That this House has considered the Green Book review.
It is an honour to serve under your chairship, Mr Pritchard. I thank all hon. Members who have come today to talk about the Green Book. Our constituents all know that something is very clearly not right and has not been right for a very, very long time. They pay their taxes but they cannot see things getting any better. In Congleton, I cannot see any evidence of any significant infrastructure spending for many years, except for where it has been facilitated through house growth. Government money does not appear to have been involved in significant ways for a long time.
The previous Government talked a good game about levelling up the north, but actual investment never followed, which is why my constituents voted for change. In my area, I want to see the Middlewich bypass, the A50/A500 north midlands manufacturing corridor, massive investment in improving our electricity grid, and all kinds of other changes and improvements, but I can see very clearly that something is not right.
Total capital public spending per person in the north-west in 2022-23 was £13,297 per year; in London, it was £14,842. Something is being done to allocate money in that way. The Green Book is the guidance issued by His Majesty’s Treasury on how to appraise policies, programmes and projects. The five-case model is the required framework for considering the use of public resources. They must be used proportionately to the costs and risks involved, taking account of the context in which a decision is taken.
The five-case model involves a strategic dimension—what the case for change is, including the rationale for the intervention, the current situation, what is to be done and so forth. There is an economic dimension and a commercial dimension: can a realistic and credible commercial deal be struck, and who will manage which risks? There is a financial dimension and a management dimension—are there realistic and robust delivery demands, and can the proposal be delivered?
The hon. Lady led the charge in the 9.30 am debate, and she is doing the same at 4.30 pm—well done for both. I just want to back her up. Does she agree that the Green Book review has to have a view to each area of the United Kingdom, and must not simply point all roads to London and the south-east? We are all aware that, in other areas, UK policies and procedures that work well in London do not translate to rural local authorities, so we need a review of that. Is the hon. Lady saying exactly that?
We are pleased that the Treasury has initiated a review into the Green Book and we believe it is an opportunity to once and for all address a range of key issues that have undermined successive Governments’ attempts to rebalance our regional economies. We must grasp this opportunity. We believe that the review must be done with ambition and a willingness to challenge underlying customs and practices. In particular, it needs to learn from the successes and failures—largely failures, I would say—of previous Green Book reviews, in particular the 2020 review.
The review recommended that the locational effects be understood via place-based analysis, with the benefits of any intervention valued specifically for the area, hence enabling any transformational impacts to be properly recognised. But once again, those recommendations do not appear to be generally reflected in practice, particularly in the application of Department-level appraisal guidance. It is vital that the current review addresses that. I believe that considering options in the context of place and properly valuing the transformational impacts of interventions is crucial if we are to realise the potential of the north-west and all our regions.
We need to simplify and speed up our Green Book processes. The guidance is enormously long and incredibly complex. It has multiple supplementary documents adding up to thousands and thousands of pages. Its changes, subtleties and intent get lost within the complexity, and practice remains unchanged. That very complexity leads to a desire for a metric that cuts through, and that probably explains why the business case thresholds remain so dominant. That is probably how the weighting towards expenditure in London and the south-east continues to predominate.
There is a consultancy industry around the Green Book, and that raises the cost of developing a successful business case. It also makes it very difficult for smaller local authorities to successfully put together a business case because the complexity of doing so is absolutely mind boggling. Frankly, the whole thing is just a bunch of piffle—we need to make this very simple and outcomes driven. We need to really slim it down and for it to be in a format that our local and devolved mayoral authorities, as we acquire one in Cheshire and Warrington, will be able to actually use in a practical way.
It is a pleasure to serve under your chairmanship, Mr Pritchard. I thank my hon. Friend the Member for Congleton (Mrs Russell) for securing the debate.
The current design of the Green Book holds back communities such as mine in Loughborough, and by doing so holds back our country. Due to a flawed methodology, it overestimates the benefits of investment in London, and by doing so underestimates the benefits of investing elsewhere. It is one of the reasons why we have the most economically centralised nation in the OECD, and the reason why places that have been locked out of investment and growth are turning away from us in this place and away from democracy. I am so glad that the Chancellor is reviewing the Green Book at last to help spread investment across our nation, so that we can all reap the gains.
I represent a constituency in the east midlands—a region that has been left behind because of the decline of our great industries and chronic under-investment. The fall in industrial employment was one of the most rapid anywhere in Europe. Suddenly community centres were gone, jobs were lost and people’s sense of purpose and dignity disappeared. On top of that, and contributing to it, my region has the lowest transport investment in the country. We need to end this cycle of decline, because it is holding back our nation. We need to invest in communities such as mine to make the country a better place and to help create good jobs.
