PM can keep country guessing over what he intends for HS2
BORIS Johnson's decision to order an inquiry into HS2 made a lot of sense politically. Regardless of what happens regarding Brexit, it's always been clear that he would need to call a general election soon.
That's because he inherited a working majority of just one MP, which is not enough for any administration to govern the country effectively.
Of course, he's now lost his majority entirely, following the defection of former Tory MP Phillip Lee to the Liberal Democrats.
HS2 was bound to come up as an election issue. Some Conservatives who oppose the rail scheme think that Mr Johnson may be one of them and plans to scrap the project, while other Tories – such as the Conservative West Midlands mayor, Andy Street – are firmly in favour.
If a review is taking place during the election, he can avoid upsetting either side too much.
It delays the need to make a decision.
Having said that, the signs have always been that Mr Johnson is minded to go ahead with HS2. In fact, he's said as much himself,
Speaking to the Post in July, shortly after becoming Prime Minister, he said: “I want to stress to everybody that, look there's no one more fanatical about major infrastructure projects than me ... I'm going to hesitate for a long time before scrapping any major infrastructure project.”
The trouble for Mr Johnson, and for supporters of HS2 generally, is that the project really does appear to be in trouble.
This week the Department for Transport published a report by
Allan Cook, the chairman of HS2 Ltd, the Government-owned business building the line. It confirms that the proposed rail network, due to run between London, Birmingham, Manchester and Leeds, will cost more than expected and cannot be completed on time.
Phase 1 of HS2, the line between London and Birmingham, was due to
open in 2026 and cost £27 billion.
But Mr Cook said: “Though much work has been done to date to drive down costs through independent reviews and pilot studies, the cost is likely to rise from £27 billion to a range of £36 billion to £38 billion; and the target delivery date of December 2026 should become a more realistic, manageable and cost-effective staged opening between 2028 and 2031.”
Phase 2a of HS2 is the section between Birmingham and Crewe.
The cost of this is to rise from £3.5 billion to a range between £3.6 billion and £4 billion, said Mr Cook.
And phase 2b – lines from Crewe to Manchester and from Birmingham to Leeds – is also going to be over budget and late. Mr Cook said: "The cost of Phase 2b is likely to rise from £28.6 billion to a range of £32 billion to £36 billion with target delivery moving from 2033 to between 2035 and 2040.”
It means that completion of the whole thing could take up to seven years longer than planned. It was due to be finished in 2033 and might now be delayed until 2040.
As a result, a project that was due to cost £55.7 billion in total might now cost up to £78 billion.
These figures are all in 2015 prices. That's when the original budget was set, so it makes sense to use them when talking about how the cost of the project has increased. But in today's money the cost is actually increasing from £62.4 billion (which is the equivalent of £55.7 billion in 2015) to between £81 billion and £88 billion, according to Transport Secretary Grant Shapps.
The cash cost of any project that takes decades to complete is always likely to go up year after year, simply because of inflation.
It's wrong to consider this to be a real increase. But given that HS2 is, in fact, set to go over budget, the scheme's opponents might be tempted to highlight the £88 billion figure – and it certainly is a lot of money.
Supporters of HS2 realise they need to speak out to support it.
Andy Street, the Mayor of the West Midlands, is a member of the review panel set up to consider the future of the scheme, chaired by Douglas Oakervee, who is a former chair of HS2 himself.
Mr Street said:: “Clearly the announcement today about the cost and the timeline for HS2 is disappointing, and that is why the Prime Minister has called a review to make sure the management and budget of HS2 are under control – and that the project continues to provide value for money for taxpayers.
“As a member of the panel of the Oakervee Review, I am working with the chair and the other members of the panel from other parts of the country to review the HS2 project and to get a grip on both the costs and the timeline.
“HS2 is mission critical for the West Midlands as it will free up the capacity we so desperately need on our existing railways, drive huge economic growth, and is already creating jobs and building new homes in the region.”
Business leaders also made the case for the project. Paul Faulkner, chief executive of the Greater Birmingham Chambers of Commerce, writing in today's Post said: “Today's announcement is disappointing but needs to be appreciated in its proper context.”
Campaigners hoping to stop the project, meanwhile, naturally feel their case has been strengthened.
Penny Gaines, chair of Stop HS2, said: “What's clear from Grant Shapps statement is the very dire state of the HS2 project, just a couple of months after Government ministers were claiming the budget and schedule were fine.”
Completion of the whole thing could take up to seven years longer