Northern Powerhouse Rail

Lord Hendy of Richmond Hill Excerpts

Monday 19th January 2026 Lords Chamber

[Baroness Pidgeon (LD)]

My Lords, as we have heard, the northern powerhouse initiative was launched in June 2014 by the then Chancellor George Osborne. Featuring new and significantly upgraded railway lines, it should be the region’s single biggest transport investment since the Industrial Revolution. Twelve years on, despite various promises by various Prime Ministers, all that seems to have happened so far is lots of talking and planning, but no concrete plans.

On these Benches, the Liberal Democrats fully support measures to grow our economy across every nation and every region. We are supporters of delivering Northern Powerhouse Rail and a new Liverpool to Manchester rail connection. But the only solid information in this Statement, as we have heard, is just over £1 billion be spent over the next four years planning what should be in the final plan, not on spades in the ground.

I absolutely accept that the previous Conservative Government failed to deliver infrastructure projects such as this and High Speed 2, but surely our northern towns and cities were hoping for so much more. Can the Minister confirm that while we can hope that there may be some upgrades to rail infrastructure at some point in the 2030s, there will be no new trains running on new tracks until 2045 at the earliest? Can the Minister assure the House that the Government are not falling into the trap of the previous Government’s playbook of stop-start funding and delay on rail projects?

Safe, reliable and affordable railways are vital for employment, quality of life and economic growth. This is particularly true for the north of England, where the need for investment in infrastructure is clear. How will the Minister ensure that this major transport infrastructure project, no matter how welcome, secures the funding that is needed and does not go wildly over budget and end up years behind schedule? Will some clear strategic thinking by shadow Great British Railways be undertaken now to avoid costly feasibility studies being undertaken by other parties and to ensure a grip on the project?

Northern Powerhouse Rail, if delivered properly, will unlock growth, connect communities and boost employment opportunities. I hope the Minister can provide clear answers that help us all understand what is being promised in this Statement and when it will be delivered.

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

My Lords, the Statement by my honourable friend the Secretary of State in the other place last Wednesday set out a practical and deliverable set of railway improvements in northern England related to an economic plan for the northern growth corridor across either side of the Pennines. The noble Lord, Lord Moylan, and the noble Baroness, Lady Pidgeon, have set out some of the more tangled history of Northern Powerhouse Rail over the past 10 years.

This Government are drawing a line under some uncosted and, frankly, undeliverable plans, of which Network North was the worst, although the Integrated Rail Plan for the North came near it, because there was a little bit of funding but it was not prioritised in any way. We are setting out a realistic plan for the delivery of a better railway for the north of England, which will include more frequent trains—so frequent that you do not need a timetable—more reliable trains, faster journey times and a mixture of using existing lines, upgrading existing lines and, as has been pointed out, a new railway between Liverpool and Manchester.

It is also phased. Noble Lords will note that, on the east side of the Pennines, improvements can come more quickly, because the upgrading will be to existing lines. The line across the Pennines is already being significantly upgraded: the trans-Pennine route upgrade has not so far been mentioned, but £11 billion-worth of railway improvements are being carried out now, with capacity, electrification, reliability and journey time improvements. The plan then sets out a new railway between Liverpool and Manchester, using the northern part of the stalled powers for HS2, which are languishing in Parliament at the moment, together with a new railway from Millington to Liverpool.

Thirdly, upgrades will be made later from Bradford to Manchester and Sheffield to Manchester. The Government believe that the plan, set out in that way, is much more deliverable and practical than any previous plan has been.

The noble Lord, Lord Moylan, asks about abandoning a new railway across the Pennines. Yes, there will not be a new railway across the Pennines because, in effect, the trans-Pennine route upgrade will deliver what is virtually a new railway but on the existing alignment. He also asked about the proposition that, somehow, Northern Powerhouse Rail will not be effective without the delivery of HS2 to Manchester. He will note that one of the things in the Government’s plan and the Secretary of State’s Statement is the reservation of the existing purchase of land from Birmingham to Manchester, because more capacity—note that phrase; it is more capacity, not a high-speed line—is likely to be needed at some stage. It will therefore eventually complement the part of the HS2 alignment that will be used as a result of the new railway from Liverpool to Manchester.

