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Business leaders are demanding that the government boost infrastructure spending in the north after it scrapped or reviewed projects that were part of the Northern Powerhouse plan. 

Two lobby groups representing thousands of companies have each written letters to ministers calling for an end to the north-south divide in investment in rail and road networks. 

Chris Grayling, the transport secretary, cancelled the electrification of part of the Midland main line to Sheffield and said in July that a promise to run electric trains from Liverpool to Newcastle might also be broken.

The same month the transport secretary offered support to London’s £26bn Crossrail 2 scheme, which would start in his Epsom constituency, though funding has not yet been decided.

Business North, a lobby group, said it was concerned about “reports on the downgrading of investment in northern rail”. It called on Mr Grayling to “commit to reversing the under-investment in northern infrastructure”. 

The letter’s signatories include Chris Hearld, chairman of Business North and KPMG’s northern region, Henrietta Jowitt, deputy director of the CBI business lobby group, and Steven Underwood, chief executive of developer and logistics group Peel. It accompanies a 70,000-strong petition organised by think-tank IPPR North, which highlights that £59bn more has been spent on transport in London and the South East over the past decade than in the north. 

George Osborne, the former chancellor who fostered the Northern Powerhouse, has also weighed in with an article in the Financial Times. 

Mr Osborne, still head of the Northern Powerhouse Partnership, said Theresa May, prime minister, should now earmark funding for “Northern Powerhouse rail”, a new fast line from Liverpool to Sheffield, Hull and Newcastle that could cost up to £30bn and would link to HS2, the planned fast line from London. 

“Northern Powerhouse rail has to be the next stage in the government’s high-speed network,” he writes. “This new railway would transform the northern economy.”

He says enough money is available to build it and Crossrail 2, the north-to-south cross-London route. It would create a big enough pole to rival London for jobs and investment, Mr Osborne argues. 

Business leaders and politicians including Andy Burnham, the mayor of Greater Manchester, will meet on Wednesday in Leeds to make the case for fresh investment. 

The transport department said it would take a decision next year on trans-Pennine electrification.

“We are committed to improving trans-Pennine services and are working with Transport for the North to cut journey times and increase capacity between the major cities of the north,” it said.

The transport secretary said it was too difficult to upgrade parts of the 19th-century Leeds-Manchester section. Instead, a review could back “bimode” trains that are powered from electric cabling but switch to diesel engines when necessary. 

Mr Grayling said these offered the same time savings and capacity increases as electric trains. But railway experts say they are heavier, more expensive to run and less reliable. 

Mr Grayling also cancelled electrification of the line from Kettering to Sheffield, expected by 2023, along with the Oxenholme to Windermere and Cardiff to Swansea routes. 

Several chambers of commerce have also signed the letters or contacted ministers. The north-east chamber has invited Mr Grayling to visit the region. 

It told him the “huge” transport funding imbalance has a “severe and limiting” effect on the regional economy. It was vital to have the “missing piece” on a stretch of electrified railway from Newcastle to Liverpool. 

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