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Commenting on announcements made on the Northern Hub rail investment in Chancellor George Osborne's budget speech today, IPPR North Director Ed Cox said:

"We welcome the announcement of further elements of the Northern Hub plans as another important piece of the puzzle but the government isn't going far enough if we want to see real jobs growth in the North of England.

"Osborne was right to admit that transport investment is unfairly skewed towards London and the South East and IPPR North research has recently shown that transport spending in the North East is just £5 per head compared to £2700 per head in London and the South East. Investing in the Northern Hub will go some way to rebalance investment.

"We hope to see the final stages of Northern Hub funding confirmed later this year along with other rail priorities such as rolling stock and station capacity improvements: investment that amounts to just 2.5 per cent of the cost of HS2. This would create 20,000-30,000 extra jobs in the North of England and would add over £4bn to the Northern economy.

"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.

"We also welcome the announcements about Manchester's City Deal and in particular proposal to invest £1.2bn in transport infrastructure. We look forward to seeing the other City Deals and hope they are as ambitious as Manchester's.

"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."

On regional pay he said:

"We urge caution by George Osborne on the issue of regional or local pay and hope that he waits for the results of the Independent Pay Review Bodies' review which is due in July. It is especially important that he thinks about what some of the unintended consequences could be, particularly the dangers of further depressing the Northern economy.

"While few dispute evidence of a pay gap, decisions on regional pay must be based on solid evidence that introducing different pay grades for public sector workers in different parts of the country will boost private sector jobs growth."

Notes to editors:

Four questions Osborne must answer before introducing regional pay: Why has the Chancellor jumped the gun of an independent review?By Ed Cox is here: http://www.ippr.org/articles/56/8880/four-questions-osborne-must-answer-before-introducing-regional-pay-why-has-the-chancellor-jumped-the-gun-of-an-independent-review?siteid=ipprnorth

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

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)

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%

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

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

Station improvements in Liverpool, Leeds and Sheffield: increases capacity at all stations, both passenger numbers and train journeys

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.

Contact:

Tamsin Crimmens, 0191 233 9051, 07800 742 262, t.crimmens@ippr.org