Major infrastructure in the UK may have today become much harder to achieve. In his keynote speech at the Labour party conference Ed Balls has seriously questioned the High-Speed 2 rail project – questioning whether the opportunity cost is too high.
In his speech in Brighton Balls said: “under this government the High Speed 2 project has been totally mismanaged and the costs have shot up to £50bn. David Cameron and George Osborne have made clear they will go full steam ahead with this project – no matter how much the costs spiral up and up. They seem willing to put their own pride and vanity above best value for money for the taxpayer.”
“Labour will not take this irresponsible approach. So let me be clear, in tough times – when there is less money around and a big deficit to get down – there will be no blank cheque from me as a Labour chancellor for this project or for any project.”
“Because the question is – not just whether a new high-speed line is a good idea or a bad idea, but whether it is the best way to spend £50bn for the future of our country. In tough times it’s even more important that all our policies and commitments are properly costed and funded.”
That’s a big policy shift. Labour have long backed HS2 and are likely to campaign in 2015 in support of the scheme – with the caveat that it doesn’t go over £50bn. But now they’re saying that once they’re in power, they’ll review it even if it doesn’t go over £50bn, to make sure it’s the right way to spend that capital.