What did IoD members think about the cancellation of HS2?
On October 4 2023, Rishi Sunak scrapped the northern leg of the High Speed 2 (HS2) rail project due to spiralling costs.
Instead, the prime minister pledged to “reinvest every penny” saved – estimated at £36bn – in rail, roads and buses in the north, the Midlands and across the country.
It was a hugely controversial decision that sparked uproar from a number of northern leaders, including Andy Burnham, the Labour mayor of Manchester, and Andy Street, the Conservative mayor of the West Midlands.
The mixed feelings and lively debate that ensued was replicated among members of the Institute of Directors (IoD). We decided to find out what they thought of the decision, so we conducted a survey, which posed the question: To what extent will the Government’s decision to cancel the extension of HS2 north of Birmingham have an impact on the productivity of your business over the longer term?
The results were interesting. Those who thought it would have no impact accounted for 62.89%; some impact 21.74%; significant impact 10.81%; and don’t know 4.56%.
A similar survey conducted by the IoD, back in 2013 produced remarkably similar results. That survey showed that just 27% of IoD members felt the project represented good value for money, with 70% saying the faster rail line would have no impact on the productivity of their business.
The IoD was also more openly critical of HS2 back in 2013, with the then director general, Simon Walker, describing the project as “one grand folly”.
It is important to note that the survey question and its results provide a good snapshot of what businesses across the country feel about the high speed line – linking London, Birmingham and Manchester – and its ability to boost company productivity. However, there are bound to be regional differences, depending on where businesses are based and their proximity to HS2.
This mixed picture, and the range of views on HS2, is highlighted by the online poll conducted by the IoD on LinkedIn, which asked a different question: Do you believe that the Prime Minister is right to scrap the HS2 Manchester link?
Almost 1,200 people responded, with 63% voting ‘no’ and 37% pressing ‘yes’.
It was also informative to look at the responses in the comments section of the main survey. Members expressed a variety of reasons as to why they supported or opposed the government’s decision.
Those for the cancellation expressed the importance of redirecting investment into transport infrastructure in the North of England.
One respondent, working in the health and social work sector in the South West of England, said: “Good decision, connectivity in the North is more important than a bit quicker to London.”
Another member, working in construction in the East of England, added: “The whole concept was a complete waste of money, it made no sense to spend vast amounts of money to save a small amount of time, better to improve the infrastructure between the northern cities which has been crying out for investment.”
Members also noted that due to their location, HS2 would never have affected them, either positively or negatively.
A member working in the professional, scientific and technical sector in London, said: “For us, no benefit to have HS2 and therefore no issue not to have HS2.”
Another, working in the information and communication sector in the East Midlands, said: “It was never going to serve my business region at all.”
Our survey also noted that there is less of a need for nation-wide travel due to the advancements of remote working technology post-Covid.
Those disappointed with the u-turn fell into four categories. Firstly, there were those who were concerned about the reputation of the UK government, and its ability to successfully manage projects of this scale.
One member, working in accommodation and food services in London, said: “The HS2 cancellation will not affect our West London business but it does undermine confidence in government planning, project planning & review, costing and financial management, etc.”
Others expressed concern over the cancellation of the project as their businesses were directly involved and now face financial loss.
A contractor in the West Midlands said: “I am a supplier to HS2, the decision to stop Phase 2 will cause me significant loss of income.”
Another, working in the professional, scientific and technical sector in London, added: “HS2 activated businesses of all types. I have been heavily involved in the design of HS2 Phase 2B and opportunities for my business given my expertise in the field have now been completely scrapped.”
Members also noted that the cancellation would make in person meeting even harder, especially when remote working does not meet all their business needs.
Someone in the financial services sector in London said: “We have clients in the Manchester and Leeds regions and this will reduce our ability and willingness to visit them or when we do a trip, see multiple clients in a reasonable timeframe. This will reduce time in the office and client interaction.”
Finally, some were concerned about the negative environmental impact the unfinished project will have.
A respondent working in the professional, scientific and technical sector said: “The impact of this decision also affects the environment and combined with the equally poor decision regarding net-zero, the north south road artery, the M6 is set to continue to be a non-viable toxic method of travel.”
Full Survey results
768 responses from across the UK, conducted between 12-29 October 2023. 15% ran large businesses (250+ people), 18% medium (50-249), 22% small (10-49 people), 32% micro (2-9 people) and 13% sole trader and self-employed business entities (0-1 people).
To what extent will the Government’s decision to cancel the extension of HS2 north of Birmingham have an impact on the productivity of your business over the longer term?