The £1.1 billion-worth is in this spending review period, rather than to 2030, which was referred to last week. It will deliver some enhancements, too: for example, the cost of the new station in Bradford, subject to its business case, will be part of that £1.1 billion. We expect delivery to be well started, because the site is nearly agreed and the proposition is sound. We are also expecting improvements to Leeds station, which is a critical block to having more trains on either side of the Pennines, as a result of this expenditure. But it is true that a lot of that money will be spent on planning, because one of the lessons from HS2, to which this House will return fairly shortly, was the foolishness of starting to build a railway without specifying it and with contracts that make the contractors money whatever they are building and however long they take to build it.

The funding envelope of £45 billion is a very sensible proposition, bearing in mind the experience of HS2, by which government can limit the costs and give some budgetary pressure to those specifying the improvement. As the House will hear fairly soon, one of the difficulties with HS2 was the zealotry with which the original specification was written and the consequent enormous cost. We are not going to make that mistake. The last point of course is that the £45 billion is a sum to be spent after the end of this spending review, so the first part of it will be in this Government’s term.

The Government are working very hard to produce a practical programme of improvements that can be delivered by both the railway and its supply chain. I say to the noble Baroness that we do need to plan first; it is sensible to do that. She asked whether GBR would be involved. It will: very much so. One of the mistakes of HS2 was to regard it as a completely independent railway when, actually, it has to be regarded very much as part of the railway network, which is certainly what this Government envisage Northern Powerhouse Rail to be.

[Baroness McIntosh of Pickering (Con)]

My Lords, can I press the Minister on the timetable? Obviously, I have a vested interest as a resident of the north. The Chancellor of the Exchequer has announced that the benefits will be felt by the early 2030s, but I understand that the final project will not be finished until the 2040s, and there may be a change of Government in that time. Can the Minister give a clearer setting out of the timetable, and in particular when the stretch from York to Middlesbrough might benefit?

[Lord Hendy of Richmond Hill (Lab)]

The noble Baroness is right that railway improvements, sadly, take a very long time. They take a long time to be delivered safely, unlike in the Victorian era when hundreds of people were killed during their construction, and many of them have to be done on the operating railway, which can tolerate some closures but cannot tolerate everything.

The Chancellor spoke correctly in saying that the benefits will start to be felt in the 2030s. In fact, I think some benefits will be felt before then, because we must improve Leeds station and a new station in Bradford will make a significant difference to Bradford’s economic prospects. I cannot tell the noble Baroness precisely when all the parts of the improvement will be delivered, because we need to plan this out properly, but the Government hope that, with a general consensus about the economic prospects of the north of England being improved by better transport, we have for the first time seen a plan that sets that out in a progressive way that enables it to be delivered. The hope is that, whoever the Government are—hopefully, this Government will be here for a long time—it can be delivered over the course of a number of Parliaments.

The noble Baroness will of course recall that the most difficult occasion in the recent history of railway planning was the peremptory cancellation of phase 2a of HS2, which was done, sadly, without any contemplation of a replacement. If future Governments were to modify this plan, one hopes they would contemplate the effects of what they were doing, in order to be able to deliver the plan roughly as it is set out today.

[Lord Grocott (Lab)]

My Lords, there is a great deal in this Statement that I warmly welcome: in particular, the bit the Minister has just referred to about what was HS2, the link from Crewe to Manchester. He has repeated, and it is clear in the Statement, that

“we will retain land … already purchased between the west midlands and Crewe”.—[Official Report, Commons, 14/1/26; col. 931.]

The only point of retaining the land—I strongly welcome the fact that it will be—is that a railway will be built on it at some stage.

I would like the Minister’s confirmation that, welcome as these improvements to east-west connectivity are—they are very welcome and probably should be taking precedence—they will not in any way help to solve the capacity problems on the west coast main line, which are being solved in part as far as Birmingham but need to be solved between the West Midlands and Manchester as well. What hope can the Minister offer me that a new railway—he can call it HS2 or whatever he likes—will be built to replace HS2 to Manchester and correct the huge mistake that was made when it was cancelled?

[Lord Hendy of Richmond Hill (Lab)]

My noble friend is right: the Government are retaining that part of the land between the West Midlands and Crewe that they have bought for precisely that purpose, because they know that at some stage a railway will have to be built. It will probably not be a high-speed railway. It is certainly not a railway to the specification of High Speed 2 phase 1, which has cost an extraordinary amount of money because of its specification. It might be that only part of that route is needed sooner than the more northern parts.

