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4 November 2013

Cameron’s concession to Labour on HS2 costs

After ministers previously pledged to deliver the new line "on budget", the PM now promises that it will come in "under budget".

By George Eaton

After HS2 avoided derailment last week, David Cameron used his speech to the CBI to reaffirm the case for the new line, accusing Labour of “playing politics with Britain’s prosperity” and “betraying everyone north of Watford” by refusing to commit to the project.

But his address also contained a significant concession to the opposition. After Labour signalled that its support for the line was conditional on HS2 chairman Sir David Higgins being given “a free hand” to reduce costs, Cameron said:

Britain has shown it can build great infrastructure like HS1 or the Olympics on time and on budget. And with Sir David Higgins in charge – the man who built the Olympics – we will do that for the north-south line too. He has agreed that the first vital step will be to bring his penetrating eye and expertise to a specific task. To report on the costs [emphasis mine]. And to maximise the benefits for all parts of the country as quickly as possible. He has already said the line could come in ‘substantially’ under the current budget. And he has also made it clear he needs cross-party support to do it.

The PM later emphasised that he wants HS2 to come in “under budget”. That contrasts with the previous commitment from ministers to merely deliver the project “on budget”, a notable shift in rhetoric that Labour is rightly chalking up as a victory. 

In his own speech to the CBI, Ed Balls again warned that there was no “blank cheque” for the HS2 but also emphasised that the party would continue to scrutinise “the benefits” (rather than merely the costs) of the scheme to “ensure this is the best way to spend £50bn for the future of our country”. 

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The shadow chancellor’s warning that the money could potentially be better spent elsewhere (first made in his conference speech) is a sign that the party’s stance hasn’t softened as much as some have suggested.