Labour has revived Northern Powerhouse Rail (NPR) with a pledge of up to £45bn, setting out a three-stage rail package aimed at improving connections between the North’s biggest cities and “reversing years of chronic underinvestment”.
Just over £1bn has been allocated to develop a detailed plan linking cities from Liverpool to Newcastle, with the Treasury imposing a £45bn spending cap in an attempt to avoid the cost overruns that plagued HS2.
The government claims NPR will deliver faster, more frequent services and act as the backbone of a wider growth programme, improving links between Liverpool, Manchester, Bradford, Leeds, Sheffield and York.
However, construction is not expected to begin until the 2030s and will not be completed until at least 2045.
What is Northern Powerhouse Rail – and is it HS2?
NPR is not a rehash of HS2. HS2 was designed as a north–south high-speed line. Northern Powerhouse Rail is an east–west programme intended to strengthen connectivity between northern towns and cities, where services are frequently slow, crowded and limited by capacity.
Labour said it “set out its intention” to build a new Birmingham–Manchester line after Northern Powerhouse Rail is completed, while insisting this would “not be a reinstatement of HS2”. The move would, in effect, replace the cancelled HS2 leg to Manchester, which was scrapped by the Conservative government in 2023.
What is in the rail package?
NPR is a three-stage programme:
Stage one builds on the current TransPennine Route Upgrade and includes a new station in Bradford, making West Yorkshire one of the earliest beneficiaries.
Stage two would deliver a new line connecting Liverpool and Manchester, routed via Manchester Airport and Warrington. The route follows part of the previously planned HS2 corridor, allowing the possibility of a future link towards Birmingham.
It would mean Manchester Airport, the UK’s largest outside London, would gain a new station on the line.
Stage three would bring further improvements across the Pennines, strengthening connections between Manchester, Leeds, Bradford, Sheffield and York.
Funding cap and local contributions
The Treasury’s £45bn cap means parts of the programme may still depend on local funding contributions if costs rise beyond it.
Government officials said funding options were being developed and could include raising money through business rates, tourist taxes, or borrowing against future revenues, which is similar to the way London helped fund Crossrail.
Funding is also likely to be a key aspect of negotiations with regional mayors, particularly where high-cost elements of the project remain undecided.
An example of this is Manchester Piccadilly. Greater Manchester mayor Andy Burnham has pressed for an underground station to allow through-running services and reduce disruption in the city centre. The cost difference between underground and surface options is thought to run into several billion pounds.
Political pressure to deliver in the North
Even though Northern Powerhouse Rail has been championed by successive governments, it has been repeatedly delayed and scaled back. After HS2’s northern leg was cancelled in 2023, rail insiders said NPR remained alive “in accounting terms only” but had not progressed to a workable route plan.
Labour has now committed to developing a full programme, with ministers saying the decision is central to boosting growth and restoring confidence in long-term infrastructure delivery.
What it means for investment
Although the timeframes are long, major transport schemes can influence property markets years before any work begins, as investors and developers price in the value boost provided by future improvements in connectivity. The benefits are mostly concentrated around stations and key hubs, with measurable premiums for homes within walking distance of rail stations.
The most immediate beneficiaries of this are therefore likely to be around the proposed Liverpool–Manchester line via Warrington and Manchester Airport, because it links two of the North’s largest city economies and a major employment hub outside London.
Bradford’s new station could be another early investment hot spot, with city-centre station projects often used to anchor wider regeneration plans, which is likely to attract the interest of developers.
However, it will all still depend on the Government finally delivering on its promises.
