‘Great train robbery’: Eastern leg of HS2 scrapped as plans for Northern Powerhouse Rail downgraded
The eastern leg of HS2 has been scrapped and plans for Northern Powerhouse Rail have been downgraded, Grant Shapps has confirmed.
The transport secretary told MPs that a new £96bn Integrated Rail Plan for the north and the Midlands will instead deliver “faster” train journeys both earlier and cheaper than the original HS2 plans would have done.
But a senior Tory criticised the government for “selling perpetual sunlight” and delivering “moonlight” for people in the North of England.
Grant Shapps said work on the new Integrated Rail Plan will start ‘by Christmas’
Unveiling the new plan in the Commons, Mr Shapps confirmed that the eastern leg of HS2 will no longer go all the way to Leeds. It will instead stop in the East Midlands near Nottingham.
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Plans for HS2 were originally meant to connect London with the city centres of Birmingham, Manchester, and Leeds.
The transport secretary told MPs a new £96bn rail plan will instead deliver three high-speed lines – HS2 Crewe to Manchester, Birmingham to East Midlands Parkway, Warrington to Manchester – but not HS2 to Leeds or Northern Powerhouse Rail Leeds to Manchester.
Justifying the revised project, Mr Shapps said it “will bring benefits at least a decade or more earlier”, adding that under the original scheme, HS2 would not reach the North until the early 2040s.
“We will provide a journey time of 33 minutes from Leeds to Manchester, a significant, a very significant, improvement,” he told MPs, adding that the new plan “will provide a better service than the outdated plan for for HS2 a decade ago”.
But Conservative chairman of the Transport Select Committee Huw Merriman told the Commons the government’s new plan “compromises some fantastic projects that will slash journey times and better connect our great northern cities”.
Grant Shapps told MPs the government’s new Integrated Rail Plan ‘will provide a better service than the outdated plan for for HS2 a decade ago’
Fellow Tory MP Robbie Moore pointed out that Bradford – the seventh largest city in the UK – will still not have a mainline station under the new plans.
“I’m deeply disappointed by today’s announcement. The Bradford district has been completely short-changed,” the MP for Keighley said.
Conservative MP for Thirsk and Malton in Yorkshire, Kevin Hollinrake, added that the original HS2 project could have been a great economic boost for Bradford.
And Conservative former minister Sir Edward Leigh described HS2 as “a white elephant missing a leg”.
Meanwhile, Labour’s shadow transport secretary Jim McMahon described the government’s new plan as a “great train robbery”, adding that ministers have “betrayed” the north.
He accused Prime Minister Boris Johnson of breaking a promise to build the entirety of HS2 made “60 times” in the past few years, telling MPs: “We were promised a Northern Powerhouse, we were promised a Midlands Engine, to be levelled up. But what we have been given today is a great train robbery.”
Plans for HS2 were originally meant to connect London with the city centres of Birmingham, Manchester, and Leeds
Mr McMahon said most of the £96bn rail investment Mr Shapps confirmed is not “new money” and therefore amounts to “crumbs off the table”.
“He promised the North would not be forgotten. He hasn’t just forgotten us – he’s completely sold us out!”, the shadow transport secretary added.
And Labour former minister Hilary Benn accused ministers of leaving a “huge big hole in the middle” of the North of England.
But Mr Shapps said the new “landmark” Integrated Rail Plan is an “ambitious and unparalleled programme” to overhaul inter-city links across the North and the Midlands – and said work will start “by Christmas”.
“This new blueprint delivers three high-speed lines. First, that’s Crewe to Manchester Second, Birmingham to the East Midlands with HS2 trains continuing to central Nottingham and central Derby, Chesterfield and Sheffield on an upgraded mainline. And third, a brand new high-speed line from Warrington to Manchester and to the western border of Yorkshire – slashing journey times across the north,” the transport secretary told the Commons.
He also insisted that the new plans will “speed up the benefits for local areas”.
Mr Shapps added that it is “wrong” to say the government is just “electrifying the TransPennine route”.
“What we’re actually doing is investing £23 billion to deliver Northern Powerhouse rail and the TransPennine route upgrade, unlocking east-west travel across the north of England,” he told MPs.
“So, in total, this package is 110 miles of new high-speed line, all of it in the midlands and the north. It’s 180 miles of newly-electrified line, all of it in the midlands and the North.”
