Budget 2016: Chancellor Expected To Announce A Boost Of Billions For Northern Infrastructure

Experts Welcome Osborne’s Bid To Revive Northern Powerhouse Scheme


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Legal experts at Irwin Mitchell have welcomed news that George Osborne is to inject billions of pounds into building projects in a bid to revive the stuttering economy.

Media have reported that the Chancellor will bring forward infrastructure spending, pencilled in for the last years of the Parliament, in tomorrow’s eighth Budget announcement. 

He is expected to reveal plans which include hundreds of millions of pounds for the Crossrail 2 project in London and the HS3 high-speed rail link between northern cities.

The move comes as a sign of commitment to the Chancellor’s ‘Northern Powerhouse’ plan.

The plans are expected to include a £75million investment to explore options for an 18-mile tunnel running under the Peak District between Sheffield and Manchester.

The tunnel, which would run under the A628 Woodhead Pass and cost £6billion, could become one of the longest ever constructed.

Treasury officials said the Chancellor will ‘bring forward capital spending in this Parliament, to invest in the Government’s priorities and boost jobs and productivity’.

Tomorrow’s Budget is expected to include a series of announcements, some of which have been promised before. They include:

  • £60million to develop plans for the HS3, which would reduce journey times between Sheffield and Manchester by up to 30 minutes
  • £161million for Highways England to accelerate upgrades to the M62
  • £80million to fund the development of plans for Crossrail 2, which would link the south-west and north-east of London

The boost to infrastructure is being billed as Britain’s largest programme of rail investment ‘since the Victorian age’.

A blueprint for HS3 – which could cost as much as £15billion – will be published next year.

The expected announcement comes as the National Infrastructure Commission, led by former Labour peer Lord Adonis, published their recommendations.

Adonis said: “If the north is to become a powerhouse, it has to be better connected.”

He said the aim should be journey times of just half an hour and it was not acceptable to wait decades for the improvements and set a target that the travel time between the two cities should be 40 minutes by 2022.

He added: “A better connected north will be better for jobs, better for families and better for Britain. The work should begin as quickly as possible.”

Expert Opinion
Increasing infrastructure investment to reduce journey times across the north of England are vital if ‘Northern Powerhouse’ is going to succeed. The forthcoming Budget would be an excellent opportunity to make theses promises quickly turn into a reality.

Our own survey of 1,000 business leaders identified that investment in local road and rail was the policy most likely to lead to economic growth mainly because it can go a long way towards improving productivity and broadening an organisation’ talent pool.

Not only should there be a significant increase in infrastructure spending in the north, we also believe that the Government needs to listen to businesses when deciding where its transport hubs should be located.

In Sheffield, for example, the Government’s current plan is to locate the HS2 station at Meadowhall even though the financial benefits of it being located in the city centre are expected to be far greater. We believe that if the Government doesn’t change its mind, it will waste the chance to create 6,500 more jobs and generate up to £2.5bn more income.
Paul Firth, Partner