HS2 could be reviewed amid spending cuts, says Gove

Michael Gove has said HS2 could be scaled back as the government plans spending cuts to balance its books.

The levelling-up secretary was asked by Times Radio yesterday about the likelihood of HS2 being subject to cuts. “I am sure everything will be reviewed,” he said, adding: “I do think HS2 is a significant investment.”

His comments came as the government planned spending cuts and tax rises to plug a reported budget gap of between £40m and £50m, before announcing its autumn financial statement on 17 November.

Laying some of the blame on former prime minister Liz Truss’s short-lived government, Gove said: “As a result of different factors, including mistakes that were made at the mini-budget [in September], we have got to make some decisions, which will be painful.”

He acknowledged that the government had “already had to make economies” on HS2 such as last year’s scrapping of the planned eastern leg of the high-speed railway from Birmingham to Leeds.

Gove added: “I think long-term capital investment in making sure this country is better connected is a good thing. And ideally you don’t want to cut that long-term capital investment because it helps contribute to economic growth and greater opportunity.

“But when we face the particular economic problems that we have at the moment, I’m sure that some capital spending will be cut.”

Last week, the latest HS2 project update was presented to parliament, revealing a potential cost increase of £1.9bn. Some £1.1bn of the predicted overspend was attributed to main civil works and stemmed “largely from lower-than-planned productivity and additional design costs”.

Earlier this month, Construction News reported on fears among trade bodies that the second phase of HS2 – between Manchester and Birmingham – could be under threat.

Conservative politicians including North West Leicestershire MP Andrew Bridgen and Lord Wolfson have been calling for HS2 to be cut to help balance the books.

At the time, a Railway Industry Association spokesperson called for government reassurance of its commitment to the project, adding: “Unless we get reassurance from the government on HS2, there will be heightened uncertainty for both rail businesses working on the project and for the communities the line will serve. What’s more, this lack of certainty impacts the ability of rail suppliers to invest and plan for the future, limiting the jobs, investment and economic growth they could otherwise provide.”

A government spokesperson said today: “HS2 is underway, within budget, and supporting 28,000 jobs. The government remains committed to delivering it on time and to budget.

“As the latest report to parliament sets out, current cost pressures are covered within the existing budget and we continue to identify areas where savings and efficiencies can be made.”

Meanwhile, Gove told Sky News yesterday that he was reviewing Truss’s plans for so-called investment zones – areas of the country where businesses would be given tax breaks and planning rules would be relaxed to stimulate growth and development.

“We need to make sure that any change we make is one which, of course, helps to support economic growth and good jobs for people, but also one of the concerns raised about investment zones was the impact on the environment,” he said.

“Anything that might in any way undermine environmental protections is out.”

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