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Osborne urged to invest in transport in the North to create much-needed jobs

An investment equivalent to just 2.5 per cent of the cost of HS2 would create 20,000-30,000 extra jobs in the North of England and would add over £4bn to the Northern economy.

Following official unemployment figures released this week revealing the gap between the unemployment rate in the North of England and the South East is the widest on record, the Northern Economic Futures Commission is urging chancellor George Osborne to invest urgently in transport projects across the North to create much needed jobs.

A new report, prepared by think-tank IPPR North on behalf of the Commission, and published redcently reveals that an investment equivalent to just 2.5 per cent of the cost of HS2 would create 20,000-30,000 extra jobs in the North of England and would add over £4bn to the Northern economy.

The Commission argue that if the government committed to investing £560 million in the Northern Hub railway development which would deliver faster, more frequent trains between Liverpool, Manchester, Leeds, Sheffield and Newcastle, the result would be a £4 boost to the economy for every £1 spent.

Analysis by IPPR North shows that almost half of major transport projects involving public funding benefit only London and the South East accounting for 84 per cent of planned spending. This is compared to 6 per cent in the North of England as a whole and only 0.04 per cent in the North East.

The Commission’s report also reveals that 87 per cent of the Northern Rail franchise’s rolling stock was manufactured in the 1980s or earlier but 64 per cent of Southern’s rolling stock and 53 per cent of Southeastern’s was manufactured in the 2000s. The report recommends the government invest in improving rolling stock in the North which would create jobs associated with manufacture and also increase cost efficiency and lower carbon emissions.

The Northern Economic Futures Commission argues that there are five urgent rail priorities to boost growth in the North of England:

  1. Northern Hub: reduces travel times between Liverpool, Manchester, Leeds, Sheffield and Newcastle and increases capacity at Manchester Piccadilly at a cost of £560m (£85m already approved)
  1. HS2–Midland Mainline Connection: immediate benefit from HS2 Phase 1 to East Midlands, East Yorkshire and North East and reduces travel times between Newcastle, Sheffield, Derby at a cost of £30m. Existing HS2 benefits increased by 20–25%
  1. Extending Transpennine electrification: maximises benefit of Manchester–York upgrade by connecting to Middlesbrough, Scarborough and Hull and reduces travel times between Newcastle–Manchester Airport, Hull–London plus reduces congestion on M62 at a cost of between £85–110m but would pay for itself over its lifetime
  1. Improved rolling stock: enhances capacity and customer experience; increases cost efficiency and lowers carbon emissions and maximises benefit of Transpennine electrification while creating jobs associated with manufacture
  1. Station improvements in Liverpool, Leeds and Sheffield: increases capacity at all stations, both passenger numbers and train journeys

Geoff Muirhead, Chair of the Northern Economic Futures Commission said:

“The Northern Economic Futures Commission is developing a medium-term strategy for sustainable economic development in the North of England. This is a significant challenge, but we believe that there has to be a greater focus on cities in the North if we are ever to make sure that there is real recovery in the UK economy. Cities like Manchester, Leeds and Newcastle have the potential to create real growth in the economy but this potential has to be taken seriously by the government with a focussed regional policy.

“Transport infrastructure is crucial for ensuring that the northern economy is the driver of national prosperity that it has the potential to be. Investment in transport infrastructure can give an immediate boost to struggling local economies as well as providing a basis for jobs growth. The Northern Economic Futures Commission has considered carefully the range of options available and calls upon the chancellor and transport secretary to approve immediately five priorities for urgent action and investment.

Ed Cox, Director of IPPR North said:

“If the government is serious about rebalancing the economy, they need to commit to investing in job creation in the North of England which is currently being hardest hit by unemployment. Transport investment in the North is vital if we want to see economic growth and people coming off benefits and into employment. The link between better transport infrastructure and regional economic growth is clear. Not only does immediate investment create local jobs, but improved transport results in time savings to journeys and greater economic dynamism.”

Notes to Editors:

IPPR North’s analysis of figures from the National Infrastructure Plan published alongside the Government’s Autumn Statement in November 2011 which looks at infrastructure spending to 2015 shows transport spending is:

  •     £2731 per head in London    
  •     £792 per head in the South East      
  •     £311 per head in the East Midlands 
  •     £269 per head in the West Midlands
  •     £201 per head in Yorkshire & Humber
  •     £134 per head in the North West
  •     £43 per head in the East
  •     £19 per head in the South West
  •     £5 per head in the North East

Further details of this analysis: http://www.ippr.org/publications/55/8411/on-the-wrong-track-an-analysis-of-the-autumn-statement-announcements-on-transport-infrastructure

The total cost of the 5 proposed schemes is £810 million, just 2.5 per cent of the HS2 proposals or 3.2 per cent of current investment in Crossrail, Thameslink and London Underground improvements. The funding for these projects would come from existing funds within the HLOS2 / SoFA CP5 ‘envelope’ which is being decided between now and June

Analysis by IPPR North of the latest official unemployment figures shows:

  • North East - 138,000 unemployed - down 11,000 – but still 10.8%
  • London - 433,000 unemployed - up 11,000 – to 10.2%
  • Yorkshire/Humber - 261,000 unemployed - up 9,000 – to 9.8%
  • North West - 317,000 unemployed - up 16,000 – to 9.3%
  • Wales - 134,000 unemployed - up 1,000 – to 9.1%
  • West Midlands - 241,000 unemployed - down 1,000 – but still 9.1%
  • Scotland - 234,000 unemployed - up 6,000 – to 8.7%
  • East Midlands - 187,000 unemployed - up 5,000 – to 8.2%
  • East - 208,000 unemployed - down 10,000 – to 6.8%
  • Northern Ireland - 56,000 unemployed - down 4,000 – to 6.5%
  • South East - 287,000 unemployed - up 14,000 – to 6.5%
  • South West - 169,000 unemployed - down 8,000 – to 6.3%

IPPR North analysis shows the number of unemployed people compared to a year ago is:

  • up 20 per cent in the North West (53,000 more people unemployed)
  • up 9 per cent in the North East (11,000 more people unemployed)
  • up 9 per cent in London (37,000 more people unemployed)
  • up 13 per cent in East of England (24,000 more people unemployed)
  • up 8 per cent in Wales (10,000 more people unemployed)
  • up 6 per cent in Yorkshire and Humber (16,000 more people unemployed)
  • up 8 per cent in Scotland (18,000 more people unemployed)
  • up 3 per cent in East Midlands (5,000 more people unemployed)
  • up 2 per cent in South East (7,000 more people unemployed)
  • down 8 per cent in West Midlands (22,000 fewer people unemployed
  • down 0.08% in the South West (150 fewer people unemployed)

The Northern Economic Futures Commission is developing a medium-term strategy for sustainable economic development in the North of England.

http://www.ippr.org/research-project/44/7405/northern-economic-futures-commission

IPPR’s analysis of the latest official unemployment figures:

http://www.ippr.org/press-releases/111/8851/unemployment-hits-women-public-sector-a-the-north

The latest unemployment figures can be found here:

http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/march-2012/index.html

Contact:

Tamsin Crimmens, 07800 742 262, t.crimmens@ippr.org

 

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