Transport committee says government should play down cost of project and look into bringing forward second phase

It is essential for the UK that the HS2 high-speed rail project goes ahead, a report by MPs says. It says the risks of not proceeding with the project significantly outweigh the risks of proceeding with it.

The Commons transport committee, chaired by Louise Ellman, Labour MP for Liverpool Riverside, says serious thought should be given to building the second-phase northern section of the line at the same time as the first phase.

The committee says it remains convinced that the project is justified, although MPs say they would not accept a situation in which other vital transport projects are delayed due to HS2 funding requirements.

The cost of the project in its entirety is estimated at £42.6bn, with £7.5bn needed for the high-speed trains. Of the £42.6bn, a total of £14.56bn is contingency.

The report says: "The Department for Transport's (DfT) communications about HS2 should emphasise that the estimated cost is £28bn, not £50bn, and that cost increases to date have largely been due to the decision to undertake more tunnelling and other work to mitigate the impact of the project on people living near the route.

"The project is now commonly regarded as costing £50bn and rising. This has led to exaggerated references to HS2 requiring a 'blank cheque' from government."

The first phase of the scheme, between London and Birmingham, is due for completion in 2026, with a second Y-shaped section between Birmingham and the north-west and north-east due to be finished in 2032-33.

The report says the incoming HS2 chairman, Sir David Higgins, should report to ministers by the end of 2014 "on options for speeding up HS2 so that trains run north of Birmingham on high-speed routes well before 2032-33".

The MPs took evidence from bosses of the consultants KPMG, who said that by 2037 HS2 would boost the UK economy by £15bn a year. However, some economists who gave evidence to the committee cast doubt on this figure.

In its report, the committee says: "The DfT's written evidence clearly identifies the limitations with KPMG's research, referring to 'challenging' forecasts and 'uncertain' results."

The MPs say their support for HS2 is "not unqualified" and they remain concerned about how Heathrow will be incorporated into the plans for phase one and what impact including a Heathrow stop would have on the budget.

The report concludes: "Many important local issues will be debated and resolved by the (HS2) hybrid bill committee and there will be detailed debates about many aspects of the project. However, we are convinced that it is essential for the UK for HS2 to go ahead, and to do so as a project which has the backing of all three major political parties."

Ellman said: "We remain confident that construction of a new high-speed line is the only way to deliver the step change in capacity on the west coast mainline needed to accommodate long-term demand for both passengers and rail freight."

Joe Rukin, campaign manager for the Stop HS2 group, said: "Unlike the public accounts committee and Treasury committee hearings on HS2, it was clear that this inquiry was going to be a cheerleading whitewash when the transport committee only called people who support HS2 to give evidence.

"Despite the official cost of HS2 standing at £50bn, the committee want to pretend it is £28bn, even though they said it would be £34bn in 2011. In saying this and telling the DfT they should abandon their standard assessments to improve the case for HS2, they are effectively ordering the government to spin harder on HS2."

Patrick McLoughlin, the transport secretary, said: "HS2 will be a heart bypass for the clogged arteries of our transport system. We therefore welcome the transport committee's conclusion that the new north-south railway is the best long-term solution to increasing capacity and that alternative proposals would simply not cope with the predicted increase in demand."