Better Connected – what impact does transport have on the economy?

Tuesday, 30th July 2019

Guest blog by Ian Morris, Partner, Newgate Communications 

“Truly exciting” and “we should definitely be doing it” was our new Prime Minister’s reply to Conservative MP Andrew Percy’s request for him to commit to Northern Powerhouse Rail in BoJo’s first session in Parliament as PM.

Let’s hope such a positive response is followed up by concrete commitment, because the plan is one that will have significant positive ramifications across the North, as we heard at this event hosted by Squire Patton Boggs.

“What impact does transport have on our economy?” was the overarching question posed in this session, a question answered by a host of leading experts in the sector.

Taking Northern Powerhouse Rail (NPR) as an example, Dan Cochlin of the Northern Powerhouse Partnership said the project would provide huge benefits from enhanced capacity and frequency, reduced journey times, and the ability for 1.3m people to access four key cities across the North within an hour. But he argued that it would be an enabler for so much more, including access to jobs and attracting business investment.

Indeed, Cochlin said, the economic principle of agglomeration underpinning the Northern Powerhouse concept is that our cities will be economically must stronger if they are better connected to each other. These benefits cover a lot of things, but they are all underpinned by transport.

Many in the North would like nothing more than to be in control of all our own infrastructure development, and there is understandably a lot of frustration at the lack of action and investment from national government over several decades. But the scale of the ambition of NPR means it has to be centrally funded, explained Tim Foster of Transport for the North (TfN).

The transformational project, which is currently on the desk of the Treasury after endorsement from the (now former) Secretary of State for Transport, has therefore required a detailed and credible business case to be built to demonstrate to Government why it is worth the investment.

And this value is not merely in increased passenger numbers or shorter journey times. The project is ultimately about improving people’s lives, so has to take into account the broader relationship between transport and regeneration and growth. The business plan recognises that transport on its own can’t be the answer and must be integrated into a broader planning picture encompassing housing, schools, shops, opportunities for jobs and for businesses, in order to maximise the benefit of the investment.

This approach was echoed by Liam Brooker of HS2 Ltd, who says there is now a huge focus on social as well as economic benefits in planning HS2 terminals in a way that makes them work for the overall economy and local areas.

Similarly, the case of Manchester Airport demonstrates that the value derived from its growth is about much more than just the airport itself and the people around Greater Manchester.  Adam Jupp from Manchester Airports Group (MAG) explained how the airport’s growth, with more direct connections to major cities around the world, would deliver a vast number of benefits for the North as a whole.

Already well-used by passengers across the North, more direct connectivity would stimulate exports for British businesses, influence multinationals to relocate major offices and top jobs to the region, act as a catalyst for high growth sectors that are disproportionately reliant on access to other parts of the world, and provide a boon to the region’s hospitality and tourism industries.

Jupp said the support and cooperation of northern cities behind the airport’s case has been founded on the realisation that it will stimulate benefits for the entire North, which has been key to influencing the Government around the value of the airport. Though MAG is investing heavily itself to the tune of £1billion, Jupp agreed with Tim Foster that on some issues, national government buy-in is essential – in this case in the airport’s call for improved rail and road access to the airport. By linking the airport to NPR and HS2, MAG can ensure the benefits of the airport’s growth can flow across the whole of the North, not just around Manchester.

One of the cities that would benefit from this growth is Liverpool, which also stands to generate significant benefits from its investment in port infrastructure. Huw Jenkins of Liverpool City Region Combined Authority said around 90 per cent of freight coming into the UK comes into ports in the South of the country, yet 60 per cent of it is headed for the North. By contrast just 3 per cent of inbound freight arrives via Liverpool. But with the Liverpool 2 deep water terminal expansion now completed, the port can now handle 95 per cent of the world’s container vessels so by using this port more for incoming freight we can remove 150 million HGV miles off our roads per annum, hugely decongesting roads in the Midlands. Similarly, Jenkins explained, there is currently very little rail capacity for freight, which we can address by investing in HS2, another benefit for the national as well as regional economy.

Indeed, as numerous panelists stressed, well thought-out investment in transport infrastructure can have vast economic benefits, but also much broader impacts on diverse areas from public health to clean air and academic research partnerships. Benefits which are great for the North, but which are also great for the nation as a whole.

Powerful arguments. Let’s hope the new PM and his team are really listening.