The Chamberlain News

Does Labour have the Balls to build HS2?

If the fence that the Labour Party is sitting on over HS2 becomes any thinner, someone is going to suffer a very nasty mishap.

Labour’s official line is that it still supports the planned £50 billion high speed rail line from London to Birmingham, Manchester and Leeds as a means of improving connectivity, creating jobs and delivering a welcome economic boost to the West Midlands and the north.

But, and it is becoming an increasingly big but, more and more caveats are being placed in the way of HS2, most of them it has to be said coming from Ed Balls, the Shadow Chancellor.

This is significant since it will be Mr Balls who holds the purse strings if Labour takes power in 2015. Will he give a green light to Britain’s largest and most significant infrastructure project for decades?

Mr Balls told Chamberlain News last week that he would not write a blank cheque for HS2.

He would want to be convinced of the business case and be certain the project provided value for money, although he remained “for” high speed rail.

So far, so good. This kind of cautionary approach is exactly what you would expect from someone who believes he will be inheriting a public sector debt of £90 billion if and when he gets to Downing Street.

However, Mr Balls upped the ante when addressing the Labour conference in Brighton by questioning whether HS2 was the best way to spend £50 billion. He even went on to spell out alternative ways in which such a large sum of money could be used for the good of the country.

This is what Mr Balls had to say: “We support investment in better transport links for the future. And we continue to back the idea of a new north-south rail link.

“But under this government the HS2 project has been totally mismanaged and the costs have shot up to £50 billion.

“David Cameron and George Osborne have made clear they will go full steam ahead with this project – no matter how much the costs spiral up and up. They seem willing to put their own pride and vanity above best value for money for the taxpayer.

“Labour will not take this irresponsible approach. So let me be clear in tough times – when there is less money around and a big deficit to get down – there will be no blank cheque from me as a Labour Chancellor for this project or for any project.

“Because the question is – not just whether a new high speed line is a good idea or a bad idea, but whether it is the best way to spend £50 billion for the future of our country.

“In tough times it’s even more important that all our policies and commitments are properly costed and funded.”

He went on to promise that a Labour government would ask the Office for Budget Responsibility  to independently audit the cost of every individual spending and tax measure in Labour’s manifesto at the next election – including, presumably, HS2.

This is what Mr Balls told me when I interviewed him last week: “We have supported north-south investment for years, but there has to be value for money, control of the costs and being clear that the benefits are there and that they are real.

“I am for HS2 so long as we can see the value for money case and see that the case has been made properly. It’s the government’s responsibility to lead.

“George Osborne gives the impression that he is so committed that whatever happens to the cost he is going to do it. That’s no way to run the Treasury and I am not going to write a blank cheque.

“I want to know there is a solid case on the journey times, the capacity and the economic improvements.

“Would the existence of HS2 boost the economies north and south? The answer is yes, but is it a big enough boost to justify the expense?”

The Shadow Chancellor went on to state that “as a northern MP” one of his prime concerns was to deliver a third runway at Heathrow. He sees this as the most efficient way of improving connectivity between the north and south, and of boosting the northern economy.

Mr Balls’s conference speech prompted HS2 supporters to speak out.

CBI chief policy director Katja Hall swung Britain’s bosses behind the project: “We’ve always said that the Government must redouble its efforts to sell the benefits of HS2 while keeping a tight lid on costs. But let’s not forget why this project matters. HS2 will connect eight of our ten biggest cities, boost regeneration projects across the country for years to come, and will avert a looming capacity crunch on the West Coast Main Line.”

Lillian Greenwood, shadow rail minister, told a Centro fringe meeting at the conference that while there were legitimate concerns over the project, there was a need to invest in greater rail capacity adding that rail journeys were set to increase.

Addressing arguments that HS2 would suck growth towards London she said the experience in France had shown that high speed rail benefitted a wide range of regions and cities.

The MP said there were issues with the proposed link from HS1 to HS2 adding that “Labour would review this.” She said there were concerns over ticket prices and urged the government to provide greater clarity to ensure the line was not exclusive.

It’s been my view since 2010 that HS2 may never be built, at least not in its current form. I see nothing to change that gloomy prognosis, certainly not if Labour wins an outright majority in 2015.

I just don’t see Ed Balls and Ed Miliband splashing out £50 billion on a railway in ‘austerity Britain’ at a time when the public sector is facing unprecedented financial cuts. It would have been a brave thing for the Conservative-Liberal Democrat coalition to have done. For Labour, it could be £50 billion too much.

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