Multi-billion-pound plans have been announced by government to transform rail and grow economy across the North-west, Yorkshire and the North-east.

Plans for Northern Powerhouse Rail (NPR) include a new rail route between Liverpool and Manchester, running via Manchester Airport and Warrington and improved connections across the Pennines between Manchester, Leeds, Bradford and Sheffield.

The scheme is part of the major government drive to boost growth and living standards across the North, helping to unlock around £40bn of economic potential.

The second phase of NPR will include three new stations at Manchester Airport, Manchester Piccadilly and Warrington Bank Quay Low Level along the route, with delivery starting in the 2030s.

Improvements to busy stations, Liverpool Lime Street and Liverpool Central, are also being considered alongside the work the government is undertaking together with Liverpool City Region to look at options for a major regeneration scheme in the city centre.

This will follow phase one which will see upgrades across routes between Leeds, Bradford, York and Sheffield. The third phase will focus on improved connections between Manchester and Sheffield, Manchester and Leeds and explore options for Manchester to Bradford.

Transport secretary, Heidi Alexander, said: “For too long, the North has been held back by underinvestment and years of dither and delay – but that ends now.    

“This new era of investment will reignite the economy across Liverpool and Manchester, helping their iconic sport and cultural industries to thrive, and cementing Manchester Airport as the gateway to the North.  This exciting new line will not only speed up journeys, it will open up new jobs and homes for people, making a real difference to millions of lives.”

Other NPR plans include:

• Prioritise upgrades and electrification between Leeds-Sheffield, Leeds-York and Leeds-Bradford.
• Work on the business case for the Leamside Line will be taken forward, as part of ensuring NPR services reach Newcastle.
• The North-east will also benefit from regular services onwards to Newcastle via Darlington and Durham. This follows recent investment of £4bn in the East Coast Mainline which has seen 60,000 extra seats weekly through the new timetable.
• More than £11m of local transport funding has now been agreed for South Yorkshire to develop a new Rotherham Gateway station.

This upgrade to rail travel is one of the central building blocks of a plan for the North – to be published in the spring. This will include plans for a northern growth corridor from Liverpool to York – which has the potential to be one of Europe’s great economic powerhouses. It will also include plans to make the most of economic opportunities right across the North, including in clean energy, defence and advanced manufacturing.  

A funding cap of £45bn will be set for the programme, including £1.1bn over the current Spending Review period allocated from existing budgets first. Learning lessons from HS2, the government will work closely with local partners to ensure planning processes are carried out efficiently, and approvals are streamlined to reduce delays and prevent projects going over budget.   

The NPR plans are in addition to the Transpennine Route Upgrade, which will cut journey times between York and Manchester and Manchester and Leeds, create over 5,000 jobs, and support the development of 6,500 new homes in the region.

The government is also setting out a long-term objective to see a full new north-south line from Birmingham to Manchester.

This will ensure sufficient capacity and better connectivity on the West Coast Main Line, but it won’t be a revival of HS2 Phase 2. A previous plan to extend HS2 between the cities was scrapped by Rishi Sunak’s Conservative government in October 2023 to save money.

The government will launch a feasibility study, working with local partners on what will be delivered, when and to what specifications. No timescale has been provided on when it would be built but the Treasury said the new line would not be open until after the completion of NPR.

Chancellor Rachel Reeves said: “If economic growth is the challenge, investment and renewal is the solution. That’s why we’re reversing years of chronic underinvestment in the North. Our transformative plans will create jobs, build homes and unlock opportunities for businesses to invest.”

Industry today welcomed the news of rail investment for the north.

The Association for Consultancy and Engineering (ACE) said the government’s announcement of a new Birmingham to Manchester rail line, and renewed commitment to NPR, was a “landmark moment” for the UK’s transport network.

Ben Britain, director of public affairs at ACE, said: “This is a smart, pro-growth decision that strengthens the backbone of a national rail network fit for the demands of a modern economy. A new direct Birmingham–Manchester connection, alongside Northern Powerhouse Rail, provides the missing link needed to improve productivity, attract investment and better connect people to opportunity.

“Our members will work hand in glove with government to move quickly from announcement to delivery, starting with clarity on delivery timelines and scope. The economic transformational effect of these infrastructure projects need to be felt quickly, so speed of delivery is mission critical. By bringing commercial discipline, engineering expertise and a clear focus on outcomes, we can remove obstacles, control risk and ensure these projects are delivered efficiently and deliver real value for taxpayers and businesses alike.”

Richard Whitehead, chief executive Europe and India at AECOM, said: “Today’s commitment to Northern Powerhouse Rail is a significant moment for the North of England. After years of delays and false starts, this announcement provides the certainty that businesses and communities have been waiting for. The economic case for transforming connectivity across the region has never been stronger.

“But commitment must now translate into delivery. Government should set out a clear funding model that unlocks private capital alongside public investment, empower metro mayors to drive delivery locally and establish strict timetables with defined milestones at each stage.

“This plan offers the certainty that the North has been long overdue and the task now is to work quickly to set the wheels in motion – I know that industry and devolved authorities stand ready to do just that.”

Nancy MacDonald, Stantec’s UK and Ireland regional business lead – infrastructure, said: “Today’s announcements will be welcome news for communities across the North of England. These regions have long needed a more connected and more mobile labour market. Once built, Northern Powerhouse Rail will remove the perception of distance and time as barriers. In turn, this new network should support more inclusive growth and employment opportunities across northern conurbations.

“However, the delivery of this vital but complex infrastructure will not be without its challenges. Connecting into existing local infrastructure should be viewed as integral, making thorough community engagement a crucial factor. Efficiency, local accountability, and cross-sector collaboration, backed by a range of experienced interdisciplinary project teams, are critical to timely delivery and rebuilding public trust in the UK’s ability to deliver large infrastructure.

“Northern Powerhouse Rail holds so much potential to improve connectivity across the north over generations. Both the public and the industry will want to see regular, meaningful progress within reasonable timescales.”

Michael Toher, head of rail UK and Ireland at Ramboll, said: “It is great to see plans for Northern Powerhouse Rail moving forwards. The £45bn committed to upgrading rail links and delivering key developments across historically underserved regions is both long-awaited and highly welcome.

“Investment in transport infrastructure is vital for both local and national growth, playing a crucial role in creating a more resilient and sustainable economy while breaking down regional barriers and ultimately supporting those communities that stand to benefit most from development. With investment at this scale, there is a genuine opportunity to set new benchmarks for the standard of rail and connectivity in the North.

“What’s now critical is confident, swift delivery. Infrastructure improvements often spark a ripple effect of investment and growth, but we need assurance that plans are well-backed and can move forward quickly. Mixed messages and delays, as seen with NPR, can be damaging to attracting essential private investment.

“As recognised by the Department for Transport’s recent climate adaptation strategy, sustainability must be central to delivery plans, including commitments to protect biodiversity through net gain initiatives, ensuring growth through projects like NPR is fit for the future and stands the test of time. While this requires significant investment, it's all about balancing interests and collaborating effectively to avoid tipping too far in any direction.”