𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Rachel Reeves’s Northern Powerhouse Rail (NPR) plan for Northern England is based on “implausible” growth figures, a leading economist has suggested. This week, the Government announced what it described as the biggest travel upgrade in the North in a generation, with the £45 billion project set to bring faster and more frequent rail services and better connect Liverpool, Manchester, Leeds, Bradford, Sheffield, York, and Newcastle and Hull with improved services.

However, Paul Swinney, chief economist at The Data City, has cast doubt on the productivity figures the Chancellor used to push her Northern Growth Strategy, including its rail projects. He has claimed that official figures showing that Manchester’s productivity grew four times faster than the national average since COVID-19 were likely inaccurate. While the UK’s productivity grew just 0.5% per year between 2008 and 2023, Manchester went from having average annual productivity growth of 0.5% between 2008 and 2019 to 3.3% after 2019.

However, Mr Swinney has cast doubt on its plausibility. While calling it a “staggering improvement,” he said one small area of Trafford – which might normally be expected to host around 4,000 jobs across all sectors – recorded a 21,000 increase in employment in just the legal and accounting sectors between 2019 and 2023.

“A quick look at satellite imagery shows that there is nowhere in this suburban area that could house these jobs. It must be a data error,” he said.

Discounting Trafford’s legal and accounting output growth reduces the productivity growth in all of Greater Manchester between 2019 and 2023 from 14% to 12%. Then, adjusting for what Mr Swinney suspects is “an undercounting of self-employment” cuts its productivity growth again, to 9%.

Mr Swinney then warned Ms Reeves against making big decisions based on data which may be misleading.

Mr Swinney said: “The UK’s productivity performance over the past 15 years has totally flatlined, impacting on money in people’s pockets and how prosperous they feel.”

“This data potentially complicates that picture further, rather than adding clarity on how we are going to get the economy firing again and how we are going to make people feel more prosperous.”

The ONS, however, said it is confident in the regional data for areas as large as Greater Manchester, according to The Telegraph.

A spokesman said: “Our sub-national productivity figures are produced by balancing a number of sources to create the best estimates we can of changing levels of employment and economic activity in the UK’s cities.

“Our estimates show that productivity has been growing in recent years in Manchester, with economic activity growing more quickly than employment.

“While we do give some estimates at neighbourhood level, these involve making broad assumptions and so we urge caution when interpreting these figures.”

The Treasury also said: “These statistics are calculations based on official ONS statistics, which are subject to the ONS’s robust quality assurance processes.”