Question to the Department for Transport:

To ask His Majesty's Government, given current economic conditions, what assessment they have made of the likely additional costs of labour and materials on the overall cost of delivering the HS2 project; and what impact these additional costs will have on the benefit-cost ratio (BCR) of HS2.

The HS2 programme is experiencing high levels of inflation, consistent with the rest of the economy and construction industry. Whilst I am clear that HS2 Ltd and its supply chain must do all they can do mitigate inflationary pressures, the overall cost of the programme is not affected in real terms because the budgets are set in 2019 prices.

Inflation affects the value of the costs as well as the benefits and using a consistent price base removes the effects of general inflation from the benefit-cost ratio (BCR) calculation. If materials cost inflation and general inflation are significantly different, the BCR could change. Labour and materials costs are modelled as part of the BCR analysis and will be updated for the next iteration of the HS2 business case.