Rachel Reeves will finally unveil plans for new rail lines and upgrades between major Northern cities on Wednesday, but will commit just £1.1bn in concrete funding and will refuse to give a start date for the project.
The Chancellor will also set out an intention to build a new link between Birmingham and Manchester after the cancellation of HS2 North, but only after improved rail connectivity is delivered across the North in the 2030s.
The announcement of the Northern Powerhouse Rail (NPR) scheme ends months of delays, and is expected to be given a firm backing by regional mayors, including Greater Manchester Mayor Andy Burnham, who was understood to have reservations about the details of the scheme.
According to officials, the overall project will have a funding “cap” of £45bn in 2025 prices, which will rise in line with inflation. The initial £1.1bn set out in the current spending review will cover planning, development and design work for the project.
Officials added that the scheme also had no overall start and completion date, as ministers want to avoid another HS2 by setting deadlines that are unlikely to be met. The full details of the plans have also yet to be hammered out with local leaders.
Under the plans, the rail scheme will be delivered in three phases, with the first focusing on upgrades to existing rail lines in West Yorkshire, including the electrification of links and improved services between Sheffield and Leeds, Leeds and York, and Leeds and Bradford.
It is understood that this work could be started during this parliament. The second phase, due to commence in the 2030s, will include a new route between Liverpool and Manchester, running via Manchester Airport and Warrington, while the third phase will seek to improve connections across the Pennines between Manchester, Leeds, Bradford, Sheffield and York.
The Chancellor will commit just £1.1bn in concrete funding for NPRReeves has earmarked the north as a major potential growth area for the UK, and believes improving connectivity between some of the fastest growing cities in the country would deliver a significant economic boost to the country.
Government officials described the North of England as an “untapped gold reserve that we haven’t yet used”, claiming that £40bn a year extra could be raised for the Exchequer if productivity in the North was lifted to the national average.
“If economic growth is the challenge, investment and renewal are the solution. That’s why we’re reversing years of chronic underinvestment in the North,” the Chancellor said in a statement.
The proposal has received backing from Labour’s northern mayors, including Andy Burnham, who said it shows the government has “an ambitious vision for the North”.
Government and northern mayoral sources have said they expect senior Labour figures to put on a united front and it is unlikely there will be any “fireworks” in terms of public criticism of what has been put forward.
But there will be close eyes on whether Burnham is fully satisfied with all aspects of the plan, as it stands.
The Greater Manchester mayor has long called for a new line between Birmingham and Manchester to replace the section of HS2 which was axed by Rishi Sunak’s government.
Experts say the West Coast Mainline will soon reach capacity and Burnham has previously said there must be improvements by 2034.
The Government says its “intention” is to build a new line “in the long term” – although this will not be until after NPR is fully completed, which looks likely to be in the 2040s.
A Labour MP described this as a “major” shift in policy which the party can point to as a “dividing line” in terms of commitment to northern infrastructure, but admitted “questions will inevitably be asked about deliverability”.
Experts and union figures warned the rail improvement plan was “desperately short on delivery detail” and that the Government would need to move at pace to get “spades in the ground”.
Regions will need to raise revenue to fund NPR
Burnham and his counterpart in Liverpool, Steve Rotheram, have secured a commitment for a new line between their two cities, although many significant details are still to be decided.
They include whether Manchester Piccadilly will get the new underground station that Burnham and other local leaders have long campaigned for.
The Government says it will now work with mayoral authorities to come to an agreement on how best to deliver station improvements, including looking at whether they can make their own local contributions.
Officials suggested local regions would be able to raise revenue for additional aspects of the project, such as a new underground station at Manchester Piccadilly, by borrowing against future projected revenues, such as business rates, while money raised from the incoming “tourist tax” could also help fund add-ons.
“We’ll now work at pace to prove the case for an underground station and work up detailed designs for the route between Liverpool and Manchester,” Burnham said.
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‘Long on aspiration, short on delivery details’
Zoe Billingham, director of the Institute for Public Policy Research (IPPR) thinktank, said: “Over the past decade, the North has been shortchanged in its transport investment; IPPR North research shows the region is owed a debt of £140 billion since 2009/10. It’s good to see a £45bn commitment to Northern Powerhouse Rail, but so far only £1.1bn is guaranteed.
“Now the government need to get moving and get those spades in the ground quickly; only then will the public place their trust in this critical project.”
According to some estimates, the official £80bn estimated cost of the high-speed rail link HS2 works out at around £400m per kilometre, meaning the £1.1bn set aside for NPR would buy around 3km of track. Or about £570m per mile, working out at just under 2 miles of NPR track.
General Secretary of the Transport Salaried Staffs’ Association (TSSA) union Maryam Eslamdoust said: “This announcement seems to be long on aspiration but desperately short on delivery details.
“The fact remains that following nearly 15 years of Conservative austerity, rail workers and millions of passengers have heard too many promises about transforming northern rail, only to see projects delayed, diluted or dropped.
“It’s vital the Government acts at pace to deliver these plans and signal a break with the austerity of the past… If not, this risks becoming another press release instead of a plan, with delays, exclusions and public trust once again paying the price.”
Conservative rail minister Jerome Mayhew said: “Labour have spent months talking up Northern Powerhouse Rail, yet today they’ve put back any plans to actually deliver it and rewritten timetables on the fly.”
Meanwhile, former Conservative Rail Minister and chair of the Liverpool to Manchester railway partnership, Huw Merriman, said: “This is superb news for the North and for the entire country.”
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