Rishi Sunak’s plan to build HS2 between London and Birmingham but not extend it to Manchester will be “very poor value for money”, cross-party MPs have warned.
The Public Accounts Committee (PAC), which examines government spending, said there are “many uncertainties” in the assessment that it was better to complete Phase 1 of the project than cancel the whole thing.
The group also said it is “highly sceptical” that the Department for Transport (DfT) will be able to attract the private investment needed for the planned central London terminus at Euston.
The report stated: “HS2 now offers very poor value for money to the taxpayer, and the department and HS2 Ltd do not yet know what it expects the final benefits of the programme to be.”
A spokesperson for the Department for Transport said they disagreed with the committee’s assessment.
It comes as the Conservative mayor of the West Midlands, Andy Street, and his Labour counterpart in Greater Manchester, Andy Burnham, are due to hold an event on Wednesday to outline their plans to work with private investors on improving rail in the North and Midlands.
The estimated cost of building HS2 between London and Birmingham could be as high as £67bn, according to HS2 Ltd, up from a budget of £44.6bn in 2019.
The original bill for the whole project – at 2009 prices – was supposed to be £37.5bn.
Advertisement
The PAC report said there are many “unknown ramifications” of the decision to scale back the railway, ranging from how land and property no longer needed will be disposed of, impacts on other rail projects dependent on the cancelled phases, what will be delivered with the money saved, and how HS2 trains will operate on existing lines.
The report said the DfT have acknowledged to the committee that the total costs of building Phase 1 “will significantly outweigh benefits”, but officials have judged that continuing with that section “was value for money”, partly due to avoiding £11bn of costs that would be incurred from cancellation.
However, the report said: “There are many uncertainties in this assessment and we were left with little assurance over the calculations.”
Please use Chrome browser for a more accessible video player
2:40
Burnham: HS2 plan ‘doesn’t make sense’
Mr Sunak’s October 2023 announcement also included a new plan to rely on private investment to extend HS2 from Old Oak Common in the suburbs of west London to Euston, near the centre of the capital.
This is aimed at saving £6.5bn of taxpayers’ money.
But the PAC said: “We are… highly sceptical that the department will be able to attract private investment on the scale and speed required to make the London terminus station a success.”
Dame Meg Hillier, the Labour MP who chairs the committee, said: “HS2 is the biggest ticket item by value on the government’s books for infrastructure projects.
“As such, it was crying out for a steady hand at the tiller from the start.
“But, here we are after over a decade of our warnings on HS2’s management and spiralling costs, locked into the costly completion of a curtailed rump of a project and many unanswered questions and risks still attached to delivery of even this curtailed project.”
Spreaker
This content is provided by Spreaker, which may be using cookies and other technologies.
To show you this content, we need your permission to use cookies.
You can use the buttons below to amend your preferences to enable Spreaker cookies or to allow those cookies just once.
You can change your settings at any time via the Privacy Options.
Unfortunately we have been unable to verify if you have consented to Spreaker cookies.
To view this content you can use the button below to allow Spreaker cookies for this session only.
The move to ditch the northern leg of HS2 was highly controversial, triggering a backlash from Tory grandees, regional leaders, businesses and the rail industry.
HS2 was touted as the UK’s biggest infrastructure project and was supposed to transform public transport between London, the Midlands and the North.
Last month, HS2 Ltd executive chairman Sir Jon Thompson said reasons for the cost increase include original budgets being too low, changes to scope, lower than expected productivity, weak contractual models and inflation.
In response to the PAC report, a spokesperson for the company said they have been “clear about the cost challenges”, adding: “HS2 Ltd is now under new leadership and implementing changes across the programme aimed at controlling costs and learning the lessons of the past.”
A DfT spokesperson said: “We disagree with the Committee’s assessment.
“Our plans for Euston have already received extensive support from the private sector to invest and will offer a world class regeneration opportunity, mirroring the successful King’s Cross and Battersea and Nine Elms development programmes.
“The Permanent Secretary has already written to the Committee chair setting out her assessment on value for money, and we have repeatedly made clear we will continue to deliver HS2 at the lowest reasonable cost, in a way that provides value for taxpayers.”
The former leader of Reform UK in Wales has been sentenced to 10 and a half years after he admitted accepting tens of thousands of pounds in cash to make pro-Russian statements to the media and European Parliament.
Nathan Gill had “abused a position of significant authority and trust” and was “motivated by financial and political gain”, said Mrs Justice Cheema-Grubb during remarks at the Old Bailey on Friday.
Image: Nathan Gill is surrounded by media as he arrives at the Old Bailey. Pic: PA
The Old Bailey heard his activities were linked to pro-Russian statements about Ukraine while he was a member of the UK Independence Party (UKIP) and subsequently the Brexit Party.
Following an investigation by counter-terrorism police, officers said they believe Gill likely took a minimum of £40,000 in cash and was offering to introduce other British MEPs so they could be bribed. Officers also said they believed some individuals in this case had a direct link to Vladimir Putin.
