Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The Labour party has asked transport secretary Mark Harper to explain plans to release £1bn in taxpayer’s money to allow High Speed 2 to start tunnelling under central London despite promises that private developers would pay for the costs of connecting the new rail line to its planned terminus at Euston.
Louise Haigh, shadow transport secretary, has written to Harper asking where the funds will come from and whether they will “come at the expense of any other planned transport infrastructure investment”.
The intervention by the main opposition party came after the Financial Times reported earlier this week that HS2, the state-owned company building the controversial railway, would soon get the green light to start boring a 4.5-mile tunnel under the capital with ministers expected to release more than £1bn to start the work.
The decision would end uncertainty over whether the controversial project will reach its planned central London terminus at Euston. But it raises questions about Prime Minister Rishi Sunak’s pledge last year to shift the entire £6.5bn cost of the Euston link from Old Oak Common in west London and the redevelopment of the station on to the private sector.
Sunak unveiled the plan in October as he scrapped all of HS2’s northern leg because it was running tens of billions of pounds over budget. His decision turned a line conceived as a grand project connecting the north and south of the country into a truncated line between London and the midlands.
“Will you be transparent about whether any other aspects of the HS2’s Euston development will now require taxpayer subsidy to be completed?” Haigh asked in the letter to Harper.
She also pressed him for more details on how the government expected the proposed redevelopment of Euston, in the London borough of Camden, to proceed, including how many homes would be built at the site.
“There are significant outstanding questions about other promises made around a privately financed Euston development, including your claim that 10,000 homes will be delivered through the project, a figure which a recent report commissioned by Camden council has criticised for a ‘lack of clarity’,” said Haigh.
Haigh pointed to a report from the National Audit Office last year which criticised the government for creating “uncertainty” around the development and creating additional costs through pauses to the scheme.
Much of the area around Euston has already been demolished even though there is no agreed plan for the new station despite work starting more than a decade ago.
Last November Sir John Armitt, chair of the National Infrastructure Commission warned that “the government will need to be ready to fund the core civil engineering for the final miles of the project”.
Harper insisted in December that this was not the case and that the private sector would be able to pay for the work.
“The prime minister knew the promise to deliver a privately financed Euston development was one he could not keep,” said Haigh. “Yet he made it anyway, misleading the public and adding significant delay and potential additional cost to the project.”
The government did not immediately respond to a request for comment but officials told the FT earlier this week that even if the state put up an initial £1bn-plus outlay tunnelling it could still potentially be recouped by future levies on private developers of the area in and around Euston.
