George Osborne: A rail renaissance to build a ‘Northern powerhouse’

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THERE is a hard truth we need to address: the cities of the North are individually strong, but collectively not strong enough. The whole is less than the sum of its parts so the powerhouse of London dominates more and more and that’s not healthy for our economy.

We need a Northern Powerhouse too. Not one city, but a collection of northern cities – sufficiently close to each other that combined they can take on the world. We need to bring the cities of the North together as a team – that’s how Britain will beat the rest.

There is a powerful correlation between the size of a city and the productivity of its inhabitants. The top 600 cities in the world contain just 20 per cent of global population but create 60 per cent of global GDP.

The last Census found that the average commute of someone who travels into London is 40 miles. If you make a circle of the same distance, and centre it on Manchester, you’d have a catchment area that takes in Leeds, Sheffield and Liverpool, Lancashire, Cheshire and Yorkshire, and contains 10 million people – more than Tokyo, New York or London. An area containing nearly two million graduates. A huge pool of talent.

How do we build the Northern Powerhouse?

Manchester and Sheffield are just 38 miles apart – yet it takes over one hour 20 minutes to travel by car. In that time you can get from Southampton to Oxford, which is twice the distance. It’s quicker to travel the 283 miles from London to Paris by train than it is to travel less than half that distance between Liverpool and Hull.

Bus trips in the capital are up a third over the last 10 years, but down by seven per cent in the Northern cities.

Now I’m trying to fix this with a series of massive investments in the transport infrastructure in the North. I’ve committed £600m to the Northern Hub, which will cut journey times on trains between Manchester, Leeds, Bradford and Sheffield. I want now to properly hook up Hull to our national network too.

This winter we will tender for the whole new Northern rail franchise. We’ll want to see not just better services, and more seats at peak times, but also better journeys. Bidders will be asked to include options to get rid of outdated “railbus” or “pacer” style trains. It’s time for modern rolling stock in the North.

Above all, we are building HS2, which will connect eight of the 10 largest cities in the UK, including Manchester, Leeds and Sheffield. Phase two alone is a £21bn investment, and will support at least 60,000 jobs. It’s the most important investment in the North for a century.

We’ve done a lot – but we must do much more to connect our Northern cities. We need an ambitious plan to make the cities and towns here in this northern belt radically more connected from east to west – to create the equivalent of travelling around a single global city. As well as fixing the roads, that means considering a new high speed rail link.

I want us to start thinking about whether to build a new high speed rail connection east-west from Manchester to Leeds. Based on the existing rail route, but speeded up with new tunnels and infrastructure.

Another thing you need in a powerhouse is, of course, power. Global cities have powerful city governments. I think it’s great to see how local authorities here are getting much better at working together.

We’ve been devolving power through City Deals. We’ve signed 25 deals. They encapsulate two things about our approach. We don’t offer an identikit model, instead, we offer each area the different specific things it needs to get growth going. And, instead of laissez faire, we recognise that there’s a crucial role for local leaders to clear away the obstacles to growth and enterprise, and get things moving.

Today I want to ask: is it now time to take the next steps? London has the advantage of a strong, recognisable city leader. The haircut that is recognised all over the world. Boris Johnson.

There are big advantages in having an elected Mayor to represent your city.

Wales has its own parliament, and can pass its own laws. But, as the Centre for Cities points out, the economies of Manchester and Leeds are each individually bigger than Wales. But they don’t have a single leader who can speak for the whole area.

I say it again: a true powerhouse requires true power. So today I am putting on the table and starting the conversation about serious devolution of powers and budgets for any city that wants to move to a new model of city government – and have an elected Mayor. A Mayor for Greater Manchester. A Mayor for Leeds. With powers similar to the Mayor of London.

The Northern Powerhouse can’t be built overnight. It’s a long-term plan for a country serious about its long-term economic future. It means jobs and prosperity and security for people here over future decades. And I promise you this – I will work tirelessly with anyone across political divides in any of these great cities to make the Northern Powerhouse a reality. For this plan is bigger than any one of us – and it’s worth it for us all.

George Osborne is the Chancellor of the Exchequer who delivered a speech yesterday in Manchester entitled ‘We need a Northern powerhouse’. This is an edited version.