Rachel Reeves humiliated as top economist claims she’s made £45bn mistake | Politics | News
Rail expansion plans for northern England rely on ‘incredible’ figures (Image: Getty)
Rachel Reeves’ Northern Powerhouse Rail (NPR) plan for northern England is based on “incredible” growth figures, a leading economist has claimed. This week the Government announced what it described as the biggest travel upgrade in the North in a generation, with a £45bn project aimed at bringing faster and more frequent rail services and better connecting Liverpool, Manchester, Leeds, Bradford, Sheffield, York and Newcastle and Hull with improved services.
But Paul Swinney, chief economist at The Data City, cast doubt on the productivity figures the Chancellor is using to push forward the Northern Growth Strategy, including rail projects. He claimed official figures showing Manchester’s productivity rising four times faster than the national average were likely inaccurate due to Covid-19. While the UK’s productivity increased by just 0.5% per year between 2008 and 2023, Manchester saw productivity growth average 0.5% per year between 2008 and 2019, rising to 3.3% after 2019.
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Doubts cast over Reeves’ productivity figures in Manchester (Image: Getty)
But Mr Swinney cast doubt on its credibility. Describing it as a “staggering development”, he said the small area of Trafford, normally expected to be home to around 4,000 jobs across all sectors, had recorded a 21,000 increase in employment in the legal and accounting sectors alone between 2019 and 2023.
“A quick look at satellite imagery shows there is nowhere in this suburban area that could accommodate these jobs. This must be a data error,” he said.
Reducing Trafford’s legal and accounting output growth would reduce productivity growth across Greater Manchester from 14% to 12% between 2019 and 2023. Then adjusting for what Mr. Swinney suspects is “the undercounting of self-employment” brings the productivity growth back down to 9%.
Mr. Swinney later warned Ms. Reeves not to make big decisions based on potentially misleading data.
Mr Swinney warned Ms Reeves not to make big decisions based on potentially misleading data (Image: Getty)
Mr Swinney said: “The UK’s productivity performance over the last 15 years has flatlined, which has affected the money in people’s pockets and how prosperous they feel.”
“Rather than clarifying how to get the economy moving again and make people feel more prosperous, these data potentially complicate the picture further.”
But the ONS said it relied on regional data for areas as large as Greater Manchester. Telegram.
A spokesman said: “Our international productivity figures are produced by balancing a range of sources to create the best estimates we can of varying levels of employment and economic activity in UK cities.
ONS statistics based on ‘robust quality assurance processes’, Treasury says (Image: Getty)
“Our forecasts show that productivity in Manchester has increased in recent years, with economic activity growing faster than employment.
“While we provide some estimates at the neighborhood level, they involve making broad assumptions and so we recommend 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.”
