Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

Rishi Sunak shocked at runaway cost of HS2

by September 26, 2023
September 26, 2023
Rishi Sunak shocked at runaway cost of HS2

Rishi Sunak is “alarmed” by the escalating cost of HS2 amid claims that executives on the project have acted like “kids with the golden credit card”.

The prime minister has told allies that he is not prepared to watch the cost continue to escalate after being presented with figures suggesting that the overall price could pass £100 billion.

He is said to be particularly concerned by the apparent lack of cost controls, high salaries at the company overseeing the project and claims that the line had been deliberately “over-engineered”.

The prime minister is expected to delay a decision until the autumn statement in the face of a backlash from senior Conservatives.

Lord Hammond of Runnymede, a former chancellor, said that the project risked becoming a white elephant if it was not finished, and Patrick McLoughlin, a former transport secretary, said that scaling it back would be “completely wrong”.

It means that two former Tory prime ministers, three former chancellors and a former transport secretary are all opposed to curtailing the line.

Sunak is considering cancelling the northern leg of HS2 between Birmingham and Manchester and terminating the line at Old Oak Common in west London rather than in Euston to save money. He wants to reallocate savings to other regional transport projects including Northern Powerhouse Rail (NPR) between Manchester and Leeds.

It is understood that the prime minister may offer to fund a new underground rail station in Manchester as part of a package of transport investment in the north in a move designed to win the support of Andy Burnham, the Labour mayor.

Officials are also investigating a compromise that would mean the Birmingham to Manchester leg being delayed by up to seven years but with a commitment not to disband the project entirely.

This would help the government to balance the books before the next election as future costs would no longer fall into the financial period assessed by the Office for Budget Responsibility.

A source familiar with Sunak’s thinking said the prime minister believed that HS2’s northern leg and Euston terminus was a bad use of money and more could be achieved by doing it differently.

They said that the finances of the project were “far worse than anyone knows” and he was unwilling to “sit back and watch this balloon.”

It is understood that the cost of Phase 1, London to Birmingham, will “absolutely bust” the most pessimistic contingency plans, of £44.6 billion (at 2019 prices). When the project was announced the budget for its entirety was about £30 billion. It is now expected to cost more than £100 billion, even allowing for the fact that a line from Birmingham to Leeds has been scrapped.

One official said: “The whole project has been over-specced. It seems that the mantra of HS2 bosses has been to massively overspend all along to make it too big to kill . . . From the start they were like kids with the golden credit card.”

The project has been beset by delays and inflation. Ministers are particularly concerned that the project has been “over-engineered” to take trains that can run at speeds of up to 400km/h. HS2 trains will run at a maximum 360km/h, however, as part of efforts to reduce the cost of the rolling stock.

There is also concern over the management of the project by HS2 Ltd, set up by the government. More than 40 executives are paid over £150,000 and Mark Thurston, the chief executive, who is stepping down at the end of this month, is earning £640,000 a year.

Northern leaders are far keener on improving east-west links through the Northern Powerhouse scheme. A key part of the scheme, however, relies on about 13 miles of high-speed track from Manchester to near the airport.

Cancelling the section north of Birmingham would mean that several cities and large towns on the existing mainline — Stafford, Stoke-on-Trent, Macclesfield, Wilmslow and Stockport — are no longer bypassed.

The new US owners of Birmingham City FC have told Sunak he will damage trust in Britain if he limits the project. A letter from Tom Wagner, the chairman, was seen by the Financial Times.

Read more:
Rishi Sunak shocked at runaway cost of HS2

0
FacebookTwitterGoogle +Pinterest
previous post
Cato’s new Globalization Quiz Tests Your Knowledge (and Debunks a lot of Myths)
next post
Newsom’s longtime ties to Hunter Biden emerge after he justifies his business deals: ‘Here’s my direct email’

You may also like

The Outdoor Revival: How RockFence Capitals Is Changing...

May 7, 2025

Chapel Down on the Market Amid Soaring Demand...

June 25, 2024

Indonesia-linked investor in talks to save Britishvolt in...

January 11, 2023

Surge in voluntary liquidations sparks abuse of process...

September 27, 2024

Wowcher faces court threat over ‘misleading’ sales practices

November 16, 2023

Less than a quarter of Brits passed this...

July 3, 2023

Halfords’ profits halve as customers put the brakes...

June 22, 2023

Getting To Know You: Paul Eatock, MD, Eatock...

November 27, 2023

International Investment Summit delivers £63bn boost and 38,000...

October 15, 2024

UK Businesses Face Tightening Cash Flow Amid Rising...

October 15, 2024

The Outdoor Revival: How RockFence Capitals Is Changing...

May 7, 2025

Chapel Down on the Market Amid Soaring Demand...

June 25, 2024

Indonesia-linked investor in talks to save Britishvolt in...

January 11, 2023

Surge in voluntary liquidations sparks abuse of process...

September 27, 2024

Wowcher faces court threat over ‘misleading’ sales practices

November 16, 2023

Less than a quarter of Brits passed this...

July 3, 2023

Halfords’ profits halve as customers put the brakes...

June 22, 2023

Getting To Know You: Paul Eatock, MD, Eatock...

November 27, 2023

International Investment Summit delivers £63bn boost and 38,000...

October 15, 2024

UK Businesses Face Tightening Cash Flow Amid Rising...

October 15, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • ‘Gone too far’: GOP lawmakers rally around Trump after Musk raises Epstein allegations

      June 6, 2025
    • Democrats begin to embrace Musk amid Trump spat after party railed against him as a ‘dictator’

      June 6, 2025
    • Trump administration defends US and Israeli sovereignty with new sanctions against four ICC judges

      June 5, 2025
    • Musk unleashes wild Epstein claim against Trump after being booted from DOGE

      June 5, 2025
    • Three Charts Showing Proper Moving Average Alignment

      June 5, 2025
    • Biden only hand-signed one pardon during final spree, and it was his most controversial one

      June 5, 2025

    Categories

    • Business (8,149)
    • Investing (2,011)
    • Politics (15,542)
    • Stocks (3,129)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved