Downing Street has refused to guarantee the HS2 will run to Manchester as planned amid reports Rishi Sunak and Jeremy Hunt are in talks about scrapping the project’s second stage.
It comes after The Independent reported ministers were considering shelving the northern phase amid concerns about spiralling costs and severe delays.
The Prime Minister’s official spokesman said “spades are already in the ground on our HS2 programme and we’re focused on delivering it” but would not promise the line would go to Manchester.
“I can’t comment on speculation around a leaked document. It is obviously standard process for departments to discuss the phasing of major projects like HS2… but the work is already under way,” he said.
Asked whether the prime minister was committed to the line going to Manchester, the spokesman said: “We are committed to HS2, to the project.
“I can’t comment on the speculation that’s a result of a photograph. We are as you know looking at the rephasing of the work in the best interests of passengers and taxpayers.”
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Signs that the leg to the northern city may be in trouble came when the DfT confirmed in March that work on the crucial leg between Birmingham and Crewe – which is then due to continue to Manchester – would have to be put on hold because of the impact of inflation.
It meant that services were not going to extend to Manchester until the 2040s.
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In its report, The Independent said a cost estimate revealed that the government has already spent £2.3bn on stage two of the railway from Birmingham to Manchester, but that ditching the northern phase could save up to £34bn.
The newspaper said the documents were discussed at a meeting in Downing Street on Tuesday and suggested the £2.3bn was now not recoverable even if it is cancelled.
HS2 plagued by delays
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.
The initial opening date of 2026 has fallen back to 2033, while cost estimates have spiralled from about £33bn in 2010 to £71bn in 2019 – excluding the final eastern leg from the West Midlands to the East Midlands.
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Delays to HS2 announced by the government earlier this year to help
It is not just the northern section of the project that has encountered trouble, with there also being doubts about the future of Euston station in London.
Under the HS2 map, Euston is supposed to provide the final leg in the south after linking up to Old Oak Common in the suburbs of northwest London.
However, Transport Secretary Mark Harper recently told MPs that work at Euston would be paused for two years because costs had risen to £4.8bn compared with an initial budget of £2.6bn – which MPs on the Public Accounts Committee described as ” wildly unrealistic”.
Since construction began there six years ago, hundreds of homes and businesses have been demolished – but now the huge building site is virtually empty.
The DfT has said it will use the two-year period to determine its priorities and minimum requirements for the station.
This summer HS2 was also rated “unachievable” as part of an annual report from a government watchdog.
The Infrastructure and Projects Authority (IPA) gave the first two phases of the rail link – from London to Birmingham, and from Birmingham to Crewe, a “red” rating, saying the whole plan may need to be “reassessed”.
The government announced further delays to HS2 earlier this year in an effort to “balance the books” after inflation hit the cost of materials.
But analysis exclusively leaked to Sky News showed the two-year pause in works would end up being three-and-a-half years, and was likely to cost the taxpayer at least £366m.
In its report, the IPA said: “Successful delivery of [HS2] appears to be unachievable.”
The watchdog added there were “major issues with project definition, schedule, budget, quality and/or benefits delivery, which at this stage do not appear to be manageable or resolvable”.
As a result, it said the project “may need re-scoping and/or its overall viability reassessed”.
This latest criticism comes in the same month that HS2 Ltd’s chief executive, Mark Thurston, announced he would be resigning from his post in September.
Britain has sent a senior commander and a small number of troops to Israel to help international efforts to monitor a fragile Gaza ceasefire following an American request.
John Healey, the defence secretary, revealed the deployment barely a week after Yvette Cooper, the new foreign secretary, said the UK had “no plans” to send soldiers.
The British Major General will work as the deputy to a US commander, who is tasked with running a civil-military coordination centre that is also expected to include troops from Egypt, Qatar, Turkey, and the United Arab Emirates.
The ceasefire deal, brokered by Donald Trump, between Hamas and Israel has created the “opportunity for a long-term peace”, Mr Healey said.
Image: Defence Secretary John Healey said Donald Trump had created the conditions for an end to the fighting. Pic: PA
“We have specialist experience and skills that we have offered to contribute,” he said, answering questions after delivering a lecture on wider defence issues to business leaders at an event in London on Monday evening.
The defence secretary said: “We can contribute to the monitoring of the ceasefire. That is likely to be led by others.
“We have also, in response to the American request, put a first rate two-star officer into a civilian-military command, as the deputy commander.
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“So Britain will play an anchor role, contribute the specialist experience and skills where we can. We don’t expect to be leading… but we will play our part.”
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Ceasefire in fragile state.
The British officer is being accompanied by a small team of UK military personnel, with expertise in planning.
The United States, for its part, is sending up to 200 troops to Israel. They will not enter Gaza.
The British contingent will also not be operating inside the strip.
A Ministry of Defence spokesperson said: “A small number of UK planning officers have embedded in the US led CMCC, Civil Military Coordination Centre, including a 2* deputy commander to ensure that the UK remains integrated into the US led planning efforts for Gaza post-conflict stability.
“The UK continues to work with international partners to support the Gaza ceasefire to see where the UK can best contribute to the peace process.”
Details about the US plans – headed by Central Command – to help facilitate the flow of humanitarian aid as well as logistical and security assistance into the territory emerged after Mr Trump brokered a ceasefire deal between Hamas and Israel on 10 October.
Image: Gazan mourners pray over the bodies of Palestinians killed by Israeli fire. Pic: AP
One official said the new team will help monitor implementation of the ceasefire agreement and the transition to a civilian government in Gaza.
It is separate to a planned international stabilisation force that would deploy into the territory to help secure the peace.
That force is a key part of Mr Trump’s 20-point peace plan.
In a sign of potential problems, though, The New York Times reported on Tuesday that countries that might contribute soldiers to the international force are nervous about putting boots on the ground while Hamas remains an armed group.
The arrival of British troops in Israel comes as the ceasefire deal remains under pressure, with Israel and Hamas accusing each other of breaching its terms.
Israel briefly resumed airstrikes over the weekend after its troops were reported to have come under attack.
Meanwhile, the Hamas-run health ministry in Gaza yesterday reported more than 50 deaths in the last 24 hours.
A current senior member of the King’s household was the head of royal protection at the time Prince Andrew allegedly asked one of his police officers to dig up dirt on Virginia Guiffre, Sky News has discovered.
Lord Peter Rosslyn, who is now Lord Steward and Personal Secretary to the King and Queen, was head of Royalty and Diplomatic Protection between 2003-2014.
It is not clear if Lord Rosslyn – known at the time as Commander Peter Loughborough – was made aware of Prince Andrew’s request. However, it reportedly happened in 2011 when it’s claimed Andrew wrote in an email that he passed the date of birth and confidential social security number of his accuser, Virginia Guiffre, to one of his close protection team to find out information about her.
Image: Lord Peter Rosslyn arriving at the Duchess of Kent’s funeral. Pic: PA
Sky News approached Lord Rosslyn for comment, which was passed to Buckingham Palace.
A palace spokesperson said: “As you may or may not be aware, Lord Rosslyn works for The Royal Household and thus this issue has been referred to me. However, since this matter relates to his time in service with the Metropolitan Police, they would be the appropriate body to approach with media enquiries of this nature.”
The Met Police had nothing further to add.
Police sources have told Sky News the officer (CPO) involved would have been expected to escalate this request from Andrew to his superiors.
While there may have been other members of senior staff between the CPO and Lord Rosslyn, the request should have been considered serious enough to be referred to the top of the Royalty and Diplomatic Service.
Those with knowledge of the royal household tell us Lord Rosslyn is one of the King’s closest and most trusted members of staff.
His role as Lord Steward involves managing all aspects of the King’s personal affairs, and the non-state business of the monarch.
Who is Lord Peter Rosslyn?
As well as being much respected by Queen Elizabeth II, and affectionately known as her “favourite policeman”, in 2014 Lord Rosslyn was appointed as Master of the Household of the then Prince of Wales and the Duchess of Cornwall at Clarence House.
In February 2003, he was made Lord Steward by the King, thereby becoming the “first dignitary of the King’s court” – a sign that the monarch wanted to keep him around.
While Andrew’s alleged attempts to smear Virginia Guiffre would have been morally wrong, he also would have been asking his police officer to put his career on the line.
Any attempt to use police databases to find information on an innocent individual not connected to a crime would have been a sackable offence, and unlawful.
In his statement on Friday, Prince Andrew again stressed that he vehemently denies the allegations against him.
A Buckingham Palace source told Sky News that the recent claims that have emerged are being viewed by the Royal Family with “very serious and grave concern” and “should be examined in the proper and fullest ways”.
Image: Prince Andrew’s signature
Andrew should give evidence to US authorities – minister
The revelation comes as a government minister said Andrew should give evidence to US authorities – and anger grows after it emerged he had been paying “peppercorn rent” for two decades.
Passages from the memoir released on Tuesday of the late Virginia Giuffre, who accused Prince Andrew of sexually assaulting her, provide further details of their alleged encounters.
Prince Andrew has always strenuously denied the allegations.
Business Secretary Peter Kyle said on Tuesday he would “support” Prince Andrew giving evidence to US prosecutors.
