Boris Johnson has given HS2 the go-ahead, claiming his Government had the “guts to take the decision” to deliver prosperity across the country.
The Prime Minister acknowledged that “cost forecasts have exploded” and criticised the company responsible for developing the high-speed railway.
“I cannot say that HS2 Ltd has distinguished itself in the handling of local communities,” he told the Commons.
But he insisted that “poor management to date has not detracted from the fundamental value of the project”.
He announced that HS2 Ltd can “focus solely” on building the railway between London and Crewe, while “new delivery arrangements” will be created by the Government for the Phase 2b stretches from Crewe to Manchester, and Birmingham to Leeds.
Mr Johnson added that the Government will “look at how we can best design and integrate rail investments across the North including Northern Powerhouse Rail between Leeds and Manchester”.
Labour leader Jeremy Corbyn warned that Mr Johnson “promised so much in the general election” to people in the Midlands and the North, but they will be “sorely disappointed when they see what actually happens”.
He claimed the Government has “proved itself unable to manage infrastructure projects properly and incapable of keeping a lid on the cost”.
The Confederation of British Industry welcomed the decision with chief UK policy director Matthew Fell saying it was “exactly the sort of bold, decisive action required to inject confidence in the economy”.
But Greenpeace UK executive director John Sauven said Mr Johnson’s decision would give him the “dubious honour of being this century’s largest destroyer of ancient woodlands in the UK”.
The decision has caused splits in the Conservative Party over cost and environmental concerns.
HS2 critic and Lichfield MP Michael Fabricant warned the railway will cause “immense” damage to the countryside.
Tory MP Andrew Bridgen for North West Leicestershire told the chamber HS2 is “unloved, unwanted and has been grossly mismanaged”.
The Prime Minister’s announcement follows the completion of a Government-commissioned review by former HS2 Ltd chairman Douglas Oakervee into whether or not the programme should be scrapped.
The Oakervee Review recommended that ministers should proceed with the project, but warned that the final bill could reach £106 billion at 2019 prices, compared with a budget of £62.4 billion.
Phase 1 between London and Birmingham was due to open in December 2026, but HS2 Ltd chairman Allan Cook said last year it would be “prudent to plan for an opening between 2028 and 2031”.
The Prime Minister told MPs that to avoid “further blowouts” in HS2’s cost or schedule, a series of measures will be taken to “restore discipline”.
This will include appointing a minister whose full-time job will be to oversee the project, and changes to the way HS2 is managed.
Mr Johnson also announced a five-year £5 billion cash injection to boost bus and cycle links in English regions outside London.
He said the country is being “held back by our inadequate infrastructure” and pledged to create a “transport revolution”.
Mr Corbyn responded by accusing the Government of being unwilling to make the investment needed to revive parts of the country “decimated by successive Conservative governments”.
The Labour leader also claimed the Prime Minister is fond of announcing “big shiny projects”, such as exploring the possibility of a bridge between Scotland and Northern Ireland, joking: “Why not go the whole hog and make it a garden bridge connected to an airport on the sea?”
When he was mayor of London, Mr Johnson proposed the building of a pedestrianised bridge covered with trees and flowers, and an airport in the Thames Estuary which opponents referred to as “Boris Island”. Neither scheme went ahead.