The Chancellor has announced the start of the bidding process for phase one of the High Speed 2 (HS2) rail mega construction project to general approval from both business groups and trade unions.
At least seven new contracts will be opened up to companies, with a total combined value of £11.8 billion.
Noting that Britain's ageing infrastructure is in desperate need of investment, John Longworth, Director General of the British Chambers of Commerce (BCC), said: "The contracts will be welcome news to firms seeking to become involved with the project and will provide a boost to the economy, but it is also important to ensure that as much of the work as possible is completed by UK contractors and that the benefits of the scheme are felt right across the regions it spans."
In China when he made the announcement, Chancellor George Osborne said that a new "HS2 partnering day" would offer the chance to British and Chinese firms to explore co-operating on bids for contracts.
He said that HS2 forms a major part of the Government’s plan to rebalance the UK economy and build a Northern Powerhouse by providing high speed rail services from London to the Midlands, and the North.
TUC General Secretary Frances O’Grady agreed that HS2 has a key role to play in boosting the construction and rail engineering sectors, narrowing the north-south divide and speeding the UK's economic recovery.
She called for it to be built in a way that maximises high-skill jobs and apprenticeships.
Terry Scuoler, Chief Executive of EEF, the manufacturers’ organisation, also welcomed the decision to start the bidding process, describing it as a welcome boost to manufacturers.
He too warned that British businesses must be at the heart of delivering this important and high profile project at every stage.