Ex-minister calls for inquiry into HS2 as he warns of ‘disastrous’ consequences if northern leg is scrapped
A former transport minister who signed off HS2 has told Sky News he wants an inquiry into the chaos of the project “to make sure it doesn’t happen again”.
The northern leg of the high speed rail line – set to run between Birmingham and Manchester – appears to be under threat amid reports the prime minister and chancellor are holding discussions this week on its future due to soaring costs.
Politics Live: Downing Street repeatedly refuses to comment on HS2
Rishi Sunak earlier declined to back building HS2 to the North in the face of warnings by senior Tories not to axe the rail project, hitting out at the “speculation” surrounding its future, but doing nothing to quell fears just ahead of the Conservative Party’s conference.
Former chancellor George Osborne and ex-Conservative deputy prime minister Lord Heseltine were among those saying cutting the Manchester route would be a “gross act of vandalism” and would mean “abandoning” the North and Midlands.
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Rishi Sunak on HS2 ‘speculation’
Norman Baker – a former Liberal Democrat MP who worked as a transport minister in the coalition years – said Mr Sunak had an “anti-rail mindset”, and the rumoured scrapping of the northern leg of the line would be “disastrous”.
Speaking to Sky News at the Lib Dem conference in Bournemouth, he said: “Let’s be quite clear about this. If HS2 is cancelled, it’s not simply a question of inconvenience to passengers.
“There’s going to be job losses in the rail industry. And it’s going to be massive reputational damage to this country.
“People are going to say, what on earth are you doing? You’re cancelling your environmental policies, you’re pulling out of the European Union, you can’t build a railway. Just what is happening with Britain these days?”
Norman Baker was a transport minister for the Lib Dems during the coalition.
Mr Baker – who now works at the Campaign for Better Transport – said people wanted “more HS2, not less HS2”, but criticised the project for being “very badly handled”.
He added: “It’s been hugely expensive. It’s been out of control financially. And we need to have in conjunction with HS2 going head to Manchester and indeed to Leeds as well, we have a proper inquiry as to understand why this has happened and to make sure it doesn’t happen again.”
However, the Lib Dems’ transport spokesperson in the Lords, Baroness Randerson, had concerns an inquiry would cause further delays.
Committing her party to the “full” HS2 project, the peer told Sky News: “Every time the government changes its mind, every time the government trims a few hundred yards, a mile or two off, one end or the other, they are pushing up the cost per mile and they are fatally undermining the economic arguments for it, the economic impetus for it, and its potential economic success.
“If you keep chopping and changing, playing the ‘hokey cokey’, as someone put it… then you are going to put in uncertainty, you’re going to drive up the costs and people are going to lose their mission on it.”
Baroness Randerson committed her party to HS2 in “full”.
But instead of an inquiry, she called for a “complete review”, adding: “It needs to be reinstated at the heart of government transport strategy, and then it will serve the north of England in the way it was intended to do, to level up.
“I don’t think we need anything that will impede its progress. We need to get on with it. But what we do, what we do need to do, for the sake of any future project, we need to make sure these mistakes aren’t made again because we have to have consistency.
“We are the nation that invented the railways. Now, 200 or so years on from that and we seem incapable of building a modern railway.”
Read more:
What is HS2 and why are parts being delayed?
Why are so many people upset with rail project?
HS2 was first touted by Labour in 2009, but it was the coalition government that signed off the plan, designed to connect the south, the Midlands and the North of England with state-of-the-art infrastructure.
If the Manchester leg is axed it would be the latest watering down of the project, with the eastern leg to Leeds scrapped entirely and work between Birmingham and Crewe delayed due to the impact of inflation.
Some estimates have put the total cost at over £100bn, while the project has been rated “unachievable” by the infrastructure watchdog.
Pushed on the rumours during a visit to a community centre in Hertfordshire on Monday, Mr Sunak said: “We’re absolutely committed to levelling up and spreading opportunity around the country, not just in the North but in the Midlands, in all other regions of our fantastic country.”
