黑洞社区

Nadhim Zahawi has rubbished rumours that HS2 could be sacrificed to demonstrate the sustainability of UK finances.

Chancellor Kwasi Kwarteng is expected to make spending cuts after a disastrous response to his mini-budget last month and there has been speculation that the rail megaproject could face the axe with calls from some Conservatives to ditch it.

However, speaking at a fringe meeting at the Conservative Party conference in Birmingham yesterday, the chancellor of the Duchy of Lancaster insisted that the rail megaproject was going ahead.

鈥淭here is no way HS2 is going to be scrapped. HS2 is going ahead,鈥� said Zahawi.

Given that, as of March, 拢14.3bn has already spent 鈥� and another 拢12.7bn under contract 鈥� on the first phase of the scheme, it is unlikely that the government would cancel it wholesale.

While it could scrap the next section, which runs from the Midlands to Crewe and onto Manchester, such a move could be deeply unpopular with northern Tories and their constituents, who have already seen the government row back on promised investments in Northern Powerhouse Rail. 

Conservative MP and HS2 opponent Andrew Bridgen told the Today programme last week that the government should 鈥済et on an announce鈥� that the project would be ditched, while influential Conservative donor Lord Wolfson of Aspley Guise has said it would be 鈥渢op of our list鈥� if spending cuts were necessary.

Zahawi, who was speaking at an event in support of West Midlands Mayor Andy Street, also emphasised the importance of the government鈥檚 new investment zone agenda and told the local audience: 鈥淚 want the first investment zone to be here in Birmingham.鈥�

On Sunday, the government announced it was encouraging formal applications from local authorities to set up investment zones and Street said at Monday鈥檚 event he had already agreed with Coventry City Council and Warwick District Council that an application would be put forward for an investment zone in the Midlands to facilitate the development of a new gigafactory.

The government hopes the investment zones will stimulate investment through tax and regulatory incentives. On the first day of conference, Wales secretary Robert Buckland compared the zones to the free enterprise zones established by Lord Heseltine during Margaret Thatcher鈥檚 first government and said he saw them as 鈥減art of the levelling up agenda鈥� and a continuation of Johnson鈥檚 interventionist approach to government.

鈥淲e make interventions where appropriate,鈥� he said. 鈥淭he idea that the government has come to preach trickle-down economics is for the birds.鈥�

Heseltine himself is in Birmingham this week and told an event hosted by the European Movement that to be successful his free enterprise zones had 鈥渉ad to have planning powers, land acquisition powers, leadership and certainty they would still be there in four to five years鈥�.

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Heseltine bemoaned the lack of a single point of contact for local authorities seeking to speak to government about leveraging public investment opportunities, asking: 鈥淗ow many phone calls do you have to make to Whitehall now?鈥�

鈥淵ou can鈥檛 run a successful economy like that. And no other capitalist country tries to do it 鈥� they have strong devolved governments.鈥�

He also emphasised the need for government ministers to get on the ground and understand the local context. 鈥淢y whole experience of urban regeneration is that you have to go there and listen. The weakness of the current system is that they think Whitehall knows best,鈥� he said.

Elsewhere at conference, ex-cabinet minister Theresa Villiers also expressed skepticism about the investment zones, raising concerns about the 鈥渆rosion of local decision-making in planning鈥�.

David Thomas, chief executive of Barratt Homes, said he did not want to see 鈥渋nvestment zones being used to short-circuit environmental regulation鈥�, while Paul Brocklehurst, chair of the Land Promoters and Developers Federation, told 黑洞社区 that he suspected the zones would see commitments to good design in the Levelling-up and Regeneration Bill cast aside in order to fast track development.

鈥淚 expect design codes are going to go in investment zones,鈥� he said.