Image: Nathan Gill pleaded guilty to eight counts of bribery. Pic: Met Police
Prosecutor Mark Heywood KC previously told the court the bribery offences related to Gill’s association with pro-Russian Oleg Voloshyn, who had been a Ukrainian government official before 2014 and was sanctioned by the UK in 2022.
Gill’s activities emerged in WhatsApp messages after he was stopped at Manchester Airport on 13 September 2021.
He was about to board a flight to Russia to be an observer in elections there.
Bundles of cash recovered
Police said the messages revealed Voloshyn had tasked Gill to make pro-Russian statements on a reward basis. Counter-terrorism officers said the text of some speeches was provided to Gill, which he delivered almost word-for-word.
In other cases, he was paid to offer commentary to news outlets, such as the pro-Russian media organisation 112 Ukraine.
A search of his home in Wales also uncovered thousands in euros and dollars.
Image: Bundles of cash were recovered from Gill’s home. Pic: Met Police
Image: Pic: Met Police
Greed ‘primary motivation’
Commander Dominic Murphy, head of the Metropolitan Police Counter Terrorism Command, described Gill as being motivated by money.
“It appears… greed was his primary motivation. But I think there’s an element of him that had a pro-Russian stance as well, but only he can answer that question, to be honest with you, he never told us that.”
Image: Gill said no comment when interviewed by officers in 2022. Pic: Met Police
‘A grave betrayal of trust’
During sentencing, Mrs Justice Cheema-Grubb described Gill’s offending as “sophisticated” and “a grave betrayal of the trust vested in you by the electorate”.
She told him: “You accepted payments from foreign nationals, made statements on important international matters at their behest, utilised scripted material presented as your own, and orchestrated the involvement of other MPs.
“Your misconduct has ramifications far beyond personal honour, which is now irretrievably damaged. It erodes public confidence in democracy when politicians succumb to financial inducement.”
Image: Gill was paid to offer commentary to pro-Russian media outlet, 112 Ukraine. Pic: Met Police
Other UK politicians at risk
Commander Murphy said that police were continuing to investigate other MEPs, including some from the UK.
“What we do know from the conversations with [Oleg] Voloshyn is that Nathan Gill actually offered his services to contact other MEPs, mostly UK MEPs, to also make statements that might be supportive of a Russian position in Ukraine,” he said.
He added: “I do believe that some of the individuals in this case do have direct connections to Vladimir Putin. And I have no doubt that if we were able to, we could follow this trail and it would lead straight to Moscow.”
Image: Commander Dominic Murphy believes greed was Gill’s primary motivation
Gill led the Welsh wing of UKIP between 2014 and 2016 and was a member of the Senedd between 2016 and 2017.
He was an MEP between 2014 and 2020, but left UKIP in 2019 to join Nigel Farage’s Brexit Party – later Reform UK.
Political fallout after prison term
Police have confirmed Nigel Farage has not been part of this investigation, but political rivals have called on the Reform UK leader to launch a thorough investigation.
Defence minister Al Carns, a former colonel in the Royal Marines, said Gill’s actions were “a disgrace”. He added: “I just think wherever we see Russian influence in UK politics, it’s got to be weeded out.”
Meanwhile, Liberal Democrat leader Sir Ed Davey said “a traitor was at the very top of Reform UK”, referring to Gill, but also launched a direct attack on Mr Farage by calling him, and his party, “a danger to national security”.
“Nigel Farage himself was previously paid to be on Putin’s TV channel, Russia Today, and said he was the world leader he admires the most.
“We must all ask – where do his loyalties really lie? We need a full investigation into Russian interference in our politics,” he said.
Reform UK, which previously kicked Gill out of the party, said in a statement: “Mr Gill’s actions were reprehensible, treasonous and unforgivable. We are glad that justice has been served and fully welcome the sentence Nathan Gill has received.”
Liz Saville Roberts, Plaid Cymru’s Westminster leader, welcomed Gill’s jail sentence “for his acts of betrayal in taking bribes from Russia”.
In a statement, she said: “If the former Reform UK leader in Wales was part of a broader, co-ordinated effort to advance Moscow’s agenda within our democratic institutions, then the public deserves to know the full truth, and how far Russian money and influence reached into Nigel Farage’s inner circle.”
There is rampant speculation that the government might do something to bring down energy bills in the budget next week – but what could this look like, and will other taxes go up?
The high rates people pay for heating and electricity is becoming a more salient issue as temperatures drop, and the confirmation the price cap is rising will do nothing to help public opinion on the topic.
Energy bills are also rising as a direct result of government policy, including on net zero, with some criticising Energy Secretary Ed Miliband for his stalwart defence of the project.
Technology Secretary Liz Kendall told Sky News that the government is looking at taking “more action” on the cost of living, when asked if bills were coming down.
