UK: HS2 Back On Track?

The future of HS2 looked uncertain for a while but reports that Chancellor of the Exchequer Sajid Javid will back the project may pave the way for the government to announce that it will go ahead with what is currently the largest infrastructure project in Europe.

The Oakervee Report

On 21 August 2019, Transport Secretary Grant Shapps announced that an independent review would be undertaken to determine, based on "the facts", whether the HS2 project should proceed. The review, led by Douglas Oakervee (former HS2 chair) with Lord Berkley (Labour peer and vocal critic of HS2) as his deputy, angered prominent supporters of the project but was welcomed by those who questioned its true value.

In early November, it was announced that publication of the Oakervee Report, which was in the process of being finalised, would be delayed until after the general election. Whilst Brexit was always going to be the focus, the delay to the Oakervee Report side-lined the HS2 issue during campaigning, which was somewhat convenient for the main political parties given the project's rising costs and divisive nature of the debate.

The project's future was then dealt an apparent blow when, on 19 January 2020, the Financial Times leaked the unpublished Oakervee Report, reporting a 20% increase in costs to £106bn, "lukewarm" support from Oakervee and a recommendation to the government to pull funding on the second phase of the project (ie those parts north of Birmingham linking the Midlands to Leeds and Manchester).

Political support for rail infrastructure

Although support for HS2 was rather muted in the run-up to the election (because Oakervee's recommendation was awaited), during campaigning there was cross-party support for more general investment in rail infrastructure (see here) with a particular focus on reopening regional branch lines including those closed following the Beeching report.

There was also cross-party support for Northern Powerhouse Rail (NPR) (also termed Crossrail for the North) and for further devolution to the regions of infrastructure spending and control.

Regions vs HS2

Following the Oakervee Report leak, a 60-strong group of newly-elected Tory MPs in the north and Midlands demanded that HS2 be scrapped to fund immediate transport upgrades and improved connectivity in their constituencies. This contrasted with the Northern Powerhouse Independent Review (NPIR), which was established in part to pre-empt the outcome of the Oakervee Report, calling for a new body, HS2 North, to be established to integrate HS2 with proposed NPR links. Whilst the two groups may have opposing views on the benefits of HS2 to the regions, the common theme is that there is a lack of trust that the government will honour its oft-repeated pledges of support to improve transport infrastructure beyond London and the southeast.

Of course, advocates of HS2 argue that the high-speed route is an integral part of the Northern Powerhouse and Midlands Engine objectives – to boost regional economies and invest in skills – and that to pull the plug on the project now would undo much of the progress already made in the regions. Taking Leeds as one example, the city council's leader Judith Blake has said that the promise of HS2 coming to the region has already attracted high-profile inward investment in the form of Channel 4's new regional headquarters and funding for the development of the South Bank of the River Aire. In short, proponents of the project in the regions are of the view that regional and national investment in transport infrastructure are not mutually exclusive.

What's next?

It is understood that the Oakervee Report will be published in February and that the recommendations will form the basis of government policy on the project. If Sajid Javid's pronouncement is anything to go by then it sounds like it may be full steam ahead for the part of the project that is underway (London-Birmingham) but it remains to be seen how "lukewarm" the government will be towards the northern phases.

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