It is clear that the west coast main line is full of trains. There is no space left. The Office of Rail and Road declined all the open access applications last summer, simply because there was no timetable space on the railway to accommodation them. It is right for the Government to think about the future and to plan to deliver this new railway at a time when it is needed.

[Lord Birt (CB)]

My Lords, I worked at No. 10 as Tony Blair’s strategy adviser in 2005 when an in principle go-ahead was given to an ambitious high-speed rail network for the whole country. Twenty-odd years later, we do not even have one small part of that plan in place. In the same period, since 2008 China has built 48,000 kilometres of high-speed rail.

I am a Liverpool supporter, so I regularly go—

[Lord Birt (CB)]

It has been a difficult weekend. I regularly visit the north-west of England, as I did at the weekend. I am involved in an east of Pennines business, so I am very familiar with the 19th-century infrastructure of the whole of the north of England. Are we remotely ambitious enough with our rail infrastructure?

[Lord Hendy of Richmond Hill (Lab)]

The simple answer is yes. What the north of England needs is better, more reliable connectivity, most importantly at a frequency at which a timetable is not needed. This is the intention of this Government’s whole plan. It can be delivered as a consequence of finishing the trans-Pennine route upgrade and carrying out, in sequence, the plans set out by the Secretary of State last week.

[Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)]

May I remind noble Lords that this is an opportunity to ask questions of the Minister? Can we keep comments succinct? There is plenty of time for everyone to get in if we all keep our questions sharp, so that he can answer them.

[Lord Harper (Con)]

My Lords, I am grateful to the Minister for recognising the success of the trans-Pennine route upgrade—which was, of course, started by the last Conservative Government, when a lot of significant work was done. The Minister also had responsibility for that in a previous role.

I have two specific questions. Is the £45 billion pound cost envelope that the Minister mentioned calculated in 2026 pounds, or is it going to be uprated for inflation? That is a very important question, given the length of time HS2 has taken and the significance of that. Secondly, is the delivery authority for the Northern Powerhouse Rail project going to be GBR?

[Lord Hendy of Richmond Hill (Lab)]

The £45 billion is in 2026 pounds. I think the noble Lord will recognise that, for example, we have been accounting for HS2 in 2019 prices for a number of years, which is clearly a ridiculous proposition. I expect GBR to take responsibility for much of this, except that the Government may well decide to deliver building a brand new route between Liverpool and Manchester separately, as with East West Rail. We have to regard the whole thing as part of the national railway network and not as something dreamt up, delivered from Mars and imposed on the railway, with the consequent loss of connectivity and the ability to change trains at stations for all the journeys people want to make.

[Lord Liddle (Lab)]

My Lords, I accept the incrementalism of the plan, but can the Minister give us a little more detail about how it will be managed? What will be the role of the northern mayors? Is funding to be solely from the Treasury, or will it be regionally based? Are the Government exploring how the railway can benefit from the development value of the surrounding land, which will then increase greatly in value?

[Lord Hendy of Richmond Hill (Lab)]

I thank my noble friend for raising a really important point. First, the mayors are party to the proposal, and there is a compact with each of them in the northern growth corridor. This is really important, because previous proposals have been done to those mayors and not with them. They play an important role because, as it says in the announcement, although there is a funding cap, which has been discussed already, they should have the ability to change or improve the specification in line with the aspirations for their region’s economy, jobs and homes. If they do, they should be able to raise some money, and the Government are going to pursue that with them discussions.

The noble Lord is right that one of the underused features of infrastructure funding so far is not buying into the inevitable rise in value of the land. One of the most difficult things to witness and not comment on is that, as you approach Birmingham, the skyline is full of cranes and buildings but none of the owners or developers of the land has paid a penny towards the railway. That cannot be right.

[The Lord Bishop of Newcastle]

My Lords, I have spoken in the Chamber before about the Leamside line, which is a modest 21 miles of railway in the north-east. Would the noble Lord agree that it illustrates the disconnect between statement and construction timeline? Would it be worth considering prioritising projects such as the Leamside line in order to power up the northern powerhouse, particularly in the north-east, which sometimes feels on the edge of plans?

[Lord Hendy of Richmond Hill (Lab)]

I am delighted that the right reverend Prelate has raised that, because I discussed this very subject with Kim McGuinness two or three times in the last month. The extension of the metro to Washington, which is the northern part of the Leamside line, is proceeding anyway. The development of the southern part of the Leamside line will be pursued alongside the first tranche of Northern Powerhouse Rail, with a view to deriving economic growth, homes and jobs benefits from extending services southwards. I hope I have answered the right reverend Prelate’s question very positively.

