Connect with us

Published

on

Rishi Sunak has confirmed the long-rumoured decision to scrap the northern leg of HS2 .

Reports the planned high speed rail line would end in Birmingham – rather than continuing up to Manchester – have been circling for weeks, with sources telling Sky News on Monday the decision had been made.

But the prime minister has spent days dodging the question, only making the announcement as he gave the closing speech to this year’s Conservative Party conference.

Read more: HS2 axe branded betrayal of the north – politics latest

Mr Sunak defended the move by promising to spend the billions of cash savings on hundreds of other transport schemes across the country instead.

They will include:

• The ‘Network North’ project to join up northern cities by rail

• A ‘Midlands Rail Hub’ to connect 50 stations

• Keeping the £2 bus fare cap across the country

But a number of the projects appear to have been announced before and critics have suggested Mr Sunak is reviving schemes he was responsible for cancelling.

HS2 will still go to Euston despite suggestions it could end in the west London suburb of Old Oak Common, rather than in the centre of the capital.

The proposed site of the London Euston HS2 terminal

Speaking from a former railway station in Manchester, where the Tories’ annual event was held this year, Mr Sunak told members getting infrastructure right was key to driving growth, but a “false consensus” had emerged, with projects “driven by cities at the exclusion of everywhere else”.

‘I am ending this long running saga’

He said HS2 was “the ultimate example of the old consensus”, saying the cost had doubled and the “economic case” for the line had “massively weakened with the changes to business travel post-COVID”.

The prime minister added: “I say, to those who backed the project in the first place, the facts have changed. And the right thing to do when the facts change, is to have the courage to change direction.

“So I am ending this long-running saga. I am cancelling the rest of the HS2 project.”

Mr Sunak said scrapping phase two to Manchester would free up £36bn, and “every single penny” would be spent on “hundreds of new transport projects in the North and the Midlands, and across the country”.

But the government’s new “focus” would be on a project called Network North, which would “join up our great towns and cities in the North and the Midlands”.

The fully electrified line would see trains make the journey from Manchester to Hull in 84 minutes, to Sheffield in 42 minutes and Bradford in 30 minutes.

“No government has ever developed a more ambitious scheme for northern transport than our new Network North,” the prime minister added.

“This is the right way to drive growth and spread opportunity across our country. To level up.”

Sunak has rolled the dice


Tamara Cohen

Tamara Cohen

Political correspondent

@tamcohen

Rishi Sunak’s speech was packed with policy – on banning smoking, replacing A-levels with a new qualification – though not for quite a few years – and of course the long awaited axing of HS2 to fund regional transport upgrades.

There were also some indications of campaign attacks on Labour – in particular with his references to trans issues, and Sir Keir Starmer’s previous positions on Brexit.

A year out from an election, these are long term plans that may never happen, if voters don’t want to keep the Conservatives in the short term.

But Sunak has rolled the dice on the idea his party can regenerate for the future.

Listing other transport pledges, Mr Sunak said he would “protect” the £12bn project to link Manchester and Liverpool, build a tram in Leeds and upgrade the A1, A2, A5 and the M6.

He also promised to extend the West Midlands Metro, electrify the North Wales main line and 70 further road schemes.

“I challenge anyone to tell me with a straight face that all of that isn’t what the North really needs,” he said.

“Our plan will drive far more growth and opportunity here in the North than a faster train to London ever would.”

The plans immediately drew criticism from regional mayors, including Andy Burnham in Greater Manchester, who said the HS2 announcement was “no way to treat our city when they are in our city”.

He said the government had not announced a “coherent plan” but a “transport plan patched together in hotel rooms at a party conference with no input with northern leaders or mayors”.

Mr Burnham went on to say the current plan would not solve the problem of bottlenecks and lack of capacity on the railway network in the north, which covers from Liverpool in the west to Hull in the east.

He also accused the government of failing to turn its transport pledges into reality and suggested that previous statements had been made “with political intentions in mind to try and win votes here”.

“It’s starting look very much like that’s what it was all about – and what has been announced today feels more of the same,” he added.

His concerns were echoed by Labour’s shadow transport secretary Louise Haigh, who said the north and Midlands had been “left to pay the price” for this “staggering Tory fiasco”.

“Only after 13 years of dismal failure could the Conservatives make the centrepiece of their conference a re-announcement of promises the Conservatives have made before,” she said.

Politics Hub with Sophy Ridge

Politics Hub with Sophy Ridge

Sky News Monday to Thursday at 7pm.
Watch live on Sky channel 501, Freeview 233, Virgin 602, the Sky News website and app or YouTube.

Tap here for more

Read more:
Analysis: Sunak’s woes are a conference sideshow
HS2 explained – what is the route and why has leg been axed?

West Yorkshire Mayor Tracy Brabin called the decision “yet another betrayal of the North which will punish passengers and businesses alike”.

The head of research and policy at the GMB union, Laurence Turner, also said the scrapping of the northern HS2 leg would “send a shockwave through the construction industry and railway supply chain, costing hundreds of jobs”.

