Network Rail estimates work to increase capacity and cut journey times will be worth £4bn to north of England

Work has begun on a £600m programme of rail upgrades to boost train services and cut journey times across the north of England.

The construction project, billed as the Northern Hub, was formally launched by the chancellor, George Osborne, at Manchester airport station on Friday. The government has promised the scheme will create up to 20,000 jobs.

The Northern Hub will provide electrified track and new stretches of railway over the next five years, radiating out from Greater Manchester, to allow faster connections between stations from Chester and Liverpool to Bradford and Leeds, cutting out some of the gridlock around Manchester Piccadilly.

Network Rail has estimated that the wider economic benefit to the region will be worth £4bn, and that it will increase railway capacity by up to 700 more trains a day, and cut journey times.

Osborne said: "Because of the tough decisions we've taken on day-to-day spending, we're able to invest in key infrastructure projects like the Northern Hub, which will create billions for the region.

"This investment will ensure growth is not concentrated in any one place by keeping Britain connected and creating thousands of local jobs, delivering a brighter economic future for the whole country."

Osborne's first spade in the ground was on work at the station for Manchester airport, the UK's third biggest airport. With a £20m upgrade, including work on the railway links, the airport will be directly connected to places such as Bradford and Halifax from December 2016.

The programme will also see the number of fast trains from Liverpool to Manchester double to four an hour, and more trains will travel across the Pennines. Journey times are expected to drop by about 25% between the cities.

Martin Frobisher, the area director for Network Rail, said: "The Northern Hub and electrification programme is the biggest investment in the railway in the north of England for a generation and will transform rail travel for millions of passengers every year."