Labour must pledge to safeguard the HS2 route to Manchester

It's time to break the rules to save the future

Update (6th Jan 2024): Exciting news! The Observer is reporting that Labour could have the opportunity to do, well, basically exactly what I propose below and safeguard the northern leg of HS2. So to celebrate, I’ve unlocked this post so that everyone can see the full case for doing so. Go on Labour, do the right thing!

What I admire most about Keir Starmer is the cold-hearted ruthlessness with which he is pursuing a Labour victory at the next election.

It is genuinely impressive to watch the execution of a strategy to turn around the party’s electoral prospects after the disaster of 2019. What Starmer and his team have successfully done is reform the party so that every decision and choice that is made is done so with a laser-like focus on the people they need to win over. They have optimised everything about the party to appeal to their preferences and tastes of the right voters, in the right places.

And what makes it so refreshingly clear-eyed is that he has done it without the sort of self-indulgent sentimentality that would weigh down a lesser leader.

In a strange way, I’m reminded of the similarly incredible corporate turnaround at Microsoft under current CEO Satya Nadella, who took a troubled company that missed the transition to mobile, and turned it into the cloud-and-AI success story it is today.

However, pursuing a dramatic turnaround strategy isn’t easy. It involves making often brave choices that are controversial. For Microsoft, that meant doing what would have been unthinkable, and effectively sidelining Windows, and instead becoming a company that makes software designed to work across multiple systems¹.

Similarly, Starmer hasn’t just gone for the easy wins after taking control of the party. Sure, he has wrapped himself in the Union Jack and kicked out the antisemites, but that was just table-stakes, required to fumigate the smell of the previous regime.

The braver decision he made – Starmer’s Windows dumping moment² – was to go even further, and and make policy decisions that cut against the preferences of leftish-liberals like me, such as ruling out any membership of the Single Market, or talking tough on immigration.

This makes sense and as the polls for the past two years have shown, it is paying off in a big way. The voters Labour needs to win back almost by definition do not instinctively share all of Labour’s values. So the only way the party is going to win is by positioning itself closer to where the voters it needs are, not with the median member of the party. So if activists aren’t at least a little outside their comfort zone, then that’s a very bad sign for their party’s electoral prospects³.

However, though this positioning logic is completely sound in terms of electoral strategy, it does have trade-offs that Labour will have to navigate when it reaches government.

For example, arguably Starmer’s most consequential strategy decision has been to rule out various tax and spend decisions that would position Labour at odds with the current government. Just as in 1997, there’s a sound electoral logic to it, because it helps maintain Labour’s economic credibility with the voters it needs (people who voted Tory last time), and it mitigates against attacks that frame Labour as being irresponsible with money⁴.

So that’s why Labour has pledged to essentially to stick to Tory spending plans if Labour win the next election, and why Labour will be boxed in, even if the party is lucky enough to find itself in power.

But there is, of course, one major exception to this: That’s Labour’s commitment to its climate change “mission”, that will see it, by the end of the next Parliament, spending an extra £28bn a year on climate-related investments.

In my view this is a brilliant idea, and is one of the reasons I’ve slowly become a bit of a Starmer shill over the last few years. As my writing on this Substack surely makes clear, green growth is my jam.

But given this massive exception to the rule, you can imagine how it might make people think “but what about spending on other similarly important issues?”.

However, as much as I’d like Labour to turn on the spending taps and likewise pay for, say, the liberation of the Postcode Address File, if the party did it for everyone’s pet cause, it would lose the discipline and risk its reputation for economic credibility. So I understand the logic of trying not to go too mad with the extra spending commitments.

Except there is this one thing.

I’m talking, of course, about HS2. Because despite the remorseless logic of the current strategy, in my view Labour needs to act now and pledge to safeguard the cancelled route to Manchester – because it would be a multi-generational act of national self-sabotage not to do so.

And here’s why.

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Rage against the Tunnel Boring Machine

The cancellation of the northern leg of HS2, from Birmingham to Manchester, was the single most reckless decision made in British politics since, well, 2016. That understates exactly how disastrous cutting HS2 short is because, hey, we’ve made lots of bad decisions lately. But still, I can’t stress enough that it was really, really bad.

This isn’t just because I’m a transport nerd who thinks new trains are cool, but because HS2 was more than just a useful new railway. It was a once-in-a-generation strategic investment in Britain’s national infrastructure – and the lack of it will have profound consequences.

The arguments for what made HS2 important are well rehearsed: It isn’t just about making trains slightly faster, the real benefit is in terms of capacity. By separating out high speed intercity services from freight and local services, it unlocks capacity to run more commuter trains and carry more goods on rails.

This is great news for the climate, as the train becomes more convenient than driving for many more journeys, and because thousands of lorries can be removed from motorways. But just as importantly, it also improves our productivity, grows the economy and helps ‘level up’ the North.

