I have taken many flights between Heathrow and Manchester, I would have taken the train if it was cheaper and more reliable. The last 2 times I have been up to Manchester I have driven as sometimes door to door it is quicker than the plane.
If they limited domestic flights then most people would probably drive instead of taking the train which would defeat what the politicans wanted.
If someone provided a train service that got to Manchester in under 90 mins and to scotland very quickly and also had a branch to Heathrow for those that would otherwise have connected to long haul flights on domestic flights then I could see it working.
But I don;t trust politicians to get themselves in gear to do anything. Seeing as the London Crossrail scheme was first talked about in the mid 90's and it is still not off the ground then there is no hope for anything to be done!