Introduction
Mr Speaker, with permission, I’d like to make a statement on HS2.
Last summer, I stood at this despatch box and promised we would be straight with the British people.
Not just about the appalling mess we inherited, but how we would fundamentally reset the HS2 project.
Today, I am publishing the latest parliamentary report and the Lovegrove report – an assessment of what past failings in the delivery of HS2 means for the Civil Service and wider public sector.
This was a Cabinet Secretary investigation commissioned by the Prime Minister last year.
I would also like to take this opportunity to update honourable members on the latest stage of the HS2 reset.
Context
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Costs soared by £37 billion under the previous government alone.
Billions of taxpayers’ money was sunk into phase 2 work for the section north of Birmingham, before it was abruptly cancelled.
Huge contracts were handed out without improvements in price, despite the Oakervee Review’s recommendation to negotiate a better position.
Instead of signalling this country’s ambition, HS2 became a symbol of this country’s decline.
After more than 5 years of construction, and over £40 billion spent, the country was no closer to having an operational HS2 railway than when construction first began.
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And I’m afraid it gets worse.
I can today confirm the previous government spent most of HS2’s budget without laying a single metre of its track.
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Progress on reset this year
New CEO Mark Wild and Chair Mike Brown have an almost impossible job on their hands.
As Mark put it to me recently
it’s like changing the engine of the aeroplane mid-flight.
However, the new leadership team at HS2 is turning things around.
6 major construction milestones were reached earlier than planned this past year.
The organisation is more focused on things that matter, 300 back-office roles removed.
HS2 Ltd is reviewing its supply chain contracts and the incentives within them to ensure we finish the job at the lowest reasonable cost. And it is managing those contractors properly to make sure supplier performance is up to scratch.
Finally, we’re seeing improved oversight – with HS2’s leadership now receiving real-time updates, helping to prevent delays and keep construction to time.
New budgets and timescales
But there’s no getting away from the fact, Mr Speaker, the vast majority of HS2’s previous budget was blown on completing around a third of the entire project.
And over the past year, Mark Wild and HS2 Ltd have worked closely with my department to assess the remaining work to be done.
They have now provided me with updated costs and timescales, which I can share with the House.
It gives me no pleasure to say the expected cost of completing HS2 is now between £87.7 billion and £102.7 billion priced in 2025.
Two thirds of this increase is down to past misunderstanding of the work required, underestimation and inefficiency – issues within the control of HS2 Ltd, some of its suppliers and previous governments.
The remaining third is linked to inflation, which was not factored into previous cost estimates regularly enough.
On timings, I said last year that I see no route by which trains could be running by 2033.
We now expect first services to run from Old Oak Common to Birmingham Curzon Street between May 2036 and October 2039.
And where the previous government could not say when the full HS2 scheme between Euston and Handsacre Junction would be delivered, I now expect that will happen between May 2040 and December 2043.
Lessons have been learned from the Stewart Review, meaning HS2’s cost and schedules are now built on more solid foundations – with credible estimates published as ranges to ensure they better stand the test of time.
Colleagues may feel they’ve heard this all before. And I understand that scepticism, but it is different this time.
HS2 Ltd have now used the same experts and methods behind the successful Crossrail reset.
They have priced future work against what we’ve learned so far and their homework has been checked by an independent panel of experts.
But Madam Deputy Speaker, if this seems like an obscene increase in time and costs – it’s because it is.
And if it seems like I am angry, it’s because I am.
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I’m angry on behalf of the thousands of rail and construction workers giving their all on this project, who do not deserve to have their industry tarnished in this way.
And I am angry on behalf of passengers, who continue to wait for the new services and new opportunities they deserve.
Improving time and delivery
Madam Deputy Speaker, despite this sorry situation, we are determined to claw back as much time and money as possible.
Not only does the Lovegrove report corroborate the Stewart Review’s damning assessment of the decision-making environment around HS2 under the previous government.
But it also talks about the original ‘gold plating’ of HS2.
It talks about the focus – and I quote
on the highest possible speeds, resulting in bespoke and highly engineered design.
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If we were a country the size of China, I could understand it.
But we are not.
Passengers just want reliable trains that turn up when they’re supposed to. More services and more seats. They want a common-sense approach that gets them the railway they deserve. Not a vanity project with trains so fast that proper testing couldn’t be done until track and railway systems were complete.
So, Madam Deputy Speaker, I asked Mark Wild to remove the gold-plating and complexity from this project.
Today, I have accepted his recommendation to align HS2 with speeds already delivered on other European high-speed networks.
That still means we will run some of the fastest trains in Europe – with speeds reaching 320 kph.
But crucially, it lowers the costs of testing.
It makes delivering the project less risky.
And it could realise savings of up to £2.5 billion and at least a year in delivery time.
Cancellation?
Now I realise there will be those who say this is all too much, and we should just cancel the whole thing.
However, I can confirm today that it could cost almost as much to cancel the line as it would to finish it, while delivering none of the benefits. With half-finished structures strewn across the English countryside – a relic to what could have been.
And so, this government is clear – we will deliver HS2 to completion.
Because this country can build big things – we just need competent people at the helm to deliver them.
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We’ve rolled up our sleeves and done the hard yards, putting the right team in place and being honest about the scale of the challenge.
Conclusion
Madam Deputy Speaker, I understand that this statement today will be met with cynicism and anger, but I say with genuine pride and conviction that I believe we are finally starting to see real delivery.
Tunnelling machines are currently working under Londoners’ feet to make HS2 to Euston a reality.
Birmingham’s skyline is changing before our eyes, with new film studios, a sports quarter and housing all being built around the new Curzon Street station.
This is national renewal in action.
Madam Deputy Speaker, when I last worked with Mark Wild and Mike Brown, we took the delayed and over-budget Crossrail project and turned it into the Elizabeth Line – which has now served more than half a billion passengers.
We’ve done it before; we’ll do it again.
And I commend this statement to the House.