For too long, investment has been biased towards London and the south-east. Someone living in London gets £800 more infrastructure spending per year than the national average. That is because the cost-benefit analysis set out in the Green Book to evaluate projects has a hardwired London bias. First, the Green Book prices the benefits of projects in a way that benefits places with higher wages—namely, London. Secondly, it does not estimate the wider impact of investment on growth.
It is a pleasure to serve under your chairmanship, Mr Pritchard. For too long, my constituents in Warrington South have been told to wait their turn—for infrastructure, for investment and for opportunity. This Labour Government were elected to change the way this country works, and nowhere is that more urgently needed than in how we decide where and how public money is spent. The Green Book should enable fair and effective investment across the UK, but instead it has too often reinforced the very inequalities that we were elected to overcome.
My constituency sits between powerhouse cities such as Liverpool and Manchester, yet struggles to unlock the investment that we need to improve our transport links, further regenerate our town centre or bring truly affordable housing to our communities. Why? Because despite previous reforms, the rules governing public investment are still rigged in favour of places that already have higher land values. That means that towns such as Warrington are too often seen as low-return risks, rather than high-potential communities.
I welcome the Chancellor’s announcement of a full review of the Green Book under this Government, but let me say this clearly: this must not be a technocratic tweak; it must be a fundamental reform, where people, place and long-term potential are at the heart of investment decisions, unlocking the long-term, sustainable pipeline of investment needed in areas such as mine.
But this about more than Warrington South; reforming the Green Book is about building a fairer, stronger and more productive Britain. It is about enabling spending decisions that truly serve the whole country—lifting all our regions, reducing inequality, enabling better growth, wages, opportunity and health, and delivering fair public spending.
My hon. Friend is talking about fairness, which is really important. The Institute for Public Policy Research said that, if the north was a country, it would be second bottom in the OECD league table in terms of public investment, just above Greece. Is that not a sign of how unfair public investment is in the UK?
I absolutely agree with my hon. Friend. Things are deeply unfair as they stand. Delivering fair public spending in all our regions is urgently needed. We cannot grow our economy using a toolkit that still assumes that the south-east is the default. We need a Green Book that reflects the reality of 2025, not the London-centric logic of the past. This is our moment to rewrite the rules—[Interruption.]
Order. I will suspend the sitting because we have a Division. I encourage Members to come back as quickly as possible. If there are multiple votes, a maximum of 15 minutes will be allowed for the first vote, with 10 minutes for subsequent votes, but please try to get back earlier.
We cannot grow our economy using a toolkit that still assumes that the south-east is the default. We need a Green Book that reflects the reality of 2025, not the London-centric logic of the past. This is our moment to rewrite the rules and deliver the growth, dignity and opportunity that the people of Warrington South and the people of the north have been denied for too long.
It is a pleasure to serve under your chairship, Mr Pritchard, and I congratulate my hon. Friend the Member for Congleton (Mrs Russell) on securing this important debate.
Investment in regions such as the north-east is not just about fairness; it is about unlocking economic growth and ensuring prosperity for future generations. Good infrastructure is the backbone of a strong economy. By investing wisely now, the Government can set themselves on the right course to achieve their growth mission, creating jobs, boosting businesses and putting more money in working people’s pockets.
But let us be honest: too often, as we have heard today, the north has been short-changed. For years, grand promises have been made, only to be broken. Successive Conservative Governments have failed to deliver the infrastructure we need. Take Northern Powerhouse Rail, a transformative project that would have boosted capacity, slashed journey times and strengthened connectivity between key cities in the north. It was scrapped, and where did the money go? Whether it went on fixing potholes in London or vanished in an accounting black hole, the result was the same.
Even promised Conservative investment in the north, such as dualling the A1, was built on money that never existed in the first place. The north was left behind again and again. Even when the last Government tried to find their way to the north-east, they could not decide whether it was Tyneside or Teesside; they were never quite sure. However, they would have struggled to navigate the mess they left us.
Members across the House will recognise that our roads have suffered years of under-investment. For five years, we heard talk of levelling up, but did the previous Government actually adjust the Green Book to prioritise communities such as Cramlington and Killingworth, where better transport links could change lives? No. Instead, they boasted about redirecting funds to Tunbridge Wells at the expense of the north.
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We need a stronger focus on place. We need to really look properly at where money has been spent historically and where we therefore need investment. We need to weight that specifically towards areas that have not received investment so that we can redress the imbalance in which transport spending in London vastly outweighs that in the rest of the country.
