George Osborne must explain how the postponement of Network Rail’s planned update work will impact the ‘Northern Powerhouse’, according to the Association of Chartered Certified Accountants (ACCA).
The government has implemented a £13billion initiative to modernise the commuter route between Manchester and Leeds, but plans to electrify the railway line between the two cities seem to have been out on hold.
ACCA has called upon the Chancellor to address how this will affect growth in the region when he delivers his budget on Wednesday.
Gillian Fawcett, ACCA head of public sector, said: “The government has made the Northern Powerhouse a key policy for this parliament, but the announcement last month from the Transport Secretary shows this policy is in jeopardy.
“If the government expects to be able to rebalance the economy away from the South East, major infrastructure upgrades are needed.”
The body, which currently has 170,000 members and 436,000 students in 180 countries, says Osborne must shed light on how the ‘powerhouse’ can become a reality without the necessary rail upgrades.
Ms Fawcett added: “We recognise that cutting the deficit must be a priority – the country is paying far too much in debt interest – but he needs to be strategic about how he cuts.
“As well as cutting the deficit he needs to be wary of stifling growth. The UK economy may be growing but without investment in our northern cities we are going to end up with an even greater imbalanced economy and one too reliant on a couple of industries.
“Government spending contributes about a third of GDP, the recovery is still fragile and Mr Osborne needs to walk a very fine line if growth is to continue throughout this parliament.”
These comments come just days after Ashton Labour MP Angela Rayner challenged Osborne to ‘put up or shut up’ and demanded commitment from the Chancellor to bridge the gap between the ‘investment-starved north and the rich south’.
She said: “We must pressure the Government to deliver on its promises, otherwise the Chancellor’s pet Northern Powerhouse project will be seen as so much empty rhetoric.
“The project has already been delayed for far too long – the uncertainty needs to be ended now, once and for all.”
Electrification is seen as a means of enriching the region’s economy and easing the pain of rush hour commuters by reducing overcrowding.
However, the delays mean the pressure is mounting on the government to deliver on its promises, and Osborne is likely to come under greater fire if the issue is not addressed on Wednesday.
Image courtesy of Richard Kay, via Wikimedia, and HM Treasury with thanks.