Construction leaders have warned the government that scrapping Phase 2 of High Speed 2 would have “serious implications” for the UK economy.
Prime Minister Rishi Sunak is expected to derail or postpone the HS2 extension from Birmingham to Manchester amid concerns over the cost of the project. This morning (September 25) Sunak once again refused to support Phase 2 during an interview with BBC News.
The possible scrapping of Phase 2, which also includes a route from west London (Old Oak Common) to central London (Euston), has been met with horror by construction executives, who warned on Friday ( 22 September) that they “cannot exaggerate how damaging” the changes to the scope of HS2 are.
Senior executives from Mace, Skanska and VolkerRail were signatories to an open letter (see in full, below) of the construction industry to the government, asking it to support Phase 2 of HS2. Other signatories include executives from consultancies such as Aecom, Arcadis and Atkinsréalis, as well as High Speed 1, British Steel and the Railway Industry Association.
“The renewed speculation over the past week has been deeply alarming and destabilizing for the industry as a whole,” the letter says.
“It is a special blow to the 30,000 people who work to deliver this vital infrastructure every day, and the thousands of businesses in the North West who are currently investing in the area based on HS2 coming to Manchester.
“Discarding [the government’s commitment to HS2 phase 2] it will now have serious implications for the UK economy.”
The letter added: “Perhaps most important of all, from a business perspective, these constant changes to a flagship infrastructure project add to the perceived risk of the UK as a place to do business, as well as adding to the cost of each and every infrastructure project in the future.
“At a time when we have to compete globally more strongly than ever and we have to provide infrastructure more efficiently than in the past, we cannot overstate how damaging this is.”
Speculation that the route between Birmingham and Manchester could be scrapped or delayed arose earlier this month, after pictures emerged suggesting the Prime Minister and Chancellor were discussing the costs of continuing the scheme.
Sunak has not confirmed its commitment to the full HS2 route. He is expected to make an announcement this week, ahead of the Conservative Party Conference in Manchester this weekend.
Former transport secretary Grant Schapps told the BBC on Sunday (September 24) that going ahead with the plan would be “irresponsible” in the face of rising costs.
The alleged change of plans has faced backlash from a spectrum of business and political leaders.
John Armitt, chairman of the National Infrastructure Commission, told the BBC on Saturday (September 23) that capping HS2 would be a “tragedy”, telling the government: “You control costs, you don’t run at the first blow of shots.
“You dive in and address these cost issues and deal with them on a daily basis throughout the project.”
Gordon Brown, whose Labor government originally proposed HS2, said: “Every country in Europe is doing high-speed rail.
“It is becoming the norm rather than the exception, and Britain is in danger of having 19th-century solutions to 21st-century problems.”
Sunak has also faced backlash from his own party. Former cabinet members George Osborne and Michael Heseltine wrote in the times that scrapping the line in Manchester would be a “serious act of vandalism”.
Full: letter from industry to government
Dear Prime Minister and Chancellor,
We are writing as representatives of 21 companies, who collectively employ thousands of people across the UK, to urge you to end the speculation and recommit to HS2 from Manchester to Euston. All the companies signing below are either based here or have substantial, long-term commitments to invest in and support the UK economy.
As you know, nothing is more important in business than certainty and trust. This is the basis on which we invest and grow, and the basis on which we employ people and develop their skills. Our growth supports the government’s pledge to take office last year to grow the economy and create better paying jobs.
As such, it was welcomed when each, as Prime Minister and Chancellor of the Exchequer respectively, took office and gave clarity and certainty to HS2, the country’s biggest public infrastructure investment project. The project already employs around 30,000 people, most of whom work in our UK-based companies and SME supply chains.
Delivering great infrastructure properly means making a long-term commitment, giving certainty to the companies that build it, and planning to rely on it well into the future. In the Autumn Statement, just 10 months ago, the Chancellor unequivocally committed to Phase 2 of HS2, stating that “smart countries build on their long-term commitments rather than scrap them. .. so today I am confirming that… we will deliver… HS2 in Manchester.”
We agree that you were right to make this long-term commitment. Scrapping it now will have serious implications for the UK economy. As more uncertainty emerged around HS2 earlier this year, the Chancellor stepped in again to provide certainty and business confidence. When asked if HS2 would come to Euston, the chancellor insisted he saw “no conceivable circumstances” that it would not.
Over the years, Prime Minister, you have also been clear in your support for HS2. In March this year you told the Liaison Committee: “I think it’s important that we take on the big infrastructure projects, that we do them right.”
In view of the above, the renewed speculation during the last week has been deeply alarming and destabilizing for the industry as a whole. It is a particular blow to the 30,000 people who work to deliver this vital infrastructure every day, and the thousands of North West businesses who are currently investing in the area based on HS2 coming to Manchester.
The UK’s reputation as a place to invest and do business has already suffered in recent years. Statements by some politicians have had the effect of undermining the UK’s reputation for certainty, trust and predictability in decision-making in our country. Together, you have both worked hard to address these reputational challenges since taking office a year ago.
This hard work would be undone if the rug was pulled from under HS2. The scope of the project has already changed three times in the last three years, with the eastern section being withdrawn, the Golborne link being removed and then certain works being postponed for two years. Each change in scope adds to the costs: the two-year postponement alone will cost at least £380m, with 100 jobs already cut as a result of the decision. At the same time, it reduces the benefits of the scheme, weakening the business case.
Perhaps most important of all, from a business perspective, these constant changes to a flagship infrastructure project add to the perceived risk of the UK as a place to do business, as well as adding to the cost of each and every infrastructure projects in the future. . At a time when we must compete globally more forcefully than ever and must provide infrastructure more efficiently than in the past, we cannot overstate how damaging this is.
We urge you to move urgently to quell the speculation and reaffirm your commitment to the delivery of HS2 Phase 2, from Manchester to Euston in full, to sustain the growth in the widespread economic benefits that this project is already delivering.
Your
Colin Wood, CEO of Aecom
Alan Brookes, Global Managing Director of Arcadis
Richard Robinson, CEO UK and Europe, Atkinsréalis
Xijun Cao, Chairman and CEO of British Steel
Chris Rumfitt, CEO of Field Consulting
Nigel Milton, Head of Cabinet and Carbon, Heathrow
Dyan Crowther, Chief Executive, High Speed 1
Michael Hird, Chairman and Owner, Hird Group
Darren James, CEO of Keltbray
Paul Goodhand, Managing Director of Knorr-Bremse Rail Systems (UK) Ltd
William Wilson, CEO of Linbrooke Services Ltd
Mark Reynolds, Group Chairman and CEO of Mace Group
Charlie Cornish, Group Chief Executive, Manchester Airports Group
Darren Caplan, chief executive of the Rail Industry Association
Lucy Prior MBE, Chair, Railway Industry Association SME Group
James Bain, Chief Operating Officer Europe, Worldline and President, Rail Supply Group
Rob Morris and Sambit Banerjee, Joint CEOs of Siemens Mobility
Thomas Faulkner, Executive Vice President of Skanska UK
Nick Salt, CEO of Systra
Andy Bell, vice president of Thales GTS UK
Alan Robertson, Chairman, VolkerRail
