Rachel Reeves 'set to sign off HS2 running to Euston'

by · Mail Online

Rachel Reeves is believed to be preparing to sign off HS2 running to Euston despite alarm at the multi-billion pound price tag.

The Chancellor is expected to approve running the line to the central London hub after months of speculation. 

The reports come amid signs that Ms Reeves will redraw fiscal rules in the Budget so the government can rack up extra borrowing.

Bank of England liabilities and other debt could be reclassified to give ministers another £30billion of headroom - or perhaps even more.   

Questions over the future of Euston station were raised when Rishi Sunak cancelled the Birmingham to Manchester section of the HS2 scheme last year. 

Rachel Reeves is believed to be preparing to sign off HS2 running to Euston despite alarm at the multi-billion pound price tag

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Questions over the future of Euston station were raised when Rishi Sunak cancelled the Birmingham to Manchester section of the HS2 scheme last year

With the bill for redeveloping the hub spiralling towards £5billion, there were rumours the high-speed link could instead terminate at Old Oak Common in the suburbs of west London. 

Passengers would have needed to complete their journeys to central London on the Elizabeth Line, with critics saying it would be 'insane''.

However, according to the Sunday Times the Euston section and a new rail link between Manchester and Liverpool are set to be approved by the Chancellor.

A government source said: 'HS2 just wouldn't work if the terminus was not at Euston. The station is also well overdue for investment and has become a dystopian mess and stain on London.'

Ms Reeves previously committed to meeting the Tories' provision that public sector net debt should be falling in the fifth year of a forecast period. 

Any move to change the debt calculation would raise concerns after government borrowing hit 100 per cent of GDP for the first time since 1961

But the calculation of that debt could be changed. Options being considered for the Budget include removing the Treasury's losses on the Bank of England winding down its quantitative easing programme from debt calculations, and keeping new bodies such as Great British Energy off the books.

Officials could also be ordered to put more emphasis on the long-term returns from borrowing to invest in infrastructure.

However, any such move would raise concerns after government borrowing hit 100 per cent of GDP for the first time since 1961. It would also not solve pressures on year-on-year spending, as the extra money would be one-off.