THE future of the Coalition's high-speed rail project has been thrown into doubt after Ed Balls questioned whether it was wise to spend £50 billion on it.
Repeating the Labour line that it would not offer a "blank cheque" on HS2, the Shadow Chancellor told delegates in his keynote speech: "The question is - not just whether a new high-speed line is a good idea or a bad idea but whether it is the best way to spend £50bn for the future of our country."
John Longworth, Director General of the British Chambers of Commerce, said: "Labour must address worrying hints that they are starting to lose their nerve on investment projects, including HS2, in favour of current spending."
Later, a senior party source admitted the party leadership was a "toughening up" its language but stressed that, at present, it was still supportive of the high-speed London to Birmingham rail link.
The recent doubts about HS2's viability were sparked by Alistair Darling, the ex-Transport Secretary, who raised fears that spending so much money on the high-speed line could starve resources from the rest of the UK rail network.
Much of the cooling in Labour's ardour for the scheme stems from the UK Government's own rise, including contingencies, in the price of the scheme to £42.6bn with a further £7.5bn for the trains. One recent independent study put the eventual cost as high as £80bn while there have been reports that the Treasury is working on the cost being more than £70bn.
The first phase of HS2 - from London to Birmingham - will cut through Tory heartlands in beauty spots in the Chilterns and is due to be completed by 2026.
The second phase, taking the line north in a Y-shape to Manchester in the north west of England and to Leeds in the north east, would be completed in 2032/33. While there are no current plans to extend the project to Scotland, HS2 would cut by an hour the train journeys between Glasgow, Edinburgh and London.
l The Yes campaign's arguments for Scottish independence were "falling apart", Mr Balls claimed.
He told conference: "With Alex Salmond in a total state of confusion on the single most important economic decision a country can take - which currency to have - first he wanted the euro, saying sterling was a 'millstone around our neck' and now he wants independence but to keep the pound all the same."
The Shadow Chancellor added: "Let us win the argument that we are better together in next year's Scottish referendum."
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