Rishi Sunak faced a barrage of questions on Tuesday when he faced the media from the conference arena in Manchester. Getty Images
Rishi Sunak faced a barrage of questions on Tuesday when he faced the media from the conference arena in Manchester. Getty Images
Rishi Sunak faced a barrage of questions on Tuesday when he faced the media from the conference arena in Manchester. Getty Images
Rishi Sunak faced a barrage of questions on Tuesday when he faced the media from the conference arena in Manchester. Getty Images

HS2 cancellation takes centre stage at Conservative Party conference


Damien McElroy
  • English
  • Arabic

Britain's new Defence Secretary Grant Shapps has many issues to grapple with, from the war in Ukraine to aircraft carriers without fighter jets to defend them at sea.

Not even Mr Shapps was immune to the all-consuming issue of the $100 billion dilemma facing this week's Conservative Party conference: how to cut costs of the HS2 railway mega-project that has become a symbol of the ruling party's commitment to northern parts of England.

Taking the stage in a soundproof booth at a fringe event, Mr Shapps got into his stride by describing himself as an “enormously experienced” manager of large government departments delivering multibillion-pound budgets.

When it was pointed out that he was the transport secretary responsible for HS2 oversight for several years, Mr Shapps, who left that position last year, said he had closely monitored it but conceded the essential point about budget overruns. “It was under control when I was there,” he said.

Rishi Sunak faced a barrage of questions on Tuesday when he faced the media from the conference arena in Manchester. Like Mr Shapps, the Prime Minister was defiant in response to accusations that the high-speed line was a national disappointment.

He was also forced to deny the drip, drip reporting on his plans to cancel a leg of the building north of Birmingham to Manchester had consumed conference management over the weekend and ahead of his leader's speech on Wednesday. “No, I don't think that,” he said. “Actually we are having a great conference. The mood here is great.”

  • UK Prime Minister Rishi Sunak after delivering his keynote speech on the closing day of the UK Conservative Party Conference in Manchester on Wednesday. Bloomberg
    UK Prime Minister Rishi Sunak after delivering his keynote speech on the closing day of the UK Conservative Party Conference in Manchester on Wednesday. Bloomberg
  • Prime Minister Rishi Sunak and his wife Akshata Murty after his keynote speech at the Manchester Central convention complex. PA Wire
    Prime Minister Rishi Sunak and his wife Akshata Murty after his keynote speech at the Manchester Central convention complex. PA Wire
  • Mr Sunak during his address to the Conservative Party Conference. Getty Images
    Mr Sunak during his address to the Conservative Party Conference. Getty Images
  • Akshata Murty, the wife of the British Prime Minister, introduces her husband before his speech at the conference. EPA
    Akshata Murty, the wife of the British Prime Minister, introduces her husband before his speech at the conference. EPA
  • From left, Grant Shapps, Secretary of State for Defence, Home Secretary Suella Braverman and Foreign Secretary James Cleverly at the conference. Getty Images
    From left, Grant Shapps, Secretary of State for Defence, Home Secretary Suella Braverman and Foreign Secretary James Cleverly at the conference. Getty Images
  • Leader of the House of Commons Penny Mordaunt addresses the annual conference on Wednesday. PA Wire
    Leader of the House of Commons Penny Mordaunt addresses the annual conference on Wednesday. PA Wire
  • MP Andrea Leadsom, second left, on the final day of the Conservative Party Conference. Getty Images
    MP Andrea Leadsom, second left, on the final day of the Conservative Party Conference. Getty Images
  • Minister for Veterans' Affairs Johnny Mercer on the final day of the conference. Getty Images
    Minister for Veterans' Affairs Johnny Mercer on the final day of the conference. Getty Images
  • The scene before Mr Sunak's speech at the conference. Reuters
    The scene before Mr Sunak's speech at the conference. Reuters
  • Grant Shapps, Secretary of State for Defence, speaks to the media on the final day of the conference. Getty Images
    Grant Shapps, Secretary of State for Defence, speaks to the media on the final day of the conference. Getty Images
  • Former prime minister Theresa May on day three of the conference. Getty Images
    Former prime minister Theresa May on day three of the conference. Getty Images
  • Consultants and junior doctors from across the country hold a rally outside the Conservative Party conference. Getty Images
    Consultants and junior doctors from across the country hold a rally outside the Conservative Party conference. Getty Images
  • Chancellor Jeremy Hunt attends day three of the Conservative Party Conference. Bloomberg
    Chancellor Jeremy Hunt attends day three of the Conservative Party Conference. Bloomberg
  • Prime Minister Rishi Sunak during a meeting with his staff before his speech to the annual conference. PA
    Prime Minister Rishi Sunak during a meeting with his staff before his speech to the annual conference. PA
  • Britain's Secretary of State for Levelling Up, Housing and Communities Michael Gove at the conference. Getty Images
    Britain's Secretary of State for Levelling Up, Housing and Communities Michael Gove at the conference. Getty Images
  • Secretary of State for Science, Innovation and Technology Michelle Donelan gives her speech to the Conservative Party conference. Getty Images
    Secretary of State for Science, Innovation and Technology Michelle Donelan gives her speech to the Conservative Party conference. Getty Images
  • Health and Social Care Secretary Steve Barclay speaking at the Conservative Party conference in Manchester. PA
    Health and Social Care Secretary Steve Barclay speaking at the Conservative Party conference in Manchester. PA
  • Mr Sunak views a VR headset on the sidelines of the event. Reuters
    Mr Sunak views a VR headset on the sidelines of the event. Reuters
  • Mr Sunak pets a dog at the conference. Getty Images
    Mr Sunak pets a dog at the conference. Getty Images
  • Mr Sunak is addressing Tory members as leader of the party for the first time this year. Getty Images
    Mr Sunak is addressing Tory members as leader of the party for the first time this year. Getty Images
  • Mr Sunak tours the Exhibitor's Hall. Getty Images
    Mr Sunak tours the Exhibitor's Hall. Getty Images
  • Gillian Keegan, left, Secretary of State for Education talks at a Conservative Women's Organisation event on the sidelines. PA
    Gillian Keegan, left, Secretary of State for Education talks at a Conservative Women's Organisation event on the sidelines. PA
  • Conservative Party paraphernalia on display. PA
    Conservative Party paraphernalia on display. PA
  • Merchandise on sale at the party shop during the Conservative Party annual conference at Manchester Central. PA
    Merchandise on sale at the party shop during the Conservative Party annual conference at Manchester Central. PA
  • The conference at Manchester Central ends on Wednesday. EPA
    The conference at Manchester Central ends on Wednesday. EPA

