Back on Track: Business leaders ‘fear North-South divide could grow’

Top businesses - including Yorkshire Building Society, Endless, Leeds Bradford Airport, Yorkshire Design Group and Town Centre Securities - are among nearly 70 signatories to an open letter, published by The Yorkshire Post today, calling on Chancellor George Osborne to reaffirm his commitment to essential rail projects.

Work on the electrification of the TransPennine and Midland Mainline routes has been “paused” indefinitely, as newly-appointed Network Rail chairman Sir Peter Hendy undertakes a review of projects worth £38bn due to be delivered by 2019.

The letter challenges Mr Osborne to honour pre-election promises to put transport at the forefront of his Northern Powerhouse plan to ensure a new era of growth and prosperity in the region.

Businesses expressed concern at the delay could squeeze the region’s future growth.

Terry Jones, partner and head of BDO in Yorkshire said: “If we move from ‘pause’ to ‘stop’, it will be a huge blow; one that sees us stifle social mobility and economic promise for future generations.

“A poor rail network and lack of connectivity between regions and cities means we will suffer in business, tourism and leisure.”

His comments were echoed by John Holden, senior partner, at law firm Gordons, who said the upgrades were needed to enable Yorkshire’s economy to grow “faster and stronger”.

The cost of an antiquated transport network to business is high, WYG chief executive Paul Hamer said.

Mr Hamer - who is also a member of Leeds City Region Local Enterprise Partnership board - said: “Electrification would make it far easier for us to move our businesses, our people, our clients.

“The amount of time and efficiency lost in moving people across the City Region and across those Northern Powerhouses is huge.”

Mark Viner, commercial director at Leeds-based manufacturer Airedale International Air Conditioning said the firm’s growth plans are dependent on a reliable transport network.

“As a major employer in the region we have a duty to demand a fit for purpose, reliable and connected public transport network,” he added.

As the issue of devolution looms, FSB chairman for South and East Yorkshire Gordon Millward argued central control of infrastructure spent “limited what can be achieved” in the North.

“With the domination of the South East economy, northern cities are not competing on a level playing field, which is undermining UK economic growth and hindering the North from making full use of its diverse regional economic assets.

“If the Government is truly committed to northern devolution it must demonstrate its commitment by reinstating rail electrification.”

The issue is set to be raised at transport questions in the House of Commons today.

For some of the region’s business community, the electrification “pause” could be an opportunity for the North to get a better deal.

Chris Hearld, KPMG’s northern chairman - who declined to sign The Yorkshire Post’s letter - said the disappointing part of the pause to the electrification projects is “what has not been said”.

He said: “Hopefully another factor behind the Government’s decision is the matter of giving consideration as to whether electrification should proceed in the context of ambitions for a far more impactful modernisation of the North’s transport infrastructure. The concern is that this point has not been made.”