HS2: Parts of rail project to be delayed for two years

Published

2 years ago

March 10, 2023

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The government has announced the construction of sections of HS2 will be delayed by two years to save money.

The high-speed railway was initially set to link London and the West Midlands with a further phase extending to cities in the North.

However, Transport Secretary Mark Harper said on Thursday: “We have seen significant inflationary pressure and increased project costs, and so we will rephase construction by two years, with an aim to deliver high-speed services to Crewe and the North West as soon as possible after accounting for the delay in construction.”

The delay will affect the northwest section of HS2, from Birmingham to Crewe, and then from Crewe to Manchester.

The first part was due for extension between 2030 and 2034 to help boost transport in the north of England, but the window has now shifted to 2032 to 2036 while services will not extend to Manchester until the 2040s.

In a written ministerial statement, Mr Harper said the government is “prioritising HS2’s initial services” between Old Oak Common in west London and Birmingham Curzon Street.

On delivering services to central London, he also hinted at delays, saying: “We will address affordability pressures to ensure the overall spending profile is manageable.

“We will therefore take the time to ensure we have an affordable and deliverable station design, delivering Euston alongside high-speed infrastructure to Manchester.”

This means it could be more than a decade before high-speed services stop at Euston, with passengers expected instead travel for half an hour on the Elizabeth Line.

Mr Harper also announced a series of setbacks affecting key road projects under cost-saving measures that threaten to deliver a blow to “levelling up” plans.

A planned extension to Leeds was already shelved in November 2021.

Labour said the latest delay meant the North was again having to “pay the price” for government failures.

Louise Haigh, the shadow transport secretary, said: “Tens of thousands of jobs, and billions in economic growth are dependent on this project.

“The North is yet again being asked to pay the price for staggering Conservative failure.

“Conservative chaos and chronic indecision is holding back jobs, growth and costing the taxpayer.

“This is the biggest project in Europe and delays pile costs up in the long run – ministers now need to come clean on precisely how much their indecision will cost taxpayers and the North.”

Raising a point of order in the Commons, Labour MP Sarah Owen also attacked Mr Harper for “avoiding scrutiny”.

She said the cabinet minister “should have had the decency to come to this House and explain to members why they are doing this” instead of publishing a written statement “at nearly 5 o’clock on Thursday afternoon”.

Commons speaker Lindsay Hoyle also criticised the way the delay was communicated, with his spokesperson saying: “The Speaker has consistently told the government that major policy announcements should be made to the House first so that members have the chance to ask questions on behalf of their constituents, rather than hearing about them via the media.”

Delay ‘could lead to higher costs’

Delivery of the high-speed railway has been a core pledge of the Conservative government but it has been plagued by delays and ever-increasing costs – from estimates of about £33 billion in 2010 to £55.7bn for the whole project in 2015.

By 2019, the estimated cost had soared to at least £71bn, excluding the final eastern leg from the West Midlands to the East Midlands.

Ministers are understood to be delaying construction of the northern section in the hope they can spread the cost over a longer period of time so it was more affordable annually.

Chancellor Jeremy Hunt is set to announce his spring budget next week and will have Rishi Sunak’s target in mind – to get government debt to fall as a percentage of GDP within five years.

However, the Confederation of British Industry (CBI) said the delay would hit confidence in the rail industry and could ultimately lead to higher overall costs for HS2.

John Foster, the CBI’s policy unit programme director, said the news “will ultimately reduce investor and contractor confidence in the rail sector”.

“To mitigate further loss of confidence, it is critical that government tackles the inflationary pressures which are biting hard across the infrastructure sector,” he said.

“Delays to projects may create short-term savings, but they can ultimately lead to higher overall costs and slow down the UK’s transition to a better, faster and greener transport network.”

HS2 a ‘colossal mistake’

Leader of Birmingham City Council, Ian Ward, said the delay is “another betrayal of the Midlands and the North, making a mockery of the government’s empty promises to level up the UK economy”.

But Conservative MP and former chief secretary to the Treasury Simon Clarke said delaying construction “would be a sensible decision”.

“Having observed HS2’s progress as chief secretary, I have serious doubts as to value for money and cost control,” he said.

Greg Smith, the Conservative MP for Buckingham, called for the government to “accept the whole thing was a colossal mistake and scrap it, all of it”.

Just last week, rail minister Huw Merriman told the Commons the government is “absolutely committed” to delivering HS2 but admitted “cost pressures” must be examined.

HS2 Ltd chief executive Mark Thurston said the project had suffered a “significant” impact from increased costs in building materials, fuel and energy due to high inflation.

HS2 is Britain’s biggest infrastructure project and has had support from governments of all stripes since it was first mooted more than a decade ago.

But last month, the government reportedly planned to make drastic changes that would almost halve the number of high-speed trains per hour and services would travel slower to save money.

The Department for Transport (DfT) said at the time it “does not comment on speculation” and said the government “remain committed to delivering the project”.

In January, Chancellor Jeremy Hunt said he did not see “any conceivable circumstance” in which the original plan would not be followed after reports the high-speed line could stop before reaching central London.