He added: “The UK’s political instability was already holding the economy back – it will now be even harder to fund and deliver the new infrastructure that the country desperately needs.

“We can’t rebalance the economy or fix the railway capacity crisis without HS2. It’s essential that the planned route is now protected so that a future government can reverse this disastrous decision.”

Mr Sunak accepted he would face criticism for the decision – having already been slammed by Tory grandees, regional politicians and businesses before the announcement was even made.

“They will say that halting it signals a lack of ambition,” he told the audience. “There will be people I respect, people in our own party, who will oppose it.

“But there is nothing ambitious about simply pouring more and more money into the wrong project.

“There is nothing long-term about ignoring your real infrastructure needs so you can spend an ever-larger amount on one grand project.

“For too long, people in Westminster have invested in the transport they want, not the transport the rest of the country, particularly the North and Midlands, wants and needs.”

Mr Sunak addressed one critic in particular – the Tory mayor in the West Midlands, Andy Street – saying he was a man he had “huge admiration and respect for”, Mr Sunak added: “I know we have different views on HS2.

“But I know we can work together to ensure a faster, stronger spine: quicker trains and more capacity between Birmingham and Manchester.”

Mr Street confirmed he would not resign from his post despite being “incredibly disappointed” about the HS2 decision.

He said he had “thought incredibly long and hard about what my future in the Conservative Party should be”, but had decided to remain a member.

“The West Midlands must be at the heart of the UK’s modern transport network and reap all the benefits that will bring,” he said.

“The prime minister has today reached out to work with me to make that happen and to turn my back on that offer would be doing a serious dis-service to my region.

“I know this decision will make me deeply unpopular in some circles, and indeed many wanted me to resign and make a statement against my party.”

The prime minister announced a number of other policies that had been trailed in the days leading up to the conference – including introducing a British baccalaureate to allow pupils over 16 to study a wider range of subjects, and new tactics for making England smoke-free.

Continue Reading

Business

ITV back in spotlight as suitors screen potential bids

Published

on

By

ITV back in spotlight as suitors screen potential bids

Potential suitors have again begun circling ITV, Britain’s biggest terrestrial commercial broadcaster, after a prolonged period of share price weakness and renewed questions about its long-term strategic destiny.

Sky News has learnt that a number of possible bidders for parts or all of the company, whose biggest shows include Love Island, have in recent weeks held early-stage discussions about teaming up to pursue a potential transaction.

TV industry sources said this weekend that CVC Capital Partners and a major European broadcaster – thought to be France’s Groupe TF1 – were among those which had been starting to study the merits of a potential offer.

The sources added that RedBird Capital-owned All3Media and Mediawan, which is backed by the private equity giant KKR, were also on the list of potential suitors for the ITV Studios production arm.

One cautioned this weekend that none of the work on potential bids was at a sufficiently advanced stage to require disclosure under the UK’s stock market disclosure rules, and suggested that ITV’s board – chaired by Andrew Cosslett – had not received any recent unsolicited approaches.

That meant that the prospects of any formal approach materialising was highly uncertain.

The person added, however, that Dame Carolyn McCall, ITV’s long-serving chief executive, had been discussing with the company’s financial advisers the merits of a demerger or other form of separation of its two main business units.

More from Money

Its main banking advisers are Goldman Sachs, Morgan Stanley and Robey Warshaw.

ITV’s shares are languishing at just 65.5p, giving the whole company a market capitalisation of £2.51bn.

The stock rose more than 5% on Friday amid vague market chatter about a possible takeover bid.

Bankers and analysts believe that ITV Studios, which made Disney+’s hit show, Rivals, would be worth more than the entire company’s market capitalisation in a break-up of ITV.

People close to the situation said that under one possible plan being studied, CVC could be interested in acquiring ITV Studios, with a European broadcast partner taking over its broadcasting arm, including the ITVX streaming platform.

“At the right price, it would make sense if CVC wanted the undervalued production business, with TF1 wanting an English language streaming service in ITVX, along with the cashflows of the declining channels,” one broadcasting industry veteran said this weekend.

“They would only get the assets, though, in a deal worth double the current share price.”

Takeover speculation about ITV, which competes with Sky News’ parent company, has been a recurring theme since the company was created from the merger of Carlton and Granada more than 20 years ago.

ITV said this month that it would seek additional cost savings of £20m this year as it continued to deal with the fallout from last year’s strikes by Hollywood writers and actors.

It added that revenues at the Studios arm would decline over the current financial year, with advertising revenues sharply lower in the fourth quarter than in the same period a year earlier because of the tough comparison with 2023’s Rugby World Cup.

Allies of Dame Carolyn, who has run ITV since 2018, argue that she has transformed ITV, diversifying further into production and overhauling its digital capabilities.

The majority of ITV’s revenue now comes from profitable and growing areas, including ITVX and the Studios arm, they said.

By 2026, those areas are expected to account for more than two-thirds of the group’s sales.

This year, its production arm was responsible for the most-viewed drama of the year on any channel or platform, Mr Bates versus The Post Office.

In its third-quarter update earlier this month, Dame Carolyn said the company’s “good strategic progress has continued in the first nine months of 2024 driven by strong execution and industry-leading creativity”.

