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Labour’s Balls Says ‘No Blank Check’ for High-Speed Rail

Aug. 23 (Bloomberg) -- There is no guarantee a future Labour government would press ahead with a high-speed rail line linking London to northern England if costs continue to rise, the party’s finance spokesman said.

“There will be no blank check from a Labour Treasury for this project or any other project,” Ed Balls told BBC television today. “It’s got to be value for money.”

Balls’s comments may indicate a softening of the party’s support for the project, which was begun under the previous Labour administration. The current coalition of Conservatives and Liberal Democrats plans to begin construction in 2017. Alistair Darling, a former Labour chancellor of the exchequer and transport secretary, said today he’s changed his mind and now opposes the plan.

Darling cited reports of rising costs and doubts about the economic case for the line, known as HS2, which will cut journey times and increase capacity on existing lines for freight. The government estimates the cost of the line and trains at 50 billion pounds ($78 billion), including a 16 billion-pound allowance for contingencies.

“Politicians are always excited by ‘visionary’ schemes,” Darling wrote in an article for the Times newspaper. “One thing I have learnt is that transport, rather like banking, is at its best when it is boring.”

Rural Tunnels

While the plan has cross-party support, it’s unpopular among people who live on the route, which passes through Conservative-supporting rural districts. To try to allay concern, more than half the 140 miles (225 kilometers) of the first leg, from London to Birmingham, will be in cuttings or tunnels.

The government intends to introduce legislation supporting HS2 by the end of 2013, with a plan for it to be passed by Parliament by 2015. Construction will then begin in 2017, with the line to Birmingham opening in 2026. After Birmingham the line will split, with tracks going to Manchester and Leeds. These sections aren’t expected to open until 2033.

“We have to make sure every pound is spent wisely,” Balls said. “The costs have been spiraling up. They’ve got to get a get a grip.”

Interviewed on BBC Radio 4 today, Darling said there are better ways to boost the economy outside southeast England and that high-speed rail risks starving the existing network of much-needed investment.

“I’m an enthusiast for the railways but my fear is that if you build this visionary project you’ll have a nightmare on the rest of the network because you won’t have the money to spend on it,” he said.

‘Expensive Mistake’

Darling isn’t the first prominent Labour figure to oppose the plan. Peter Mandelson, a former business secretary, said in July he feared it would be an “expensive mistake.”

Tory Transport Secretary Patrick McLoughlin told the BBC that it would be “a nightmare” if HS2 doesn’t go ahead.

“What we’ve seen is a massive growth in our railways over the past 20 years,” he said. “We’ve seen rail numbers go from 750 million passenger journeys to 1.5 billion, we’ve seen freight increase by 60 percent in the last 10 years. Now, I want to see freight continue to increase on our railways, I want to see more people using our railways, but there is a big capacity problem.”

To contact the reporters on this story: Eddie Buckle in London at ebuckle@bloomberg.net; Robert Hutton in London at rhutton1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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