HS2 Reset

Lindsay Hoyle Excerpts

Wednesday 18th June 2025 Commons Chamber

[The Secretary of State for Transport (Heidi Alexander)]

With permission, Mr Speaker, I shall make a statement on HS2.

As a London councillor over 15 years ago, I remember hearing the then Labour Government’s bold plans for high-speed rail to link our major cities, address the capacity needs of the future and, in the words of then Prime Minister, Gordon Brown, to join

“the high-speed revolution sweeping the world.”

It was a vision of a confident nation and a clear signal: our great towns and cities in the midlands and the north, with potential that had been untapped at best and ignored at worst, could be places of opportunity and aspiration again. That was the promise of HS2.

But after a decade and a half of Tory timelines planned then delayed, routes drawn up then cancelled, budgets calculated then blown and promises made then broken, we inherited a project that had lost the trust of the public, that created an image of a Britain woefully unable to deliver big infrastructure projects and that had been axed from swathes of the country it was originally meant to serve. Phase 1 could end up becoming one of the most expensive railway lines in the world, with projected costs soaring by £37 billion under previous Conservative Governments, and £2 billion of taxpayers’ money was sunk into phase 2 work before it was cancelled by the previous Government.

There was also clear evidence of poor management. Despite the 2020 Oakervee review advising that Government halt construction contracts pending improvements in price and simpler engineering, they pressed ahead regardless. It has been no less than a litany of failure and today I am drawing a line in the sand, calling time on years of mismanagement, flawed reporting and ineffective oversight. It means this Government will get the job done between Birmingham and London. We will not reinstate cancelled sections we cannot afford, but we will do the hard but necessary work to rebuild public trust, and we have not wasted any time.

Since July we have appointed new leadership of HS2 Ltd to turn this project around. We have made clear to the new chief executive, Mark Wild, that the priority is building the rest of the railway safely at the lowest reasonable cost even if this takes longer. We have started the year-long task of fundamentally resetting the project, including commissioning infrastructure expert James Stewart to lead a review into governance and oversight. As part of that reset, we have reduced financial delegations to HS2 Ltd, placing a lid on spiralling costs until the reset is complete and we regain confidence, and we have supported Mark Wild’s review of the size and cost of HS2 as an organisation.

But today we are going further. I can confirm we have published the landmark James Stewart review and the Department’s response. The review, commissioned in October last year by my predecessor, was a tough, independent look at how the Department for Transport and Government deliver major projects. The Government not only welcome the review, but have accepted all the recommendations, and my Department is already delivering on these, specifically across five key areas.

First, on the lack of oversight and scrutiny, quite simply there have been too many dark corners for failure to hide in. The ministerial taskforce set up to provide oversight of HS2 had inconsistent attendance from key Ministers, including the then Transport Secretary and the then Chief Secretary to the Treasury. The Government have re-established the taskforce with full senior attendance per the review’s recommendations. A new performance programme and shareholder boards will offer much-needed oversight and accountability.

Secondly, the report highlights HS2 could cost the taxpayer millions more than planned. We will stop this spiralling any further by delivering all the recommendations on cost control. That starts with HS2 fundamentally changing its approach to estimating costs. It includes certainty over funding, which the spending review has given. It also means HS2 working with suppliers so that their contracts incentivise saving costs for taxpayers; as far as I am concerned, suppliers should make a better return the more taxpayer money they save.

Thirdly, the review identified a deficit in capability and skills, with a fundamental lack of trust between my Department and HS2 Ltd. I am clear that both capability and cultural issues within HS2 must be addressed. The new chief executive is already strengthening the organisation, including by filling critical gaps in areas such as commercial expertise, and he will be backed by Mike Brown, announced today as the new chair. This is a new era of leadership that the project desperately needs, with Mike bringing significant experience as a former Transport for London commissioner. Mark and Mike were part of the team, with me, that turned Crossrail into the Elizabeth line; we have done it before and we will do it again.

Fourthly, between 2019 and 2023 HS2 Ltd provided initial designs for Euston station coming in almost £2 billion over budget. When asked for a more affordable option, it offered one costing £400 million more than the first attempt. The word “affordable” was clearly not part of the HS2 lexicon. The combined cost for those two failed designs, which has now been written off, was more than a quarter of a billion pounds.

What is more, the previous Government announced a Euston ministerial taskforce. Unbelievably, the taskforce never met. This Government recognise Euston’s huge potential. We have already committed funding to start the tunnelling from Old Oak Common to Euston, and we will set out more details in our 10-year infrastructure strategy.

We will use James Stewart’s findings to transform infrastructure delivery across Government. Implementing real change in how we deliver infrastructure is not just for the Department for Transport. This Government are committed to implementing these recommendations and adopting a new approach to delivering infrastructure, as will be set out in our upcoming 10-year infrastructure strategy. In that spirit, the Prime Minister has also asked the Cabinet Secretary to consider the implications for the civil service and the wider public sector of the issues raised in the report, including whether further action or investigation is warranted.

