The Economic Affairs Committee of the House of Lords has recommended capping speeds and stopping trains at London terminus Old Oak Common rather than Euston to control the cost of the High Speed 2 (HS2) rail project.

The House of Lords has also warned that failing to rein the expenses will derail the expectation of a better northern rail connection.

The latest report, which comes four years after an earlier report that was also submitted by Lords Economic Affairs Committee in March 2015, has also criticised the government for not giving satisfactory answers of the issues raised in the previous report.

Economic Affairs Committee chairman Lord Forsyth said: “Commuter services in the north of England are badly overcrowded and reliant on ageing trains. Rail connections between northern cities are poor.

“As the Committee suggested in its 2015 report, rail infrastructure in the north should be the government’s priority for investment, rather than improving north-south links which are already good.

“The north is being short-changed by the government’s present plans, especially as construction on HS2 is starting in the south. Any overcrowding relief from HS2 will mainly benefit London commuters.”

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Lord Forsyth further said that the project is not likely to be completed within the government’s allocated budget of £56bn.

Forsyth concluded: “Hence, the plans for Northern Powerhouse Rail should be combined with the plans for the northern section of HS2, and funding for the project ringfenced. It will provide rail investment in the north to be prioritised where it is most needed.”

“The north is being short-changed by the government’s present plans, especially as construction on HS2 is starting.”

The first phase of HS2 between London and Birmingham is scheduled to be concluded by 2026. By 2033, the government plans to extend the high-speed railway to Manchester and Leeds.

HS2 is expected to provide extra rail capacity, boost connectivity and deliver economic benefits of approximately £92bn for people and businesses across the north.