Government commits £45b in plan to transform rail links across the North

Dubbed 'Northern Powerhouse Rail', the investment follows the scrapping of HS2 and aims to deliver faster, higher-capacity journeys...

By Manchester's Finest | 14 January 2026

(Credit: David Dixon)

The Government has announced a major investment package totalling £45 billion to overhaul rail connections across the North of England, setting out a long-anticipated programme intended to speed up journeys, expand capacity and support economic growth from Liverpool to Newcastle.

Being dubbed ‘Northern Powerhouse Rail’, the new plan is being framed as a fresh start and an attempt to restore confidence in large-scale transport investment for the region.

The announcement follows the Tory government’s decision to scrap HS2 north of Birmingham in 2023, a move that sparked widespread criticism from business leaders, northern mayors and transport experts.

The cancellation left many questioning the future of major infrastructure investment in the region, with fears that the economic divide between the North and South would deepen without a high-speed link. The new programme is being presented as a renewed commitment to improving rail capacity and reliability across key northern routes.

piccadilly station
(Credit: Richard Kelly)

The plan will be delivered in three phases. The first includes upgrades to existing lines between Sheffield and Leeds, Leeds and York, and Leeds and Bradford, as well as development work on the Leamside Line in the North East.

The second phase outlines a new route between Liverpool and Manchester, running via Manchester Airport and Warrington.

The third focuses on improved connections across the Pennines between Manchester, Leeds, Bradford, Sheffield and York, with onward services to Newcastle via Darlington and Durham, Hull, and Chester for North Wales links.

Subrahmaniam Krishnan-Harihara, Director of Business Policy and Research at Greater Manchester Chamber of Commerce, said: “Regardless of the specifics, the core economic case for Northern Powerhouse Rail remains unchanged: it is about bridging the ‘mental distance’ in the North of England.

“To become a successful economic region that can contribute to rebalancing the UK economy, the cities in the North should function as a single, cohesive labour market. In the North of England, a distance of 40 to 60 miles, such as between Manchester and Leeds or Leeds and Hull often feels like a barrier rather than a bridge.

“Therefore, a high-speed east to west link becomes critical. It is not just about saving minutes in a journey timetable; it is about building new capacity and enabling psychological proximity thus transforming the North of England into a unified economic powerhouse where talent and investment can freely flow. And that is the standard by which any new proposal must be measured.”

Former Chamber President Wayne Jones OBE, who sits on the Liverpool to Manchester Railway Board, added: “Today’s announcement regarding the progression of NPR will be welcome news for the business community after years of speculation and as a member of the Liverpool to Manchester Railway Board it is great to see this project clearly mentioned in the brief.

“Improving connectivity in the North is essential to boost our economy, improve employment opportunities and deliver much needed housing development in this area. Reducing journey time and increasing capacity are of course very welcome but this railway is much more than this.

“It’s about driving growth, creating thousands of new jobs and connecting our region to improve national and international investment enhancing our local ports and airports. Of course there is more information needed but at least we now have the clear message to connect the North and drive national prosperity.”

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(Pic credit: David Dixon)