What is troubling Mr Sunak is that cost of the mostly tunnel fast train service have leapt by tens of billions across a decade long set of estimates. The man who took over the Conservative leadership less than a year ago is believed to think he could raid some of that projected expenditure for spending elsewhere in northern England.

Escalating costs

So far for Mr Sunak, the issue is one of leadership and competence in managing the country's finances. “It's clear that the costs of this programme has escalated far beyond what anyone thought at the beginning,” he said. “I know there's lots of speculation on it, but what I would say is I'll approach this in the same way I approach everything in this job, I will take the time to look at it properly, get across the detail and then decide what's right for the country.”

“It's obviously not my money – it's taxpayers' money and we should make the right decisions on these things.”

Speaking Tuesday he made reference to his intervention to change the focus of net-zero policies last month, something that shifted the polls in the aftermath of the announcement. “I think that's what the country wants to see – people who make the right long-term decision, don't take the easy way out, don't chase the headlines,” he said. “And that's what I did with net zero.”

Channelling his political nickname “King of the North”, Labour's Greater Manchester mayor Andy Burnham has appeared on balconies overlooking the Manchester conference secure zone demanding a meeting with the Prime Minister on the HS2 decisions. “If they're about to pull the plug, that would just be a desperate act of a dying government with nowhere left to go,” he believes, saying promises of extra spending elsewhere cannot be credible. “You scrap HS2, you are scrapping the possibility of a new east-west line across the north of England any time soon. We will not accept vague commitments about improving east-west links – we really won't – because people here have waited far too long for a functional railway and we are not going to sell our own residents down the river.”

Andy Street, mayor of the West Midlands, at the UK Conservative Party conference in Manchester speaking about HS2. Bloomberg
Andy Street, mayor of the West Midlands, at the UK Conservative Party conference in Manchester speaking about HS2. Bloomberg

Others have talked about the potential damage to national prestige in the about turn.

“It is madness to leave what was meant to be the UK's flagship infrastructure project like this,” said Henri Murison, a government appointee as chief executive of the Northern Powerhouse Partnership. “Unless we can protect the hybrid bill, which is currently going through parliament and which authorises the tunnel between Manchester and Manchester airport, this means the end for Northern Powerhouse Rail and levelling up as a whole is finished.”

Even Conservatives are hostile to the idea that the line could now finish in the country's second city Birmingham, possibly not even with a central London terminus at Euston. The Conservative mayor of the West Midlands region Andy Street has pleaded with Mr Sunak not to cancel the link between Birmingham and Manchester.

“You will be turning your back on an opportunity to level up – a once-in-a-generation opportunity,” he said in rain drenched doorstep at the conference. “You will indeed be damaging your international reputation as a place to invest.”

Bundesliga fixtures

Saturday, May 16 (kick-offs UAE time)

Borussia Dortmund v Schalke (4.30pm) 

RB Leipzig v Freiburg (4.30pm) 

Hoffenheim v Hertha Berlin (4.30pm) 

Fortuna Dusseldorf v Paderborn  (4.30pm) 

Augsburg v Wolfsburg (4.30pm) 

Eintracht Frankfurt v Borussia Monchengladbach (7.30pm)

Sunday, May 17

Cologne v Mainz (4.30pm),

Union Berlin v Bayern Munich (7pm)

Monday, May 18

Werder Bremen v Bayer Leverkusen (9.30pm)

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

Company%20profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Letswork%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202018%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3EFounders%3A%20%3C%2Fstrong%3EOmar%20Almheiri%2C%20Hamza%20Khan%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20co-working%20spaces%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20%242.1%20million%20in%20a%20seed%20round%20with%20investors%20including%20500%20Global%2C%20The%20Space%2C%20DTEC%20Ventures%20and%20other%20angel%20investors%3Cbr%3E%3Cstrong%3ENumber%20of%20employees%3A%3C%2Fstrong%3E%20about%2020%3C%2Fp%3E%0A
Ain Dubai in numbers

126: The length in metres of the legs supporting the structure

1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch

16 A380 Airbuses: The equivalent weight of the wheel rim.

9,000 tonnes: The amount of steel used to construct the project.

5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place

192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.

COMPANY PROFILE
Name: ARDH Collective
Based: Dubai
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Sector: Sustainability
Total funding: Self funded
Number of employees: 4
Moonfall

Director: Rolan Emmerich

Stars: Patrick Wilson, Halle Berry

Rating: 3/5

Updated: October 03, 2023, 10:46 AM