The outgoing coalition government launched the Northern Transport Strategy just days before the start of the General Election campaign – surely no coincidence. Professor Graham Winch looks beyond the short-term politics to explain why the outlined investment is worth it.
The just published Northern Transport Strategy aims to use better transport links in Northern England “to create a single economy across the North”. But what are the actual benefits of the massive proposed investment programme?
Transportation infrastructure provides the connectivity services which are essential for economic growth and quality of life. For instance, it provides commuting services to get people to and from work; transporting services to move freight from ports and manufacturers to customers; and networking services to enable meeting up for business and pleasure.
For commuters, shaving 19 minutes off the daily commute (the proposed improvement for the Leeds to Manchester rail journey) yields over three more hours a week to spend with the family (or working!). For businesses, reducing journey times has a major impact on efficiency in the movement of goods and people. And perhaps more important than elapsed times, reliability and capacity are improved so that journey times are predictable and services more frequent which confer considerable socio-economic benefits in their own right.
To complement this intra-regional connectivity, transportation infrastructure also enables national and international connectivity. The two arms of HS2 and the global connectivity offered by Manchester International Airport (MIA) are vital if the full potential of the region is to be realised. As Birmingham becomes a satellite of London thanks to HS2, the Northern region will genuinely become the ‘Northern Powerhouse’ as England’s principal economic counterweight to the London conurbation. The models for this are two other dynamic European ‘polycentric agglomerations’: the Randstad in The Netherlands and the Rhein-Ruhrgebiet in Germany.
The newly announced strategy for Northern England builds on a number of investments that are already underway. These include the Northern Hub project from Network Rail, which electrifies large stretches of the regional rail network and provides crucial interconnectivity through Manchester; the Mersey Gateway Bridge; and the Atlantic Gateway investment by the Peel Group which enhances Liverpool for the ‘New-Panamax’ shipping world. Interestingly, the latter is a direct result of another major infrastructure investment: the widening and deepening of the Panama Canal, which should complete next year.
Some of the most eye-catching ideas in the Northern Transport Strategy include feasibility studies for a new rail link for Liverpool, connecting with both MIA and HS2, and road and rail tunnels under the Pennines between Sheffield and Manchester. These proposals complement a host of strategic improvements to existing infrastructure.
Upgrades to ports – particularly Hull and Liverpool – will enhance the North’s status as the UK’s logistics hub. Improvements to road and rail systems will then be needed to enable the distribution of the increased freight movement without generating massive congestion. MIA is profoundly important for the whole region, hosting over 60% of regional air traffic. Quick and easy access to MIA is therefore crucial for both business and leisure travel internationally. Japanese fans of Beatrix Potter and American fans of the Brontës need intercontinental flights to MIA and swift onward transfers with inter-modal ticketing if they are to be tempted away from the multiple attractions of destinations such as Paris or London.
But what of the cost? Very large sums are involved, particularly if we are talking about tunnels under the Pennines. However, a recent report from the International Monetary Fund argued that well-planned infrastructure investment generally pays for itself. In a period of very low interest rates, the economic growth stimulated by such investment provides a large enough return on the borrowing required to more than pay it back, thereby reducing overall national debt. This counter-intuitive result – that borrowing reduces debt over the longer-term – derives from two powerful benefits. Firstly, from the growth generated by the investment itself as it stimulates activity which multiplies through the economy; and secondly from the growth enabled by the greater supply of the infrastructure services discussed above.
However, this analysis is subject to an important caveat: public investment must be ‘efficient’ and not wasteful or corrupt. This means that best practice standards for project appraisal, project selection, budgeting, project delivery and ex-post evaluation are essential. Best practice project governance can ensure that investments are made in infrastructure that will genuinely increase rates of growth and project delivery managed effectively – the right project needs to be done right. The Northern region already has one infrastructure white elephant – the Humber Bridge – and does not need any more.
So, investment in the Northern Transport Strategy is definitely worth it, paying for itself and more. It will also generate a faster rate of growth in the North relative to the South and hence help to redress regional economic imbalances. We must ensure that project selection is carefully and transparently done based on realistic estimates of costs that are exceeded by clearly specified socio-economic benefits, but we know how to do this. If these criteria are met, the strategy should be a major factor in economic growth in Northern England.
Let us hope politicians remain as committed to the project after the General Election as they are before it.