ALEX BRUMMER: Don’t turn your back on HS2, Rishi

Boris Johnson is not the only former UK prime minister excited about big infrastructure projects. In 1970, another Conservative prime minister, Ted Heath, ignored Treasury advice and ordered work to begin on a new London airport at Maplin in the Thames Estuary.

It was a brave decision and the grand plan was designed to relieve congestion at Heathrow and end noise and emissions in large areas of London.

Four years later, after expensive stacking and preparation work, Heath threw in the towel when the cost rose to £825 million (about £8.4 billion in today’s money). Under pressure from the Treasury over the dire state of the public finances and rising fuel costs, Heath canceled the project and abandoned the dream of an airport that would equip the UK for the next generation.

History repeats itself. Rishi Sunak’s government, which claims to be committed to the long term, is preparing to truncate the high-speed rail link to the North amid Whitehall panic over the cost.

The excitement and vision of fantastic projects are too important to ignore. The British can-do spirit triumphed with the Elizabeth Line, which was billed by critics as a fast rail link to nowhere. Now, packed with air conditioning and internet, it is London’s busiest route.

At Hinkley Point Power Station in Somerset, one of the most magnificent engineering projects of our time is being carried out with French assistance. The massive roof of each nuclear reactor will be pre-assembled as a giant steel saucer that will be lowered into position by the world’s largest land crane. It is a project on a scale that would have excited our industrial pioneers.

However, HS2, an imaginative infrastructure project that was approved by David Cameron’s government, is in danger of hitting the ceiling. A now-focused Treasury mindset is trumping Britain’s long-term needs for an overhaul of the Victorian rail system and the huge economic benefits that could flow.

Prominent critics of HS2 argue that the rising cost of running the project (the eastern stretch to Leeds has already been scrapped) is unsustainable in an era of crumbling schools and hospitals and pressure on budgets. They are right to point out that the projected cost, which now rises from £37bn to perhaps £100bn, is intolerably high. But they should not think that once the capital tied up in HS2 is released, all will be well for urgent government programmes.

HS2 is an architectural and civil engineering undertaking on a gigantic scale that future generations could marvel at.

But as excellent an idea as it may seem to restrict the plan, Treasury orthodoxy doesn’t work the way people expect. Money saved on capital investment is money pocketed and swallowed by growing NHS and social care budgets, even if some of the capital is allocated to less prestigious commuter lines.

The waste that has been the management of HS2 is shameful. The greed that siphoned off some £10m in wages and rewards last year is unforgivable. The answer is not to truncate the project but to resume it. Fire failed leadership and bring in trustworthy one. Elizabeth Line engineers, for example, now working in Tel Aviv, could be called back into action. The chief executive of a respected UK engineering group suggested to me that London Underground often gets a bad rap, but has more proven world-class engineering skills than the HS2 team. There could be a case for transferring project management from the semi-public sector to private British engineering groups, whose skills are in demand globally.

The main concern is cost. By reducing the stretch from Birmingham to Manchester and the distance from Old Oak Common in west London to Euston, capital costs could be limited. An alternative proposed by a senior City economist is to shift funding to a ‘consol’ model.

Consoles are undated long-term public debt and have been in use since 1751. They can be redeemed and redeemed at the request of the government. Long-term investors would get the HS2 consoles, with reliable performance. But for a nation that prides itself on its financial innovation, public finances are managed without inspiration or ambition.

The political problem with HS2 partly goes back to the way it was sold to Parliament and the public. Much of the campaign focused on shorter travel times. It was also seen as relieving freight capacity by taking them off the highways.

The most important reason for the project was in black and white in the 2017 legislation. This is an economic project that already directly employs 30,000 people and is important for the survival of our steel industry.

The most important lessons must be learned from Japan. Cities on bullet train routes were once economic backwaters. They are now the beating heart of the world’s second largest economy, based on the Western model.

Headache: Ted Heath’s plan for an airport off the Essex coast did not take off

Proof of the investment power of infrastructure can be seen in the development around Elizabeth Line stations, where in less fashionable parts of London it is lifting entire neighborhoods out of squalor.

The most telling example of how HS2 could change Northern economies comes from the Birmingham metropolitan area, which is already benefiting from HS2’s halo effect. It has skyrocketed the league of foreign direct investment in Britain. The regional economy has expanded 36 per cent to £29 billion over the last decade.

In a break with the City, HSBC decided to make Birmingham its UK headquarters. Commercial and property prices in the region have been among the most buoyant in the UK.

Andy Burnham, the passionate Labor mayor of Greater Manchester, fears that truncating HS2 will deprive less developed parts of his region of long-term productivity and economic boost.

But it is too late to regret that designers have not decided to start HS2 in Manchester and build it in the south.

Anyone who thinks the HS2 terminal should be at Old Oak Common should visit the elegant Eurostar terminal at St Pancras and compare it to the Gare du Nord terminal in Paris, which is cavernous, cold and lacking in facilities. Instead of seeing Euston as a problem, the Government should see it as a St Pancras-style masterpiece.

Global Britain is destined to reach out to the world. On its own, outside the EU, the nation must be seen as a visionary state capable of passing on a brilliant legacy to future generations.