He added he would also support any decision by the Met Police to investigate allegations that Prince Andrew used a Met bodyguard to gain information on Giuffre.
It comes as anger continues to grow over Prince Andrew’s housing arrangements.
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‘Victims should be in driver’s seat’
‘Peppercorn rent’
The royal has only paid “peppercorn rent” for more than two decades at his Windsor mansion, according to a National Audit Office report published in 2005.
“Peppercorn rent” is a legal term used in leases to show that rent technically exists, so the lease is valid, but it’s nominal, often literally £1 a year or just a symbolic amount.
In practice, it means the tenant pays no rent.
It also shows he was required to pay a further £7.5m for refurbishments.
A document from the Crown Estate also shows he signed a 75-year lease on the property in 2003.
It reveals he paid £1m for the lease and that since then he has paid “one peppercorn” of rent “if demanded” per year.
The agreement also contains a clause which states the Crown Estate would have to pay Andrew around £558,000 if he gave up the lease.
Pressure is mounting on him to give up the 30-bedroom mansion.
Senior Tory Robert Jenrick called for Prince Andrew to live privately.
‘He has disgraced himself’
He said: “It’s about time Prince Andrew took himself off to live in private and make his own way in life.
“He has disgraced himself, he has embarrassed the royal family time and again. I don’t see why the taxpayer, frankly, should continue to foot the bill at all. The public are sick of him.”
Image: Virginia Giuffre’s posthumous memoir was released today. Pic: Reuters
Mr Kyle, however, said that would be a question for King Charles.
But he did say MPs could bring forward a motion to strip Prince Andrew of his remaining titles, adding it would be up to Speaker Sir Lindsay Hoyle to choose one of these motions for debate.
The chief executive of Lloyds Banking Group has warned that a tax raid on the banks could harm lending to households and businesses.
In an exclusive interview with Sky News at the government’s regional investment summit, Charlie Nunn urged the chancellor to ignore calls for a windfall tax on commercial banks even though the sector is enjoying record profits.
“If we are going to have the ability and the confidence to continue to lend into the real economy, to help households and businesses invest, we need to make sure that the financial services system and Lloyds Banking Group really remains healthy in that context,” he said.
Image: Charlie Nunn was appointed Lloyds boss in November 2020. Pic: PA
Britain’s four largest banks – HSBC, Barclays, Lloyds Banking Group and NatWest – posted record profits of £45.9bn last year and are on course for another bumper performance this year, thanks to higher interest rates.
Their financial success has raised speculation that the sector could be in the chancellor’s firing line at next month’s budget.
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Rachel Reeves could raise the bank surcharge – a levy on bank profits in addition to corporation tax.
The Conservative government cut the levy from 8% to 3% in 2023. Returning it to 8% could raise £2bn for a chancellor who needs to find anywhere up to £50bn to meet her fiscal rules.
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Chancellor faces tough budget choices
Some have suggested a separate windfall tax, which could raise closer to £8bn.
Mr Nunn said such a move risked undermining the health of a sector which underpins the country’s economic prosperity.
“Obviously, taxes are a matter for the government to look at. But it’s definitely one of the factors that impact our ability to support the real economy in the UK,” he said.
A raid on the banks would cause pain to a sector that is already facing substantial costs because of the car finance scandal.
Lloyds, one of the most exposed lenders, has set aside nearly £2bn to cover potential compensation arising from the Financial Conduct Authority’s (FCA) redress scheme.
The FCA established the scheme to draw a line under the long-running mis-selling scandal, in which lenders failed to disclose commission paid to brokers, meaning many customers ended up paying more than they should have for their car finance.
Under the FCA’s scheme, eligible customers – as many as 14.2 million – could receive an average of £700 each.
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Payouts due after motor finance scandal
There is mounting anger within the industry at the way the scheme, which is going out to consultation, has been set up. Mr Nunn said the proposal was too generous to customers and not proportionate to the harms actually caused to customers.
He did not rule out the possibility of a judicial review but, in the first instance, called for a rethink, warning that the current scheme risks scaring away investors, causing an exodus from the market and driving up the cost and availability of credit.
“When you look at the implication of what’s being proposed by the FCA, it’s going to potentially take 20 years of profitability of the car finance industry. And, what does that mean for invest ability in that industry and for other investors and businesses looking to invest in the UK? There’s real concern that this is going to create an invest ability issue,” he said.
“Our concern is will the industry continue to function? Will it support all customers across the whole of the UK that need finance? Will other investors be looking at this and wondering whether the UK is a place they should invest, if retrospectively we can take away 20 years of profits?”