When I moved to the north of England, I was so shocked when I first used the railway network; I was in my 20s and the Pacer trains were still being used. Those trains were fashioned out of bus chassis and carried on being used for 37 years. They were given a maximum lifespan of 20 years; they were supposed to be a very basic short-term thing to start with, and the level of shoddiness was just astonishing. That is what we are always given in the north-west. We are given the cast-offs, and then we are expected to make do, and then what we are expected to make do with is expected to continue way beyond its intended lifespan. That has been going on now for as long as anyone can remember, and our economy then reflects that very sad point.
I know the Labour Government are focused on improving the situation. I would really like us to work extensively together on that. I know that the Green Book review will be carried out at pace, and that the Government have announced these plans. That cost-benefit analysis needs to be fundamentally changed so that we can shift capital expenditure out to our regions at pace. By that, I do not mean demanding, as the last Government did, that local areas produce a shovel-ready project at the drop of a hat, so that they could rush spending through and make it look as if they were doing something for the north of England. I mean a fully considered set of proposals that enable regions to be fully developed through our devolved mayoral authorities, which I think are going to be a spectacular improvement for many areas of the north, and that will enable us to have proper economic development in the north of England.
Alistair Darling said:
“it isn’t just about pots of money or building the odd rail or extending a road. It’s about quality of life. It’s about making places that people want to go and live in, where they feel confident, they can live there, their children can grow up there, there’s opportunities there, and they don’t have to go somewhere else to get on, as it were. None of this is beyond us. Most other countries do it, and I don’t see why we shouldn’t either.”
That was quite some time ago, but it applies more than ever now.
To take the first issue, hourly wages are higher in London, and the benefits of transport projects are calculated in terms of commuting time saved. That commuting time is priced in wages, so according to the current methodology, one hour saved is worth more in London than elsewhere. The projected benefits of investing in London become larger, more projects are built here and the logic because self-fulfilling.
To take the second issue, economies are dynamic—they respond to investment. Better transport allows businesses to attract more customers and workers. It gets economies growing and wages rising. But the Green Book does not account for those dynamic effects. Instead, it assumes that every single project is marginal to an area. It assumes that projects do not influence either growth or prices around the area in which they take place.
The review is taking place precisely because the Government know that investing in our regions outside London will make us all better off. Getting the basics right—more investment outside London, and basic transport infrastructure—will do a lot more for growth than another infrastructure project in London. That is the change we need.
To achieve all of that, we need to overcome the tyranny of the cost-benefit analysis. It has to be confronted and destroyed. This review must not be like reviews of the past. Warm words about regional inequalities are not enough. We need to change a flawed methodology and appreciate the dynamic benefits of investment.
For non-graduates in communities such as mine, it is far more difficult to find a good job than it is here in the capital. The jobs available to my constituents are less secure and lower paid, because we do not get the public investment we need. Our future has been held back by a flawed methodology and a system that does not work for my community, my region or indeed the country.
When people cannot see a good future, their anger grows. We can end that anger, and rebuild hope and a better future, by changing the Green Book so that investment takes place outside London—in my community and in communities across the nation. We can create good jobs, get wages rising and drive growth across the country.
That is why I really welcome this Government’s commitment to responsible, properly funded investment. I am pleased that the Department for Transport continues to assess critical projects, such as the Moor Farm roundabout and the A19 junctions north of Newcastle. As it stands, that is the only north-east project in the road investment strategy 3 pipeline, and those are the last two A19 roundabouts not to have been upgraded. That project has the potential to unlock tremendous growth for the North of Tyne area.
Improvements in the road network there are crucial to unlocking growth in south-east Northumberland—a key growth corridor, both regionally and nationally, that includes the Northumberland Energy Park, which will house a £10 billion AI data centre—and in north-west North Tyneside. But we find ourselves in a constant catch-22, where we know of investment and commercial opportunities that are being missed. National Highways, a statutory consultee, objects to the plans due to the congestion, but then we do not have the investment to do anything about the congestion on the roads there.
If we are to meet the ambitions for growth and development, these upgrades will be absolutely critical. They will also strengthen industries such as wind turbine production and improve connectivity between manufacturing in Blythe and the River Tyne, further driving growth. These upgrades are also recognised in the local growth plan that the North East Mayor has put together, and they are key priorities for Northumberland County Council and North Tyneside Council. That investment can drive the development and job creation that the north-east urgently needs, unlocking its potential.
Unlike the last Government, this Government do not make unfunded promises, and I welcome the Treasury’s commitment to seriously review the Green Book. In its current form, it bakes in regional inequality. When Ministers look at infrastructure investment as part of the spending review, I urge them to recognise the enormous potential in communities such as Cramlington and Killingworth. Currently, the Green Book holds back the north-east and prevents us from getting our fair share of investment. If we get this right, we can ensure that the north-east gets its chance and the right investment, which will drive growth for not just the region but the whole country.