Osborne will pledge £300m for road and rail to link-up the North

The money will help develop plans for high speed trans-Pennine rail services - dubbed HS3 - and a road tunnel connecting Manchester and South Yorkshire.

Three ways George Osborne could create the first major cross-Pennine road since the M62

It will also speed up a series of projects along the M62 and an investigation into upgrades to other trans-Pennine routes including the A66.

The Chancellor asked the National Infrastructure Commission, led by former Labour Transport Secretary Andrew Adonis, to look at the transport projects the North will need to transform its economic fortunes.

Business and political leaders in Yorkshire have expressed growing concern about the timetable for Mr Osborne’s plan to transform the North economy, known as the ‘northern powerhouse’, and Lord Adonis’s report recommends short term improvements should be made as longer term plans are drawn up.

It says the North will receive the quickest economic boost by improving journeys between Leeds and Manchester.

The report recommends pushing ahead with existing plans to cut rail journey times between the two cities to 40 minutes alongside longer term measures to reduce that further to 30 with a full plan for the HS3 network covering cities including Sheffield and Hull to be in place by the end of next year.

The Commission side-steps the contentious issue of where the proposed station in South Yorkshire for the planned north-south HS2 high speed rail line should be located.

But it says the final route of the northern leg of HS2 should focus on cutting the rail journey time between Leeds and Sheffield to 30 minutes, whether that is through a city centre HS2 station in Sheffield or a faster link between the city centre and the current proposed station site at Meadowhall.

It calls for the acceleration of improvements to the M62 and for plans to be drawn up for the upgrade of the M1 between Leeds and Sheffield.

And it says the Government should make funding available to create a “comprehensive strategy” for transport across the North.

Lord Adonis said: “A better connected north will be better for jobs, better for families and better for Britain.

“The work should begin as quickly as possible.”

Mr Osborne has been under growing pressure to show his ‘northern powerhouse’ plan to better connect the North’s town and cities so they can compete together in world economy is moving from drawing up proposals to delivering projects

He said: “Now is the time us to make the bold decisions and the big investments that will help us to lead the world in infrastructure, and create jobs, push up living standards and boost our productivity for the next generation.”

But government backing for HS3 was “no substitute” for construction work actually beginning, a think tank claimed.

IPPR North warned that the region will expect significant investment in the project - as was the case for London’s £14.8 billion east to west Crossrail route, which is due to open in phases from next year.

The organisation’s director, Ed Cox said: “It is important to remember though that project development work is no substitute for spades in the ground and only raises expectations about the Government’s ambitions for the North.

“In due course, Government will be expected to invest significant amounts of public money to finally get the construction of these projects off the ground just as it has done with Crossrail in London.

“Until then, as a region and as a nation, the amount of money we invest in transport infrastructure remains much lower than other developed nations.”

Louise Ellman, chair of the Commons’ Transport Select Committee, said there is “far more investment in the South than there is in other regions” and described improving trans-Pennine links as “equally important” to the North as Crossrail is to London.

She said the £300 million Budget package to boost transport in the North “isn’t very much” compared to Crossrail 2, which is expected to cost £27-£32 billion.

Ms Ellman added: “We need to know the detail of what is being proposed.”

Lord Adonis maintained the package involved immediate improvements in the north of England as well as a longer-term plan and insisted that London was not getting the lion’s share of transport investment.

“It’s not just jam tomorrow, we have recommended immediate action on the M62, on the railways linking the northern cities, but of course you also need a longer-term plan to bring about transformation,” he told BBC Radio 4’s Today programme.

“Putting those two together - immediate improvements on the M62 and the railways - and then also what’s called HS3 which is producing much faster links, half-an-hour between Manchester and Leeds, and the possibility of significant new roads in the North too, for example linking Manchester and Sheffield with the possibility of a tunnel under the Peaks, which would be a hugely ambitious project.”

Pressed on the scale of investment in London compared to the North, Lord Adonis said: “The biggest single infrastructure project in Europe is HS2 and most of that spending is going on the Midlands and the North, to link the cities of the Midlands and the North together and then with London.

“So it’s not the case that all this investment is going in London, there is massive investment going in the Midlands and the North too. What’s needed is to join it up so the short-term investments lead to longer-term ones and people haven’t got to wait another 20 years before they get transformed services between Liverpool, Manchester, Leeds, Hull, which is essential.”