear how the collection of schemes announced today will address the gap left behind by HS2.”
Crucially for the prime minister, a major split within the Tory party was avoided when Andy Street confirmed he would stay in the party and work with Sunak on an alternative. The prime minister’s press secretary also said all ministers had been “very supportive” of the plans in a 45-minute cabinet meeting in Manchester on Wednesday morning, and that stopping work on the northern leg would not need a new vote in parliament.
Street said he was still “putting place before party”, adding: “The PM said emphatically today that the Manchester leg of HS2 was cancelled but, delusion or not, I believe through this work a high-speed link between Birmingham and Manchester can be revived … Do not forget that HS2 was never meant to reach Manchester until 2041, and I am convinced we can find a way to get back on track.”
However, the Department for Transport said that land earmarked for the HS2 route between Birmingham and Crewe would not be safeguarded for potential future expansion of the high-speed railway.
Cities and industry groups have united in expressing concern and scepticism about a decision that overturned years of planning.
The business lobby group the CBI said the decision sent “a damaging signal about the UK’s status as global destination for investment”.
Jason Prince, director of the Urban Transport Group, which represents city authorities outside London, said they had designed local transport schemes “around the promise of larger infrastructure projects, whether HS2 or otherwise. Our members need the confidence that once schemes are announced, they are delivered”.
Zoë Billingham, director of IPPR North, said the replacement plan “not only undermines levelling up but also lacks credibility”.
Rail firms said the decision would limit how many freight trains could run, and would mean half a million more lorries on roads every year.
Andy Bagnall, chief executive of Rail Partners, said the consequences of scrapping HS2 would be “felt for generations by the rail industry, its supply chain, passengers and freight customers” and it would “ultimately mean more lorries on our roads”.
The Road Haulage Association welcomed Sunak’s pledge that funds from scrapping HS2 would be directed to improving roads.