Rishi Sunak is facing a huge backlash from senior Tories and business leaders amid signs he is ready to scrap the northern section of the HS2 high speed rail line before the Conservative conference opens in Manchester next weekend.
Several sources told the Observer on Saturday that a meeting was scheduled to take place involving the prime minister and the chancellor, Jeremy Hunt, on Monday or on Tuesday, with a decision to be announced by Sunak by the middle of this week.
One source said any decision to cancel the section of HS2 from Birmingham to Manchester could not be made at the conference and would have to come before it. “He has to do it before Tories go to Manchester. To do it there would be inconceivable. It would be a kick in the teeth for the city. So doing it before seems to be the plan.”
On Saturday night – with indications that business leaders were bombarding No 10 with demands not to scrap the northern section – there were strong rumours that at least one middle- ranking minister could resign if the project is dramatically cut back.
Another minister who backs HS2 made clear he would be appalled. “I can’t talk about it. I don’t want to talk about it. My position has been clear for a long time.”
One source said it was “not inconceivable” that Sunak could yet get cold feet and decide not to axe the Birmingham to Manchester section. Downing Street refused to comment other than to say it remained committed to HS2, though this would cover its support for the London to Birmingham line.
News of the HS2 U-turn comes just days after Sunak reversed a series of climate crisis policies, including delaying a ban on the sale of new petrol and diesel cars from 2030 to 2035, as he seeks to open new “dividing lines” with Labour before a general election.
On Saturday night, the Labour mayor of Greater Manchester, Andy Burnham, said that if HS2 were not built to Manchester then that would also be the death knell for new east-west rail links, long promised by the Tories as part of their levelling up agenda.
Burnham said: “HS2 to Manchester builds the core of a new east-west line called Northern Powerhouse Rail. If the government pulls the plug on HS2, they will be pulling the plug on that new east-west line – and on the north as a whole. We will be left with Victorian rail infrastructure while the southern half of the country will be connected by new high-speed lines.
“At the end of the parliament which was meant to level us up, the Conservative party will have succeeded in laying the foundations for the north-south divide to get much wider. As political betrayals go, it doesn’t get much bigger.”
Sunak is said by those close to the HS2 project to have long disliked it and to be more opposed to building the northern section than Hunt.
Two former prime ministers, David Cameron and Boris Johnson, have both made known their opposition to scaling back HS2, which would be one of the few prestige infrastructure projects of the Tories’ 13 years in office.
There are also growing suggestions that HS2 will not, as planned, run to Euston station in a further cost-cutting measure.
This weekend, Sadiq Khan, the mayor of London, has written to Sunak saying that if this is the case, a journey from London to Birmingham on existing lines would be quicker than on the proposed new one.
Khan wrote: “The government’s approach to HS2 risks squandering the huge economic opportunity that it presents and turning it instead into a colossal waste of public money.”He added: “Terminating the service at Old Oak Common would be a shortsighted decision which will have long-term implications, significantly downgrading the value of HS2 as a high-speed connection and leaving a ridiculous situation where a ‘high speed’ journey between Birmingham and central London could take as long as the existing route, if not longer.”
The Observer understands that there is concern across Whitehall, including inside the Treasury, that cutting the leg beyond Birmingham would destroy the business case for the project. One Whitehall source warned scaling it back would make it “totemic of incompetence”.
One insider said: “Even Treasury officials actually are a little concerned both about supply chain implications, and the implications of cancelling such a big commitment and the way that looks, both nationally and internationally.” Sources also said that any savings arising from scaling back the line would not help Sunak in the short term or raise significant money that could be used for pre-election tax cuts.
A Whitehall source said: “Without doing Euston and the bit above Birmingham, the entire economics of the programme don’t stack up. And, actually, it may no longer be value for money.”
After the flurry of U-turns and new policy ideas floated last week, some in government say that decisions appear to be being made in accordance with Sunak’s personal preferences, including his long-held dislike of HS2 and smoking.
On Saturday, the Guardian suggested No 10 was looking at measures that would effectively ban young people from ever buying cigarettes. “It’s a strange basis to make policy,” said one senior Tory. “Net zero, smoking, A-level reform – what unites these things other than his personal views?”
The growing view in Whitehall is that No 10 is driving ahead with a range of radical policy switches to both open dividing lines with Labour and give a clear definition to the Sunak prime ministership. Many see this as preparation for a general election in May next year.
Meanwhile, criticisms outside Whitehall continued to mount over the rolling back of the government’s green commitments after it emerged that a taskforce to speed up home insulation and boiler upgrades had been disbanded.
Chris Stark, chief executive of the Climate Change Committee, which independently advises the government, questioned whether it signalled an end to the government’s goal to reduce total UK energy demand by 15% by 2030.
“The taskforce was a collection of serious figures from across commercial and finance sectors to advise on that goal,” he said.
Jason McCartney, Tory MP for Colne Valley in West Yorkshire, said it would be a huge blow for the north if HS2 were not built in full, along with Northern Powerhouse Rail.
“I am a great supporter of both. They will create thousands of jobs and deliver much needed connectivity. We need both parties to support these projects. There needs to be real cross-party commitment.”