We are wasting no time in delivering on this review. I will update Parliament on our progress through my six-monthly reports, even if the information is uncomfortable, because for a Government who last week pledged billions in capital investment for new major projects, and who believe in the power of transport infrastructure to improve lives and deliver on our plan for change, that level of failure cannot stand. We will learn the lessons of the past 15 years and restore our reputation for delivering world-class infrastructure projects.

I have spoken about our inheritance and James Stewart’s review, so let me finally turn to Mark Wild’s initial assessment, which lays bare the shocking mismanagement of the project under previous Governments—I will place a copy of his interim findings in the Library. He stated, in no uncertain terms, that the overall project, with respect to cost, schedule and scope, is unsustainable. Based on his advice, I see no route by which trains can be running by 2033 as planned. He reveals that costs will continue to increase if not taken in hand, further outstripping the budget set by the previous Government, and he cannot be certain that all cost pressures have yet been identified.

It gives me no pleasure to deliver news like this. Billions of pounds of taxpayers’ money has been wasted by constant scope changes, ineffective contracts and bad management. There are also allegations that parts of the supply chain have been defrauding taxpayers, and I have been clear that those need to be investigated rapidly and rigorously. If fraud is proven, the consequences will be felt by all involved.

I have to be honest: this is an appalling mess, but it is one that we will sort out. We need to set targets that we can confidently deliver and that the public can trust, and that will take time, but rest assured that where there are inefficiencies, we will root them out; and where further ministerial interventions are needed, I will make them without fear or favour. HS2 will finally start delivering on our watch.

Years of mismanagement and neglect have turned HS2 into a shadow of that vision put forward 15 years ago, but this Government were elected on a mandate to restore trust to our politics, and that is why we will not shirk away from this challenge and why today we turn the page on infrastructure failures. I can think of no better mission than delivering new economic opportunities, new homes, commercial regeneration and an upskilled supply chain, all of which HS2 can still unlock, but no one should underestimate the scale of the reset required. Passengers and taxpayers deserve new railways that the country can be proud of. The work to get HS2 back on track is firmly under way under this Government, and I commend this statement to the House.

[Mr Speaker]

I call the shadow Secretary of State.

--- Later in debate ---

[Mr Speaker]

I call the Chair of the Transport Committee.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

I also thank the Secretary of State for the decisive action she has taken to address the causes of HS2’s cost overruns. We look forward to having Mark Wild and the Rail Minister at our Committee very shortly.

I actually want to celebrate something that HS2’s leadership should be proud of: the work they have done on skills and workforce innovation. They have provided best-practice work that the construction industry and transport projects can learn from, and in fact are learning from. However, I urge the Secretary of State to get her Department to learn from countries such as France and Spain, which have managed to deliver extensive high-speed rail projects to time and at a fraction of the cost of HS2 here in the UK.

[Heidi Alexander]

I thank the Chair of the Transport Committee for her comments. She is right to recognise the excellent work that HS2 has done on skills and the workforce. We have over 300,000 people working on this project at the moment, and I think that HS2 has done good work on opening up opportunities, whether through apprenticeships for the next generation or through the supply chain. I will heed my hon. Friend’s advice about learning from the speed and ease with which other countries deliver infrastructure projects.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Mr Paul Kohler (Wimbledon) (LD)]

I thank the Secretary of State for her statement and for advance sight of it. What we have heard today is clearly a damning indictment of Conservative mismanagement. Connecting our largest cities with high-speed rail was meant to help boost economic growth and spread opportunity. The original idea—a high-speed rail network connecting London to Manchester and Leeds—was clearly the right one, but what we have ended up with is years of delay and billions of pounds of taxpayers’ money being poured down the drain, with no end in sight. The litany of errors that the Secretary of State has outlined is truly shocking and shows that the Conservatives were comatose at the wheel. A lack of oversight, trust and planning has left us with a high-speed railway drastically reduced in scale and inflated in price. The shocking allegations of fraud by a subcontractor are emblematic of the Tories’ lack of oversight and interest in properly safeguarding the public interest and public money, as we saw with the scandal of personal protective equipment procurement during covid. We must now make sure that any money lost to fraud is clawed back as soon as possible.

May I ask the Secretary of State three things? First, can she guarantee that, if any fraud has taken place, any money lost will be returned to the Government and her Department as soon as possible, and that the police will be provided with the necessary resources to investigate the matter fully? Secondly, the Secretary of State has said that the ministerial taskforce set up to provide oversight on HS2 had inconsistent attendance from the then Transport Secretary and Chief Secretary to the Treasury. Does the Secretary of State agree that those right hon. Members should apologise for those particularly damning lapses? Thirdly, we share the Secretary of State’s confidence in Mark Wild and Mike Brown, but can she say when she expects to be able to give the House an accurate assessment of the scheme’s full costs and of when HS2 will finally be up and running?