Why this HS2 U-turn is good news for levelling up – John Longworth

Ever since its conception, the costs of HS2 have been spiralling out of control. Its cost projections had soared into the hundreds of billions of pounds, all for a rail link which was ultimately about improving travel times to London.

The new IRP comes in, by comparison, at a fraction of the cost of HS2, and will deliver far more impactful results in the same timeframe. By the time the first phase of HS2 is set to be completed (by the early 2030s), the IRP will have completed the electrification of at least five separate lines across the North of England, and two phases of upgrades along the East Coast Main Line.

These are the upgrades that the regions need, not what those in Whitehall think they should have. HS2 is emblematic of the conceit that has dogged Westminster and its policy makers for years, extending into multiple areas of government.

In a report the Independent Business Network published earlier this year, we examined manifestations of this conceit. As well as HS2, we outlined the proposed ‘sugar tax’, farming subsidies and foreign aid spending as other key areas where the self-interest of a few took precedence over the needs of the many for whom ‘levelling up’ is of great importance.

Thankfully, the Government has listened to what we proposed as an alternative to HS2 and committed to more local infrastructure development. It must now continue this same re-examination across the other facets of levelling up, which can only be achieved through the creation of high value, sustainable jobs in the regions, not by a simple wage rise, which only serves to put businesses under even greater pressure.

As well as transport infrastructure, which should include roads as well as railways (trans-Pennine routes other than the M62 and the ill-suited, often out-of-action Snake Pass are sorely needed), communications infrastructure must be looked at. There is no point in rolling out superfast 5G mobile and broadband networks when there are still large parts of the regions that do not even have mobile signal, let alone access to superfast broadband connections. This must be rectified in order to ensure all regions are on an equal footing going forward.

For businesses, who have suffered greatly over the last 18 months, long-term patient loan capital, in particular for next-stage businesses and startups, a simplified regulatory regime and a simplified tax code must be introduced. These will make businesses easier to create and run, and will alleviate much of the financial pressure that makes the difference between businesses being a success or failure.

Of huge importance is ensuring that young people have the skills they need for businesses all across the country to thrive in the years to come. The current system churns out sheep-like graduates on a conveyor belt that leads them to London, or for those who don’t fit the mould, low-skill and low-pay work awaits.

The recent spending review committed more money to skills and training programmes to provide essential skills for the future, such as coding, and to providing more apprenticeships so that more young people can learn skills vital for UK manufacturing. This is a start, but more funding is needed to teach business skills, so that young people can go forward with the entrepreneurial skills crucial to succeeding not only in existing businesses, but also in creating their own businesses, continuing our nation’s proud tradition of entrepreneurialism.

The Prime Minister has made the right choice in deciding that HS2 was not the right path to follow. Given its status as the flagship infrastructure project of previous governments, it cannot have been an easy decision to make. In doing so, he will save tens of billions of pounds and make changes that people actually want to see.

Such a mindset must continue. Throwing money at people in the form of wage rises and handouts will not achieve the levelling up this Government is so desperate to see, in the same way throwing a high-speed line at the North won’t produce the infrastructure improvements the region needs.

Infrastructure is back on track to support levelling up; Boris Johnson must make sure the rest of government policy is too.

John Longworth is chairman of the Independent Business Network, Foundation for Independence and a former director general of the British Chambers of Commerce. He is a former Conservative MEP.

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