Labour vows to close ‘North-South divide’ in public spending

Motorway sign says "The North"Image copyright
ALAMY

Labour has vowed to “close the gap” between spending in the north and south of England and end the “bias” it says there has been in transport investment.

Shadow chancellor John McDonnell said in a speech that London and the South East have disproportionately benefited from projects such as Crossrail.

He said a Labour government would act to prevent regional imbalances.

The Conservatives say they are spending £13bn alone on transport in the North.

As part of its “northern powerhouse” plan, the government is giving extensive powers over transport, skills, planning and economic development to cities and city regions, including Greater Manchester, Merseyside, Sheffield, north-east England and Tees Valley.

But speaking in Liverpool, Mr McDonnell said the North had consistently lost out in terms of spending – and promised a future Labour government would try to rectify that.

He cited figures from the National Infrastructure Commission suggesting projected capital spending per head of population in the north of England will increase by just £1,491 by 2020-2021, compared with by £3,114 per head in London.

He said Crossrail’s £14.5bn price tag was four times the entire public investment budget for Yorkshire and six times that of the North East.

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Reuters

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The new Elizabeth Line in London will be fully open by the end of 2019

“We have to put an end to the Whitehall view that what’s good for the City of London is good for the country as a whole,” he said.

“It is time for the rest of the country to get a look in.”

If Labour wins power at the next election, he says, it will pass laws requiring ministers to audit capital spending in the English regions against their relative economic need and to report any disparities to Parliament.

He likened the proposal to a “Barnett formula” for the north of England – comparing it with the funding mechanism which has set a floor for UK government spending in Scotland, Northern Ireland and Wales for the past 40 years based on population size.

“The next Labour government will put in place the mechanisms needed to close that gap in funding,” he added.

“We will make sure that no government can ever again bias its own investment plans so heavily against the majority of the country.”

Asked how he would invest in the North, Mr McDonnell told BBC Breakfast that Labour wanted a northern Crossrail.

He said: “It’s been argued for for a long time. [Former deputy prime minister] John Prescott actually produced the idea several years ago.

“We’d like to see a Crossrail for the North which links Liverpool to Manchester to Leeds and then on to Hull and Newcastle, and in that way you can see the sort of project that is taking off in London at the moment distributed in the North as well.”

Rail and road investment

The government has earmarked £19bn in total capital spending for the north of England.

It has created Transport for the North, a new body to co-ordinate transport investment in the region, modelled on Transport for London, and has accepted all its recommendations to improve connectivity.

Its plans include an accelerated upgrade of the M62, major improvements to junctions on the M1 and M56, investments in leading stations and £1.2bn to increase capacity on the Northern and TransPennine rail routes.

In the longer term, the government has agreed in principle to a new Trans-Pennine tunnel in the Peak District and the scoping out of an HS3 rail route between Leeds and Manchester.

Ministers say the second phase of the HS2 high-speed line, connecting the West Midlands to Manchester and Leeds, will also bring major economic benefits.

Labour vows to close ‘North-South divide’ in public spending}

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