Rishi Sunak announced a new 'Network North' to replace the Manchester leg of HS2
In its place, Mr Sunak proposed a new 'Network North' which he said would bring a wide array of benefits for transport in the North of England.
Speaking in his landmark speech at the Conservative Party conference, the prime minister said: "The facts have changed and the right thing to do when the facts change is to change direction.
"I am ending this long running saga. In its place, we will reinvest every single penny."
He told the packed hall at Manchester Central, where the annual Conservative Party conference has been taking place since Sunday 1 October, that HS2 was the "ultimate example of the old consensus".
He said: "It was said the only link that mattered were North to South and not East to West.
"HS2 is the ultimate example of the old consensus.
"The result is a project whose costs have more than doubled and has been repeatedly delayed.
"The economic case has been massively weakened with the changes business travel post Covid."
In the speech the prime minister announced the £36 billion, believed to be saved from scrapping HS2, would be reinvested in hundreds of new transport projects in the North and the Midlands.
"Every region outside London will receive the same or more investment than they would have done with HS2 with quicker results," he said.
"There is nothing ambitious about pouring more and more money into the wrong project."
He continued: "For too long people in Westminster have invested in the transport they want, not the transport the rest of the country - particularly the North and the Midlands - wants and needs.
“And to those who disagree, who will focus on what I have stopped, I ask you to consider what we have just created with Network North.
“An alternative which in place of one delayed and overrunning project will now begin hundreds upon hundreds of new projects, large and small, road and rail, bus and train covering the whole country that will be delivered faster, that will see every region receiving more investment than they would have done.
“You can’t have both, so those who wish to disagree with me, I respect that. But they should have the honesty to admit that they would now be cancelling the hundreds of alternative projects right across the country that people will benefit from instead."
Mr Sunak said passengers would be able to get from Manchester to a new station in Bradford in 30 minutes.
He added he would protect a £12 billion to link Manchester and Liverpool and would consult with local leaders on how to do it.
He also pledged to resurface roads around the country and upgrade the energy coastline between Carlisle, Workington and Barrow.
He also promised to keep the £2 bus fare across the country.
The prime minister added: "I challenge anyone to tell me with a straight face that all of that isn't what the North really needs.
"Our plan will drive far more growth and opportunity here in the North than a faster train route to London ever would."
He confirmed that HS2 trains will still run from Euston to Birmingham and journey times would be cut by 30 minutes.
Mr Sunak pledged for faster and quicker trains with more capacity between Birmingham and Manchester.
He said that a new Euston development zone will be created to build new homes and deliver a station with the capacity needed.
The £6.5 billion saved from the Euston site is to be given to the rest of the country.
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