As he prepares for what may be his last party conference as Prime Minister, Rishi Sunak is working on a truly unpleasant gift for Manchester, host city to the gathering that opens on Sunday. Though ministers insist that no final decision has been taken, they have conspicuously declined to deny reports that the Birmingham-Manchester section of HS2 is set to be scrapped — or delayed to the point that it is an objective only on paper.
It is also increasingly likely that the London terminus of the high-speed rail-link will be Old Oak Common, six miles west of Euston, as originally planned. If Sunak proceeds on this basis, HS2 will amount to no more than a 140-mile connection between two inconveniently situated stations in London and Birmingham.
It is not hard to see why a fiscal conservative such as Sunak is fretful. Estimated to cost £32 billion in 2009, HS2 is now heading towards a total cost more than three times that original figure. Time to slam on the brakes, surely? How can a financially straitened nation possibly afford to pursue such a plan?
Look at the whole board and you will see that we cannot possibly afford not to. The weakest argument for proceeding as originally planned is the so-called “sunk-cost fallacy”: namely, that one should not abandon a strategy that has already consumed significant resources.
The real case for doubling down on HS2, getting a grip of the troubled project and realising its potential involves a greater understanding of what infrastructure truly is. For Sunak, the man of finance, it is no more than a line item on the public accounts. In truth, however, national infrastructure is better understood as an organism that grows or atrophies.
Big schemes spawn smaller schemes. New rail links — like better internet connectivity and enhanced energy grids — bring new jobs, new training schemes, new inward investment, lower carbon emissions.
Look at the Channel Tunnel today, once scorned as the greatest white elephant of them all
Look at the Channel Tunnel today, once scorned as the greatest white elephant of them all. Look at the triumph of the Elizabeth line, so frequently the object of derision when it was still known as Crossrail.
Former chancellor George Osborne and former deputy PM Michael Heseltine were correct to argue in yesterday’s Times that the proposed tearing up of the original HS2 plan would be “an act of huge economic self-harm”.
HS2 is not just a cost. It is also the basis of a prospective transport ecosystem that, if nurtured properly and with courage, could yet transform transport in large sections of this country. As Network Rail has warned, the high-speed link should not be seen in isolation but as the heart of our rail strategy.
The Government’s response to that argument appears to be: we will take the money saved and spend it instead on local transport projects in the North and Midlands. And if you believe that, I have a rather nice bridge you might be interested in buying.
Certainly, axing the Birmingham-Manchester spur would make a mockery of “levelling-up” and of Northern Powerhouse Rail. Andy Burnham, the mayor of Greater Manchester, was richly entitled to complain on yesterday’s Today programme that such a decision “would leave the North of England with Victorian infrastructure probably for the rest of this century”.
Already, existing and prospective investors are troubled by what they hear. As today’s Financial Times reveals, the new American owners of Birmingham City Football Club have written to the Prime Minister, warning him that “any deviation could result in a loss of investor trust. This would have a considerable negative impact on the UK.”
At present, Sunak’s conservatism amounts to little more than a belief in the control of inflation, a longing for eventual tax cuts and a dismal fixation with “small boats”. This is nothing like enough for the challenges of the 21st century or a sufficient engine for the growth that we will require to meet our basic needs.
Instead of wielding his accountant’s axe, the PM should display the true leadership that gets projects like HS2 over the line. As Robert Caro records in his classic biography of Robert Moses, the mighty New York urban planner: “Science, knowledge, logic and brilliance might be useful tools but they didn’t build highways or civil service systems. Power built highways and civil service systems.”
Does Sunak have the power to show the world that the UK is indeed committed to serious public investment and to staying the course? As the Iron Lady herself might put it: this is no time to go wobbly.
