HS2 'A Grand Folly' Says Business Group
The Government has rounded on a business lobby group after it called for HS2 to be scrapped, describing the high speed rail scheme as a "grand folly".
The Institute of Directors (IoD) said a survey of its members found just 27% felt it represented good value for money while 70% said the project would have no impact on the productivity of their business.
The report also showed, the IoD said, there was little enthusiasm for the project even in the regions where the benefits are supposed to be strongest.
In August 2011 a survey of IoD members found 54% rated HS2 important to their business.
The latest survey was heavily criticised by transport minister Norman Baker who said: "This is not an economic analysis by the IoD. It is a survey of less than 4% of its members who have responded to some of the misleading reports of late."
Construction on the first phase of HS2, the route from London to Birmingham, is due to start in 2017 with the first trains to run by around 2026.
The second phase will see two spurs added - one through Manchester and the other through Leeds - but opposition to the project has shifted beyond residents' groups and environmentalists.
Former Labour chancellor Alistair Darling admitted last week he had changed his view on the case for HS2.
He told The Times that the economic benefits were now "highly contentious" and he expressed fears the project would drain money from other vital transport projects.
The U-turn fuelled speculation Labour could be about to pull its support though shadow transport secretary Maria Eagle has told City AM a Labour Government would redesign the route linking HS2 with the current HS1 to minimise disruption to the residents of Camden.
The CBI told Sky News today that its backing for HS2 was not absolute.
The group, which represents the leaders of big business, said: "In the coming years the UK will need more railway capacity and that is why the CBI supports HS2 in principle, but it must be demonstrably clear that the benefits outweigh the costs - it must deliver value for money."
A separate report by the Institute for Economic Affairs last week put the eventual cost of HS2 at £80bn, almost double the official estimate and the Treasury is reported to be working on a figure of £73bn.