More than 1,300 jobs will be forfeited if a planned high speed rail depot is built on historic industrial land in east Birmingham, ministers have admitted.

Transport Minister Robert Goodwill told MPs the Government believed 3,700 jobs could be created if Birmingham City Council's plans to build a major business park on 40 acres of land at Washwood Heath went ahead.

But he insisted the land must instead be used as a depot for High Speed Two (HS2), the planned new rail line from London to Birmingham and the north, even though this would lead to just 2,340 jobs.

While the Government's figures are lower than the estimates drawn up by Birmingham's MPs, who believe a business park could create 7,000 jobs, it is the first time ministers have publicly admitted the rail scheme could cost hundreds of jobs.

Mr Goodwill said the Washwood Heath scheme had to be seen in the context of the HS2 project as a whole which would create up to 20,000 jobs in the West Midlands.

He was speaking as city MPs continued their campaign to force HS2 Ltd, the company formed by the Government to build the £50 billion rail line, to rethink one of the most controversial aspects of the project.

The battle focuses on the future of land which has been used for manufacturing since the Victorian age and once housed firms such as train manufacturers Metro Cammell and van-makers LDV, employing 4,000 people between them.

Today, it is largely derelict but Birmingham City Council, backed by MPs, has drawn up plans to improve road links to the site and turn it once again into a centre for business and industry, creating an estimated 5,000 to 7,000 jobs.

The council's plans have been blocked by HS2 Ltd, which says it needs the land for a marshalling yard where trains will be serviced as well as the national control centre for the HS2 network.

As a result, MPs, the local authority and bodies such as passenger transport authority Centro are campaigning against HS2's proposals although they also back the principle of building a new line.

Mr Goodwill told the Commons he did not accept the claim up to 7,000 jobs could be created on the site but added: "Our consultants estimate that a figure of 3,700 jobs is more likely."

Reminded by MPs that this was still far higher than the number of jobs created by the Government's plans, he said: "Indeed. We have been absolutely honest about this. The density of employment in the yard, under the proposals, is not as high as the density under high-value engineering or even warehousing or other uses for the site.

"However, the advantages to the West Midlands as a whole from this project will bring jobs to the area."

Mr Goodwill said 640 jobs would be created by the HS2 depot while between 870 and 1,700 jobs could be created on the land left over.

"That is 2,340 jobs on the site. Real jobs are being created through this project, not aspirational jobs, which would be great to have, but in some cases could be pie in the sky."

An artist's impression of Paternoster Place, from the Birmingham Curzon HS2 Masterplan
 

He said HS2 Ltd had considered other possible sites for the depot, which are believed to include land near Middleton, Warwickshire, but concluded that the Washwood Heath site was the best option.

"Those considerations include the need for trains to slow down as they approach the depot, which means it is operationally better for the depot to be on a slow section of the route.

"Washwood Heath is also close to Curzon Street station where trains will start their journey.

"If the depot were located on a section of the route where trains do not start their journey, the train running costs would be increased."

The minister was responding to Birmingham MP Liam Byrne (Lab Hodge Hill) who has been leading calls for a rethink.

Mr Byrne said: "I know that High Speed 2 needs a marshalling yard. We are supporters of High Speed 2 and we want it to be a success. We want it to happen fast."

But he added: "Unless the plans change, we are confronting the most grim of scenarios, because we are set to lose not only the great prizes that I think are there for the taking, but hundreds of job in the short term.

"As the minister knows, the site is not completely empty. It is home to the great Business Post, to Cemex, which makes most of the railway sleepers that our country needs, and to other great businesses, such as Taroni's.

"In fact, by my calculations, there are some 850 jobs on the site today but those businesses are closing. They are increasingly frustrated and they are haggling and arguing with a normally non-communicative HS2, because they now have to close down, so we will lose 850 jobs in the worst unemployment hot spot in the country during the next couple of years."

He was backed by MP Jack Dromey (Lab, Erdington), who said: "Would it not be bizarre if something designed to develop and create jobs actually causes the sacking of workers currently in a job and the denial of opportunities on a grand scale?"

And Khalid Mahmood (Lab, Perry Barr) said: "It is important that we create jobs in Birmingham.

"It has been forgotten for too long nationally. Other cities have prospered that, with all due respect, do not have the facilities and skills that Birmingham has had traditionally."

MPs considering petitions from organisations and residents demanding changes to the HS2 scheme will come to Birmingham in July for two days of talks with Birmingham City Council and Centro.

Both bodies are pushing for HS2 Ltd, the company set up by the Government to oversee construction of the line, to improve proposals for stations at Curzon Street, in the city centre and in Solihull near Birmingham Airport and the NEC.

Construction of the first phase of the line, from London to Birmingham, is to begin in 2017 and the first high speed trains could be running by 2026.

The Birmingham Post has launched a free app for iPad and iPhone. Download it here.