Analyse the possible impact(s) upon labour markets of the cancellation of part of Phase 2b of HS2 to Leeds.

The cancellation of the HS2 leg to Leeds could have significant negative impacts on labour markets in the North of England. One major impact would be on the construction industry. The project would have created thousands of construction jobs directly. The cancellation means these jobs will not materialise, leading to lower employment and income for construction workers in the region. This could increase the unemployment rate in areas like the North East, which already has the highest rate (5.6%) according to Figure 6. Secondly, there is a long-term impact on labour mobility and productivity. Improved transport links like HS2 can make it easier for people to commute to jobs in different cities, effectively creating a larger, more integrated labour market. This can lead to better matching of skills to jobs and increased productivity. By cancelling the link to Leeds, this potential benefit is lost. It may become harder for businesses in Leeds to attract talent from other regions, and for workers in Leeds to access opportunities elsewhere. This could reinforce the regional economic inequality shown in Figure 6, where median incomes in the North (£30,056 in NW, £28,444 in NE) are significantly lower than in London (£37,856). The lack of investment may discourage skilled workers from staying in or moving to the North, leading to a 'brain drain'.