John McDonnell, the Shadow Chancellor, has vowed that a Labour government would deliver a “Crossrail for the North” with a plan to end the North-South divide in Government spending.

Speaking at the first of Labour’s regional economic conference – aimed at addressing an imbalance between investment in the North and South – he said the new “High Speed 3” rail link would transform the economy of northern England, creating 850,000 additional jobs by 2050.

During his speech in Liverpool, the Shadow Chancellor insisted Labour would reverse the “under-investment, delays and a lack of real commitment from Whitehall” which had blighted the economic prospects for the North under the Tories.

“Labour is absolutely committed to delivering HS3, a Crossrail for the North, starting right here in Liverpool and connecting the great cities of the north of England,” he said.

“It’s at least a £10bn commitment from Labour to invest in the North.

“It means the journey from Manchester to Leeds will take just 25 minutes, instead of close to an hour. Or you could get from Liverpool to Manchester in 25 minutes.

“Crossrail for the North will become the foundations for a transformed northern economy.”

Mr McDonnell, one of Jeremy Corbyn’s closest allies, said the pledge was part of his plan to close the investment “gap” between the South and North of England. But the Conservatives warned Labour’s borrowing plans would “crash” the economy, threatening jobs and infrastructure investment.

Under current Conservative plans, he said, London was set to receive twice the level of public investment per head than the North, an imbalance they would redress through a “Barnett Formula for the North” – a reference to the mechanism for distributing government support for Scotland, Wales and Northern Ireland.

Labour, he said, would legislate to require ministers to audit their regional capital spend against economic need, and report to Parliament when the investment imbalances are “excessive”.