The government will “study how best to take HS2 trains into Leeds”, Mr Shapps said.
He also confirmed £360m to reform fares and ticketing with the rollout of contactless pay-as-you-go ticketing to 700 urban stations, “including 400 in the North”.
Northern political leaders had warned the government will pass up huge economic benefits and betray promises to voters if, as expected, it cancelled the eastern leg of HS2 and a new Manchester-Leeds line.
The Northern Powerhouse Partnership said the cuts, which will see upgrades on the existing trans-Pennine line, will save just £4bn, and short-change commuters and businesses.
“Watering down Northern Powerhouse Rail for the sake of only 10% of the overall original budget of £39bn is unforgivably short-sighted from the Treasury,” said director Henri Murison.
He added: “We won’t be hoodwinked into believing we’re getting £96bn for a transport revolution in the North.”
The cuts will raise questions about the prime minister’s oft-quoted “levelling up” agenda, designed to spread wealth beyond southeast England, leaving him vulnerable to a charge of breaking a promise to new Conservative voters in the North.
In a statement, the PM said: “If we are to see levelling up in action now, we must rapidly transform the services that matter to people most.
“That’s why the Integrated Rail Plan will be the biggest transport investment programme in a century, delivering meaningful transport connections for more passengers across the country, more quickly – with both high-speed journeys and better local services, it will ensure no town or city is left behind.”
The FTSE 100 has secured a new record closing high after riding out a US trade war-linked slump.
The index of London’s leading shares gained 20 points to hit 8,884, surpassing the 3 March peak of 8,771 and leaving its value more than 8.6% up in the year to date.
It was achieved despite gloomy official figures covering April – when the impact of the US trade war started to be felt, household bills spiked and budget tax and wage rises hit employers for the first time.
The Office for National Statistics reported that the economy contracted by 0.3%.
Money latest: Boeing shares suffer after India plane crash
The FTSE 100 tumbled early in the spring when Donald Trump‘s protectionist agenda gathered steam through a series of on-off tariffs against global trading partners, later exacerbated by his “liberation day” escalation.
Stock market values were hit worldwide as the consequences for domestic economies – and global activity – were digested amid a slew of output downgrades by respected international bodies such as the International Monetary Fund.
But the suspension or reductions of many trade tariffs, coupled with select deals to end hostilities with nations such as the UK, has helped values climb back since last month.
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PM defends UK-US trade deal
A new high for the UK’s top flight shares was almost achieved on Wednesday, as a limited trade truce between the US and China was on the table following talks in London.
But market analysts said on Thursday that the optimism was overtaken by nerves around whether the progress could be maintained and a surge, of up to 4%, in global oil prices due to growing tensions between the US and Iran.
Mr Trump has repeatedly warned the country it is at risk of airstrikes by the US and Israel if it is found not to be complying with its nuclear obligations.
A United Nations report has made such a finding – and some US personnel have been evacuated from the Middle East region as a result.
The spike in oil costs late on Wednesday, which took the Brent crude international benchmark to a two-month high, lifted the values of energy-linked shares including those of BP and Shell early on Thursday.
Precious metal miners were also doing well.
Tesco was among the winners too, gaining almost 2%, thanks to a solid set of first quarter results.
Weaker than expected US inflation figures yesterday, which kept the prospect for a summer interest rate hike by the Federal Reserve intact despite the continuing trade war, also helped prop up sentiment internationally.
The outlook for UK and global stock market values, however, is very uncertain.
FTSE 100 firms make the bulk of their earnings overseas so a deep-seated trade spat between the world’s two largest economies is particularly damaging.
The big risks to listed companies have all been related, in some way, to trade war exposure since the start of the second Trump administration.
Neil Wilson, UK investor strategist at Saxo Markets, said of the record high: “I think we have clearly seen a rotation in global equity markets as investors have for the first time in years questioned the TINATA – there is no alternative to America.
“Investors are looking elsewhere and consistently conversations with clients revolve around geographic diversification and reducing exposure to the US.
“Of course there are alternatives to the UK – we should note that while the FTSE is up over 8% YTD [year to date], the DAX has rallied almost 20%, but clearly the UK has picked more than a few crumbs.
“More than this, it’s got some attraction from a value, income and defensive perspective given the volatility we have seen and changed macro backdrop and assumptions about US exceptionalism.”
As hundreds lie dead following the latest tragedy to beset a Boeing passenger plane, it is too early to determine blame.
