Labour Unveils £15bn Plan for Trams, Trains, and Buses Outside London
In a bid to showcase the government’s commitment to regional investment, Chancellor Rachel Reeves has announced a £15bn package for transport projects outside London. The move is part of a broader £113bn investment in capital projects over the remainder of the parliament, including transport, homes, and energy.
According to The Guardian, Reeves began meeting with groups of backbench Labour MPs to argue that the spending review will not be a return to austerity. The chancellor wants to focus on capital spending to address rising discontent among the public and provide a better economic story. As The Guardian reports, Reeves’s allies argue that departments will receive £300bn more than the Conservatives had planned as a result of the decisions she took in the autumn budget.
The £15bn package for transport projects outside London is expected to include £2.4bn for the West Midlands to fund an extension of the region’s metro from Birmingham city centre to the new sports quarter. West Yorkshire will receive £2.1bn to start building a mass transit system by 2028, while Greater Manchester will get £2.5bn for projects including new tram stops in Bury, Manchester, and Oldham, and an extension of the tram network to Stockport. A £1.5bn investment in South Yorkshire will include £530m to renew the region’s trams, and the East Midlands will receive £2bn to design a new mass transit system between Derby and Nottingham.
Reeves is also expected to announce that Treasury investment rules will be rewritten to give extra weight to schemes that increase productivity in the Midlands and the north. In a speech in Greater Manchester, she will say that this represents a "step change in how government approaches and evaluates the case for investing in our regions … to make sure that this government gives every region a fair hearing when it comes to investments."
As The Guardian notes, the spending review is expected to be challenging, with the Institute for Fiscal Studies warning that the chancellor faces "unavoidably tough decisions" as the demands of funding for the NHS and defence raise the prospect of deep cuts elsewhere. However, Reeves’s allies argue that the government’s investment in capital projects will help to drive growth and improve public services.
The announcement has been welcomed by some Labour MPs, who have been pressing for greater investment in regional transport projects. However, others have expressed concerns about the potential for cuts in day-to-day spending. The Guardian reports that some departments, including the Foreign Office and the Department for Culture, Media and Sport, have already agreed their budgets and are facing significant cuts.
The Home Office and the Ministry of Energy are among the departments still to agree their budgets, with Home Secretary Yvette Cooper and Energy Secretary Ed Miliband holding out. Cooper has been fighting hard against what she sees as an impossible settlement, particularly on policing. Six police chiefs publicly warned last week that the funding gap meant that Labour could miss its manifesto promises.
As the spending review nears its conclusion, ministers are looking for ways to combat the electoral threat of Reform UK. Labour officials are attempting to refocus anxious backbenchers away from expected cuts in day-to-day spending, and on to capital budgets. "We’re investing to rebuild," one said.
The Treasury has confirmed that some departments that settled early had some of the harshest settlements and thus faced the biggest cuts. However, others, such as the Ministry of Justice, are being held up as examples of departments that had a clear, realistic ask and got much of the substantial funding they had asked for.
The main fight for Housing Secretary Angela Rayner is over the affordable homes budget, given that both she and Reeves had promised a generational shift in social housing when £2bn for the programme was announced before the spring statement.
The announcement of the £15bn package for transport projects outside London is a significant move by the Labour government to showcase its commitment to regional investment. As The Guardian reports, Reeves’s allies argue that the government’s investment in capital projects will help to drive growth and improve public services.
