I am Jen Williams, the FT’s northern correspondent, filling in for Pete as he follows the global fallout from “liberation day”.
Last time I covered this newsletter, I looked at the new government’s lack of a coherent approach to economic development outside of the south east.
This week I thought I would zoom in a little closer, via the economic brake that is the north’s chronic rail problems — and the noisy Labour mayoral jostling that is now filling the national policy vacuum.
The long shadow of HS2
Readers will remember the political theatre of Rishi Sunak cancelling HS2 to Manchester at the 2023 Tory party conference (in Manchester). They may also recollect Network North, the jumble of local rail upgrades proposed in lieu of it, which appeared to have been drawn up on a conference hotel napkin. As many noted at the time, it was not a network, and much of it was not in the north.
That never seemed much of a serious proposition. A new Labour government now instead talks, in general terms, about better “east-west” connectivity across northern England.
However as June’s spending review draws closer, there is no clear sense of what that means either, after years of previous upgrades being unveiled and cancelled, or stalling because other things were cancelled.
The one big project being built — the Transpennine Route Upgrade, a huge and desperately needed set of electrification and other improvement works between Manchester, Leeds and York — has been under way for two years. TRU had been on its own lengthy journey, having variously been “announced” by Conservative ministers in 2011, 2012, 2014, 2018, 2021 and 2022 before finally getting going.
We can now add to that 2024 and 2025. After the October Budget, the chancellor Rachel Reeves visited Stalybridge station to announce it again.
Last week then saw Sir Keir Starmer visit Huddersfield, after the Spring Statement, to unveil £415mn for the Leeds-to-York phase. As one northern official noted when I enquired about it, the project would basically stop if that money was not released, so that wasn’t new either.
Now, all governments do this with transport policy. The first question to ask is always “is this new money?” And very often, the answer is basically no.
More striking is the reason TRU is currently being leaned on so heavily: so far, there is nothing much else in the offing to point at.
This is the consequence of several factors, besides Labour not coming into government with its own plan.
On a policy level, a key issue is the vacuum left by HS2 — not just by the Sunak cancellation in 2023, but by the eastern leg’s cancellation under Boris Johnson, in 2021.
These two decisions have left the future of rail infrastructure across much of north-west England and Yorkshire without a coherent plan. Proposals for “Northern Powerhouse Rail” — a long-mooted, high-speed east-west line from Liverpool to Hull, dating back more than a decade — were thrown into question by the western leg’s cancellation, while there remains no solution for the chronic west coast mainline bottleneck north of Birmingham.
That latter issue already has an anti-growth impact, for while Labour politicians now prefer to talk more about east-west connections than north-south, business does want to travel between the north west and London.
Emma Degg, chief executive of the North West Business Leadership Team, notes that the cost and productivity loss for firms struggling to get senior staff down to London for face-to-face meetings “will inevitably begin to impact on investment decisions”.
HS2’s disappearance also raises what Rob Mackintosh, chair of the TRU upgrade board and a former senior official at Network Rail, calls “the big ugly Manchester question”, in other words how to redesign the acute crunch point in the city’s Victorian rail network, the effects of which ripple out across the entire northern region.
This is a long-standing and fundamental — but, again, currently under-discussed — single point of failure in the northern network. Fixing it will be costly. Equally, many in the north will point to the £19bn spent on the cross-London Elizabeth Line.
Similarly, the loss of HS2’s eastern leg meant that the electrification of the Leeds to Sheffield line and major capacity constraints at Leeds station — another huge northern pinch point — were also left without a solution.
A “study” launched by the Boris Johnson government intended to solve the station problem has never seen the light of day.
Limbo
Into this space have stepped the metro mayors.
But given the nature of mayors and their respective urban fiefdoms, that does not so far mean a coherent locally devised plan for the northern rail network either. Rather it means a flurry of rail proposals springing up ahead of the spending review, without any obvious guiding mind connecting them.
In the north west, Greater Manchester mayor Andy Burnham’s £200mn-£300mn spending review bid for rail freight relocation — simultaneously enabling Manchester United’s development plans — has had plenty of national airtime in recent weeks.
