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Cameron pledges HS2 'fightback'
David Cameron has pledged a "fightback" on HS2 after a barrage of criticism cast doubt on the flagship high-speed rail project's future.
The Prime Minister insisted there were "huge benefits" to the plans as the Government published a new study arguing it would drive growth in the regions.
The analysis by accountants KPMG suggests the economy could receive a £15 billion a year boost from the proposed link between London and cities in the Midlands and north of England.
Transport Secretary Patrick McLoughlin is stressing the importance of the increased capacity on the route, rather than merely the speed. He has also dismissed fears that the £42.6 billion budget could spiral out of control.
MPs on the Commons spending watchdog issued a scathing report on the scheme this week, warning that the apparent benefits were dwindling as the costs soared.
The case for the massive project was based on "fragile numbers, out-of-date data and assumptions which do not reflect real life" with no evidence that it would aid regional economies rather than sucking even more activity into London, according to the Public Accounts Committee report.
But Mr McLoughlin will point out that the KPMG research, commissioned by HS2 Ltd, estimates the Birmingham area's economy will be boosted by between 2.1% and 4.2%, there will be a 0.8% to 1.7% benefit to Manchester, 1.6% for Leeds and 0.5% for Greater London.
He will say: "It addresses that vital question: will HS2 create jobs and growth in the North and Midlands, where they are needed most? The answer is absolutely clear. Yes. High Speed Two will make Liverpool stronger. Manchester stronger. Leeds stronger. Britain stronger. A £15 billion annual boost to the economy. With the North and Midlands gaining at least double the benefit of the south."
The Exchequer could benefit from £5 billion a year in extra tax receipts as a result of the boost to the economy, KPMG said.
The Transport Secretary's speech forms part of a coordinated campaign announced by Mr Cameron to counter what he has called an "unholy alliance" of sceptics. Prominent critics have included Labour's Alistair Darling, who first approved the project as chancellor, former business secretary Peter Mandelson, and the Institute of Directors.