Read the “Network North” section of the government’s briefing document on the scrapping of HS2 and I suspect there is little that you would condemn. There are plans to deliver the West Yorkshire mass transit system, a new line and station for Bradford and funding for the Midlands rail hub. The problem is that these necessary investments have come at the cost of HS2 – something successive governments have promised to build. The decision is depressing for business. Cross-party consensus delivers the certainty upon which investment decisions can be made. Why can’t politicians, one fund manager said to me this week, stick to a plan for 20 or 30 years? That’s democracy.
Politically, Rishi Sunak is trying to break down consensus in the hope that he can define his premiership against what has come before. His party’s reputation is too bad to defend. As I wrote yesterday, this is the right strategy. The key problem for the Prime Minister is that these decisions don’t reflect the immediate priorities of voters. Nor can Sunak escape the impression that he is scaling back rather than building the future.
There is another, perhaps more interesting, consequence of Sunak’s decision to question the HS2 and net zero consensus. Agreement over them meant that two of the largest policy programmes in the country were not subject to day-to-day political debate. Now, Labour is forced to respond. Is Sunak creating a new consensus that Labour will follow? Or will Labour define itself in opposition to the decisions?
That will largely depend on whether Labour wants to find the money to fund both HS2 and “Network North”. Rachel Reeves’s fiscal conservatism places her much closer to Sunak than some in Labour would like to admit. (Such an approach may not survive contact with the reality of government. As John Gray writes, “A further spike in oil prices or escalating geopolitical conflicts in Ukraine, Kosovo or Taiwan will test it to destruction.”) Labour’s response to the changes will be one of the best signs yet of whether it will rethink the country’s approach to public finances or stick to the orthodoxy of the past few years.
This piece first appeared in the Morning Call newsletter; subscribe to it on Substack here.
[See also: The return of the two Germanys]
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