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HS2 cancellation: Industry reaction

While the decision to axe parts of the High Speed 2 rail programme has been met with widespread condemnation across the freight industry supply chain, others have welcomed the news that funds will be reallocated to upgrade hundreds of transport links across the UK.

Today’s announcement of the cancellation of the HS2 extension, between Birmingham and Manchester, damages investor confidence and harms the development of the national logistics network that the UK needs to thrive, said business group Logistics UK.

Logistics UK’s policy director Kate Jennings expressed the disappointment of the group’s members at the news of the cancellation: “HS2 was a vital plan to unlock economic growth across the UK – the additional capacity across the rail network which it would have released was critical to expanding rail freight opportunities and enabling a shift from road to rail to cut carbon emissions. Putting high speed trains on the existing line between Birmingham and Manchester will make today’s rail freight capacity issues even worse.

“Logistics businesses need detailed confirmation that the funding previously ringfenced for the construction of the Birmingham-Manchester stretch of HS2 will be reallocated to upgrading transport links across the UK, including across the north of England and the Midlands. This cancellation is a huge disappointment to businesses keen to reduce their environmental impact and reduce road congestion while still delivering for customers.

“Logistics is the lifeblood of the economy, supporting all parts of the UK PLC, and deserves effective, nationwide infrastructure to enable fast, efficient deliveries. On behalf of our members, we are urging government to confirm its plans for the infrastructure investment needed to smooth the transition to Net Zero, deliver a national logistics network and capitalise on an opportunity recently identified by Oxford Economics to boost UK growth by up to £7.9 billion per year.”

Rail Freight Group, the representative body for rail freight in the UK, condemned the decision describing it as “the worst possible outcome for rail freight”.

Under Government plans announced today, the new HS2 line will be truncated at Birmingham, with the route to Crewe and then Manchester cancelled. However, HS2 trains are still expected to run to Manchester and other destinations using existing railway lines, principally the West Coast Main Line.

RFG has long raised concerns over the implications of HS2 trains operating on existing tracks. The West Coast Main Line is the most important rail freight route in the country, with critically important rail terminals along its length. In recent years the rail freight sector has invested heavily in new strategic rail freight interchanges, construction terminals and rolling stock to support growth on this route, reliant on the capacity for new freight trains being available. The decision to allow HS2 trains to operate on already congested parts of the network is a blow to those investors and to all those who want to see fewer HGVs on the nation’s roads.

However, RFG said it was pleased with Government’s commitment to rebuilding Ely Junction, creating much-needed new capacity for rail freight in East Anglia.

Maggie Simpson OBE, RFG Director General said: “Scrapping HS2 whilst still allowing its trains to run on the existing network is the worst of all possible decisions. The West Coast Main Line simply does not have the capacity for these extra trains alongside current services and rail freight growth, and investment will now be required to upgrade the route to ensure all trains can be accommodated.”

"The private sector rail freight operators and customers who have already invested in new facilities and equipment also need urgent assurance that they will be able to access the rail capacity they need to bring new services onto rail."

The Railway Industry Association, which represents the UK rail supply community, also expressed its disappointment with the Government.

Chief Executive Danny Caplan said: “Many of the Railway Industry Association’s members will be extremely disappointed by the Government’s proposal announced today by Prime Minister Rishi Sunak to scrap HS2 between Birmingham and Manchester. This follows the previous scrapping of the Eastern Leg to Leeds, the Golborne Link to enable High Speed trains to get to and from Scotland, and the ‘pausing’ of the Old Oak Common to Euston stretch.

“The Government cites cost as its main reason for scrapping Phase 2, yet it should be remembered that this was the Government’s own scheme, built to its own specifications, and that the chopping and changing of the scope and timing of the project – adding considerably cost and delay – was entirely of the Government’s own making. Every time the scheme is rescoped it increases the cost.

“Scrapping HS2 Phase 2 is simply unnecessary and squanders the full benefits of Phase 1. The Government can work with metro mayors, the railway industry, rail suppliers, and other stakeholders, to agree a cost-effective way forward, including encouraging private investment to take pressure off the public purse.

“Today’s nuclear option is defeatist and sends a terrible signal to potential overseas investors that the UK simply cannot deliver large national transport infrastructure schemes. For companies with existing contracts, the implications of the Prime Minister’s proposal to release £6.5bn from the Euston site and create a development zone are particularly unclear.

