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Scrapping HS2 will damage trust in Britain, warn US buyers of Birmingham City

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Rishi Sunak has been warned by the new US owners of Birmingham City football club, in which NFL superstar Tom Brady has a minority stake, that he will damage trust in Britain if he aborts the HS2 high-speed rail project.

Tom Wagner, the club’s chair, wrote to the prime minister to warn that truncating HS2 would hurt Birmingham’s economy and shake investor confidence in government promises.

“The expectation is that the government will honour its commitment to deliver on publicly stated long-term plans,” Wagner said in a letter seen by the Financial Times.

“Any deviation could result in a loss of investor trust and this would have a considerable negative impact on the UK. The ambitious HS2 project falls into this category.”

Wagner joins a chorus of business and political criticism after government officials confirmed Sunak is considering axing the HS2 route from Birmingham to Manchester and terminating the southern section at Old Oak Common, a London suburb.

Wagner cited the planned HS2 route to Birmingham as a key factor in the decision by US hedge fund Knighthead Capital Management, where he is managing member, to invest in the football club.

He argued fast rail connections to Birmingham are a vital part of his plan to turn the second-tier football club into a major force in the game. Brady’s involvement has generated massive global interest.

Earlier this year the hedge fund took day-to-day control of Birmingham City after buying a 46 per cent share of the club and making a full purchase of its 29,000-seater stadium.

Brady, who retired from playing this year, is the most successful quarterback in NFL history. He took a minority stake in the club and became chair of its advisory board.

A Downing Street spokesperson on Monday did not deny that Sunak is close to axing the Birmingham-Manchester phase of HS2, after chancellor Jeremy Hunt said costs on the project are “totally out of control”.

The prime minister is expected to reassign HS2 spending to a package of other transport improvements including better bus services, light rail and tram schemes as well as an improved “Northern Powerhouse Rail” east-west scheme from Manchester to Leeds.

In the meantime Sunak is under mounting pressure to relent, with politicians such as George Osborne, former chancellor, and Michael Heseltine, former deputy prime minister, saying that truncating the project would “become an international symbol of our decline”.

Business leaders have also mobilised. “Once again the north has been promised the earth but all it seems we’ll get is scorched earth,” said Chris Fletcher, policy director at the Greater Manchester Chamber of Commerce.

One person close to the management of Birmingham airport said: “It’s very short-sighted to chop off the Manchester end. In 50 or 60 years’ time, people will not remember the overspend, they will remember what this government did to give them and future generations opportunities.”

Melanie Smith, chief executive of the NEC Group, the events business that owns the National Exhibition Centre in Birmingham, said: “This is a once-in-a-generation opportunity to drive economic growth and prosperity for the country and we need to maximise its potential.”

Defence secretary Grant Shapps on Sunday defended plans to change “the sequencing of that expenditure”, raising speculation that the northern leg of the project could be delayed rather than killed.

Grant Shapps on Sunday defended plans to change ‘the sequencing of that expenditure’ © Jeff Overs/BBC/PA

But one official said: “The prime minister is making a virtue of making decisions, that suggests it won’t just be another fudge.”

The looming decision is awkward given that Sunak is hosting his Conservative party’s conference in Manchester this weekend. Downing Street declined to say if he would travel to the event by train.

Sunak, interviewed by broadcasters on Monday, said he was still “committed to levelling up” despite the speculation hanging over Britain’s biggest single levelling-up scheme.

“Transport infrastructure is a key part of that, but not just big rail projects, but also local projects, improving local bus services, fixing pot holes, all of these things make a difference in people’s day-to-day lives,” he said. 

The announcement on the fate of HS2 was not due until the autumn but officials and ministers have moved to finesse the details in the past two weeks since a long-lens photographer spotted a civil servant holding a secret HS2 cuts document.

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