Ministers have shelved the Transpennine rail upgrade. Is the Northern Powerhouse dead?

"And the budget cuts will be THIS big!" George Osborne gives a speech on the Northern Powerhouse on 14 May 2015. Image: Christopher Furlong/Getty.

Note: This story was edited at 14.00hrs, to include some counter arguments to our angry rant. You can read them at the bottom of the story.

Seven weeks ago, the Conservative party won Britain’s general election on a manifesto which pledged to rebalance Britain’s economy and turn the cities of England’s M62 corridor into a “Northern Powerhouse”.

A lot of that policy has turned out to be PR fluff, of the standing-about-on-building-sites-in-high-viz-jackets variety. But at the core of it were two big and concrete ideas. One was devolving power; the other was a major investment in the region’s transport links, to make it possible to live in, say, Bradford, and commute to work in Manchester.

Anyway. Yesterday, this happened:

The government says it will delay or cut back a number of modernisation projects planned for Network Rail.

Transport Secretary Patrick McLoughlin says rising costs and missed targets make the £38.5bn five-year plan untenable.

He blamed Network Rail, saying it should have foreseen the improvements would cost more and take longer.

(That’s from the BBC.)

There were three major rail upgrades included in this plan. One is the electrification of the core section of the Transpennine route, between Manchester and Leeds. That’s been shelved.

Another is the electrification of the Midland mainline, between Bedford, Nottingham and Sheffield. (The section south of Bedford, which serves the London commuter market, was electrified years ago). That’s been shelved too.

The third is electrification of the Great Western line, from London towards Oxford, Bristol and Cardiff. Has that been shelved too? Here’s McLoughin again:

Electrification of the Great Western line is a top priority and I want Network Rail to concentrate its efforts on getting that right.

It’s not that we’re cynical about the government’s commitment to the Northern Powerhouse, exactly. But, well:

While we’re not being cynical, check out this map from Network Rail’s latest annual report, showing its major infrastructure projects in 2014-15.

One project in Scotland, one in the north, two in the Midlands... and four in London. I live in London. I work in London. I have been a Londoner all my life.

But come on.


The government has framed these cuts as an emergency response to problems at Network Rail: yesterday, it also announced that the body’s current chair Richard Parry-Jones was stepping down, to be replaced by London’s transport commissioner, Sir Peter Hendy. The implication is that ministers would just love to continue with the investment plan they announced last year, but simply can’t afford it.

But there are two problems with this. One is that Network Rail has said it knew early last year that the five-year plan would be “incredibly difficult to deliver”. The Conservative party must have known that, even as it made all those manifesto commitments to investing in the north.

The other, bigger problem is that it is very, very obvious that schemes affecting the north have been axed, while those restricted to the south haven’t.

From an economic modelling perspective this probably makes sense: as we’ve explained before, projects affecting a big and rich city like London will always do better in a cost:benefit analysis than those that don’t.

But it nonetheless means that rich southern commuters are getting investment, while less rich northern ones are stuck with the same crappy service they’ve had for decades.

If the government or its civil service are really serious about rebalancing Britain’s economy, and creating a northern powerhouse, this is a funny way of going about it.

EDIT: 14.00hrs

Pains us though it does to say it, we might have been a little unfair here. On our Facebook page (where you should definitely all like us, by the way), Nick Kingsley, the managing editor of Railway Gazette International, and a northerner himself, has got in touch to point out the other side of the story.

You can read his full comments on Facebook, but here, reposted with Nick’s permission, are the key points:

 

1) You don't cancel projects that have already been started.

“...the main reason the Great Western project is proceeding is because it’s well in hand, not because it is in the south. Neither the [Midland Main Line] nor [Transpennine] projects have yet seen serious work begin in earnest.”

 

2) Electrification isn't all it’s cracked up to be anyway.

“...it mainly delivers benefit to the rail asset manager itself, ie. Network Rail, by reducing track wear and maintenance cost.

“Yes, journeys get a bit quieter and a bit more pleasant, possibly through new rolling stock (though not always). But electrification alone does not deliver a step change in capacity or connectivity.”

 

3) It's better to take a bit longer but do things right.

“On the Manchester – Leeds corridor, there was serious concern that electrification on the existing alignment would worsen a capacity squeeze that sees the limited-stop inter-city service taking capacity away from trains serving local stations.

“As the Transport Secretary’s statement clearly implied, it might be better to come up with a much more robust rail investment programme which encompasses the HS3 idea [an entirely new Transpennine line] before we embark on a tricky, potentially flawed "patch and mend" job on just one of the five trans-Pennine rail arteries.”

 

Valid points all.

So perhaps, in the short term, this is the correct decision. It remains striking, nonetheless, how many of the projects that were already underway, and therefore untouchable – the Great Western, Thameslink, Crossrail – are the ones affecting London.

HS3, by contrast, is little more than a whizzy brand name at this point. Rather like the Northern Powerhouse itself.