Pilot error, engine failure and bird strikes are among the theories all being banded about. Only the recovery of Flight AI171‘s black box flight recorders are likely to provide the concrete answers.
What is inescapable though is that this is an air disaster the plane’s maker, Boeing, could well do without.
Plane crash latest: 53 Britons on board
It sounds petty, in the midst of such a catastrophe, to be talking about the impact on a company, but this has been a civil aviation giant left deeply scarred, in the public eye, through its attitude to safety in recent years.
While the 787 Dreamliner’s record had been impressive up until today, the same can not be said for the company’s 737 MAX planes.
The entire fleet was grounded globally for almost two years following the demise of Ethiopian Airlines Flight 302 outside Addis Ababa in March 2019.
Women mourn next to the coffins of relatives who died in the Ethiopian Airlines crash in 2019. Pic: Reuters
All 157 people aboard were killed.
Six months earlier, a Lion Air 737 MAX, carrying 189 passengers and crew, crashed in Indonesia.
At fault was flight control software that has since been rectified.
That recent past continues to haunt Boeing.
It took those crashes to uncover a culture of cover-up. It amounted to not only a corporate failure but one of regulation and justice too, according to critics, as relatives were denied their days in court due to plea bargains.
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What happened to the Air India plane?
Just last month, the US Justice Department and Boeing agreed a non-prosecution agreement over those two fatal crashes in return for $1.1bn in fines and an admission that it obstructed the investigation.
It raises several questions over the US legal system and its ability to police corporate activity and incentivise playing by the rules.
Would a British manufacturer have been offered such a deal by US prosecutors?
As for regulation, we’re told oversight has been stepped up and the number of planes that Boeing makes is still subject to controls in a bid to boost quality.
The company has long denied putting profit before safety, but that is what almost every whistleblower to have come forward to date has alleged.
The production limits were implemented after a mid-air door plug blowout aboard an Alaska Airlines Boeing 737 MAX 9 flight in January last year.
They are hampering Boeing’s efforts to restore profitability.
Read more:
Air India plane ripped apart medical hostel
What we know so far about AI171 crash
A 5% fall in its share price at the market open on Wall Street goes to the heart of Boeing’s problem.
That is every time a Boeing plane is involved in an accident or failure, investors’ first instincts are to run for the hills.
Boeing says it is seeking more information on the nature of the Air India crash.
But whether Boeing’s plane is at fault for the loss of Flight 171 or not – and we have seen nothing so far to indicate that was the case – it’s clear the company has a long way to go to restore trust.
In a statement, Boeing president and chief executive Kelly Ortberg, said: “Our deepest condolences go out to the loved ones of the passengers and crew on board Air India Flight 171, as well as everyone affected in Ahmedabad.
“I have spoken with Air India chairman N. Chandrasekaran to offer our full support, and a Boeing team stands ready to support the investigation led by India’s Aircraft Accident Investigation Bureau (AAIB).”
Boeing will defer to India’s AAIB to provide information about Air India Flight 171, in adherence with the United Nations International Civil Aviation Organization protocol, the company added.
The UK economy shrank more than expected in April as the worst of President Trump’s tariffs hit.
The standard measure of economic output (GDP) contracted a sharp 0.3% in April, data from the Office for National Statistics (ONS) showed.
During the month, Mr Trump’s so-called “Liberation Day” applied steep tariffs to countries around the world and sparked a trade war with China, the world’s second-largest economy.
The outcome is worse than expected by economists. A contraction of just 0.1% had been forecast by economists polled by the Reuters news agency.
It’s also down from the growth of 0.2% recorded in March.
Blow for Reeves
It’s also bad news for Chancellor Rachel Reeves, who has made the push for economic growth her number one priority. Speaking to Sky News following the news, she described the figures as “disappointing”.
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Reeves refuses to rule out tax rises
Additional costs on businesses were also levied during the month, as higher minimum wages and employer national insurance contributions took effect, which businesses told the ONS played a part in their performance.
Why?
The biggest part of the economy, the services sector, contracted by 0.4%, and manufacturing dropped 0.9%.
There was the largest ever monthly fall in goods exported to the United States, the ONS said.
Decreases were seen across most types of goods due to tariffs, it added.
Higher stamp duty depressed house buying and meant legal and real estate firms fared badly in the month.
After a strong showing in the first three months, car manufacturing performed poorly.
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