Burnham and his Merseyside counterpart Steve Rotheram have also for some time proposed a new line between Manchester and Liverpool, ostensibly using money left over from HS2’s western leg cancellation.
The two mayors, who have a tight political and personal alliance, have recently renamed this plan and its surrounding economic potential the “Northern Arc”. See my last newsletter for the genesis of this framing from the Heseltine Institute’s Ian Wray, the North West Regional Development Agency’s chief planner between 2000 and 2010.
Mersyside’s mayor Steve Rotheram, left, and his Manchester counterpart Andy Burnham have proposed a new rail line using money left over from the cancellation of HS2’s western leg © Getty Images
However Wray’s argument for a Northern Arc, which he proposes as a logical high-growth economic corridor from Liverpool to Cheshire and South Manchester (others would throw Leeds into that mix too), is not actually predicated on a new railway line.
Indeed the paper he co-authored last October with transport experts David Thrower and Jim Steer, notes that there are already “three [their emphasis] existing lines linking Liverpool and Manchester”.
Their argument is more about the need for a pan-north western rail strategy, one that recognises the problem of central Manchester, but also takes in the potential of the region’s more isolated post-industrial towns.
“Before the next election we need to show results on the ground, upgrading the existing network and bringing much better services to old industrial towns and forgotten places like Leigh, Wigan, Widnes and Skelmersdale,” says Wray. For which you need a bigger plan.
What about Yorkshire?
All the north west mayoral noise has now reached the other side of the Pennines. Yorkshire’s three Labour mayors have, in recent weeks, concluded they need their own rail strategy to present to ministers ahead of the spending review.
Under what has been branded the “White Rose” mayoral alliance, Labour grandee Lord David Blunkett has been drafted in to do a rapid review of what Yorkshire needs.
That includes Bradford, the country’s worst-connected city. Bradford does have plans in motion. At the tail-end of the last government, ministers green lit — in principle — a new station, with the intention of finally linking it up to the mainline intercity route from which it is currently isolated, as well as to a proposed mass-transit system for West Yorkshire. Bradford, arguably the missing transport link between these two sets of mayoral visions, has been waiting a very long time.
So is anyone pulling all these proposals together into a non-napkin-based plan?
One person familiar with pre-spending review conversations tells me that the rail minister, Peter Hendy, is now drawing up his own list of northern rail priorities — both a pipeline of more immediate upgrades and those big projects that extend long into the future.
In the meantime June is not far away and as it stands, mayoral lobbying risks being as disjointed as the northern rail system itself.
And history shows that if northern leaders don’t thrash out their own quick wins, priorities and trade-offs among themselves, the Treasury will just do it for them.
Britain by numbers
Rail is, of course, only one part of the wider growth picture in the north and across the country more widely.
This week’s chart is taken from a forthcoming paper from the economist JP Spencer at Labour’s internal think-tank Labour Together.
It shows that during the so-called “levelling up” years — from the 2019 election to more or less the end of the last Parliament — the annual geographical gap barely shifted in what he calls “growth spending” by the government, including transport, R&D and housing.
The divide remains around 19 per cent higher per head in the greater south east than in the rest of the country.
That divide in capital investment is particularly noticeable with transport and R&D, Spencer tells me — traditionally two of the areas most associated with growth stimulation. His paper will argue for a rebalancing.
On one level this is an old story. The Matthew Effect has been alive and well in the south east for decades and despite all the rhetoric around “levelling up” during the last parliament, it was always difficult to ascertain what the agenda meant or how it was to be delivered.
But the chart does bounce the ball into the new government’s court.
So far, notes Spencer, the government’s focus has been on private sector investment — deregulation, October’s investment summit, the intended signals from the chancellor’s growth speech in January.
“But you also need to be thinking about public investment,” he says, “and that needs to be particularly focused on the rest of the country, rather than higher per head in one part of the country. It’s all about balance — the current model isn’t working.”
This is a refrain Labour repeated at the Tories often in opposition, but one that has been less explicit in government.
Now it is instead being lobbied from within — from both its own think-tankers and its own mayors.
