FLAGSHIP high speed rail projects designed to connect the North of England may not be completed if Britain leaves the EU, David Cameron has warned.
Delivering the multi-billion pound HS2 and HS3 schemes are at the forefront of the Conservative party’s vision to create a Northern Powerhouse.
However a vote to abandon the EU on June 23 could signal the end of proposed levels of investment in rail, Mr Cameron suggested, as grappling with a £40m blackhole in their finances and public spending commitments would have to be managed within a smaller economy.
Speaking exclusively to readers of the Yorkshire Post in central Leeds yesterday, the Prime Minister said: “If we stay in [the EU] all our plans are fully intact and that includes HS2, and what we have said about HS3, and the overall rail investment programme.
“If we come out of course I’m sure we will want to try and maintain these important investments but when you hear nine out of ten economists, the Bank of England, the Treasury, the IMF and now the National Institute [of Economic and Social Research], all saying our economy will be smaller and will generate less tax revenue, obviously that does threaten potentially some public spending programmes.”
“If we stay in [the EU] all our plans are fully intact and that includes HS2, and what we have said about HS3, and the overall rail investment programme.David Cameron
As recently as March, Chancellor George Osborne announced a £60m fund to kick-start a speedier route between Manchester and Leeds that would slash journey times by 30 minutes, while HS2’s budget is currently £55.7bn.
Earlier in the day Mr Cameron paid a visit to a farm in Thirsk as part of his campaign to convince farmers to vote to remain in the EU.
After stopping at Brigshaw High School in Kippax near Castleford school to meet pupils, he then took questions from readers at the Yorkshire Post’s for almost an hour.
A smaller economy would naturally put the brakes on public spending, he told Andrew Latchmore, a partner in Leeds based corporate law firm Shulmans, who had asked him to prioritize investment in HS2 and HS3 if Britain leaves the EU.
Mr Cameron made a plea to readers to think “logically” about the consequences of lower tax revenues - which he claimed is the likely economic scenario if Britain votes to leave the EU as commercial services would abandon the UK.
He said: “Financial services account for seven percent of our economy. Two thirds of the jobs are outside London and financial services have a special advantage of the single market because if you’re located in one EU country you effectively have a passport to sell you services to all 27 others.
“If you come out of the single market, by definition those financial service companies, including those here in Leeds would have to think, “which other country inside Europe am I going to locate some of my staff to in order to get that passporting right?”
“That is why you have seen JP Morgan saying 4000 jobs would be lost, that’s why you’ve seen HSBC saying 1000 jobs would be lost.
“I make this point about commercial services because if you want to try to think logically about why we’ve had less tax revenue, it does seem to me that sector which generates a lot of tax revenue that we then spend on schools, hospitals, roads and HS2 - you can see how that sector would suffer.”