Fears HS2 may force firms to move abroad

Manufacturers may decide to relocate abroad if the Government presses ahead with its preferred route for the High Speed Two rail network, industry leaders have warned.
Master Cutler Neil MacDonaldMaster Cutler Neil MacDonald
Master Cutler Neil MacDonald

Initial proposals show the line cutting across the Sheffield manufacturing sites of important engineering businesses like Firth Rixson, Chesterfield Special Cylinders and Outokumpu.

Lawyers have raised serious concerns that the plans will impact on employment and spending decisions and are looking into compensation.

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Martin McKervey, a partner at Nabarro law firm, said the proposed route with a station at Meadowhall has created “corporate turmoil”.

He warned that HS2 has far-reaching ramifications “from locations to jobs... to the possibility of having to leave the region altogether or even relocate abroad”.

He also questioned the impact on the international supply chains of the strategically important sectors that the businesses operate in.

Neil MacDonald, the Master Cutler, said there is a risk that the US owner of Firth Rixson, Oak Hill Capital Partners, could move the business to America.

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The engineering group has £65m investment plans for the site following contract wins with US construction vehicle giant Caterpillar, said Mr MacDonald, a former finance director at the group.

Firth Rixson, which has been in talks with the Department for Transport over the route, declined to comment.

The preferred route also runs through the Meadowhall site of Chesterfield Special Cylinders, which manufactures products for the high-pressure gas containment market.

Mick Pinder, managing director, described HS2 as a major distraction. He said the company has “massive strategic investment plans for plant and jobs ready for the green light” but does not know which site to choose.

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“The uncertainties surrounding HS2 cause great concern and we deserve and need stronger leadership on this from the region’s politicians,” he added, singling out Deputy Prime Minister Nick Clegg.

Mr Pinder said CSC should be searching the globe for new business rather than trawling Sheffield for a potential new site.

David Grey, Junior Warden at the Company of Cutlers, said options for the HS2 route are constrained by the topography of the region and the greater the kink around special sites in Sheffield, the slower the connection to Leeds.

“Nobody invests in uncertainty,” added Mr Grey, who is managing director of the OSL group of manufacturing companies, highlighting the impact that Government transport policy is having on the region’s businesses.

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Tony Pedder, Senior Warden at the Company of Cutlers and chairman of Sheffield Forgemasters, said: “You can’t talk about rebalancing the economy and the importance of manufacturing and ignore the pleas of companies.”

A spokeswoman for Outokumpu was unavailable for comment.

A spokesman for the Department for Transport said: “The route we have set out for the HS2 line from Birmingham to the East Midlands, Sheffield and Leeds is our initial preferred route, not a final one.

“We have been reviewing and refining the route since January and will soon be going out to full public consultation on it.

“We are open to new evidence on options for the route and we are working closely with Sheffield Local Enterprise Partnership to better understand impacts on businesses. Only once public consultation has been completed will the Government reach firm decisions.”

The department hopes to make an announcement soon about the outcome of discussions with Firth Rixson, he added.