Chancellor Rachel Reeves has confirmed the government will fund HS2 tunnelling into Euston station as she made her  Budget announcement today.

The move will ensure HS2 runs into the centre of London rather than ending at Old Oak Common in west London.

The news came as part of a series of transport-related announcements.

The chancellor said: “We are securing delivery of the project between Old Oak Common and Birmingham and we are committing the funding required to begin tunnelling work to London Euston Station.

“This will catalyse private investment into the local area delivering jobs and growth.”

She said investment at Euston will be further supported through the appointment of Bek Seeley to chair the Euston Housing Delivery Group, to drive forward an ambitious housing and regeneration initiative for the local area.

Last week action to control the cost of HS2 and bring the project back on track was announced by the transport secretary.

Louise Haigh said the extent of the challenge inherited on HS2 had become clear, with costs being allowed to spiral out of control and failure to deliver to budget.

News of funding to commence tunnelling to Euston has been welcomed by industry.

Alex Vaughan, CEO at Costain, said: “This is positive news that gives certainty and clarity for the UK’s largest and most complex infrastructure programme.

“Having the HS2 railway connected to Euston, in the heart of London, will be vital for the programme to deliver its many benefits, and will act as a catalyst for the regeneration of the Euston area.

“Shaping, creating and delivering complex, transformative infrastructure demands effective planning, clear decision-making, and collaboration between the industry, government and regulators.

“The UK needs to reset its relationship with infrastructure by committing to a 10 or 20-year plan overseen by a dedicated Minister for Infrastructure.

“This will enable essential infrastructure to be delivered more productively, whilst providing consistency and continuity of demand for investors and the supply chain.”

A spokesperson for the High Speed Rail Group added: “Rail investment is far more than a short-term cost: it is a driver of national growth and regional connectivity.

“Today’s approval to complete HS2’s critical link from Old Oak Common to Euston marks a pivotal step forward.

“We hope that an era of fragmented, short-term decision making has been ended, in favour of a move towards a cohesive vision for the future of UK rail.

"However, we cannot stop here. To fully realise the socio-economic benefits of this project, it is critical that Phase 1 is properly connected north of Birmingham to Crewe and beyond.

"Taking a long-term, integrated approach to rail delivery going forward will enable HS2 and the broader network to fuel the UK’s economy and enhance productivity for generations to come.

“For the first time in some years, this Budget sees that future get one step nearer rather than further away."

The announcement came as part of a series of commitments to transport infrastructure including delivery of the Transpennine Route Upgrade between York and Manchester, via Leeds and Huddersfield and East West Rail which will connect Oxford, Milton Keynes and Cambridge and unlock land for housing and laboratories, supporting the wider Cambridge life sciences cluster.

Reeves also announced funding for "significant improvements to our road network", which includes a £500m increase in road maintenance budgets next year.

This brings the total amount dedicated to fixing the roads in England over the next year to nearly £1.6bn.