HS2 delay will discourage British investment, says infrastructure expert

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The UK’s decision to delay the HS2 rail line will discourage British investment at a time when the US and mainland Europe are pushing forward with major spending on green technology, according to the chair of the National Infrastructure Commission.

Sir John Armitt said the delay to HS2, a high-speed line that aims to increase British rail capacity, contrasted with the heavy investments by the US and EU on decarbonisation.

“That investment is going elsewhere,” Armitt said on BBC Radio 4. “We need all the investment we [can get] in this country. Making these sort of announcements simply dims the prospect and causes uncertainty in people’s minds.”

Joe Biden’s $369bn (£308bn) Inflation Reduction Act has fuelled a subsidy race between the US and EU, leaving the UK scrambling to catch up.

Ministers on Thursday confirmed that HS2 would be delayed. The transport secretary, Mark Harper, said the decision was the result of “significant inflationary pressure and increased project costs”. The delay will spread the cost over a longer period.

Parts of the planned line between Birmingham, Crewe and Manchester will be “rephased” by two years. The line to Crewe may not be open until 2036, and Manchester not until 2043.

Critics of the project point to long delays and the fact that the budget has already grown significantly. Some people affected by construction plans are also opposed. Simon Clarke, the Conservative MP, said he had “serious doubts as to value for money and cost control” on HS2 after scrutinising it at the Treasury.

However, Armitt said the delay would increase the total cost of the project by drawing out the process and prevent businesses from investing.

“It will increase the end cost,” he said. “That impacts the confidence and certainty people have in investing in this country. We’re about levelling up; we’re about competing with the world. We don’t level up, we don’t compete with the world if we create uncertainty.”

Armitt was chairman of the Olympic Delivery Authority, which oversaw the construction of the venues, facilities and infrastructure for the 2012 Games in London, and in 2013 he wrote an influential review that recommended setting up the commission in order to speed up the construction of big projects.

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However, since then the UK’s record of development has been patchy. Meanwhile, the UK’s productivity growth has stagnated since the financial crisis in 2008, and business investment has lagged behind, particularly since the Brexit vote, costing billions in lost potential output.

Armitt said it was not unusual for major infrastructure projects to run over budget, in part because politicians often announced how much it would cost before detailed work was carried out.

“HS2 is an integral part in delivering that long-term success for our transport system, for decarbonisation, and for business growth in this country,” he said.

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