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The UK chancellor is to promise that up to £45bn will be spent on a “transformative” upgrade of northern England’s rail system over the next two decades, with the government claiming it will turbo-charge the region’s economy.
Rachel Reeves will announce on Wednesday the construction of lines, stations and electrified routes as part of Northern Powerhouse Rail, as well as an ambition to build a new connection between Birmingham and Manchester to replace the axed northern leg of HS2.
However, during the current parliament — expected to end in 2029 — the chancellor is only committing £1.1bn towards “planning, development and design work”.
Reeves, the MP for Leeds West and Pudsey, said the government was “reversing years of chronic under-investment in the north”.
“Our transformative plans will create jobs, build homes and unlock opportunities for businesses to invest,” she added.
The plans are a revival of a new rail network first promised by her Conservative predecessor George Osborne more than 10 years ago.
Labour’s version of NPR would begin with electrification schemes in Yorkshire between Sheffield, Leeds and York, as well as a new station in Bradford.
Those would be followed by a new line between Liverpool and Manchester, before further upgrades across the rest of the region.
In addition to NPR, Reeves will set out an intention for a new line between Birmingham and Manchester to replace the axed north-west leg of HS2, although construction would not begin until the mid-2040s.
That route would not be built until after NPR was complete and is unlikely to be to the same specification as the original HS2. However, no government land will be sold off along the route, according to Whitehall officials.
The government has provided no clear delivery timescales on any of the phases, with only the first one likely to begin during this parliament.
People familiar with the plans said the overall contribution from central government of £45bn over 20 years was being presented as a “cap” to avoid concerns about cost overruns that have dogged British infrastructure projects.
In addition, some local leaders will be asked to contribute further billions towards the schemes, either by raiding their own funds or by borrowing against future projected revenues from higher business rates.
Reeves had repeatedly delayed announcing Labour’s version of NPR since last June as Treasury officials wrangled over costs and northern mayors lobbied for their priorities.
Yorkshire’s leaders last year proposed quicker upgrades, such as electrifying the line between Leeds and Sheffield, which will now form the first phase of the scheme.
The new line between Manchester and Liverpool, while being a top priority for the cities’ mayors, is both more expensive and more complicated.
Manchester in particular had proved a sticking point, with the government nervous that the city region’s mayor, Andy Burnham — a potential leadership rival to Prime Minister Keir Starmer — could derail Wednesday’s announcement at the eleventh hour.
Local leaders had long insisted on an underground station at Manchester Piccadilly for NPR in order to avoid losing prime development land but had struggled to get government agreement.
On Monday they agreed to provide a local contribution towards the difference between an underground or surface design — potentially into the billions of pounds — after the Treasury agreed to allow them a degree of fiscal devolution, potentially involving the retention of business rates.
In the final phase of the plan, a new line may be built from Manchester to the edge of West Yorkshire, but officials said this had not yet been decided.
Manchester airport, which will be on the Manchester-to-Liverpool route and will eventually have a new station as part of the scheme, welcomed the announcement.
Chief executive Ken O’Toole said the plan was “long overdue”, adding that he looked forward to its delivery “at the earliest possible opportunity”.