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Labour vows to close 'North-South divide' in public spending Labour's John McDonnell promises energy prices cap
(about 1 hour later)
Labour has vowed to "close the gap" between spending in the north and south of England and end the "bias" it says there has been in transport investment. Labour has promised to place a cap on the prices charged by energy companies if it wins power.
Shadow chancellor John McDonnell said in a speech that London and the South East have disproportionately benefited from projects such as Crossrail. Shadow chancellor John McDonnell made the commitment to the BBC a day after Npower said it was raising electricity prices by 15% from March.
He said a Labour government would act to prevent regional imbalances. Meanwhile, Mr McDonnell used a speech earlier to vow to "close the gap" between spending in the north and south of England.
The Conservatives say they are spending £13bn alone on transport in the North. But the Conservatives said Labour's plans would "crash the economy".
As part of its "northern powerhouse" plan, the government is giving extensive powers over transport, skills, planning and economic development to cities and city regions, including Greater Manchester, Merseyside, Sheffield, north-east England and Tees Valley. Npower said on Friday that its price rises would take effect on 16 March, with gas increasing by 4.8%.
But speaking in Liverpool, Mr McDonnell said the North had consistently lost out in terms of spending - and promised a future Labour government would try to rectify that. The company said the changes would only affect about half of its customers, but energy regulator Ofgem said it must "justify" why it was introducing one of the largest price rises in years.
He cited figures from the National Infrastructure Commission suggesting projected capital spending per head of population in the north of England will increase by just £1,491 by 2020-2021, compared with by £3,114 per head in London. Speaking on BBC Breakfast, Mr McDonnell said people would be paying for the increase having had their wages "frozen" since the recession.
He said Crossrail's £14.5bn price tag was four times the entire public investment budget for Yorkshire and six times that of the North East. Asked what Labour would do, he said it would introduce legislation that would limit the amount prices could increase by.
"This is huge. We can't allow this to keep going on," he said.
'Rest of the country'
Speaking later at Labour's economic conference in Liverpool, Mr McDonnell said the North had consistently lost out in terms of spending - and promised a future Labour government would try to rectify that.
He cited figures from the National Infrastructure Commission suggesting projected capital spending per head of population in the north of England would increase by just £1,491 by 2020-2021, compared with by £3,114 per head in London.
He said the £14.5bn price tag for Crossrail - which will open in 2017 and link 40 stations in London and the South East - was four times the entire public investment budget for Yorkshire and six times that of the North East.
"We have to put an end to the Whitehall view that what's good for the City of London is good for the country as a whole," he said."We have to put an end to the Whitehall view that what's good for the City of London is good for the country as a whole," he said.
"It is time for the rest of the country to get a look in." "It is time for the rest of the country to get a look-in."
If Labour wins power at the next election, he says, it will pass laws requiring ministers to audit capital spending in the English regions against their relative economic need and to report any disparities to Parliament. Pledging to create a "Crossrail for the North", Mr McDonnell said the high-speed line would reduce journey times between Manchester, Liverpool and Leeds and create 850,000 additional jobs by 2050.
The proposed HS3 line was approved in the government's March 2016 Budget but Labour says the government has still not brought forward a definite plan for the scheme.
It has a projected travel time of 30 minutes between Leeds and Manchester - down from the current average of 54 minutes - with potential extensions to Liverpool and Hull.
"Labour is absolutely committed to delivering HS3, a Crossrail for the North, starting right here in Liverpool and connecting the great cities of the north of England," Mr McDonnell said.
Mr McDonnell also said a Labour government would pass laws requiring ministers to audit capital spending in the English regions against their relative economic need and to report any disparities to Parliament.
He likened the proposal to a "Barnett formula" for the north of England - comparing it with the funding mechanism which has set a floor for UK government spending in Scotland, Northern Ireland and Wales for the past 40 years based on population size.He likened the proposal to a "Barnett formula" for the north of England - comparing it with the funding mechanism which has set a floor for UK government spending in Scotland, Northern Ireland and Wales for the past 40 years based on population size.
"The next Labour government will put in place the mechanisms needed to close that gap in funding," he added.
"We will make sure that no government can ever again bias its own investment plans so heavily against the majority of the country."
Asked how he would invest in the North, Mr McDonnell told BBC Breakfast that Labour wanted a northern Crossrail.
He said: "It's been argued for for a long time. [Former deputy prime minister] John Prescott actually produced the idea several years ago.
"We'd like to see a Crossrail for the North which links Liverpool to Manchester to Leeds and then on to Hull and Newcastle, and in that way you can see the sort of project that is taking off in London at the moment distributed in the North as well."
Rail and road investmentRail and road investment
The government has earmarked £19bn in total capital spending for the north of England. The government has earmarked £13bn on transport in the North and £19bn in total capital spending for the region.
It has created Transport for the North, a new body to co-ordinate transport investment in the region, modelled on Transport for London, and has accepted all its recommendations to improve connectivity. It has created Transport for the North - a new body to co-ordinate transport investment in the region, modelled on Transport for London - and has accepted all its recommendations to improve connectivity.
Its plans include an accelerated upgrade of the M62, major improvements to junctions on the M1 and M56, investments in leading stations and £1.2bn to increase capacity on the Northern and TransPennine rail routes.Its plans include an accelerated upgrade of the M62, major improvements to junctions on the M1 and M56, investments in leading stations and £1.2bn to increase capacity on the Northern and TransPennine rail routes.
In the longer term, the government has agreed in principle to a new Trans-Pennine tunnel in the Peak District and the scoping out of an HS3 rail route between Leeds and Manchester. In the longer term, the government has agreed in principle to a new Trans-Pennine tunnel in the Peak District and the scoping out of the HS3 rail route between Leeds and Manchester.
Ministers say the second phase of the HS2 high-speed line, connecting the West Midlands to Manchester and Leeds, will also bring major economic benefits.Ministers say the second phase of the HS2 high-speed line, connecting the West Midlands to Manchester and Leeds, will also bring major economic benefits.
A Conservative spokesman said Labour's borrowing plans "would crash our economy and threaten jobs and infrastructure".