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The HS2 high speed rail line could be scrapped, Chief Secretary to the Treasury Liz Truss has confirmed.

She said the Treasury was taking a serious look “for the first time” at whether the proposed rail network, which includes two new stations in Birmingham and Solihull, could be delivered within its £56 billion budget.

The findings will be presented to the winner of the Conservative leadership contest once they become Prime Minister - and they will make a decision about the future of the scheme.

Ms Truss, the most senior Treasury minister after the Chancellor, made the comments as she gave evidence to the House of Lords Economic Affairs Committee.

Prime Minister Theresa May and Transport Secretary Christopher Grayling have both said they are committed to completing the entire HS2 network, which would run between London, Birmingham, Leeds and Manchester.

But a new Prime Minister will be in Number 10 by the end of July, and Ms Truss made it clear that they could take a different approach.

She said HS2 was included in a “zero-based capital review”, which was examining major infrastructure projects in advance of the Government’s spending review, which is due later this year.

Ms Truss said: “One of the projects we will be looking at, of course, is HS2.”

(Image: PA)

She told the Lords Committee that the next Prime Minister would decide whether to go ahead with planned infrastructure projects, including HS2.

“Clearly the decisions to be made on these projects will be for the next Prime Minister, and I see my role as Chief Secretary for the Treasury as making sure we have the maximum amount of information prior to these decisions being made later this year.”

She added: “One of the things we will be looking at for the first time in this zero-based capital review is the deliverability of projects ... is it really the case that this project can be delivered for the budget envelope that the Treasury has set out, in this case £56bn for HS2, and can it be delivered in the timescale?”

Ms Truss said that officials would deliver a judgment later this year about how much HS2 will cost to build.

“At the moment I have an open mind because we are still looking at what are the economics of those different projects and also what are the likely costs of those projects.

“The Treasury set an envelope for HS2 in 2015.

“I’m expecting to receive revised information about the costings later on this summer, prior to the Spending Review.”

Asked by Committee chair Lord Forsyth if this meant the Government could choose to prioritise other rail projects instead of HS2, she said: “It does. And it also means that we could decide to prioritise other infrastructure projects.”

For example, high-speed internet services might offer better value for money, she said.

(Image: Tom Dare)

Ms Truss was speaking in her role as a Government Minister, but she has previously come out as a supporter of Boris Johnson’s campaign to become Tory leader. Mr Johnson is a longstanding critic and has called on the Government to prioritise improvements to transport links between the east and the west instead of HS2, which runs north to south.

The winner of the Conservative leadership contest is to be announced in the week beginning July 22.

Work on the planned Curzon Street HS2 station in Birmingham city centre is underway. The site spans 25,000 square metres.

An HS2 rail depot is being constructed at the former Alstom site in Washwood Heath, Birmingham, while a second HS2 station, Birmingham Interchange, is to be built near Birmingham Airport.

Theresa May attempted to put an end to speculation about the future of HS2 in a letter to business and council leaders in March, when she said the Government “remains committed” to delivering the whole project.

But rumours that the Cabinet is divided over whether to scrap the scheme have persisted, and supporters have felt the need to continue making the case for it.

(Image: Handout)

Andy Street, the Conservative mayor of the West Midlands, this week urged Tory leadership candidates to make “a firm pledge to support HS2, as part of a comprehensive investment in addressing historic underinvestment in regional infrastructure”.

And George Osborne, the former Chancellor, insists in a new report this week that HS2 is essential.

Responding to critics who say the Government should scrap HS2 and invest in the North of England instead, he wrote: “It is not a case of either/or – we need both.”