New high-speed rail link needed to boost north of England, Osborne to say
A new high-speed rail link in the north of England connecting Manchester and Leeds could help to create an economic area to rival London, Chancellor George Osborne is to say.
A "northern powerhouse" is needed as London's dominance is "not healthy" for the economy, he is expected to say.
He will say better transport links will allow it to "take on the world".
Labour's Ed Balls said "nobody" will believe the Tories can deliver jobs, growth and investment for the North.
In a speech in Manchester, Mr Osborne is expected to say that cities in the north of England are individually strong but are "collectively not strong enough".
Mr Osborne will say the building of the east-west link should be considered as part of a review into the second phase of the £50bn HS2 high-speed rail project.
The current plan for the first phase of the project between London and Birmingham has proved controversial with some residents set to be affected and critics of its price tag.
The government's preferred route for the second phase is an extension linking Birmingham with Manchester and Leeds - with the final route expected to be chosen by the end of 2014.
Mr Osborne will say: "The whole is less than the sum of its parts. So the powerhouse of London dominates more and more.
"And that's not healthy for our economy. It's not good for our country. We need a northern powerhouse too.
"Not one city, but a collection of northern cities - sufficiently close to each other that combined they can take on the world."
Along with improving roads, Mr Osborne will call for the new high-speed rail link to be considered, based on the existing rail route but with new tunnels and infrastructure.
The fastest rail services between Leeds and Manchester currently take about 50 minutes.
"We need an ambitious plan to make the cities and towns here in this northern belt radically more connected from east to west - to create the equivalent of travelling around a single global city.
"I want us to start thinking about whether to build a new high-speed rail connection east-west from Manchester to Leeds."
BBC political correspondent Vicki Young says Conservative support in the north of England has been declining and Mr Osborne's statement will be seen as an attempt to show the party is keen to increase prosperity beyond its traditional strongholds in the south.
There is, however, little detail about how these plans will be funded, our correspondent said.
Mr Osborne will say the current HS2 proposal will "change the economic geography of our country", but will add that "we must do much more to connect our northern cities".
Shadow chancellor Mr Balls said regional growth divides had "widened markedly since 2010", when the coalition government was formed.
"On high-speed rail, we said months ago that we need value for money for the taxpayer and to improve the existing plans to maximise the benefits for the whole country and strengthen the links between northern cities. Ministers need finally to start listening."