[Lord Lennie (Lab)]

My Lords, I welcome the noble Lord’s statement regarding Liverpool, Manchester, Leeds and Bradford. There is also Newcastle, as the right reverend Prelate just said. The journey time from Newcastle to Manchester is longer than from Newcastle to London. Is the plan designed to improve that particular journey?

[Lord Hendy of Richmond Hill (Lab)]

The answer to my noble friend is yes. The trans-Pennine route upgrade will make a significant improvement to the journey time across the Pennines. In addition, the intention is to have trains at higher frequency, which means less waiting time. That journey time will be improved in both respects.

[Viscount Stansgate (Lab)]

My Lords, I am delighted that the right reverend Prelate raised the question she did because, by pure chance, I have a Question on tomorrow’s Order Paper about east coast main line capacity. What impact, when delivered, will the Statement, which I welcome, have on the east coast main line, as well as on the points raised by other Members about capacity from the Midlands to the north and to the west coast?

[Lord Hendy of Richmond Hill (Lab)]

I will not spoil the Answer to my noble friend’s Question tomorrow, except to say that the east coast main line has a better timetable with more trains on it. The Government do not see the end of their aspirations for railways in the north to be solely the announcement from last week. There may well have to be further improvements to the east coast main line; if there are, they will only enhance its capacity, both in journeys north-south and in the connections between Newcastle, York, Leeds and places to the west side of the Pennines.

[Lord Kempsell (Con)]

My Lords, I thank the Minister for the update on this important cause. Let us assume that the cap will be busted. If that is the case, and the Treasury’s £45 billion envelope is broken, what assessment have the Government made of the impact on local authorities and businesses that will have to shoulder the local funding uplift?

[Lord Hendy of Richmond Hill (Lab)]

Let us not assume that the cap will be busted, because the progress on the trans-Pennine route upgrade demonstrates pretty satisfactorily that, planned properly, you can make substantial railway enhancements without limitless additions to the budget. We will come back to this House and the other House in short order about the costs and timescale of HS2, but there are some really substantial lessons to be learned from starting a project with no specification and giving contractors, in essence, a licence to print money. There is no way that this Government are prepared to do that with anything that has been announced in the past few days. One of the consequences of that is to allow ourselves time to plan what needs to be done properly, to cost it properly and to contract for it properly. I do not think that we can tolerate assuming that caps will be busted, because we have a terrible example of it at the moment, and we should leave that example in isolation and deliver projects properly, having planned them first.

[Lord Faulkner of Worcester (Lab)]

My Lords, I thank every noble Lord who has spoken in this exchange and warmly welcome the Statement that was made last week in the other place. I congratulate the Minister on getting his head around the facts and being able to explain what is happening with such clarity—for example, to the right reverend Prelate the Bishop of Newcastle on her remarkably technical but important question about the Leamside line. Did the Minister see the press coverage at the weekend on the completion of the Chiltern tunnel for High Speed 2, and does he agree that it is time that we started to celebrate such engineering feats? When it is built, the railway is going to have some marvellous engineering—not just tunnels but viaducts as well—which I think will make our railway the envy of the world.

[Lord Hendy of Richmond Hill (Lab)]

I agree with my noble friend. There are some remarkable structures, either in the ground or coming out of the ground, for HS2, but he would have to agree with me that you have to be tinged with sadness to stand here and not know how much they have cost so far. That is a shocking weakness, which we will come back to and no doubt debate at some stage. My noble friend is right that British engineering can produce some extraordinary feats, and the tunnel that was in the newspapers at the weekend and the viaduct across the Colne Valley are very elegant structures.

Incidentally, if noble Lords who take a train journey between Manchester and Leeds would like to give me prior notice, I can arrange for them to travel in the cab with the driver, and they can see the extraordinary amount of work that is being done on an operating railway, which is neither trivial nor simple, and get some understanding about what is going on there. My noble friend Lord Faulkner is right to highlight these great structures on HS2, but, equally, what has been going on between Leeds and Manchester and out to York is extraordinary, and it has been done with relatively little disruption to the train service. If any noble Lords—within reason—would like to see it at some time, I will arrange for them to be able to do that.