“ITV Studios is performing well despite the expected impact of both the writer’s strike and a softer market from free-to-air broadcasters.”

She said the unit would achieve record profits this year.

ITV and CVC declined to comment, while TF1, RedBird and Mediawan did not respond to requests for comment.

Continue Reading

Business

Ann Summers’ family owners to explore options for lingerie chain

Published

on

By

Ann Summers' family owners to explore options for lingerie chain

The family which has owned Ann Summers, the lingerie and sex toy retailer, for more than half a century is to explore options for the business which could include a partial or majority sale.

Sky News has learnt that the Gold family is close to hiring Interpath, the corporate advisory firm, to work on a strategic review which could lead to the disposal of a big stake in the chain.

Retail industry sources said this weekend that Ann Summers had been in talks with Interpath for several weeks, although it has yet to be formally instructed.

The chain, which was founded in 1971 and acquired by David and Ralph Gold when it fell into liquidation the following year, trades from 83 stores and employs over 1,000 people.

The family continues to own 100% of the equity in the company.

Sources said that some dilution of the Golds’ interest was probable, although it was far from certain that they would sell a controlling stake.

In a statement issued in response to an enquiry from Sky News, Vanessa Gold, Ann Summers’ chair, commented: “We, like many other retailers, are dealing with the unhelpful backdrop to business of the decisions announced by the government at the Budget and the rising cost to retail.

More from Money

“As a family-owned business, we are in a fortunate position and have committed investment for over 50 years.

“This has created a robust and resilient business.

“We are exploring a number of options to further grow the brand into 2025 and beyond.”

Ms Gold is among many senior retail figures to publicly criticise the tax changes announced in the Budget unveiled by Rachel Reeves, the chancellor, last month.

The British Retail Consortium published a letter last weeks signed by scores of its members in which they warned of price rises and job losses.

Private equity firms and other retail groups are expected to express an interest in a takeover of Ann Summers.

One possible contender could be the Frasers billionaire Mike Ashley, who already owns upmarket rival Agent Provocateur.

Any formal process is unlikely to yield a result until next year, with the key Christmas trading period the principal focus for the shareholders and management during the next month.

Ann Summers is one of Britain’s best-known retailers, with a profile belying its relatively modest size.

In the early 1980s, Jacqueline Gold, the then executive chairman who died last year, conceived the idea of holding Ann Summers parties – a key milestone in the company’s growth.

At its largest, the chain traded from nearly twice the number of shops it has today, but like many retailers was forced to seek rent cuts from landlords after weak trading during the COVID-19 pandemic.

This week, The Daily Telegraph reported that the Gold family had stepped in to provide several million pounds of additional funding to Ann Summers in the form of a loan.

Vanessa Gold – Jacqueline’s sister – also asked bankers to explore the sale of part of the family’s stake in West Ham United Football Club last year.

That process, run by Rothschild, has yet to result in a deal.

Interpath declined to comment.

Continue Reading

Business

Thousands of jobs to go at Bosch in latest blow to German car industry

Published

on

By

Thousands of jobs to go at Bosch in latest blow to German car industry

Bosch will cut up to 5,500 jobs as it struggles with slow electric vehicle sales and competition from Chinese imports.

It is the latest blow to the European car industry after Volkswagen and Ford announced thousands of job cuts in the last month.

Cheaper Chinese-made electric cars have made it trickier for European manufacturers to remain competitive while demand has weakened for the driver assistance and automated driving solutions made by Bosch.

The company said a slower-than-expected transition to electric, software-controlled vehicles was partly behind the cuts, which are being made in the car parts division.

Demand for new cars has fallen overall in Germany as the economy has slowed, with recession only narrowly avoided in recent years.

The final number of job cuts has yet to be agreed with employee representatives. Bosch said they would be carried out in a “socially responsible” way.

About half the job reductions would be at locations in Germany.

Read more:
Son’s anger after mum jailed in second Post Office scandal
The ‘double life’ of people-smuggling car wash bosses

Bosch, the world’s biggest car parts supplier, has already committed to not making layoffs in Germany until 2027 for many employees, and until 2029 for a subsection of its workforce. It said this pact would remain in place.

The job cuts would be made over approximately the next eight years.

The Gerlingen site near Stuttgart will lose some 3,500 jobs by the end of 2027, reducing the workforce developing car software, advanced driver assistance and automated driving technology.

Other losses will be at the Hildesheim site near Hanover, where 750 jobs will go by end the of 2032, and the plant in Schwaebisch Gmund, which will lose about 1,300 roles between 2027 and 2030.

Bosch’s decision follows Volkswagen’s announcement last month it would shut at least three factories in Germany and lay off tens of thousands of staff.

Its remaining German plants are also set to be downsized.

While Germany has been hit hard by cuts, it is not bearing the brunt alone.

Earlier this week, Ford announced plans to cut 4,000 jobs across Europe – including 800 in the UK – as the industry fretted over weak electric vehicle (EV) sales that could see firms fined more for missing government targets.

Continue Reading

Trending