Regional Growth

Lord Wood of Anfield Excerpts

Thursday 5th June 2025 Lords Chamber

[Lord Livermore (Lab)]

I tried to address that in answer to the question from the noble Baroness, Lady Pidgeon. Yesterday we talked about interconnectivity within the city regions. We will be announcing the full regional transport plan and regional growth plan for the whole of the country—England, Scotland, Wales and Northern Ireland—next week in the spending review.

[Lord Wood of Anfield (Lab)]

My Lords, one way you can tell that I am a Treasury nerd is that I am really looking forward to the Green Book review being announced next week, and I welcome what my noble friend has said about that today. There are many problems with the way the Treasury has, historically, allocated money for long-term investment. One is the regional bias that we have discussed today, but another is that capital budgets are allocated for short periods with an incentive to spend them by the end of a three-year cycle, whether it is appropriate or not for the project. Does the Treasury still intend to move towards longer-term capital budgeting, and will we hear something about that next week in the spending review?

[Lord Livermore (Lab)]

I am very grateful to my noble friend for his question and for his expertise in this matter. He is right on capital budgets, with which, historically, there have been two problems. The previous Government’s fiscal rules did not prioritise capital investment, so when they had holes in their day-to-day spending plans, they would raid the capital budget to top up them up. That is why we have seen the infrastructure of our country deteriorate over the past 14 years. This Government’s fiscal rules ensure that we do not cannibalise those investment budgets to fund day-to-day spending. That is incredibly important, and it is why we have this £113 billion of extra capital spending to announce in the spending review. My noble friend is also absolutely right about the short-term nature of those capital budgets. Yes, three years is probably too short a planning horizon, which is why we will be announcing five-year capital budgets in the spending review.