Andy Burnham, newly installed as Prime Minister, is widely anticipated to revive some form of the HS2 high-speed rail project in Northern England. The former Greater Manchester mayor has previously expressed concerns about the adequacy of current northern rail infrastructure plans and supports faster progress than currently scheduled.

The Labour Party has committed at least £45 billion toward the Northern Powerhouse Rail (NPR) initiative, which prioritizes east-west rail improvements across the North. This plan includes a proposed rail link between Birmingham and Manchester, although construction on this section is not expected to begin until the 2040s. Burnham, during his campaign as the Member of Parliament for Makerfield, indicated a desire to accelerate these developments and explore alternative funding mechanisms to make this possible.

Despite these ambitions, Burnham has pledged to adhere to Labour’s existing fiscal rules, limiting the scope for additional capital spending on transport projects. Nonetheless, the Department for Transport’s current £45 billion NPR budget includes elements that overlap with prior HS2 proposals, such as the route connecting Manchester Airport and Manchester Piccadilly stations.

Burnham is reported to support a scaled-down, slower version of HS2, aiming to reduce costs and increase private sector involvement. In 2024, he endorsed a business consortium-led proposal from engineering firm Arup, which envisioned a Birmingham-Manchester line costing 40% less than the original HS2 plan. The proposed cost savings would come from reducing train speeds from 224 mph to 185 mph, using conventional ballasted tracks rather than slab track technology, and integrating existing rail infrastructure. However, this approach would still require public-private partnership funding involving some Treasury capital.

Local taxation as a funding source remains uncertain. A 2024 proposal to study local contributions, including potential revenue from augmented business rates, was not pursued under Sir Keir Starmer’s leadership. Burnham has cited London’s Crossrail project as a funding model, noting that around 60 percent of its £19 billion cost was covered via local taxes, particularly a business rates supplement (BRS). In London, the supplement started at 2 pence on premises with a rateable value of £70,000, increasing to £92,000 by 2026. Experts, however, warn that replicating this funding level through business rates outside London is unlikely. Instead, income tax revenue sharing—where regions retain a portion of their generated income tax rather than remitting it to the central government—is seen as a more feasible local funding mechanism.

The political dynamics of local contributions also pose challenges. While it was relatively straightforward to justify Crossrail funding as a benefit to all of London, determining which constituencies should financially support a Birmingham-Manchester line and how much each should pay may trigger disputes.

HS2 Ltd, the government-created body responsible for the original HS2 development, has faced significant criticism. Nonetheless, it has quietly been tasked with initiating preliminary work on the Labour Party’s £45 billion NPR scheme.

Burnham’s approach to reviving HS2 in the North will therefore require balancing fiscal constraints, securing a mix of public and private funding, and navigating complex local political considerations.