There were claims the last leg of HS2 into Euston could be scrapped and replaced with a new hub at Old Oak Common in the suburbs of northwest London, where it is set to stop before travelling into Euston.

The government did not deny the reports or that a two to five-year delay to the entire project – currently due to be completed between 2029 and 2033 – was being considered due to record high inflation impacting costs.

World

Donald Trump announces sweeping global trade tariffs – including 10% on UK imports

Published

5 hours ago

April 3, 2025

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Donald Trump announces sweeping global trade tariffs - including 10% on UK imports

Donald Trump has announced a 10% trade tariff on all imports from the UK – as he unleashed sweeping tariffs across the globe.

Speaking at a White House event entitled “Make America Wealthy Again”, the president held up a chart detailing the worst offenders – which also showed the new tariffs the US would be imposing.

“This is Liberation Day,” he told a cheering audience of supporters, while hitting out at foreign “cheaters”.

Follow live: Trump tariffs latest

He claimed “trillions” of dollars from the “reciprocal” levies he was imposing on others’ trade barriers would provide relief for the US taxpayer and restore US jobs and factories.

Mr Trump said the US has been “looted, pillaged, raped, plundered” by other nations.

His first tariff announcement was a 25% duty on all car imports from midnight – 5am on Thursday, UK time.

Mr Trump confirmed the European Union would face a 20% reciprocal tariff on all other imports. China’s rate was set at 34%.

The UK’s rate of 10% was perhaps a shot across the bows over the country’s 20% VAT rate, though the president’s board suggested a 10% tariff imbalance between the two nations.

It was also confirmed that further US tariffs were planned on some individual sectors including semiconductors, pharmaceuticals and critical mineral imports.

The ramping up of duties promises to be painful for the global economy. Tariffs on steel and aluminium are already in effect.

The UK government signalled there would be no immediate retaliation.

Business and Trade Secretary Jonathan Reynolds said: “We will always act in the best interests of UK businesses and consumers. That’s why, throughout the last few weeks, the government has been fully focused on negotiating an economic deal with the United States that strengthens our existing fair and balanced trading relationship.

“The US is our closest ally, so our approach is to remain calm and committed to doing this deal, which we hope will mitigate the impact of what has been announced today.

“We have a range of tools at our disposal and we will not hesitate to act. We will continue to engage with UK businesses including on their assessment of the impact of any further steps we take.

“Nobody wants a trade war and our intention remains to secure a deal. But nothing is off the table and the government will do everything necessary to defend the UK’s national interest.”

The EU has pledged to retaliate, which is a problem for Northern Ireland.

Should that scenario play out, the region faces the prospect of rising prices because all its imports are tied to EU rules under post-Brexit trading arrangements.

It means US goods shipped to Northern Ireland would be subject to the EU’s reprisals.

The impact of a trade war would be expected to be widely negative, with tit-for-tat tariffs risking job losses, a ramping up of prices and cooling of global trade.

Research for the Institute for Public Policy Research has suggested more than 25,000 direct jobs in the UK car manufacturing industry alone could be at risk from the tariffs on car exports to the US.

The Society of Motor Manufacturers and Traders (SMMT) had said the tariff costs could not be absorbed by manufacturers and may lead to a review of output.

The tariffs now on UK exports pose a big risk to growth and the so-called headroom Chancellor Rachel Reeves was forced to restore to the public finances at the spring statement, risking further spending cuts or tax rises ahead to meet her fiscal rules.

A member of the Office for Budget Responsibility (OBR), David Miles, told MPs on Tuesday that US tariffs at 20% or 25% maintained on the UK for five years would “knock out all the headroom the government currently has”.

But he added that a “very limited tariff war” that the UK stays out of could be “mildly positive”.

He said: “There’s a bit of trade that will get diverted to the UK, and some of the exports from China, for example, that would have gone to the US, they’ll be looking for a home for them in the rest of the world.

“And stuff would be available in the UK a bit cheaper than otherwise would have been. So there is one, not central scenario at all, which is very, very mildly potentially positive to the UK. All the other ones which involve the UK facing tariffs are negative, and they’re negative to very different extents.”

World

Israel announces military operation expanding in Gaza to seize ‘large areas’

Published

20 hours ago

April 2, 2025

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Israel announces military operation expanding in Gaza to seize 'large areas'

Israel is beginning a major expansion of its military operation in Gaza and will seize large areas of the territory, the country’s defence minister said.

Israel Katz said in a statement that there would be a large scale evacuation of the Palestinian population from fighting areas.

In a post on X, he wrote: “I call on the residents of Gaza to act now to remove Hamas and return all the hostages. This is the only way to end the war.”

He said the offensive was “expanding to crush and clean the area of terrorists and terrorist infrastructure and capture large areas that will be added to the security zones of the State of Israel”.

The expansion of Israel’s military operation in Gaza deepens its renewed offensive.

The ceasefire between Israel and Hamas that had begun in January ended in March as Israel launched various air strikes on targets across Gaza.

