Ed BAlls has said he will not give the go ahead for High Speed 2 until he is satisfied east west rail links are being improved.
The shadow chancellor has said a Labour Government would want to sit down with David Higgins, the HS2 chairman, to discuss changing the “absurd” timetable which sees the London to Leeds and Manchester route built before a so-called HS3 option of improved trans-Pennine links.
Mr Balls comments threaten to bring a halt to the £50bn infrastructure plan backed by many northern council leaders.
Speaking after a new report questioned the economic case for HS2, Mr Balls said: “I think the idea that we wait to do the east west upgrade until after we have done the second phase of north south is topsy turvy. It is a plan with no economic or business logic at all. The label HS3 is absurd, but typical of George Osborne wanting to pretend he has a plan.
“I would want to be discussing how we could improve east west links with David Higgins from day one. That is something we can get on with quickly while we ask big questions about the second phase of HS2.”
Mr Balls added: “I don’t understand this HS3 proposal. Why would you decide to spend 20 years improving north south before finally in the third phase coming to east west?
“I think George Osborne has this all wrong. It should not be HS3, that has to come before the second phase of HS2. East west is the priority. It should not be Manchester, Leeds only, we should link Liverpool, Newcastle and others.”
Asked if he thought the east west links would be a high speed rail project, Mr Balls aid: “We need to look hard at this with Network Rail, It takes so long currently to go from Leeds to Manchester, we can make that faster, there are big questions about what high speed means, but again the idea that you wait 20 years to solve this is just wrong.
“We want good links to London, but there is a big economic case to solve east to west.”
The shadow chancellor added: “The legislation going through the Commons is for the first phase. We accept there are real congestion challenges, but there is no blank cheque. It is very important that the industry knows that the cost has to be under control. We will continue to scrutinise the value for money of this all the way through for the first phase.
“On the second phase there are big questions about whether or not we have the best value for money plan, not just on congestion but on connectivity. David Higgins has told me he thinks we do have to stand back and ask is this the best plan for Liverpool, Hull and Newcastle as well.”
Mr Balls was speaking after a House of Lords economic affairs report said HS2 was likely to bring a bigger benefit to London than the north, a report which saw Labour-led Leeds council forced to once again defend the project.
And Sheffield business and council-backed Local Enterprise Partnership also called for HS2.
Martin McKervey, LEP Board Member, said: “The economic case for HS2 has, in our view, been clearly made and accepted over the last five years.”