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HS2 will run to Euston Station, the Labor government confirmed today, but has remained mum on any plans to pay for the terminus of London’s high-speed line with public money.
In her first budget since becoming Chancellor of the Exchequer, Rachel Reeves confirmed on Wednesday (October 30) that HS2 will run to Euston and that it will receive government funding for tunnel construction between Old Oak Common and Euston.
But she stopped short of allocating public funds to build the station, suggesting it could rely on private financing. This resonated comments from former Prime Minister Rishi Sunak when he took over the project from HS2 Ltd last year.
In her budget announcement speech, Reeves said transport secretary Louise Haigh had “set out a plan to get to grips with HS2”.
“We are securing the delivery of the project between Old Oak Common and Birmingham and we are providing the funding required to commence tunneling work to London’s Euston station,” Reeves said, adding that the Euston expansion “will require private investment in would catalyze the local environment”.
Budget documents detail how the Euston Housing Delivery Group – first proposed by Rishi Sunak’s government in March – will be established to “promote an ambitious housing and regeneration initiative for the local area”.
Bek Seeley, former director of development in Europe at Lendlease, has been appointed chairman of the delivery group. Lendlease itself is leading the regeneration of the Euston site.
The announcement was positively received, with a spokesperson for the High Speed Rail Group saying Reeves’ announcement “marks a crucial step forward”.
“We hope that an era of fragmented short-term decision-making has come to an end, in favor of a move towards a coherent vision for the future of British rail,” she added. The lack of talk about Euston’s financing suggests the company could make progress with private financing.
Last December, Mace CEO Mark Reynolds sharply criticized former Prime Minister Sunak’s government for accepting his company’s suggestion around privately funding Euston to go “into a black hole”.
Despite the positivity, the High Speed Rail Group spokesperson said it was “critical” that phase one north of Birmingham will be connected to Crewe and beyond.
Earlier this month there were rumors in the wider media that the government was considering using private funding to revive phase two of HS2, in Crewe. But the Department of Transport said earlier this month it would not revive the second phase.
Richard Risdon, managing director for Britain and Europe at Mott MacDonald, said the commitment to end HS2 in Euston “demonstrates that the government understands the role connectivity plays in delivering economic growth and opportunity”.
HS2’s Euston was far from the only transport commitment Reeves made during the journey her budget speech.
She promised to deliver the first two phases of East West Rail – with services between Oxford, Milton Keynes and Bletchley starting next year. The line will reach Bedford in 2030, Reeves added.
But she said the government would launch a consultation on the next phases of the line, which was intended to run from Oxford to Cambridge.
Reeves further committed to delivering the TransPennine Route Upgrade between York and Manchester via Leeds and Huddersfield.
Progress on the upgrade will “lay the foundations” for Northern Powerhouse Rail, budget documents say.
Labor has also committed to other local transport systems, through an increase in the City Region Sustainable Transport Settlements – a series of investments across the eight combined authority regions, first announced in 2021. The increased settlements, Labor added, will help financing projects including the Baltic Railway in Liverpool. Station, the renewal of Sheffield’s Supertram system and the ongoing development of West Yorkshire Mass Transit.
On roads, Reeves promised an almost 50 per cent increase in funding for local highways maintenance, worth almost £1.6 billion a year. That equates to a £500 million increase in the same 2024/2025 budget, she said.
The Asphalt Industry Alliance welcomed funding to improve the condition of local roads. But chairman David Giles said the measure “does not meet the long-term funding horizon that the sector is asking for”.
He added: “Our hope was that the Chancellor would have announced a multi-year commitment, which will enable local authorities to plan and proactively deliver the effective maintenance required to drive the improvement of our local roads.”
The Office for Budget Responsibility (OBR) indicated in its budget analysis that the Department for Transport’s budget would increase by 1.2 percent in 2024/2025, before falling by 2.5 percent in 2025/2026.
The decline is “mainly due to declining subsidy for rail transport”, the OBR said.