The HS2 rail link IS going happen says George Osborne: Chancellor says he is 'passionate' about controversial project Network will be constructed from 2017 and is designed to run services from London to Leeds Alistair Darling warned the 'highly contentious project' is turning into a 'disaster' Chancellor George Osborne said the rail project could solve England's North South divide Costs for high speed network have reached almost £50billion By Gerri Peev, Political Correspondent Support: Chancellor George Osborne said he is 'passionate' about HS2 and thinks it could heal England's North/South divide George Osborne has vowed the controversial High Speed 2 rail project will go ahead despite fears over soaring costs. The Chancellor said he was "passionate" about the planned high-speed rail line which will link London to the North of England and West Midlands. Costs of HS2 have hit nearly £50billion, including £7.5billion for rolling stock and £42.6billion for the infrastructure, which was up from the original estimates of £30billion in 2010. Business leaders -including the Institute of Directors - have branded it a "grand folly," while Alistair Darling, the former Labour chancellor who backed the project in its early stages, has warned it is turning into a "nightmare" and that its perceived benefits were "highly contentious." HS2 is set to be constructed from 2017, and run 225mph trains from London to Birmingham by 2026 and on to Manchester and Leeds by 2032-3. But it has managed to provoke the ire of backbench Tories and residents along its proposed route, which also cuts through the Chilterns, an area of outstanding natural beauty. However, a defiant Mr Osborne said the rail project will heal the north/south divide. "I'm passionate about this project because time and again, we have this debate in our country about how we're going to bring the gap between north and south together, about how we're going to make sure that our growth is not just based on the City of London," he told the BBC's Andrew Marr Show. High Speed 2 is about changing the economic geography of this country, making sure the North and the Midlands benefit from the recovery as well. Asked whether he would withdraw his support if costs hit £70billion or £90billion, he said: "We have set the budget for £42bn for the construction costs. That includes, by the way, a big contingency. He denied that costs were out of control and said HS2 could even come in under budget. As we demonstrated with the Olympic Games, we can deliver these big projects actually under budget. Mr Osborne also defended his controversial "help to buy" house buying scheme to help cash-strapped people onto the property ladder. The scheme allows people to borrow part of their deposit from the government at cheap interest rates, and allows families to buy homes in England with a deposit of just five per cent. But critics have warned the scheme would fuel the housing bubble and make property even less affordable for future generations. Long term benefits: HS2 is set to be constructed from 2017, and run 225mph trains from London to Birmingham by 2026 and on to Manchester and Leeds by 2032-3 Adam Smith Institute director, Sam Bowman said: "It is crazy for the government to stoke demand even more without addressing supply and claim that this will help the housing market. Making taxpayer-subsidised handouts to homebuyers will only drive further house prices up, risking a bubble, improving access for a select few but making housing even more unaffordable for most people. The right-of-centre think tank will tomorrow publish a review of the scheme called Burning Down the House in which it will argue for planning laws to be liberalised to help developers build more homes. Mr Osborne denied that his home buying scheme risked fuelling prices, saying too much of the media and political debate was focused on what happened in London. Outside the centre of London, actually there's not some housing boom or some dramatic increase in house prices. 'There are many, many thousands of families watching this programme who can't begin to afford the mortgage deposits that are required to buy a home. Former Labour Chancellor said the project has turned into a 'nightmare' and Labour's shadow chief secretary to the Treasury Rachel Reeves (right) said George Osborne's mantra 'We're in this together' isn't true as house prices continue to soar 'They aspire to own their own home, that's a noble aspiration and I want to help them. He dismissed claims that the recovery would be limited to house prices, saying it was "quite broadly based." Of course it's in its early stages and although things are looking up, we mustn't let up. We've got to absolutely go on doing the things necessary to fix what went wrong in our economy and this government's got an economic plan to do that. Rachel Reeves, Labour's shadow chief secretary to the Treasury said: "George Osborne claims we are all in this together, but for ordinary people life is getting harder. Working people are worse off as prices continue rising faster than wages, yet millionaires have been given a huge tax cut. As the Governor of the Bank of England has warned this is the slowest recovery on record, with almost one million young people out of work. She said Labour would bring in a new 10p lower rate of tax and invest more in infrastructure and building new homes.