He said that transport is “key” to that vision, “not just big rail projects, but also local projects, improving local bus services, fixing pot holes”.
Pressed for a yes or no answer over whether the northern leg would go ahead, Mr Sunak said: “This kind of speculation that people are making is not right. We’ve got spades in the ground, we’re getting on and delivering.
“Downing Street made clear that he was hitting out at the nature of the speculation, rather than suggesting any of it was incorrect.”
Number 10 refused to provide further details but said there is precedent to delaying aspects of the high speed rail scheme because of “affordability pressures”, pointing towards high inflation.
The prime minister’s official spokesman said that Mr Sunak “always listens to both sides of debate, and it’s for him to make final decisions”.
The uncertainty has fuelled anger among leaders in Manchester, who have sent an “urgent” letter to Mr Sunak warning “the North of England should not have to pay for the government’s mismanagement of the HS2 budget”.
Manchester’s Labour Mayor Andy Burnham and the city council leader Cllr Bev Craig are requesting a meeting with the prime minister as a “courtesy” before a decision is taken, in which they will state “in the strongest possible terms that HS2 should not be scrapped”.
Braden John Karony, the CEO of crypto firm SafeMoon, has cited the US Department of Justice’s directive to no longer pursue some crypto charges in an effort to get the case against him and his firm dismissed.
In an April 9 letter to New York federal court judge Eric Komitee, Karony’s attorney, Nicholas Smith, said the court should consider an April 7 memo from US Deputy Attorney General Todd Blanche that disbanded the DOJ’s crypto unit.
“The Department of Justice is not a digital assets regulator,” Blanche said in the memo, which added the DOJ “will no longer pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets.”
Blanche also directed prosecutors not to charge violations of securities and commodities laws when the case would require the DOJ to determine if a digital asset is a security or commodity when charges such as wire fraud are available.
An excerpt of the letter Karony sent to Judge Komitee. Source: PACER
In the footnote of the letter, Karony’s counsel wrote an exemption to the DOJ’s new directive would be if the parties have an interest in defending that a crypto asset is a security, but added that “Karony does not have such an interest.”
The Justice Department and the Securities and Exchange Commission filed simultaneous charges of securities violations, wire fraud, and money laundering against Karony and other SafeMoon executives in November 2023.
The government alleged Karony, SafeMoon creator Kyle Nagy and chief technology officer Thomas Smith withdrew assets worth $200 million from the project and misappropriated investor funds.
Another attempt to nix the case
The letter is Karony’s latest attempt to get the case thrown out. In February, he asked that his trial, scheduled to begin on March 31, be delayed as he argued President Donald Trump’s proposed crypto policies could potentially affect the case.
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Later in February, Smith changed his plea to guilty and said he took part in the alleged $200 million crypto fraud scheme. Nagy is at large and is believed to be in Russia.
SafeMoon filed for bankruptcy in December 2023, a month after it was hit with twin cases from the SEC and DOJ. It was also hacked in March 2023, with the hacker agreeing to return 80% of the funds.
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Ukraine’s financial regulator has proposed taxing certain crypto transactions as personal income at a rate of up to 23% but excluding crypto-to-crypto transactions and stablecoins.
Crypto transactions would be taxed at 18% with a 5% military levy on top as part of the proposed framework, released on April 8 by Ukraine’s National Securities and Stock Market Commission.
NSSMC Chairman Ruslan Magomedov said in an April 8 statement that “the issue of crypto taxes is not a hypothesis, but a reality that is fast approaching.”
He added that the agency created the framework to help lawmakers make an “informed resolution” by considering each suggestion’s advantages and disadvantages because “these aspects can have a critical impact on the market and tax liability.”
Under the NSSMC’s proposed crypto framework, a tax will be applied when crypto is cashed out for fiat currency or exchanged for goods or services.
