Labour "making decision" over whether to back HS2 next spring

New shadow transport secretary Mary Creagh says "we are in the process of making that decision" when asked if Labour will support the High Speed 2 bill.

I noted yesterday that new shadow transport secretary Mary Creagh had made some strikingly sceptical comments about High Speed 2, warning, in an echo of Ed Balls's conference speech, that "we need to ensure it is the best way to spend £50 billion for the future of our country".

Today, in another significant intervention, Creagh has revealed that Labour is "in the process" of deciding whether or not to support the HS2 bill next spring. While her predecessor, Maria Eagle, declared in her conference speech, "we support High Speed 2", Labour has now moved to a position of genuine agnosticism.

Here's Creagh's exchange with Adam Boulton on Sky News earlier today.

Adam Boulton: The situation is going to be again, we are talking about 2015, talking about Labour coming in are they in favour of it or not?

Mary Creagh: The Bill is going through Parliament we are going to have it on the 31st October, the paving Bill, we are then going to have...

AB: Which you are going to support?

MC: We are. And then we are going to have the big hybrid Bill coming forward in March or April next year so there is a lot of work to be done and we will be going through the government’s figures with a fine tooth comb.

AB: Can you pledge whether you are going to support it or not?

MC:  Well we are in the process of making that decision and when we make it you’ll be the first to know.

Creagh later added:

It would be, you know, it would be easier if they’d done more work on it, we are still actually at the very beginnings of it. I was at the Department yesterday, I looked at the proposals for the line to go from Birmingham to Leeds, there are going to be a lot of communities that are looking at it and making their input on what the line could do and of course as soon as you start to introduce tunnelling it is £100m per kilometre, that is very expensive.

Based on that, the odds are against Labour backing the bill in March/April. If the party does U-turn, the choice facing the coalition will be whether to persist with the project in the face of opposition, or to argue that it is not viable without cross-party support (due to the time frame involved) and to find its own way of spending that £50bn.

A placard placed by the Stop HS2 Campaign sits in a hedegrow near to the planned location of the new high speed rail link in Knutsford. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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Autumn Statement 2015: George Osborne abandons his target

How will George Osborne close the deficit after his U-Turns? Answer: he won't, of course. 

“Good governments U-Turn, and U-Turn frequently.” That’s Andrew Adonis’ maxim, and George Osborne borrowed heavily from him today, delivering two big U-Turns, on tax credits and on police funding. There will be no cuts to tax credits or to the police.

The Office for Budget Responsibility estimates that, in total, the government gave away £6.2 billion next year, more than half of which is the reverse to tax credits.

Osborne claims that he will still deliver his planned £12bn reduction in welfare. But, as I’ve written before, without cutting tax credits, it’s difficult to see how you can get £12bn out of the welfare bill. Here’s the OBR’s chart of welfare spending:

The government has already promised to protect child benefit and pension spending – in fact, it actually increased pensioner spending today. So all that’s left is tax credits. If the government is not going to cut them, where’s the £12bn come from?

A bit of clever accounting today got Osborne out of his hole. The Universal Credit, once it comes in in full, will replace tax credits anyway, allowing him to describe his U-Turn as a delay, not a full retreat. But the reality – as the Treasury has admitted privately for some time – is that the Universal Credit will never be wholly implemented. The pilot schemes – one of which, in Hammersmith, I have visited myself – are little more than Potemkin set-ups. Iain Duncan Smith’s Universal Credit will never be rolled out in full. The savings from switching from tax credits to Universal Credit will never materialise.

The £12bn is smaller, too, than it was this time last week. Instead of cutting £12bn from the welfare budget by 2017-8, the government will instead cut £12bn by the end of the parliament – a much smaller task.

That’s not to say that the cuts to departmental spending and welfare will be painless – far from it. Employment Support Allowance – what used to be called incapacity benefit and severe disablement benefit – will be cut down to the level of Jobseekers’ Allowance, while the government will erect further hurdles to claimants. Cuts to departmental spending will mean a further reduction in the numbers of public sector workers.  But it will be some way short of the reductions in welfare spending required to hit Osborne’s deficit reduction timetable.

So, where’s the money coming from? The answer is nowhere. What we'll instead get is five more years of the same: increasing household debt, austerity largely concentrated on the poorest, and yet more borrowing. As the last five years proved, the Conservatives don’t need to close the deficit to be re-elected. In fact, it may be that having the need to “finish the job” as a stick to beat Labour with actually helped the Tories in May. They have neither an economic imperative nor a political one to close the deficit. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.