George Osborne backs ‘HS2-lite’ plan for Manchester-Birmingham route

The former Tory chancellor George Osborne has thrown his weight behind a proposal nicknamed “HS2-lite” that would deliver new high-speed train links between Manchester and Birmingham.

Osborne said the worst thing Rishi Sunak did as prime minister was cancelling the northern arm of HS2. “It was an act of infrastructure vandalism,” he said.

More than 20 business leaders and university vice-chancellors have written to the chancellor, Rachel Reeves, calling for the government to support the new proposal in the budget. They said doing nothing risked the Midlands in effect being cut off from northern cities.

The HS2-lite proposal would allow trains to travel at a maximum of 186mph, slower than the 225mph speeds of HS2 but far faster than the current west coast mainline.

There were reports last week that the government ws attracted to the idea of HS2-lite, which supporters say would be up to 40% cheaper than the original proposals.

Osborne said on the Political Currency podcast that he presents with Ed Balls that he was encouraged by the reports. “I think if it’s true it undoes a lot of the damage done by the last Conservative government. I think it is a good long-term investment in the infrastructure of the country,” he said. “I hope, even in this lighter form, HS2 is revived from the dead. It is a reincarnation I would fully support.”

The letter from business leaders, seen by the Guardian, says HS2-lite could unlock up to £70bn a year in economic growth. “This project represents an opportunity to deliver long-term, transformative growth,” they write.

The letter says they are not asking for a spending commitment in the 30 October budget but they are asking for measures including setting up a steering group between central government, combined authorities and the private sector to develop a feasibility study in the next six months.

“Please use your budget to start the conversation about the art of the possible and prevent an impending collapse of the west coast mainline, and with it the M6,” the letter says. “Capacity issues created by the decisions of the previous government have left an unfunded upgrade cost to the conventional network running to the many billions of pounds. Instead, this project can keep the north connected to the Midlands – and with it the prospect of meaningful growth beyond London alone.”

The letter has been signed by the bosses of infrastructure companies including Skanska, Mace, Arcadis and Arup as well as university vice-chancellors and the leaders of chambers of commerce in the north and Midlands.

Balls, a former Labour shadow chancellor, said on the podcast with Osborne that he thought it more likely that the government would invest first in Northern Powerhouse Rail improving east-west links.

“Do both,” Osborne said in response. “You don’t have to pick between the two.”

• This article was amended on 14 October 2024. An earlier version said that Ed Balls was a former chancellor instead of a former shadow chancellor.