Labour revives Northern Powerhouse Rail project with pledge of £45bn funds

Labour revives Northern Powerhouse Rail project with pledge of £45bn funds

The government has committed to significantly improving the railway network across northern England, pledging up to £45 billion to develop Northern Powerhouse Rail (NPR) in a move aimed at addressing long-standing underinvestment. An initial allocation of just over £1 billion will fund the creation of a detailed three-phase strategy designed to enhance links between cities from Liverpool to Newcastle, addressing many priorities highlighted by northern regional leaders.

The first phase of NPR involves upgrading TransPennine routes, with plans to extend services to a new station in Bradford. Following this, the second stage will introduce a new rail line connecting Liverpool and Manchester through Manchester Airport and Warrington, partially following a previous high-speed rail proposal that had been scrapped. This connection has the potential to enable future links towards Birmingham. The third stage will focus on further improving rail services across the Pennines, enhancing connections between Manchester, Leeds, Bradford, Sheffield, and York. Construction is expected to begin in the 2030s and extend until around 2045. Meanwhile, any new lines linking Manchester and Birmingham are planned to start after the completion of NPR.

While the government has capped the total expenditure at £45 billion to avoid the kind of budget overruns that plagued HS2, local authorities and mayors might need to contribute additional funding to ensure the project’s delivery, similar to how London financed Crossrail. Possible sources for this local funding could involve business rates, tourism taxes, or borrowing against future income. Despite some uncertainties, northern mayors have generally supported the plans. However, Andy Burnham, the Greater Manchester mayor, remains concerned about the omission of an underground station at Manchester Piccadilly—a feature he argues is essential to increase capacity, allow through trains, and minimize disruption during construction. The estimated extra cost for an underground station is in the billions.

Political leaders have responded positively to the announcement. Keir Starmer described the investment as “proof we’re putting our money where our mouth is, working with local leaders to deliver the transport links that will help working people do what they need to in life.” Meanwhile, the prime minister acknowledged past failures with promises to the north, emphasizing a commitment to backing the region fully moving forward. Other regional officials, such as Liverpool’s mayor Steve Rotheram and the managing director of Manchester Airport, Ken O’Toole, welcomed the approach as a serious and strategic investment that could unlock economic growth. Yorkshire’s leaders also praised the plan, noting the new Bradford station and improved connections between key cities as major benefits. Additional development includes work to reopen the Leamside Line in County Durham, which has been closed since 1964.

Overall, the Northern Powerhouse Rail scheme is viewed as a transformative project that could unite northern cities into a cohesive economic area akin to London and the southeast, unlocking better job opportunities and housing. Yet, behind the scenes, the deal had faced tough negotiations, with some northern mayors initially hesitant. One mayoral source observed that after extensive discussions, a broadly acceptable plan emerged, marking progress from earlier concerns about limited ambitions and cost-cutting priorities. Henri Murison, chief executive of the Northern Powerhouse Partnership, summed up the potential, stating that the investment would create “a single labour market more like that of London and the south-east … The potential of the north will be unlocked, giving us better-paid jobs and new homes.”

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