In their election manifesto last year, Labour promised to get energy bills down by £300 by 2030. Here’s how this year’s budget could work towards that.
Remove VAT
More on Energy
Related Topics:
Currently, bill payers have to fork out 5% of their charge in VAT.
This would be an easy target for the government if it wants to knock a lump off everyone’s bills, with estimates it could save people about £80 from their annual payments.
Please use Chrome browser for a more accessible video player
2:11
What’s driving energy prices higher?
However, there are warnings that this cut would benefit those who spend more on energy more than the poorest households, as it is a percentage tax – which might draw criticism for not aligning with the government’s “working people” mantra.
And with budgets tight, it is unlikely the government would be able to find the estimated £2.5bn in savings from axing VAT on energy, so tax would need to be raised elsewhere to account for it.
But household tariffs are going up because of government policy, according to Ofgem, Paul says, with taxpayers forking out for the Sizewell C nuclear power station, the warm homes discount and changes being made to the grid.
Some think tanks and action groups have called for these payments to be moved off bills and into general taxation – like with VAT – in a bid to make those with the “broadest shoulders” carry more of the burden.
Some estimates suggest moving policy payments off bills and to tax could save people again about £80 from their annual bill.
Combined with the VAT change, this leaves a potential for about £160 to be knocked off the average yearly bill – but the money would be raised elsewhere from the expected tax rises.
Changing net zero targets
The most unlikely measure is a change to the government’s net zero targets, but major changes to the policy could knock money off the average bill.
The cost of reaching net zero by 2030 – a key goal of Mr Miliband – is borne out in bills as the reform is being paid through levies of energy bills.
By delaying the 2030 target, it would allow costs to be spread over a longer period, with the trade-off being a longer period of time exposed to higher gas prices.
If this was imposed on Mr Miliband by the Treasury, it would raise speculation about whether he could continue as energy secretary.
Image: Ed Miliband is championing net zero
There are a myriad of other problems with the energy system that are causing higher bill prices.
One is curtailment costs – about £40 a year of every bill is paid to green energy producers to stop them making electricity.
This is because the grid is so old it cannot transport power from areas like Scotland to the rest of the UK when a lot is being generated. This power also cannot be stored for reuse.
Spotify
This content is provided by Spotify, which may be using cookies and other technologies.
To show you this content, we need your permission to use cookies.
You can use the buttons below to amend your preferences to enable Spotify cookies or to allow those cookies just once.
You can change your settings at any time via the Privacy Options.
Unfortunately we have been unable to verify if you have consented to Spotify cookies.
To view this content you can use the button below to allow Spotify cookies for this session only.
The leading Bitcoin mining application-specific integrated circuit (ASIC) manufacturer, Bitmain, which is based in China, is reportedly under investigation in the US over national security concerns.
According to a Friday Bloomberg report, an unspecified US official and six other anonymous people familiar with the matter said that Bitmain’s hardware is at the center of a federal investigation known as “Operation Red Sunset.” The investigation, led by the US Department of Homeland Security, reportedly seeks to determine whether the ASICs could be remotely controlled for spying or to sabotage the US power grid.
Consequences for the US crypto mining industry could be far-reaching, since Bitmain controls over 80% of the Bitcoin mining ASIC market, according to a Cambridge report. Chinese dominance in the industry is even more ironclad, with both Bitmain and the second-largest manufacturer, MicroBT, based in mainland China, controlling 97% of the market share on their own.
In some cases, investigators even disassembled Bitmain ASICs to look for malicious capabilities, the anonymous officials told Bloomberg. They declined to say whether anything was found.
A Bitmain spokesperson told Bloomberg that it’s “unequivocally false” that the company is capable of remotely controlling its machines. Instead, the company representative claimed that it “strictly complies with US and applicable laws and regulations and has never engaged in activities that pose risks to US national security,” and is unaware of the investigation.
Donald Trump’s skin in the game
Imposing restrictive measures on Bitmain machines is also likely to lead to consequences for US President Donald Trump’s family. In August, a Bitcoin mining company backed by members of Trump’s family, American Bitcoin, acquired a fleet of 16,299 Antminer U3S21EXPH units from Bitmain.
The company also inherited “substantially all” of Hut 8’s ASICs. This includes the 31,145 Bitmain Antminers S21+ machines it acquired about a year ago.
In September, American Bitcoin announced that it has “preferential access to next-generation ASIC compute infrastructure,” without explicitly citing Bitmain. US Securities and Exchange Commission (SEC) filings also reveal that American Bitcoin “paid through the pledge of Bitcoin” with a “redemption period of 24 months from each pledge date,” terms which The Guardian reports are unusually generous.
With Bitmain so dominant in the space, American Bitcoin is far from the only major US-based crypto mining company that may be affected by the findings of this investigation. The industry already got a taste of what might happen when, in mid-February, publicly traded mining companies in the US felt the effects of trade tensions between the United States and China through delays in receiving shipments of their ASICs.