LABOUR PARTY CONFERENCE: Labour’s industrial strategy will re-write the Treasury Green Book to ensure more investment is directed outside London to the regions.
Speaking at a UNITE-organised fringe event, shadow chancellor John McDonnell laid out Labour’s plan’s for £500bn of investment over the next ten years into the UK’s infrastructure to support new manufacturing.
To ensure the equal distribution of funding away from London and the South East, a team headed up by Lord Bob Kerslake is re-writing the Green Book, which sets out Treasury criteria for decision making.
‘Invest where the passengers will be’
“The Green Book says you invest where the passengers are,” said McDonnell, referring to the infrastructure spend of £2,000 per head in London against £400 a head the North West.
“It’s ludicrous. Invest where you want the passengers to be, not where they are.”
McDonnell said he wanted to create a renaissance in industrial development around the country, directed by a strategic investment board formed of the Treasury, Bank of England, business and union leaders.
“[It will] look at how we harness the finances of this country to harness investment,” he said.
“We use macro-prudential powers to direct investment itself, and it will be aimed at research and design and how we scale up products.”
National investment bank
At the same time he says Labour will create a national investment bank whose mandate will be linked to the industrial strategy and as such linked to new manufacturing and new technology. Newly created regional development banks will have similar mandates.
“We are in an economic situation where the lack of investment to confront the fourth industrial revolution, automation, new tech and robotics, is scandalous,” he said.
“Business investment is stagnating at the moment while government investment has been cut back year after year.”
McDonnell says the government will pump £250bn into developing infrastructure, which will be matched by the investment bank, creating £500bn of investment over ten years.
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