Exclusive: Adonis warns that "incompetent" coalition must control costs if HS2 is to survive

The architect of High Speed 2 and the head of Labour's growth review says that Ed Balls's threat to withdraw support for the project has "raised the bar".

After Ed Balls threatened to withdraw Labour's support for High Speed 2 and suggested that the £42.6bn allocated to the project could potentially be better spent elsewhere, I spoke to Andrew Adonis, the former transport secretary and the architect of HS2, at a New Statesman fringe event last night to get his response.

In his first reported comments since Balls's speech, Adonis, who is the head of Labour's growth review and shadow infrastructure minister, told me that the shadow chancellor had "raised the bar" for the project and that the "incompetent" coalition needed to demonstrate that it could "keep costs under control" if HS2 was to survive. He criticised the government's failure to pass legislation more quickly and to manage the programme effectively: "all they've done since coming to office is add £10bn to it".

Adonis, who warned in a recent New Statesman piece that it would be an "act of national self-mutilation" to cancel HS2, told me: "the current contingency fund of £14bn is too large and the cost needs to come down when the bill has its second reading in February/March." He added: "it's no surprise opinion is turning against it if people fear it will end up costing £100bn."

In his speech, Balls said: "the question is – not just whether a new high-speed line is a good idea or a bad idea, but whether it is the best way to spend £50bn for the future of our country. In tough times it's even more important that all our policies and commitments are properly costed and funded."

Adonis warned in his piece that the urgent need to increase rail capacity (the West Coast Main Line will be full by 2024) meant there was "no free lunch - or pot of gold which can be diverted to other projects in anything but the very short-term, with more costly consequences thereafter". But at a fringe meeting last night, Balls openly speculated on whether the HS2 money would be better spent on "building new homes or new schools or new hospitals".

With Miliband due to pledge in his speech today to build a million new homes over the course of the next parliament, it's unsurprising that Ballls is attracted by the option of scrapping HS2. It would allow Labour to raise billions for other projects while remaining within George Osborne's fiscal envelope. For Balls, understandably wary of making the case for borrowing to invest, that is political gold.

Labour peer and former transport secretary Andrew Adonis, who first announced plans for High Speed Two in 2010. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Arsène Wenger: how can an intelligent manager preside over such a hollowed-out team?

The Arsenal manager faces a frustrating legacy.

Sport is obviously not all about winning, but it is about justified hope. That ­distinction has provided, until recently, a serious defence of Arsène Wenger’s Act II – the losing part. Arsenal haven’t won anything big for 13 years. But they have been close enough (and this is a personal view) to sustain the experience of investing emotionally in the story. Hope turning to disappointment is fine. It’s when the hope goes, that’s the problem.

Defeat takes many forms. In both 2010 and 2011, Arsenal lost over two legs to Barcelona in the Champions League. Yet these were rich and rewarding sporting experiences. In the two London fixtures of those ties, Arsenal drew 2-2 and won 2-1 against the most dazzling team in the world. Those nights reinvigorated my pride in sport. The Emirates Stadium had the best show in town. Defeat, when it arrived in Barcelona, was softened by gratitude. We’d been entertained, more than entertained.

Arsenal’s 5-1 surrender to Bayern Munich on 15 February was very different. In this capitulation by instalments, the fascination was macabre rather than dramatic. Having long given up on discerning signs of life, we began the post-mortem mid-match. As we pored over the entrails, the curiosity lay in the extent of the malady that had brought down the body. The same question, over and over: how could such an intelligent, deep-thinking manager preside over a hollowed-out team? How could failings so obvious to outsiders, the absence of steel and resilience, evade the judgement of the boss?

There is a saying in rugby union that forwards (the hard men) determine who wins, and the backs (the glamour boys) decide by how much. Here is a footballing equivalent: midfielders define matches, attacking players adorn them and defenders get the blame. Yet Arsenal’s players as good as vacated the midfield. It is hard to judge how well Bayern’s playmakers performed because they were operating in a vacuum; it looked like a morale-boosting training-ground drill, free from the annoying presence of opponents.

I have always been suspicious of the ­default English critique which posits that mentally fragile teams can be turned around by licensed on-field violence – a good kicking, basically. Sporting “character” takes many forms; physical assertiveness is only one dimension.

Still, it remains baffling, Wenger’s blind spot. He indulges artistry, especially the mercurial Mesut Özil, beyond the point where it serves the player. Yet he won’t protect the magicians by surrounding them with effective but down-to-earth talents. It has become a diet of collapsing soufflés.

What held back Wenger from buying the linchpin midfielder he has lacked for many years? Money is only part of the explanation. All added up, Arsenal do spend: their collective wage bill is the fourth-highest in the League. But Wenger has always been reluctant to lavish cash on a single star player, let alone a steely one. Rather two nice players than one great one.

The power of habit has become debilitating. Like a wealthy but conservative shopper who keeps going back to the same clothes shop, Wenger habituates the same strata of the transfer market. When he can’t get what he needs, he’s happy to come back home with something he’s already got, ­usually an elegant midfielder, tidy passer, gets bounced in big games, prone to going missing. Another button-down blue shirt for a drawer that is well stuffed.

It is almost universally accepted that, as a business, Arsenal are England’s leading club. Where their rivals rely on bailouts from oligarchs or highly leveraged debt, Arsenal took tough choices early and now appear financially secure – helped by their manager’s ability to engineer qualification for the Champions League every season while avoiding excessive transfer costs. Does that count for anything?

After the financial crisis, I had a revealing conversation with the owner of a private bank that had sailed through the turmoil. Being cautious and Swiss, he explained, he had always kept more capital reserves than the norm. As a result, the bank had made less money in boom years. “If I’d been a normal chief executive, I’d have been fired by the board,” he said. Instead, when the economic winds turned, he was much better placed than more bullish rivals. As a competitive strategy, his winning hand was only laid bare by the arrival of harder times.

In football, however, the crash never came. We all wrote that football’s insane spending couldn’t go on but the pace has only quickened. Even the Premier League’s bosses confessed to being surprised by the last extravagant round of television deals – the cash that eventually flows into the hands of managers and then the pockets of players and their agents.

By refusing to splash out on the players he needed, whatever the cost, Wenger was hedged for a downturn that never arrived.

What an irony it would be if football’s bust comes after he has departed. Imagine the scenario. The oligarchs move on, finding fresh ways of achieving fame, respectability and the protection achieved by entering the English establishment. The clubs loaded with debt are forced to cut their spending. Arsenal, benefiting from their solid business model, sail into an outright lead, mopping up star talent and trophies all round.

It’s often said that Wenger – early to invest in data analytics and worldwide scouts; a pioneer of player fitness and lifestyle – was overtaken by imitators. There is a second dimension to the question of time and circumstance. He helped to create and build Arsenal’s off-field robustness, even though football’s crazy economics haven’t yet proved its underlying value.

If the wind turns, Arsène Wenger may face a frustrating legacy: yesterday’s man and yet twice ahead of his time. 

Ed Smith is a journalist and author, most recently of Luck. He is a former professional cricketer and played for both Middlesex and England.

This article first appeared in the 24 February 2017 issue of the New Statesman, The world after Brexit