Reeves to rip up 'pro-London' Treasury rules as she announces £15billion for transport outside South-East
The Chancellor is set to rip up Treasury rules said to favour London and the South East as she announces billions of pounds of investment in public transport for other parts of the country.
Announcing a £15.6billion investment package in a speech in Manchester on Wednesday, Rachel Reeves will argue that Britain 'cannot rely on a handful of places forging ahead of the rest of the country'.
The move will champion a 'new economic model – driven by investment in all parts of the country', she said.
The package includes funding to extend the metros in Tyne and Wear, Greater Manchester and the West Midlands, along with a renewed tram network in South Yorkshire and a new mass transit systems in West Yorkshire.
She is also expected to confirm the spending review on June 11 will include changes to the rules in the Treasury's Green Book that determine whether projects receive funding.
Green Book rules have been criticised by some for favouring investment in the South East, with Labour MP Jeevun Sandher, a member of the Commons Treasury Committee, saying in April it had a 'hardwired London bias'.
Ms Reeves is expected to argue that changing them will ensure the Government 'gives every region a fair hearing when it comes to investments'.
But it will also mean more money for areas of the North and Midlands, including the so-called 'Red Wall', where Labour MPs face an electoral challenge from Reform UK.
However, ministers are reportedly set to sign off more than £1billion of public funding for the Lower Thames Crossing as part of next week's spending review.
The sum will be used to help unlock private investment for the £10billion road tunnel that will link Kent and Essex, according to the Financial Times.
But it is less than the £1.9billion National Highways, the body behind the project, initially wanted. Work on the tunnel is set to begin in the next 12 months.
The investment announced by the Chancellor on Wednesday will include £2.4billion for the West Midlands to fund an extension of the region's metro from Birmingham city centre to the new sports quarter, and £2.1billion to start building West Yorkshire Mass Transit by 2028.
Greater Manchester will receive £2.5billion for projects including new tram stops and an extension of the tram network to Stockport.
A £1.5billion investment in South Yorkshire will include £530million to renew the region's trams, while the East Midlands will receive £2billion to design a new mass transit system between Derby and Nottingham.
In the south, the West of England will get £800million, including £200million to develop mass transit links between Bristol, Bath, South Gloucestershire and north Somerset.
The Chancellor insisted her self-imposed "fiscal rules" were "non-negotiable" because she would not risk the economic chaos that could be caused if the markets lost faith in her ability to control spending.
She said the combination of tax hikes she has already unveiled and the changes to the way borrowing for investment is accounted for meant £300billion extra was available over the coming years.
But she acknowledged this was not enough to meet the demands made by ministers.
She said: "Not every department will get everything that they want next week and I have had to say no to things that I want to do too."
But, she added: "That's not because of my fiscal rules. It is a result of 14 years of Conservative maltreatment of our public services, our public realm and of our economy."
Writing in the Manchester Evening News, Prime Minister Sir Keir Starmer said the announcement was 'about pushing power out of Westminster and putting it back in the hands of communities who know what they need'.
'One thing is crystal clear,' he said. 'We will not get the renewal we need by focussing only on the South East and ignoring the huge potential of the rest of the nation.
'For too long, the mindset of previous governments has been to hoard power and potential behind the walls of Westminster. The result? Proud places across the country have been neglected and left behind.'
Transport Secretary Heidi Alexander said the announcement 'marks a watershed moment on our journey to improving transport across the North and Midlands – opening up access to jobs, growing the economy and driving up quality of life'.
Some projects being backed on Wednesday, such as the development of a mass transit network in West Yorkshire, formed part of Rishi Sunak's 'Network North' plan intended to compensate for the decision to scrap the HS2 line north of Birmingham.
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The party has said it would reinstate the winter fuel allowance and scrap the two-child benefit cap in what is a clear attempt to target Labour supporters angry at the party's welfare cuts. More controversially, Reform has vowed to make "big savings" by scrapping the UK's net zero, asylum hotel and DEI (diversity, equity and inclusion) policies. Farage has also said it would lift the income tax threshold to £20,000: something the Institute for Fiscal Studies questioned, saying it would cost up to £80bn. Starmer seized on this, saying Farage's "fantasy" economics would lead to a Liz Truss-style economic meltdown. Quite how this translates into how the public continues to view the party remains to be seen. But with the next general election still four years away, there are plenty more twists and turns to come for Farage & Co. The policies Reform UK and Nigel Farage have announced this year (Yahoo News UK) The tightrope Farage is walking on race – and why he can only lose (The Telegraph) Reform-led councils in 'paralysis' as dozens of meetings cancelled in first weeks (The Independent)