And for complicated rail-planning reasons I don’t fully understand (I’ll defer to Gareth Dennis on this), the consequences of building the line would have a knock-on effect on rail capacity nationwide, especially for freight.

So yes it was obviously very expensive, but it was important. If fully realised, HS2 would be the crucial lever that advances several core strategic priorities that governments of any stripes would want to pursue.

And given Britain’s disastrous planning laws, HS2 was a miracle project in that it reached the stage where it was actually under construction. Somehow, we were actually doing it – and that’s why today there’s an enormous line of building projects stretching from London to Birmingham digging tunnels, building piers and carving out trackbeds to make the new line a reality.

But now, of course, the new railway has been kneecapped – and the construction won’t extend north of Birmingham.

So you can imagine how much I was raging at my screen when Rishi dropped the bomb during his conference speech back in October, standing at a podium emblazoned with the frankly Orwellian-given-the-circumstances slogan of “Long-term decisions for a brighter future”.

Salting the Earth

Surprisingly though, I don’t think the worst part about the decision is the cancellation of the Manchester leg itself. It’s that the project is being curtailed in such a way that it is salting the earth against it ever being possible to finally complete the line further than Birmingham.

For example, the sale of land that had been acquired for HS2 is due to begin “within weeks”, with all of the HS2 safeguarding removed, for what was called Phase 2A of the project – the section between Birmingham and Crewe⁵.

This means that even if in 30 years time the YIMBY government of national unity, led by Prime Minister Tom Harwood and his deputy Aaron Bastani⁶, were to decide that it wanted to finish the line, it would have start again from scratch designing the route and acquiring the land to build on – a process that takes years⁷.

But even worse is that plan that Rishi has announced for Euston station, which is currently a massive building site in the middle of central London.

The idea is to save money by reducing Euston in scope, taking it from housing ten new platforms⁸, to six. With the six paid for the private sector.

Though the specific details aren’t entirely clear, even to people I’ve spoken to who are close to the project, it appears that the thinking is that the private funding will come from selling land around the station to create around ten thousand new homes that Rishi also mentioned in his speech.

If you don’t think about it too much, this sounds like a pretty good place for housing. Euston would be the perfect location for a new cluster of dense, residential skyscrapers in the mould of Stratford, Canary Wharf or Battersea Power Station, as it is in central London and it is extremely well connected. So we could increase the housing supply and reduce the burden on the public finances (apparently to the tune of £6.5bn) by using the money raised to pay for the rest of the station.

But then there’s the obvious question of where will this new housing actually go?

Presumably much of it is intended for the space saved by only building six platforms instead of ten. And that’s why this is perhaps the only location in the country that I wouldn’t like to build flats on.

Because though six platforms will be adequate for serving HS2 trains to Birmingham, it essentially creates a permanent bottleneck. Because it will mean that if there’s ever a desire again to finish the line to Manchester, there won’t be the physical capacity to run services at Euston. Because even if we change our minds in 30 years time, there’s obviously going to be no appetite for knocking down ten thousand homes, and what will still then be some of the country’s newest housing stock.

In other words, if this plan goes ahead it will functionally make it impossible to ever extend HS2 to Manchester. Rishi’s short-term electioneering has locked in a path-dependent decision that will imminently bind the hands of not just the next government but future generations who may wish for Britain to have a high-speed railway line to Manchester.

And this seems utterly mad to me. Because even if we unwisely choose not to pursue high speed rail now, it seems unlikely to me that the geographic locations of London, Birmingham and Manchester are going to move significantly on a non-geological timescale, meaning that any future high speed connections between the two will need to follow roughly the same route.

The big Labour ask

This then brings me back to what Labour can do.

In an ideal world, Keir Starmer would have announced during his own conference speech, in a hail of glitter, that Labour would commit to building HS2 in full⁹.

But given Labour’s self-imposed spending discipline, this was always unlikely.

And particularly so given that Rishi set a political trap with his announcement. Yes, he cancelled HS2, but he also announced the saved money would be spent on the “Network North” grab-bag of smaller projects that we’re told is, er, 100% definitely, absolutely going to happen¹⁰.

This puts Labour in a difficult position. If it doesn’t agree to funding the smaller projects, it will be a significant dividing line in many key seats. And if Starmer were to then announce that he would build HS2 to Manchester, it’d be committing to spending over-and-above that of the government – leaving Labour open to attacks on its economic credibility¹¹.

So there is certainly a rationale for Labour continuing to go along with government (lack of) spending, for pragmatic political reasons.

However, given the massive strategic importance of HS2 to the future of the United Kingdom, I think there is a strong case for Rachel Reeves to break out of the fiscal straight-jacket, and break the rules in a specific and limited way.

In other words, Labour should commit to safeguarding the northern leg of the HS2 route, so that it may be finished at some point in the future.

Such a policy would involve spending some money above and beyond the Tories – but I still think the figures are lower than you might think for a railway currently priced at £100bn.

