Industry outrage as northern leg of HS2 scrapped

Property developers have warned businesses and homeowners across the North will suffer after prime minister Rishi Sunak confirmed the HS2 leg between Birmingham and Manchester will be scrapped. The move comes after plans for HS2’s London Euston terminus, connecting London with the Midlands and the north of England, were suspended in March this year. Instead, the PM promised to establish “a new Euston development zone” and “hundreds of other transport projects” across the country and specifically in the North, including the newly minted Network North. However, the industry has warned the impact of HS2 has already been felt, with property owners feeling stuck in a state of limbo. Tim Heatley, co-founder of Capital & Centric, said: “The decision will really hurt not only Manchester, but the North. More and more people are setting up businesses and building a life in the North as London overheats, so putting the city on a sideline can’t be the answer.” Andrew Dickman, managing director at Tritax Symmetry, added: “Excellent infrastructure and connectivity are an essential component of a thriving economy. HS2 would have provided that and would have also demonstrated that the government was truly committed to levelling up.” James Forrester, managing director of Newcastle-based property developer Stripe Property Group, agreed, adding he was “not surprised by another government U-turn and more broken promises”. He said: “Yet another example of Westminster prioritising the prosperity of the capital, with little to no regard about the rest of us that form the UK.” Richard Flenley, partner at Charles Russell Speechlys, said pulling the plug on the northern leg is another blow to the levelling-up agenda, and the basis for HS2’s creation. He said: “The impact on homeowners and businesses whose properties have been threatened by potential acquisition cannot and must not be forgotten.” In addition, questions were raised with regards to the message that the UK government is sending to the global business community about its ability as a country to commit to and deliver long-term infrastructure projects. Mark Allan, chief executive at Landsec, said: “It is now very difficult for any investor – domestic or international – to have confidence in our ability to deliver what we say we are going to deliver. “If we want to boost investment into the economy, spread growth around the country and deliver a better quality of life for people living and working around the UK, we need to change the way we get things done.” Adam Pappini, development partner at Gerald Eve, added: “We share the view of the majority of the business community that not delivering the full extent of HS2 misses a once-in-a-lifetime transformative opportunity to ‘level-up’ our towns and cities, improve long-term capacity on our national railway network, and contribute to decarbonising our transport system by transferring freight from road to rail.” Industry experts have also called on the government to reconsider its long-term commitments with regards to the delivery of infrastructure projects and invest in regional transport networks. Capital & Centric’s Heatley said: “Any reallocation of funding as part of Network North needs to be fast-tracked so northern communities aren’t waiting decades to see projects delivered, which would only widen the productivity divide. Absolute certainty is needed on funded projects so councils can build their growth strategies and regen priorities around new those new links.” Melanie Leech, chief executive of the British Property Federation, has supported the view, adding that Network North is at present “just a slogan”. She said: “The three key words for business and investors are trust, confidence and partnership. “The government must urgently flesh out its proposals and commit to providing genuinely new money with a cast-iron commitment and a clear timeline for delivery. And it must do so in genuine partnership with local and mayoral authorities as well as with the investors and business partners who will be essential to delivery.” Industry experts have remained mindful as to whether HS2 savings would be reinvested into the North after years of promises. Peter Connolly, chief executive at regeneration developer igloo, said: “While we acknowledge PM Sunak’s commitment to redistribute the £36bn to other infrastructure projects in the North, we are concerned that this allocation is not being directed towards the rail industry, as initially promised. Instead, much of it is being diverted to the road industry, with potentially some projects outside the region. This situation gives the impression that connections between Northern cities and the Midlands are being cast aside, and it has eroded the investment pledges made to the North for our future, which could have a significant impact on the region.” See also: HS2 decision leaves landlords in limbo To send feedback, e-mail evelina.grecenko@eg.co.uk or tweet @Gre_Eve or @EGPropertyNews Image © Adam Vaughan/EPA-EFE/Shutterstock