HS3 should be brought forward - and take priority over HS2 - as part of a ‘North First’ agenda to boost UK-wide growth.
IPPR says a ‘proper east-west crossing’ is vital to grow prosperity post Brexit vote.
The call by the think-tank is in a report which urges the transport secretary to close the infrastructure ‘funding gap’ with London.
And it wants the government to raise £50bn to invest in northern road and rail schemes using record-low interest rates.
‘HS3’ - Northern Powerhouse Rail - is a plan for six trains an hour, taking half-an-hour between the centres of Leeds, Manchester and Sheffield. A £1m Department for Transport feasibility study into a trans-Pennine tunnel is set to be published in October.
Tom Kibasi, director of IPPR, London, said: “The time it takes to travel, on hugely dated infrastructure, between our great regional cities is a national disgrace – this is not what happens in Germany, Japan or France, with their fantastic rail links, or the United States, with its highly developed regional air travel.
“Given the Brexit result, the North of England must urgently see growing prosperity. A proper east-west crossing would boost northern and UK growth, and must now take priority above all other major transport projects, including Crossrail 2 and HS2.”
IPPR analysis reveals the stark infrastructure ‘spending gap’ - over the next four years spending in London is set to be £1,900 per person, compared to £250 in Yorkshire and the Humber.
Total spend on London’s Crossrail alone will be £4.6bn during this period - more than all projects in the North, at £4.3bn.
The stark contrast is outlined in a letter to the new Secretary of State for Transport, Chris Grayling, urging him to develop a “North First” approach to infrastructure.
A focus on the North of England, including its cities, ports, national parks, energy assets, £300 billion economy and 15 million citizens, could unlock real and fair prosperity, according to Ed Cox, director of IPPR North.
He added: “The referendum result showed that now more than ever, we need a ‘North First’ approach to investment.
“To build Theresa May’s ‘Better Britain’, we must focus on a better North.
“The North of England’s £300bn economy is worth more than those of Scotland, Wales and Northern Ireland combined. Focusing on this is going to be critical in creating the prosperity our country is going to need over the coming years.
“The North must also ‘take control’ of its own funding decisions. The evidence shows that this would help boost growth, ditching HM Treasury’s outdated and ineffective model, better suited to mitigating congestion than driving new economic growth.”
The IPPR letter also urges the transport secretary to ensure the passage of the Buses Bill through parliament, ‘which, with the creation of metro mayors with London-style transport powers in major English cities from next year, will make a genuine difference to the daily lives of millions’.