"Already, multinational railway businesses will be making plans to rationalise their workforces and investments in a way that will be detrimental to the country’s rail supply sector specifically and UK plc more widely. This also blows a hole in the Government’s levelling-up and decarbonisation agendas – none of the replacement regional schemes referred to will have the same impact of building the HS2 in full.

"Going forward, the Government needs to safeguard the full HS2 route for future generations, and pass the relevant Bill in the King’s Speech next month. It needs to work to rebuild trust with the railway industry, for example providing reassurance that the £36bn investment it mentioned in regional transport projects announced today, such as Midlands Rail Hub and the electrification of the North Wales mainline, will go ahead following the short-notice cancellations of HS2’s Phase 2, Eastern Leg, Golborne Link, and the Old Oak Common to Euston ‘pausing’.

"And the Government needs to redouble its efforts to deliver certainty in rail by pushing on with rail reform, publishing the Rail Network Enhancements Pipeline for the first time in four years, setting out a plan for rolling stock, including a pipeline for new and refurbished trains, explaining its plans to decarbonise UK rail, including a rolling programme of electrification and fleet orders of hydrogen and battery trains, and give more freedom to bring forward private investment.

“Whilst we in the railway industry are of course concerned at the announcement made by the Prime Minister today, we now need to ensure the HS2 Phase 2 scheme can be taken on by future generations, that there will be rebuilt trust in Government rail announcements given the recent history, and provide more certainty generally, to enable rail businesses to plan their workforces and resources in the weeks and months ahead.

High Speed Rail Group, which also represents businesses in the high speed rail supply chain, said the news is “a devastating blow to our industry and our whole economy”.

A HSRG statement said: “For 15 years we have worked with the government to develop this project - their project - taking it from a concept to construction. Companies have invested in people, skills and equipment on the back of it with some even relocating in anticipation of it being completed.

“It is true the costs of the project have risen over those 15 years. In recent years inflation has been rampant in the UK economy and the construction sector has been impacted far more than most. But the principal cause of any real term cost increases lies in the chopping and changing of the project's scope, with today's news being the fourth major change by government in just three years. As any project manager will tell you, the cheapest way to deliver is against a fixed scope without constant changes. This is the biggest and most damaging U-turn in the history of UK infrastructure.

“What we have now is a plan for a railway that will not deliver the transformational benefits the north of England needs. Indeed, the solution proposed by the Prime Minister is a recipe for disaster. Merging HS2 trains onto existing lines at Birmingham will create a huge bottleneck, akin to the M40 merging onto an A-road and then a country lane - rather than the M6. Rail connectivity to the north will be worse than it is today.

“That's why it is inconceivable that HS2 will not eventually reach Manchester. Today the industry recommits to delivering the first phase as efficiently as it can, whilst continuing to make the case that this should be just the beginning of a network that reaches Manchester, Leeds and many more cities. We stand ready to work on those future developments.

“The proposed investment through ‘Network North' is an interesting one and of course welcome. But cancelling Phase 2 of HS2 frees up just £1-3 billion in the next five years, meaning any improvements are still far over the horizon.

“If we want to truly level up our country, it cannot be a choice between HS2 and other projects. The UK needs 21st century infrastructure, bringing all of its cities closer together. HS2 is the key foundation for that network. Every other major European country has managed to build a high-speed rail network, recognising it's a vital part of a modern society and economy for ears to come. We'd like to think Britain still could too."

The Road Haulage Association, meanwhile, welcomed Rishi Sunak’s pledge that some funds from the scrapped HS2 Birmingham to Manchester line will be directed to improving roads.

Declan Pang, RHA Director of Public Affairs and Policy, England, said: “We welcome the investment into the A1, A2, A5, M6 and A75, alongside more than 70 other road schemes that were announced. Together with increased funding for road maintenance, this will help the commercial vehicle sector continue to keep Britain moving, and we await publication of the timetables for completion of these schemes.”

The GMB Union said rebalancing the economy or fixing the railway capacity crisis was simply not possible without HS2. Laurence Turner, GMB Head of Research and Policy, said: “Rishi Sunak’s decision to inflict the biggest rail cut since the Beeching axe will send a shockwave through the construction industry and railway supply chain, costing hundreds of jobs.

“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.”

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