The deal had seen the release of dozens of hostages and hundreds of Palestinian prisoners, but collapsed before it could move to phase two, which would have involved the release of all hostages and the withdrawal of Israeli forces from Gaza.

The Israel Defense Forces (IDF) had already issued evacuation warnings to Gazans living around the southern city of Rafah and towards the city of Khan Yunis, telling them to move to the al Mawasi area on the shore, which was previously designated a humanitarian zone.

Israeli forces have already set up a significant buffer zone within Gaza, having expanded an area around the edge of the territory that had existed before the war, as well as a large security area in the so-called Netzarim corridor through the middle of Gaza.

This latest conflict began when Hamas launched an attack on Israel on 7 October 2023, killing around 1,200 people and taking around 250 hostages.

The ensuing Israeli offensive has killed more than 50,000 Palestinians, according to Gaza’s Hamas-run health ministry.

Aid group Doctors Without Borders warned on Wednesday that Israel’s month-long siege of Gaza means some critical medications are now short in supply and are running out, leaving Palestinians at risk of losing vital healthcare.

“The Israeli authorities’ have condemned the people of Gaza to unbearable suffering with their deadly siege,” said Myriam Laaroussi, the group’s emergency coordinator in Gaza.

“This deliberate infliction of harm on people is like a slow death; it must end immediately.”

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‘Liberation day is here’: But what will it mean for global trade?

Published

1 day ago

April 2, 2025

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'Liberation day is here': But what will it mean for global trade?

“Liberation day” was due to be on 1 April. But Donald Trump decided to shift it by a day because he didn’t want anyone to think it was an April fool.

It is no joke for him and it is no joke for governments globally as they brace for his tariff announcements.

It is stunning how little we know about the plans to be announced in the Rose Garden of the White House later today.

It was telling that we didn’t see the President at all on Tuesday. He and all his advisers were huddled in the West Wing, away from the cameras, finalising the tariff plans.

Follow the events of Liberation Day live as they unfold

Three key figures are central to it all.

Treasury Secretary Scott Bessent is the so-called ‘measured voice’. A former hedge fund manager, he has argued for targeted not blanket tariffs.

Peter Navarro is Trump’s senior counsellor for trade and manufacturing. A long-time aide and confidante of the president, he is a true loyalist and a firm believer in the merits of tariffs.

His economic views are well beyond mainstream economic thought – precisely why he appeals to Trump.

‘Stop that crap’: Trump adviser Peter Navarro reacts to Sky News correspondent’s question over tariffs

The third key character is Howard Lutnick, the commerce secretary and the biggest proponent of the full-throttle liberation day tariff juggernaut.

The businessman, philanthropist, Trump fundraiser and billionaire (net worth ranging between $1bn and $2bn) has been among the closest to Trump over the past 73 days of this presidency – frequently in and out of the West Wing.

If anything goes wrong, observers here in Washington suspect Trump will make Lutnick the fall guy.

What are Donald Trump’s tariffs, what is ‘liberation day’ and how does it all affect the UK?

And what if it does all go wrong? What if Trump is actually the April fool?

“It’s going to work…” his press secretary said when asked if it could all be a disaster, driving up the cost of living for Americans and creating global economic chaos.

“The president has a brilliant team who have been studying these issues for decades and we are focussed on restoring the global age of America…” Karoline Leavitt said.

Dancing to the president’s tune

My sense is that we should see “liberation day” not as the moment it’s all over in terms of negotiations for countries globally as they try to carve out deals with the White House. Rather it should be seen as the start.

Trump, as always, wants to be seen as the one calling the shots, taking control, seizing the limelight. He wants the world to dance to his tune. Today is his moment.

But beyond today, alongside the inevitable tit-for-tat retaliation, expect to see efforts by nations to seek carve-outs and to throw bones to Trump; to identify areas where trade policies can be tweaked to placate the president.

Even small offerings which change little in a material sense could give Trump the chance to spin and present himself as the winning deal maker he craves to be.

One significant challenge for foreign governments and their diplomats in Washington has been engaging the president himself with proposals he might like.

Negotiations take place with a White House team who are themselves unsure where the president will ultimately land. It’s resulted in unsatisfactory speculative negotiations.

Too much faith placed in the ‘special relationship’?

The UK believes it’s in a better position than most other countries globally. It sits outside the EU giving it autonomy in its trade policy, its deficit with the US is small, and Trump loves Britain.

It’s true too that the UK government has managed to accelerate trade conversations with the White House on a tariff-free trade partnership. Trump’s threats have forced conversations that would normally sit in the long grass for months.

Yet, for now, the conversations have yielded nothing firm. That’s a worry for sure. Did Keir Starmer have too much faith in the ‘special relationship’?

Downing Street will have identified areas where they can tweak trade policy to placate Trump. Cars maybe? Currently US cars into the UK carry a 10% tariff. Digital services perhaps?

US food? Unlikely – there are non-tariff barriers on US food because the consensus seems to be that chlorinated chicken and the like isn’t something UK consumers want.

Easier access to UK financial services maybe? More visas for Americans?

For now though, everyone is waiting to see what Trump does before they either retaliate or relent and lower their own market barriers.