This is because “safeguarding” doesn’t mean “building” – it literally means holding on to the land the government already owns, and restricting the development of anything on the route that would impede the future completion of HS2.

It wouldn’t be unprecedented to do so. In fact, the route for Crossrail (the Elizabeth Line) was first safeguarded in 1991, seventeen years before Parliament passed the 2008 Crossrail Act, which actually kick-started the building of the new line.

And I don’t think the figures involved are that egregious. For example, the actual land for the Birmingham to Manchester leg of the line only cost the government a mere £564m. The expensive stuff was the complicated construction project they were going to put on top of it.

The costs at Euston, for completing the platforms are slightly meatier. According to the National Audit Office, ten platforms will cost £4.8bn – more than the £2.2bn that had been initially budgeted.

It’s probably too early to tell how these costs map on to the new plan to only build six platforms, but presumably there would effectively need to be some government spending here, as they’d either have to build ten platforms in anticipation of one day completing the line, or at least leave part of the site effectively fallow, waiting for construction in the future, instead of building homes on the site¹².

So this option would require Rachel Reeves to get out the chequebook and speculatively spend some money in the low-ish billions. But in my view, it would be strongly within the national interest to do so, in order to protect the opportunity to finish the railway in the future¹³.

In any case, if Labour were to decide to safeguard the route, it should say it will do so now.

Why? Because the clock is ticking before HS2 fully unwinds and decisions are implemented that cannot easily be undone. If the land is sold off, that will be more hurdles for a future government that wants to buy it back again. If major engineering or planning decisions are made about Euston station, then that could lock in the bottleneck that renders HS2 impossible for decades to come.

But as Labour is widely expected to be the next government, and could conceivably be in power this time next year, Keir Starmer and Rachel Reeves’ words matter. If they say that they will safeguard the route, then that will send a signal to the thousands of stakeholders involved in the HS2 project about how they should behave.

For example, if the announcement were made land sales may slow as any the future of the route will once again be pointing at towards building a railway. Construction companies may not demobilise their workforces entirely, in anticipation of getting to actually finish Euston station. And though civil servants at the Department for Transport and HS2 Ltd will technically have to follow the instructions of the current government, it will inevitably change the way they approach their work and the micro-decisions they make now, if they know in their heads that in a year they will have to reverse ferret yet again.

So if Labour can’t commit to finishing the line properly, Keir Starmer and Rachel Reeves should still make one more brave decision. They should at least pledge to safeguard HS2’s route to Manchester – so that future generations can fix Rishi’s historic mistake, and not just suffer the consequences of it.

This post used to be a premium-subscribers only post, but I’ve unlocked it several months later to coincide with rumours that Labour is planning to do, well, basically what I say they should do above. So subscribe now to find out what Labour is thinking before they even think it I guess.

1. Obviously Microsoft still makes Windows, but it is essentially a legacy product now – and it is not at the centre of the Microsoft universe as it was under previous CEO Steve Ballmer. Nadella instead focused the company on cloud and services. Which is why today you can download Microsoft Office on an iPad and why the company, as demonstrated over the last few days, is well positioned to win AI.

2. Now there’s an analogy you didn’t expect to read today.

3. That’s a lesson the Tories are similarly about to learn too.

4. The fact that this is baked in to the electorates’ mind is as unfortunate, especially given, you know, Brexit and Truss.

5. Apparently the safeguarding on Section 2B, Crewe to Manchester, is being retained for the time being for use in the Network North proposals.

6. Though I suspect Aaron will have gone full Peter Hitchens and will be a Telegraph columnist by then.

7. And what’s particularly mad is that apparently if the land is sold quickly it will be sold at a loss, as the government paid above market rate – £208m – to acquire it. And yet it will be sold for only £101m. Just hold on to it!

8. Really there should be eleven new platforms, but one was cut for similarly stupid reasons a few years ago.

9. And that he’ll mandate the release of the Postcode Address File as open data.

10. Nobody tell the Tory activists who were in the hall, screaming like a congregation at an evangelical mega-church at mentions of the Shipley bypass and the Blyth relief road, that the many of the proposals were just “illustrative”, which is politics for “probably bollocks”.

11. It’s very unfair but historically voters have broadly viewed the Tories as safer on economic matters – much like how Labour has historically had an advantage on the NHS.

12. Maybe something clever like Hudson Yards could be done, with an underground space saved for platform construction, with the homes built over the top. But if this is somehow possible, it makes me wonder why this wasn’t the plan already, even when they wanted to build the whole railway?

13. Just try not to think too hard about exactly how far into the future as there’s a horrifying chance that you might be dead by the time it opens, given that before the cancellation the opening date of the Manchester leg probably would have been in the mid-late 2030s at best. So add in a decade or two of pissing about before we finish it, and it could be more of a railway for your grandkids.