Peter Mandelson bombshell raises doubts over £42 billion HS2 scheme

'Realignment': Lord Mandelson's comments risk riling Labour

3 July 2013

David Cameron's troubled £42 billion High Speed 2 rail scheme was under growing doubt today after a bombshell admission by ex-Business Secretary Lord Mandelson that the original go-ahead was driven by politics and flawed figures.

In an extraordinary public U-turn, he confessed the costings were “almost entirely speculative” when Gordon Brown’s Cabinet backed the idea.

Ministers wanted a “bold commitment to modernisation” after the financial crash, he said, and ignored the potential risks of what now looked like “an expensive mistake”.

The Evening Standard has also learned that senior transport decision-makers in London fear the flagship scheme is fatally flawed.

MPs reacted with fury and astonishment to the about-turn by grandee Mandelson, who was one of the flagship scheme’s most powerful backers.

Public accounts committee chairman Margaret Hodge said: “I agree with Lord Mandelson. Pretending there is a good social economic case for HS2 is spurious. Failing to consider alternative ways to spend £50 billion is an abrogation of duty.”

Leading opponent and Tory former Cabinet minister Cheryl Gillan said: “We now see Labour big guns turn against this project — first Alistair Darling, now Lord Mandelson. We need someone in the Government to have the courage to stop this before they throw good money after bad.”

Rebel Conservative Bill Cash branded HS2 a “White-hall elephant”, while fellow Tory John Baron said: “Spending £40 billion to take an houroff a journey makes little sense in these austere times.”

However, Conservative, Labour and Liberal Democrat high commands today insisted HS2 must stay on the rails. Transport Secretary Patrick McLoughlin attacked Lord Mandelson as a man who sees “the world from the windows of a private jet”.

Lib-Dem minister Norman Baker attacked the peer’s record in office, saying: “Given the fiasco of the Millennium Dome, for which he had personal responsibility, I hardly think he is the best person to offer advice on large projects anyway.”

A senior Labour source expressed bafflement that Lord Mandelson had turned against the project, which he said was “vital” for Britain’s economic future. He added that Labour would “continue to provide the long-term cross-party support necessary for the successful delivery of this project”.

Lord Mandelson’s intervention coincides with a growing sense among key transport policy-makers in London that HS2 is fatally flawed. Senior figures are saying there is no evidence that making the journey to and from Birmingham 15 minutes faster has any serious economic benefits.

But the architect of HS2, Labour’s former transport secretary Lord Adonis, went on Twitter to say: “Incoming Labour govt in 1974 scrapped Channel Tunnel and Maplin airport, with both under construction. We won’t make same mistake on HS2.”

Lord Mandelson wrote in today’s Financial Times that HS2 could prove “damaging” to the northern regions, adding that he once supported it “but I now fear HS2 could be an expensive mistake.” He said Labour’s plans, estimated to cost £30 billion, were based on an assumption which was “neither quantified nor proved” — that the regions would gain.

“In 2010, when the then Labour government decided to back HS2, we did so based on the best estimates of what it would involve,” wrote Lord Mandelson. “But these were almost entirely speculative. The decision was also partly politically driven. In addition to the projected cost, we gave insufficient attention to the massive disruption to many people’s lives construction would bring.”

He concluded: “All the parties — especially Labour — should think twice before binding themselves irrevocably to HS2. It is not all it seems and has the potential to end up a mistake, damaging in particular to those people that it was intended to help.”

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Peter Mandelson bombshell raises doubts over £42 billion HS2 scheme

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