The Labour government is “locked in” to rebalancing transport investment towards parts of the UK outside London that are struggling economically, culture secretary Lisa Nandy has said.
On a visit to Blackpool, Nandy told the Financial Times that Labour’s “mission” for economic growth would end 40 years of new infrastructure being concentrated “where there’s already infrastructure”.
Nandy’s comments followed repeated warnings by Prime Minister Sir Keir Starmer that his administration has inherited a dire financial legacy that will require a “painful” Budget on October 30.
Chancellor Rachel Reeves has yet to outline her overall approach to capital spending, including where transport investment will be focused geographically.
But Nandy said the government was committed to channelling public resources into economically struggling areas beyond the south-east, pointing to the wording of a Labour manifesto pledge.
“I think that the thread that knits all of this together is growing the economy ‘in every part of the UK’,” she said of the growth mission’s wording in an interview. “If we said ‘we’re going to grow the economy’, I’d be much less confident that investment would be made in places like Grimsby.”
Starmer and his cabinet had therefore “locked ourselves into a commitment that we don’t follow the model we’ve followed for at least the last 40 years, if not longer”, Nandy added of historic infrastructure decisions.
Successive Labour and Conservative governments had worked on the basis that “the highest productivity gains are where there’s already investment”, she said, resulting in “decades and decades of more and more funding for transport being piled into London and the south-east”.
The trend had left “the rest of the country, especially the north-east, very, very badly underserved”, she added.
Nandy, MP for Wigan in north-west England, is among many critics of the way such investment has previously been allocated.
The previous Conservative government was strongly criticised for cutting the northern leg of the High Speed 2 rail link, and plans for a series of individual projects under the banner “Network North” unravelled immediately after they were announced as its replacement.
Successive reports, including by the Institute for Public Policy Research think-tank that is influential in Starmer’s administration, have recommended more capital spending on transport in areas outside of the south-east in order to help close regional economic divides.
The Institute for Fiscal Studies think-tank noted in 2020 that transport spending per head in London was 2.5 times more than the rest of the country. It suggested investing more beyond the capital could help rebalance unequal productivity, but warned that doing so could cost £19bn a year.
Ben Zaranko, IFS senior research economist, said the new Labour government had since inherited public spending plans that implied a 7 per cent cut per year over this parliament.
“In that context, any rebalancing of spending towards the north of England is going to entail some large cuts elsewhere,” he said.
With the new government keen to grip public spending, last week a report commissioned by Labour in opposition recommended ministers seek private funding to help build new transport projects.
Such a move would help plug a “deep and growing” regional productivity gap, the report said, while keeping some expenditure off the public books. It is unclear whether the government will adopt its recommendations.
The Treasury declined to comment.
The Conservative government under Boris Johnson committed to “level up” the inequalities in the UK economy, a slogan quickly ditched by Labour when it took office.
One Department for Transport aide said that while Labour would not use the term “levelling up”, the department was “certainly looking at how transport can tackle regional inequality”.
Nandy also said she would continue the last Tory administration’s stated goal of rebalancing arts funding towards more deprived areas outside London.
“My first engagement with the Arts Council was around precisely this,” she said of the arm’s-length body that administers such funding in England. “I think they understand the importance of it and they understand that there’s far more to do.”
Citing the cultural life of Blackpool, including the role played by its football club and a thriving dance and music scene, Nandy said coastal towns in particular represented a growth opportunity for the government.
“I think these towns are where so much of the economic and social assets exist,” she said, adding that while many had been busy reinventing their economies, their potential had been “overlooked” by central government.
Nandy highlighted plans for a bolstered “community right to buy”, outlined in the King’s Speech in July, which she said would make it easier for people to purchase empty heritage assets and convert them into cultural venues.
The government would make it simpler for communities to find out details of current ownership via the Land Registry, the property ownership register in England and Wales, while providing “seed funding” to help them amass the necessary war chest, she said.
Local partnerships with philanthropists and businesses would also be central to the policy, said Nandy, adding: “We think there’s huge potential to tap into.”