Chancellor set to announce Government funding to develop plans for tunnel between Sheffield and Manchester

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Chancellor George Osborne is set to announce £75 million to develop plans for a trans-Pennine tunnel between Sheffield and Manchester.

The cash will also explore options for improvements to the M60 ring-road around Manchester as well as the A66 and A69 coast-to-coast trunk roads further north.

He is expected to make the announcement in his Budget tomorrow.

The Chancellor is also expected to confirm Government backing for the HS3 high-speed rail link between Manchester and Leeds, and the Crossrail 2 project to connect Surrey and Hertfordshire via stations in central London like King’s Cross, Victoria, Chelsea and Clapham Junction.

The developments come as the National Infrastructure Commission - set up by the Government in 2015 to advise on long-term projects to boost the economy - released a report calling for ‘immediate and very significant investment’ in transport for the North of England, and a plan for longer-term transformation to cut journey times, raise capacity and improve reliability.

The new report followed last week’s launch of a similar study into Crossrail 2, which urged ministers to ‘get on right away’ with the south-west to north-east cross-London line.

National Infrastructure Commission chairman, Lord Adoni,s said: “If the North is to become a powerhouse it has to be better connected.

“Leeds and Manchester are just 40 miles apart but there is no quick and easy way to travel between the two.

“In rush hour, it can take more than two hours by car, by train it can be almost an hour. So we should kick-start HS3 across the Pennines and slash journey times to just 30 minutes.

“But we must not wait decades for change - journey times should be cut to 40 minutes by 2022.

“A transformed northern rail network should include high-speed connections to HS2 and the dramatic redevelopment of Manchester Piccadilly to deliver jobs and investment across the centre of the city.

“By road, major improvements should be brought forward to transform the M62 between Liverpool and Leeds, cutting journey times by up to 20 per cent and increasing capacity by a third, alongside the development of a major strategy to enhance the entire motorway network including access to Britain’s third busiest airport - Manchester Airport.

“A better connected north will be better for jobs, better for families and better for Britain. The work should begin as quickly as possible.”

Mr Osborne said his decisions would drive forward the UK’s largest investment in rail infrastructure since the Victorian era.

“With the difficulties we see in the global economy, we’ve got to make Britain fit for the future,” said the Chancellor.

“Now is the time us to make the bold decisions and the big investments that will help us to lead the world in infrastructure, and create jobs, push up living standards and boost our productivity for the next generation.

“That’s what my Budget this week sets out to do.”

Transport Secretary Patrick McLoughlin added: “We know that good transport doesn’t just help get people around, it helps them get on.

“The National Infrastructure Commission has rightly identified these projects as transformational schemes that have the potential to further strengthen our economy.

“This is a major step forward for the Northern Powerhouse and Londoners alike.”

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