Could part of the billion-dollar HS2 rail project be revived?

Balfour Beatty Vinci’s tunnel boring machine in the West Midlands region of UK. The unit started digging towards Birmingham earlier this year as part of the HS2 rail project. (Image: Balfour Beatty)

The troubled programme, which has consistently run overbudget and overtime, will still construct phase one; connecting the cities of London and Birmingham via a high-speed rail line. That portion could conclude by 2029.

Back in January, additional money was injected into phase one of the project, and another billion pounds was added this May for tunnelling work in London. Altogether, the total cost of HS2 is estimated at £66.6 billion (€79 billion).

The original cost projection for phase one was about £30 billion (€36 billion).

Former UK Prime Minister Rishi Sunak, in October 2023, cancelled plans (phase two) to extend the line beyond Birmingham to the northern cities of Leeds and Manchester, and in the months since, questions have surfaced on whether the new Labour government is interested in resurrecting it.

What is Labour’s stance on HS2 phase two?

Over the years, Labour’s approval of HS2 phase two has fluctuated.

Initially, the party was fully in support of building out the scheme to Leeds and Manchester, and ever since this part was cancelled, noted it was the party’s preference to build-out the entire scheme ‘in full’.

However, by September 2023 – citing political disagreements with Conservatives  – Labour officials were far more noncommittal. Party leadership cited rising costs and alleged mismanagement by the Conservative government as reasons for their reservations.

Aerial view of HS2’s London Euston construction site (Image: HS2)

Labour curiously did not include a mention of HS2 in its pre-election manifesto, and newly elected Prime Minister Sir Keir Starmer has said for nearly one year that – after Sunak canned phase two of HS2 – it would be difficult to resurrect it as originally planned.

While HS2 was not mentioned, the party did make note of expansion and improvement desires for rail in ‘the north of England’.

In April, then-shadow transport secretary Louise Haigh (recently appointed to Starmer’s cabinet as transport secretary), confirmed the party had “no plans” to revive phase two from its current form.

Labour signals support for private/public-funded northern HS2 plan

While Labour may not be interested in reestablishing HS2 phase two ‘as it stood’, the government has signalled its interest in finding other means to bolster rail refurbishment for the northern segments (Leeds and Manchester) of the programme.

Just days after assuming power, Labour’s chief secretary to the treasurer Darren Jones said that the government would engage local officials and mayors to consider a private/public-funding mechanism to refurbish and construct lines to service the northern cities.

It’s a strategy Labour had previously signalled as its preference. Jones noted that leadership from regions around the since-cancelled northern leg of the project have been actively searching for private funding to help bolster public investment.

Jones said it’s a good first step in bringing back at least some portions of phase two, as the national government ‘will not be able to do everything’.

“There is going to be difficult trade-offs, and we have inherited a very difficult fiscal situation,” he said on Sky News the morning of 8 July.

No financial information or scope of construction was estimated regarding local officials’ ideas for restarting portions of HS2’s cancelled phase two.

Labour has appointed Network Rail chief Lord Hendy as rail minister – last year he criticised Rishi Sunak’s decision to halt HS2 at Birmingham.