Chancellor Calls For New Line To Help Northern Cities Compete

A new high-speed rail line between Manchester and Leeds can help the north of England compete better economically, chancellor George Osborne has said.

Speaking at Manchester's Museum of Science and Industry - the site of the world's first public railway station - George Osborne said better transport was vital to help the cities in the corridor stretching from Liverpool in the west to Hull in the east, a collective "northern powerhouse" of economic growth.

"The cities of the north are individually strong, but collectively not strong enough. The whole is less than the sum of its parts," said Mr Osborne. He explained that one reason for this was that London, as one dense centre of population, has managed to attract "clusters" of industries and entrepreneurs. This discredited the idea that the technology to make remote networking possible would make location less relevant.

He pointed to research showing that the 600 largest cities in the world contained 20 per cent of the world's population, but produced 60 per cent of economic output - a situation exemplified by London's success and something the northern cities could emulate if brought closer together.

Explaining that he wanted a situation in the north where "travelling between cities feels like travelling within one big city," Mr Osborne said investment in transport was vital to link up the northern cities. He said this was the reason for the £660 million Northern Hub rail investment, but argued that it was time to start talking about a high-speed link between the two largest cities of the north.

He told the audience - which included HS2 chairman David Higgins - that the proposed link would be "based on the existing rail route, but speeded up with new tunnels and infrastructure".

Investment in infrastructure such as transport is considered particularly important by SMEs, according to the latest research.

The Close Brothers Business Barometer found 40 per cent of SMEs consider it the number one priority for government spending, ahead of health, energy and education. Over half said improved infrastructure is essential to help sustain economic growth.

Expert Opinion

Any plans which support the growth of SMEs throughout the UK, not just in the south, have to be welcomed – as it is vital that the skills of talented growing businesses and entrepreneurs based in northern regions are supported with quality new services and infrastructure. <br/> <br/>"The latter is front and centre of the minds of many small firms, with a recent survey suggesting around 40 per cent of SMEs regard spending on infrastructure as the most important area of government investment. <br/> <br/>"It is a fundamental requirement that the needs of all businesses – large and small – are factored into these changes and any consultation needs to be thorough to ensure the needs of the many are carefully considered." Fergal Dowling - Partner