With permission, I will make a statement on High Speed 2.
Last summer, I stood at this Dispatch Box and promised that we would be straight with the British people not just about the appalling mess we inherited, but about how we would fundamentally reset the HS2 project. Today I am publishing the latest parliamentary report and the Lovegrove report—an assessment of what past failings in the delivery of HS2 mean for the civil service and the wider public sector. This was a Cabinet Secretary investigation commissioned by the Prime Minister last year. I will also take this opportunity to update hon. Members on the latest stage of the HS2 reset.
However, I will first remind the House of the litany of failures we inherited in July 2024. Costs soared by £37 billion under the previous Government alone, with billions of pounds of taxpayers’ money sunk into phase 2 work for the sections north of Birmingham before they were abruptly cancelled. Huge contracts were handed out without improvements in price, despite the Oakervee review’s recommendation to negotiate a better position.
Instead of signalling the country’s ambition, HS2 became a symbol of this country’s decline. After more than five years of construction and more than £40 billion spent, the country was no closer to having an operational HS2 railway than when construction first began. That is the shocking legacy of the previous Government, and I am afraid it gets worse: I can today confirm that the previous Government spent most of HS2’s budget without laying a single metre of its track. Today is about ending that era of neglect.
New chief executive officer Mark Wild and chair Mike Brown have an almost impossible task on their hands; as Mark put it to me recently, it is like changing the engine of an aeroplane mid-flight. However, the new leadership team at HS2 is turning things around, with six major construction milestones reached earlier than planned in the past year. The organisation is more focused on the things that matter, with 300 back-office roles removed. HS2 Ltd is reviewing its supply chain contracts and the incentives within them to ensure that we finish the job at the lowest reasonable cost, and it is managing those contractors properly now to ensure that supplier performance is up to scratch. Finally, we are seeing improved oversight, with HS2’s leadership now receiving real-time updates, helping to prevent delays and keep construction to time.
However, there is no getting away from the fact that the vast majority of HS2’s previous budget was blown on completing around a third of the entire project. Over the past year, Mark Wild and HS2 Ltd have worked closely with me and my Department to assess the remaining work to be done. They have now provided me with updated costs and timescales, which I can share with the House.
It gives me no pleasure to say that the expected cost of completing HS2 is now between £87.7 billion and £102.7 billion, priced in 2025. Two thirds of that increase is down to past misunderstanding of the work required, underestimation and inefficiency—issues within the control of HS2 Ltd, some of its suppliers and previous Governments. The remaining third is linked to inflation, which was not factored into previous cost estimates regularly enough.
On timings, I said last year that I could see no route by which trains could be running by 2033. We now expect the first services to run from Old Oak Common to Birmingham Curzon Street between May 2036 and October 2039. Where the previous Government could not say when the full HS2 scheme between Euston and Handsacre Junction would be delivered, I now expect it to happen between May 2040 and December 2043. Lessons have been learned from the Stewart review, meaning that HS2’s cost and schedules are now built on more solid foundations, with credible estimates published as ranges to ensure that they better stand the test of time.
Colleagues may feel that they have heard this all before; I understand that scepticism, but it is different this time. HS2 Ltd has now used the same experts and methods behind the successful Crossrail reset. It has priced future work against what we have learned so far, and its homework has been checked by an independent panel of experts.
However, if this seems like an obscene increase in time and costs, it is because it is. If it seems that I am angry, it is because I am. I am angry on behalf of taxpayers and affected communities who have been swindled by the failures of successive Conservative Governments; I am angry on behalf of the thousands of rail and construction workers who are giving their all on this project, and who do not deserve to have their industry tarnished in this way; and I am angry on behalf of passengers who continue to wait for the new services and new opportunities that they deserve.
Despite this sorry situation, we are determined to claw back as much time and money as possible. The Lovegrove report not only corroborates the Stewart review’s damning assessment of the decision-making environment under the previous Government, but talks about the original “gold plating” of HS2 and a focus on
“the highest possible speeds, resulting in bespoke and highly engineered design”.
To translate: it was a massively over-specced folly, with the prospect of the fastest trains anywhere in the world tickling the fancy of Conservative Ministers. If we were a country the size of China, I could understand it—but we are not. Passengers just want reliable trains that turn up when they are supposed to, more services and more seats. They want a common-sense approach that gets them the railway they deserve, not a vanity project with trains so fast that proper testing could not be done until track and railway systems were complete.
I therefore asked Mark Wild to remove the gold-plating and complexity from this project, and I have today accepted his recommendation to align HS2 with speeds already delivered on other European high-speed networks. That means we will still run some of the fastest trains in Europe, with speeds reaching 320 kph; but, crucially, it will lower the cost of testing and make delivering the project less risky. It could realise savings of up to £2.5 billion and save at least a year in delivery time.
I realise that there will be those who will say that this is all too much and that we should just cancel the whole thing. However, I can confirm today that it could cost almost as much to cancel the line as it would to finish it, while delivering none of the benefits, with half-finished structures strewn across the English countryside, a relic of what could have been.
This Labour Government are clear that we will deliver HS2 to completion, because this country can build big things; we just need competent people at the helm to deliver them. Prime Ministers Cameron, May, Johnson, Truss and Sunak—