© Bloomberg

George Osborne’s claim that his Northern Powerhouse project was taking shape garnered a mixed reaction, as businesses said they would wait to see “spades in the ground” before celebrating.

Speaking almost two years since he first announced the project during a speech in Manchester, the chancellor said: “We have put in place the mayors. We are building the roads. We are laying the track. We are making the Northern Powerhouse a reality and rebalancing our country.”

While welcoming the green light for major transport schemes, Ed Cox, director of IPPR North, the think-tank, said: “In truth he has only committed to further feasibility studies.” But he added the announcements would “heighten expectations . . . that government will ultimately commit the fresh billions required to finally see some spades in the ground”.

Alan Ferguson, executive chairman of Fergusons, a national haulage company, was also circumspect. “The problem I have is, I will believe it when we see the machines on the ground doing the work.”

In December 2014 David Cameron, prime minister, visited the Fergusons headquarters in Northumberland to announce plans, costing £290m, to make part of the A1 in the county a dual carriageway. Mr Ferguson said he was still waiting to see this work begin.

Guy Butler, director of Glenbrook property, based in Manchester and London, said the failure to guarantee a new east-west rail line exposed the Northern Powerhouse as a “sham”. He said: “It is a plot to keep northerners quiet while [the government funds] Crossrail 2. They only care about London.”

£161m

The cash pledged for bringing forward upgrades to the M62

The chancellor’s budget emphasised northern transport links, particularly in the Manchester-Leeds area. The £300m he pledged comprised £161m for bringing forward upgrades to the M62, £75m to explore options for a trans-Pennine tunnel between Manchester and Sheffield, and £60m to develop detailed plans for a fast rail link — which he has dubbed high speed 3, though it is in reality a commuter project — between Manchester and Leeds.

But Michael Gould, founder of Anaplan, a technology business based in York and Silicon Valley, said: “Despite much discussion, there still remains a level of scepticism of whether the ‘Northern Powerhouse’, laid out by the government in 2014, will ever become a reality.”

Speaking on behalf of the northern core cities — Liverpool, Manchester, Sheffield, Leeds and Newcastle — Nick Forbes, Newcastle city council leader, said: “We know that this Northern Powerhouse will only succeed if leaders are handed the powers, and funds, to create more and better jobs.”

Rob Cotton, chief executive of the FTSE 250 cyber security business NCC Group, said: “Infrastructure alone will not deliver success for the northern economies and will take many years to come to fruition.” He called on the government to build “world-class centres of excellence in our major northern cities” and urged improved university-business collaboration “to deliver the graduates to take advantage of these centres”, citing MediaCityUK in Salford as an example.

£75m

The amount set aside to explore options for a Pennine tunnel

The emphasis on transport schemes around Manchester and Leeds has caused particular unease in north-east England, the UK region with the highest unemployment.

Graeme Mason, planning and corporate affairs director at Newcastle Airport, said the chancellor’s investments seemed “very focused on the M62 corridor”.

The news of upgrades for the A66 and A69 was welcomed in the region. But Rob Charlton, chief executive of Space Group, an architectural firm with a Newcastle headquarters and offices in Hull, Middlesbrough, Leeds and London, said: “There is no doubt the north-east is getting left behind. It’s going to become a backwater if we are not careful.”

Copyright The Financial Times Limited 2018. All rights reserved.