The government’s HS2 rail project has been dubbed a “grand folly” by the Institute of Directors.
The much-criticised £42.6 billion scheme suffered a further blow as the majority of IOD members said it was a waste of money.
The survey of the IOD’s 38,000 members found that only 27 per cent felt HS2 represented good value for money while 70 per cent said the project would not help their businesses.
IOD director general Simon Walker said: “Businesses know value for money when they see it, and our research shows that they don't see it in the government's case for HS2.
“Some of the specific claims that the government has used to support its economic case for the project have been challenged by our members, who by and large do not feel that their business will benefit.”
The high-speed rail line will initially link London and Birmingham from 2026 followed by two spurs to Manchester and Leeds which are scheduled to open in 2032.
Walker said that the money set aside for HS2 should instead be spent on investing in other parts of the UK’s rail infrastructure.
“Investment in the West and East Coast main lines combined with a variety of other infrastructure projects would be a far more sensible option,” he added.
“It is time for the government to look at a thousand smaller projects instead of falling for one grand folly.”
HS2 Ltd chief executive Alison Munro defended the project and said it would “bring about a transformational change to the economic geography of our country through creating thousands of jobs and opportunities for regeneration in and around our core cities”.
“While smaller schemes may have higher benefit cost ratios, by their very nature they only make small improvements to capacity and often just move the bottleneck elsewhere on the network,” she said.
“Passenger numbers are continuing to grow on our main north/south rail arteries and the time when we reach capacity crunch is fast approaching.”
Transport minister Patrick McLoughlin last week dismissed claims in an Institute of Economic Affairs’ report that HS2 could cost up to £80 billion.