Jonn Elledge is the editor of CityMetric. He is on Twitter, far too much, as @jonnelledge.

 
 
 
 

Can you have capitalism without capital? Brighton, Ankara, Ghent and the intangible economy

The Fusebox, Brighton. Image: WiredSussex.

As you head north out of Brighton on the A23 things take a distinctly granular turn. The cool bars and trendy eateries give way to second-hand shops and nail bars.

Looming over the area, New England House, an eight-storey brutalist office block, is home to Wired Sussex, a collection of digital and media companies, as well as its offshoot The Fusebox. Here, a collection of entrepreneurs, tech visionaries and creative technologists are seeking to transform their ideas into successful businesses. This island of cutting-edge thinking, surrounded by the evidence of the glaring consequences of austerity, could stand as a synecdoche for the suddenly vogueish concept of the “intangible economy”.

Towards the end of last year, on Radio 4’s Start The Week, Jonathan Haskel, author of Capitalism Without Capital, laid out the features of this brave new economy. The ideas are scalable, have sunk costs, their benefits spill over, and they have synergies with other intangible assets. All of these things are, to a greater or lesser extent, attributes featured in the virtual reality games, apps for care home workers, and e-commerce ideas mapped out by the bright sparks in the Fusebox.

Its manager, Rosalie Hoskins, explains that it exists to support the work of small companies doing creative work. Within these clean white walls they can bounce their ideas off each other and reap the fruits of collaboration. “We’ll provide the doors,” she says. But “it’s up to them to open them.”

One innovative thinker hoping to make her entrance is Maf’j Alvarez. She tells me she studied for a masters in digital media arts at the University of Brighton, and describes herself as an ‘interactive artist’. “Right now I am playing with virtual reality,” she tells me. “There’s a lot of physics involved in the project which explores weight and light. It definitely has a practical application and commercial potential. VR can be used to help people with dementia and also as a learning tool for young people.”

The Fusebox, she says, is “about collaboration. The residents of the Fusebox are in all a similar situation.”

The willingness to work together, identified by Haskell as a key element of the intangible economy, is evident in the Fusebox’s partnership with like minded innovators in Ankara. Direnç Erşahin from İstasyon, a centre for “social incubation” based in the Turkish capital, visited the Fusebox toward the end of last year.

“It was a good opportunity to exchange knowledge about the practice of running a creative hub – managing the place, building a community and so on,” he says.

Erşahin and his colleagues have launched a fact-checking platform – teyit.org – which he believes will provide “access to true information”. The co-operation between the Fusebox in Brighton and İstasyon in Ankara  is “a good opportunity to reinforce a data-oriented approach and university and society interaction,” he argues.

But the interaction between wider society and the denizens of the intangible world is often marked by friction and, ironically, a failure of communication.

This point is underlined by Aral Balkan, who runs a company called indie.ie which aims to develop ethical technologies. “There’s a good reason we have a trust problem,” he says. “It’s because people in mainstream technology companies have acted in ways that have violated our trust. They have developed systems that prey upon individuals rather than empowering them.”

A former Brighton resident, Balkan is almost a walking definition of Theresa May’s “citizen of nowhere”. He is a regular speaker on the TED and digital circuits, and I crossed paths frequently with him when I covered the industry for Brighton’s local newspaper. He left the city last year, chiefly, he tells me, in protest over the UK government’s overweening “snooper’s charter” laws.


He has Turkish and French citizenship and is now based in Malmö, Sweden, while working with the city of Ghent on a radical redevelopment of the internet. “Ghent is a beautiful example of how location affects the work,” he tells me. “They don’t want to be a smart city, they want to encourage smart citizens. We are exploring alternatives.”

Karl-Filip Coenegrachts, chief strategy officer at the City of Ghent, is another believer in the synergies made possible by the intangible economy. “The historic perspective has impacted on the psychology and DNA of the city,” he says. “The medieval castle built to protect the nobility from the citizens not the other way around. People in Ghent want to have their say.”

Left out of this perspective, of course, are those who cannot make their voice heard or who feel they are being ignored. The fissures are easy to find if you look. The future of Belgium’s coalition government, for example, is threatened by Flemish nationalists in the wake of a scandal over the forced repatriation of 100 Sudanese migrants. In Ankara, President Recep Tayyip Erdogan has purged local government and continues to stamp on any dissent.

In the UK, the gig economy makes headlines for all the wrong reasons. Back in the area around the Fusebox, the sharp observer will notice, alongside the homeless people curled up in sleeping bags in charity shop doorways, a stream of gig-worker bikers zooming from one order to another.

The intangible economy throws up all-too tangible downsides, according to Maggie Dewhurst, vice chair at the Independent Workers Union of Great Britain. She gives short shrift to the idea of ‘capitalism without capital’.

“It does get a bit irritating when they muddy the waters and use pseudo academic definitions. They pretend tangible assets don’t exist or are free.”

In fact, she adds, “The workers are a human resource.”