Liverpool offers to pay £2bn towards HS2 link

Mayor Joe Anderson said the city region could raise £2bn through a tax increment finance scheme, using National Insurance contributions from new jobs created as a result of the infrastructure investment, to cover two-thirds of the cost of a 20-mile link into the HS2 network.

Anderson has leant his support to Ticket to Ride: How high speed rail for Liverpool can realise the Northern Powerhouse, a report by ResPublica, a think tank.

The report’s authors say Liverpool and other Northern cities “will be left behind if HS2 doesn’t go beyond favoured cities and locations.”

In a statement accompanying the report, ResPublica said: “The cost of extending HS2 to Liverpool would be less than £3bn and for the first time in the UK up to two thirds of cost could be self-financed by the city region through the local retention of taxes.”

Anderson added: “The need for Liverpool to be connected to both the other cities of the north and London is huge if we as a city are going to play our part in generating money, jobs and continued growth through the Northern Powerhouse.

“Our funding plan would make up the bulk of the price with £2bn coming from keeping hold of locally raised taxes, rather than sending them to the Treasury. Using this mechanism would allow both ourselves and the wider economy to move closer to prosperity.”

ResPublica’s proposal would see a dedicated high speed rail line linking the Liverpool City Region into the HS2 route to the north of Crewe, and connecting it to Manchester Airport and Manchester Piccadilly on high speed track. This link in turn will also be the westernmost branch of the planned east-west “HS3” or “TransNorth” route running from Liverpool to Hull and reconnecting the great cities of the north.

A tax increment financing scheme could allow the city region to fund up to two thirds of the cost of the Liverpool-Manchester link, with National Insurance contributions from any additional jobs that are generated over and above the city region’s structural jobs growth trend, together with the capitalisation of revenue from the Mersey Tunnels tolls.

Director of ResPublica, Phillip Blond, said: “High speed rail offers a real chance to make the Northern Powerhouse work but it has to connect the cities of the north with each other, as well as London. If we don’t extend the North South HS2 into an East West HS3 – the real benefits and gains from high speed rail will be lost.

“Both HS2 and HS3 could start in Liverpool and with the city able to find most of the funds there is no reason for the government to ignore this detailed and transformative proposal.

“Currently, rail lines in the Liverpool City Region are crowded and the government’s proposed limited link from Liverpool to HS2 running from Crewe on old classic lines, while cutting journey times, would not allow Liverpool to grow. This would severely constrain the Liverpool Superport project which needs extra East West rail capacity to take advantage of the potential trebling of freight into Liverpool as a result of recent investment.”

The report was endorsed by Angela Eagle, MP for Wallasey; Louise Ellman MP for Liverpool Riverside and chairman of the House of Commons Transport Select Committee; and Robert Hough, chairman of Liverpool City Region Local Enterprise Partnership.