Crypto-to-crypto transactions wouldn’t be taxed, bringing Ukraine in line with other European countries, including Austria and France, as well as crypto-friendly jurisdictions like Singapore, the NSSMC said.
The regulator says it “makes sense” to exclude stablecoins backed by foreign currencies or only apply a 5% or 9% tax because Ukraine’s tax code already excludes income from transactions in “foreign exchange values.”
A translated excerpt of the NSSMC’s report said stablecoins backed by foreign currencies could be exempt from taxation. Source: NSSMC
Mining, staking, hard forks and airdrops
Other crypto-related activities, such as mining, staking and airdrops, are also addressed in the framework which floated a few options for taxation.
The NSSMC said crypto mining is generally considered a business activity, but there might be a general tax-free limit for certain crypto transactions, including mining.
Under the framework, staking could be considered as “business captive income” or only taxed if the crypto is cashed out for fiat currencies. While hard forks and airdrops could be taxed either as ordinary income or when the tokens are cashed.
Related: Ukraine officials get training on crypto and virtual assets investigation
The regulator suggests a tax-free threshold could help “relieve the burden on small investors” and is common in other jurisdictions.
Exemptions for donations, transfers between family members, and holders who keep their crypto for a set amount of time are also flagged as possibilities. However, the NSSMC says the exemption might not apply to non-custodial crypto wallets.
Last December, Daniil Getmantsev, head of the tax committee of Ukraine’s parliament, said a draft bill to legalize cryptocurrencies was under review and expected to be finalized early this year.
Ukrainian President Volodymyr Zelenskyy first signed a law establishing a legal framework for the country to operate a regulated crypto market in March 2022.
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Digital asset manager 21Shares has filed with the US Securities and Exchange Commission to launch a spot Dogecoin exchange-traded fund, following similar filings from rivals Bitwise and Grayscale.
The 21Shares Dogecoin ETF would seek to track the price of the memecoin Dogecoin (DOGE), according to the firm’s April 9 Form S-1 registration statement. The Dogecoin Foundation’s corporate arm, House of Doge, plans to assist 21Shares with marketing the fund.
21Shares said Coinbase Custody would be the proposed custodian of its Dogecoin ETF but did not specify a fee, ticker or what stock exchange it would list on.
Source: James Seyffart
21Shares must also file a 19b-4 filing with the SEC to kickstart the regulator’s approval process for the fund.
DOGE currently has a $24.2 billion market cap and is the eighth-largest cryptocurrency by value. It was created in 2013 as a joke and is a fork of Lucky Coin, which itself is a fork of Bitcoin.
21Shares’ proposed Dogecoin ETF is the company’s latest effort to expand its spot crypto ETF offerings, which currently includes only a spot Bitcoin (BTC) and Ether (ETH) fund.
The issuer also filed with the SEC in February to launch a spot Polkadot (DOT) ETF and last year, it filed to create a spot XRP (XRP) ETF.
Related: Dogecoin millionaires are buying dips as DOGE price eyes 30% rally
The recent surge in crypto ETF filings reflects a “spaghetti cannon approach” from issuers testing which products the new SEC leadership might approve, Bloomberg ETF analyst James Seyffart said in February.
“Issuers will try to launch many many different things and see what sticks,” Seyffart said.
Seyffart and fellow Bloomberg ETF analyst Eric Balchunas said in February that there is a 75% chance that the SEC will approve a spot Dogecoin ETF this year, while the betting platform Polymarket currently gives approval odds of 64%.
21Shares and House of Doge partner for DOGE funds in Switzerland
21Shares also said on April 9 that it partnered with House of Doge to launch a fully backed Dogecoin exchange-traded product on Switzerland’s SIX Swiss Exchange.
The 21Shares Dogecoin product will trade under the ticker “DOGE” with a 2.5% fee.
21Shares president Duncan Moir said that Dogecoin “has become more than a cryptocurrency: it represents a cultural and financial movement that continues to drive mainstream adoption, and DOGE offers investors a regulated avenue to be part of this exciting project.”
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