Business leaders across the North of England have responded with cautious optimism to the government's ambitious rail investment plans, but are demanding concrete commitments to ensure the long-promised transport revolution finally materialises.
A Long-Awaited Announcement Met with Pragmatic Hope
Chancellor of the Exchequer Rachel Reeves confirmed the government's commitment to a comprehensive Northern Powerhouse Rail (NPR) programme during a visit to the Neville Hill TrainCare Depot in Leeds on 15 January 2026. The announcement also included plans for a new railway line connecting Manchester and Birmingham.
This move follows decades of stalled projects and broken promises for the region, most notably the scrapped northern leg of HS2 and previous iterations of NPR. Chancellor Reeves, however, struck a personal tone, insisting progress would be felt soon. "By the early 2030s I want people to feel the benefits of these investments," she stated, adding her determination to deliver what previous governments had failed to.
The proposed NPR scheme is outlined in three key phases. The first focuses on upgrading existing connections between Sheffield, Leeds, York, and Bradford. Phase two envisions a new route linking Liverpool and Manchester via Manchester Airport and Warrington. The final phase aims to significantly improve connections from Manchester to Leeds, Bradford, Sheffield, and York.
The Business Call: From Blueprint to Reality
While welcoming the ambition, business representatives were unanimous in their call for tangible action. Phil McCabe, representing the Federation of Small Businesses (FSB) in the North West, emphasised that "the commitments have to be concrete this time." He highlighted the project's potential to unlock productivity and dismantle regional travel barriers that have exacerbated the north-south divide, but warned that areas not seeing immediate investment must not be left behind.
The FSB is also urging the government to leverage the Procurement Act to ensure northern businesses win contracts for goods and services, maximising local economic value. McCabe stressed the need for quality, citing an underground station at Manchester Piccadilly as a non-negotiable element, and warned against "cut-price shortcuts."
Echoing the need for a cohesive economic region, Subrahmaniam Krishnan-Harihara of the Greater Manchester Chamber of Commerce framed NPR as critical to bridging the "mental distance" between northern cities. "It is not just about saving minutes... it is about building new capacity and enabling psychological proximity," he said, transforming the North into a unified labour market where talent and investment flow freely.
Learning from the Past to Deliver for the Future
The shadow of HS2's troubled delivery loomed large over the reactions. Sam Gould from the Institution of Civil Engineers (ICE) welcomed the commitment but was clear: "the government and other stakeholders must learn the lessons from HS2." The ICE's 2024 report outlined the necessity for clear purpose, leadership, and sufficient planning before construction begins.
Stephen Cowperthwaite of Avison Young in Liverpool called the announcement a "genuinely significant moment," noting that reliable east-west links are vital for functioning labour markets and long-term business confidence. "The focus must now be on delivery," he concluded, highlighting the importance of aligning national investment with local leadership.
Other industry bodies added specific conditions. The High Speed Rail Group welcomed the new Manchester-Birmingham line as "essential" but expressed concern over uncertain timescales and the impending expiry of land purchase powers. The Rail Freight Group insisted that freight capacity must be "embedded in the plans from the outset," while the Association for Consultancy and Engineering pledged to work with government to move from "announcement to delivery" with speed.
Even supportive voices, therefore, framed the announcement as a starting pistol, not a finish line. The collective message from the Northern business community is resolute: after years of false dawns, this plan must now be executed with pace, precision, and an unwavering commitment to the region's long-term transformation.
