(Bloomberg) -- Prime Minister Rishi Sunak gave the strongest indication yet that his government will scrap the northern leg of the UK’s flagship high-speed HS2 rail project, and offered a glimpse of how he’s likely to justify the decision to voters: more money for other train services, buses and repairing potholes.
During a round of interviews with local BBC radio stations, Sunak repeatedly refused to commit to building the Birmingham to Manchester leg of HS2, which is a key part of the government’s pledge to “level-up” disadvantaged regions. The government has refused for days to quash speculation the project will be shortened, with costs threatening to spiral beyond £100 billion ($122 billion).
Read More: Sunak Refuses to Commit to UK HS2 Rail Project as Costs Rise
Watering down HS2 again — a planned spur to Leeds was scrapped when Sunak was chancellor in 2021 — risks sparking anger from UK business leaders and politicians across the spectrum. The controversy is an awkward backdrop to the Conservative Party’s annual conference in Manchester from Sunday, where Sunak will set out his agenda ahead of a general election expected next year.
On Thursday, Sunak showed how he could try to navigate the backlash. “The journeys that people use most often, all your listeners probably right now, the majority of them are in their cars trying to get to work, take kids to school,” he told the BBC. “Making sure that our roads, the potholes are maintained well, making sure that our bus services are running well, that’s all important.”
He also talked up the value of better east-west connectivity among northern towns and cities, a reference to the so-called Northern Powerhouse Rail project that has been mooted in various forms for years. Sunak’s implication was clear: if the government finds savings on HS2, the money can be directed to alternative projects that could have a more immediate impact to voters.
The politics are risky. If he does scale back HS2, it’s likely to form part of Sunak’s attempt to reset the political narrative with his Conservatives trailing the opposition Labour Party by double digits in opinion polls. There are parallels with his decision to water down the UK’s green agenda, which he framed as reducing the burden on Britons struggling with the cost of living.
Potholes are also emblematic of the UK’s crumbling infrastructure, while motorists are also traditionally a key constituency in elections.
Read More: UK’s HS2 Rail Project Sets Chaotic Scene for Party Conference
Just as on the green agenda, it also has the potential to put Labour in a jam. If the government scales back a plan, the Tories would demand Keir Starmer’s party show how it would find the money to reverse it. That becomes harder if Sunak announces alternative projects that are popular.
“What the Tories are doing at the moment is what’s called classic loss aversion politics,” Liam Byrne, a Labour Member of Parliament and former Cabinet minister in Gordon Brown’s government, told Bloomberg Radio this week. The theory is that voters fear losses more than they treasure gains, he said. “What Rishi Sunak is trying to do is say, ‘Well look, there’s going to be this cost and that cost, and Labour is going to cost you more,’” he said.
The problem for Sunak is that talk of a reset leads to questions about why one is necessary. His Tories have been in power for over 13 years. His green announcement, and especially the wavering on HS2, is also divisive. Sunak was the choice of Tory MPs but not fee-paying Conservative Party members.
The HS2 project has been backed by Sunak’s five immediate predecessors as prime minister and is at the heart of the Tories’ manifesto promise to address imbalances between northern communities and the more affluent south. The Tories drew away traditional Labour voters in those areas in the 2019 election, and Sunak is under pressure to hold onto that support.
Tory party grandees including former Prime Minister Boris Johnson, ex-deputy premier Michael Heseltine and former chancellors George Osborne and Philip Hammond have urged Sunak not to scrap the Manchester link. Labour’s Mayor of Manchester Andy Burnham said it would leave northerners with “Victorian infrastructure, probably for the rest of this century.”
The government has already spent £24.7 billion on HS2 as of June, with a budget for the London-Birmingham phase of as much as £45 billion. Beyond that the numbers are more opaque. The official cost of the whole project is £71 billion — though the government’s own review said it could exceed £100 billion.
Sunak also refused to confirm HS2 would be built to Euston station in central London, amid reports that the government is also seeking cost savings by stopping the line at Old Oak Common in the west of the capital. Asked about Euston, Sunak replied that connections from Old Oak Common are “very strong” because it will be on London’s new east-west Elizabeth Line.
But critics have said that stopping the line outside central London undermines the business case for it, and there are warnings that even the new Elizabeth Line may struggle to cope with the volume of HS2 passengers transferring to trains coming from Heathrow airport.
--With assistance from Yuan Potts.
©2023 Bloomberg L.P.
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