The multi-billion pound High Speed 2 rail project is vital for economic growth in Yorkshire, even if the scheme costs more than £50bn to bring it to fruition, the Federation of Small Businesses has warned amid fresh threats from Labour that it would withdraw support if costs rose beyond £50bn.
Chris Glen, the small business group’s regional chairman, argued that replacing “Victorian” era rail infrastructure between the North and London was essential, following the comments from shadow transport secretary Maria Eagle.
“It is not necessarily just about saving journey time to London, it’s about the additional capacity that will become available on other lines, which will give us more options for more trains and better intercity journeys within Yorkshire and across the Pennines,” Mr Glen said.
“Faster travel time to London potentially brings business from London to Yorkshire but quicker journey times and more journeys between towns and cities in Yorkshire is where the big benefits are for small to medium-sized businesses in the region.”
Mr Glen said some of the higher price estimates for the project had been “surreptitiously” inflated by costs not directly related to the line, such as for associated regeneration projects which he argued would “create a lot of GDP and a lot of tax take as well”.
“We are working with a transport infrastructure that was laid down by the Victorians,” he added. “If some of those people who are decrying this had been about in Victorian times we might not have any railways at all.
“We are supposed to be on of the top economies in the world and we should have a transport system that matches that.”
The Labour leadership has insisted it still believes HS2, which could see 225mph trains linking north and south by 2026, is vital, but Ms Eagle told The Sunday Times continued backing of the scheme depends on costs being kept under control.
It follow comments from Lord Mandelson and Alistair Darling, attacking the cost, while last week shadow chancellor Ed Balls warned he would not write a “blank cheque” for HS2.
Ms Eagle said: “I am not willing to see this project start draining money from other vital rail projects – it’s got to be delivered within the current budget. Nobody who is delivering it should be under any illusions that I will allow it to go up and up. That would put our commitment to it at risk.
“It shouldn’t be going up above that £50bn cap.”
Ministers have estimated the cost, including rolling stock, will be around £50bn. Other research has suggested, however, the final bill could reach £80bn, and Treasury officials are said to be privately working on a figure of £73bn.
Transport Secretary Patrick McLoughlin insisted last week that David Cameron remained behind HS2, and expressed confidence there was still a cross party consensus in favour.
Alison Munro, chief executive of HS2, said: “In numerous interviews in the last seven days I have stated categorically the costs of HS2 are firmly under control and that we fully intend to deliver Britain’s new high speed rail network within the £42.6bn budget set by the Government.
“There is no alternative that delivers the benefits of HS2. Through building a world class 21st century high speed rail network that will link our great cities as never before we will provide the capacity we need on those routes and free up space to expand commuter services and freight.”
Labour peer and former transport secretary Lord Adonis also warned it would be “an act of national self-mutilation” for Labour to cancel HS2, if the party was to resume leadership in 2015.
In an article for the New Statesman, he said it was at a similarly early phase that the incoming 1974 Labour government cancelled the Channel Tunnel and the new London airport at Maplin Sands in the Thames Estuary, decisions he described as stupid.