Balls Reopens U.K. Labour Rift Over High-Speed Rail Project

Ed Balls, the Treasury spokesman for the U.K.’s Labour opposition, reopened his party’s rift over the planned high-speed rail line from London to northern England.

In his speech today to Labour’s annual conference in the south-coast resort of Brighton, Balls took time to repeat his August warning that the plan would be scrapped under a Labour government if costs run out of control. The 50 billion-pound ($80 billion) project, known as HS2, is designed to cut journey times and increase capacity on existing lines for freight.

“In tough times, when there is less money around and a big deficit to get down, there will be no blank check from me as a Labour chancellor for this project,” Balls said, though he said Labour continues to “back the idea” of the line. “The question is not just whether a new high-speed line is a good idea or a bad idea, but whether it is the best way to spend 50 billion pounds for the future of our country.”

His comments come after the last Labour chancellor of the exchequer, Alistair Darling, and the party’s former business secretary, Peter Mandelson, questioned the project. By contrast, Andrew Adonis, a former Labour transport secretary who is now advising the party’s leader Ed Miliband on economic policy, said last month it would be an “act of national self-mutilation” if the party were to cancel HS2.

The high-speed line is 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 would 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 wouldn’t open until 2033.

Before it's here, it's on the Bloomberg Terminal.