HS2 is a 'grand folly' and should be scrapped, business leaders warn

The High Speed 2 scheme is a “grand folly” that is “not worth the money”, business leaders have warned.

In another blow to the controversial project, the Institute of Directors (IoD) has called for the project to be scrapped.

It will intensify pressure on the Government over the scheme after senior figures in both the Tory and Labour parties voiced their opposition.

The Government has estimated the cost of HS2, which will see 225mph trains running from London to Birmingham by around 2026, at £50 billion including rolling stock.

However, experts have suggested that the eventual bill could be as high as £80 billion. It has been reported that the Treasury is working on a figure of £73 billion.

The IoD, which represents 36,000 businessmen and women, is urging the Government to cancel HS2 and instead focus on thousands of smaller transport projects.

A survey of IoD members has found that just 27 per cent now believe that HS2 represents good value for money.

In August 2011 a survey of IoD members found 54 per cent rated HS2 important to their business. This figure has now fallen to 41 per cent, with the IoD saying that this illustrated “how businesses see high-speed rail as a lower priority than it was two years ago”.

Simon Walker, director general of the IoD, said: “Businesses up and down the country know value for money when they see it, and our research shows that they don't see it in the Government's case for HS2.

“Some of the specific claims that the Government has used to support its economic case for the project have been challenged by our members, who by and large do not feel that their business will benefit.”

Work on HS2 is due to begin in 2017, with connections to Manchester and Leeds completed by 2032.

Experts have warned that it will blight large tracts of the British countryside.

Mr Walker added: “The IoD cannot support the Government's current economic case for HS2 when so many of our members are doubtful of the benefits.

“We agree with the need for key infrastructure spending, but the business case for HS2 simply is not there. The money would be far better spent elsewhere and in a way that will benefit much more of the country.

“Station upgrades, inter-city improvements, tunnels, electrification and capacity improvements should all be considered alternatives. It is time for the Government to look at a thousand smaller projects instead of falling for one grand folly.”

Alistair Darling, the former Labour Cabinet minister, last week withdrew support for the project and warned that it could lead to the rest of the UK’s rail network falling apart.

Labour has since placed a £50 billion cap on the cost HS2 and threatened to block the project if the bill spirals out of control.

A number of Tory MPs are bitterly opposed to the scheme, with former Welsh Secretary Cheryl Gillan describing the project as a “living nightmare” for thousands of constituents along the route.

There have also been indications that support from the British Chambers of Commerce for the scheme is weakening with John Longworth, the director general, telling The Telegraph he would not back HS2 “at any cost”.

Alison Munro, HS2 Ltd’s chief executive, said: “Whilst we respect the right of the Institute of Directors to state its case, we believe that HS2 will provide value for money and will bring about a transformational change to the economic geography of our country through creating thousands of jobs and opportunities for regeneration in and around our core cities.”

Peter Lawrence at Lawrence Rand said: “The case against HS2 is growing by the day and our continued support of the No to HS2 campaign continues.”