HS2 sceptic appointed to help deliver ‘Northern Powerhouse’ vision.

Jim O’Neill, former chief economist at Goldman Sachs and Chair of the City Growth Commission has been appointed as Commercial Secretary of the Treasury. It is expected that Mr O’Neill, who will join the House of Lords, has been appointed to help deliver the ‘Northern Powerhouse’ agenda.

However, this may well put him on a collision course with supporters of HS2, as whilst many insist that HS2 is essential in delivering this aspiration, Mr O’Neill does not, and in his previous post said that HS2 could be of detriment to the economy of the North of England and Scotland.

When the City Growth Commission report was produced in October 2014, he told Sky News:

“Controversially, as we concluded pretty early on, doing something to give a state-of-the-art infrastructure between those close geographic northern cities is probably way more important for them than HS2 in terms of the economic connectivity of the people in those cities.”

“Ask anybody that ever contemplates going from Hull to Liverpool or Leeds to Manchester or the other way, our modern infrastructure is just hopeless here compared with many other parts of the world.”

Then in an interview with The Observer last November, he said of HS2:

“I’d put it down as a nice luxury. It’s not obvious to me that it’s going to be useful to the north or the Midlands because all it guarantees is that people can get to London quicker than they can now.”

Finally, in January when Mr O’Neill gave evidence to the Lords Economic Affairs Committee, who produced a highly critical report on HS2 before the election, Lord May asked him if it would not be better to connect Northern cities better instead of building HS2. He responded:

“A number of Northern Cities get quite irritated with me when I said doing things to connect all these places together is way more important in my judgement than them [getting] to London faster than it is today. But they get quite annoyed with me because they want both. Maybe they think they are not going to pay for either.”

Stop HS2 Campaign Manager Joe Rukin responded:

“We have said since day one that what is needed all across Britain is better local transport infrastructure, as the vast majority of rail users take short trips to work, they are not the big bucks inter-city business users who would benefit from HS2. The very last thing anyone would want to do if they truly want to rebalance the economy is make it easier for the high earners who could afford it get to London more quickly. Hopefully, having someone in Government who acknowledges this and will make those arguments may see the Government rethink their support of HS2. The bottom line is that progressing with HS2 will only hurt the economies of the North, and make this ‘Powerhouse’ idea harder to achieve. Hopefully the fact someone is now in Government who recognises this will see an end to the HS2 white elephant, in favour of the investment the country actually needs.”

Penny Gaines, Chair of Stop HS2 said:

We welcome the appointment of Jim O’Neill as Commercial Secretary to the Treasury and his new role in the development of the Northern Powerhouse. He has long been sceptical about whether HS2 will bring the benefits to the north some proponents have claimed for it.  HS2 will cost over £50 billion in 2011 prices, so cancelling it would give the Treasury a huge amount of leeway for spending on alternative projects.”

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