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Mrs Sarah Russell (Congleton) (Lab)
I beg to move,
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?
Jim Shannon (Strangford) (DUP)
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?
Mrs Russell
I certainly agree.
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.
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.
Dr Jeevun Sandher (Loughborough) (Lab)
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.
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.
Sarah Hall (Warrington South) (Lab/Co-op)
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.
Tim Roca (Macclesfield) (Lab)
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?
Sarah Hall
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.]
Mark Pritchard (in the Chair)
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.
Sarah Hall
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.
Emma Foody (Cramlington and Killingworth) (Lab/Co-op)
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.
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.
Mark Pritchard (in the Chair)
I do not like setting time limits, but I am trying to get everybody in, so I will set an informal time limit of around four minutes.
Andrew Cooper (Mid Cheshire) (Lab)
It is a pleasure to serve under your chairmanship, Mr Pritchard, and I thank my hon. Friend the Member for Congleton (Mrs Russell) for securing this timely debate. It is a pleasure to follow my hon. Friends the Members for Loughborough (Dr Sandher), for Warrington South (Sarah Hall) and for Cramlington and Killingworth (Emma Foody). I do not believe that there is any rule about repetition in this Chamber, but I will none the less do my best to express my points in a new and interesting way.
The Green Book is part of a colourful spectrum of current Government guidance and standards documents, which alongside the Aqua Book, the Magenta Book, the Orange Book and 19 other publications and pieces of supplementary guidance forms the basis of how the Treasury appraises policies, programmes and projects. On top of that, several Departments have issued their own interpretation of the guidance as it applies to them, thankfully avoiding extending the colourful metaphors any further.
That complexity—well over 1,000 pages of guidance—is at the root of the criticism of the small industry and almost mysticism around navigating the assessment process and of the poor outcomes to which it leads. Local authorities and other public bodies, which have been grappling with cuts to their non-statutory functions for more than a decade, are the ones putting forward investment cases, yet they often lack the capability and capacity to deal with that complexity, which has several unintended consequences.
My hon. Friend the Member for Congleton referred to the expensive consultant bonanza that that complexity has created. It also creates a world in which those organisations that do have the capacity, or indeed the consultancy budget, are more likely to succeed, not necessarily those areas that are most in need of investment.
Most importantly, that complexity has led to an over-reliance on benefit-to-cost ratio to drive decision making. Because salaries are higher in London and the south-east, and because high-value sectors tend to be located here, it will always be easier to demonstrate a higher return on investment than elsewhere in the country.
We have a few decades of evidence that says that that is exactly what happens. Over the period from 2008 to 2024, had Governments instead chosen to fund the greater south-east at the same level as the England-wide average for growth spending, they would have freed up over £100 billion. That money could have been used to invest in infrastructure and people, narrow inequalities and address specific regional needs.
The Johnson Government’s review into the Green Book in 2020 was supposed to fix that. It said:
“Current appraisal practice risks undermining the Government’s ambition to ‘level up’ poorer regions and to achieve other strategic objectives unless there is a step change improvement.”
It went on to make a series of recommendations to improve practice. However, it is widely recognised that little has actually changed. The Department for Transport guidance, for example, still includes value-for-money categories derived entirely from the BCR. Local authorities tell me it is still common practice for response letters to open with sentences such as, “We note that the BCR for the proposed scheme is 1.8.” That belies the intent of the 2020 review.
To my knowledge, the terms of reference for the 2025 review have not been published, but when they are they must seek to address those points on culture. The review must end the arbitrary BCR thresholds across Government. It must simplify, increase public transparency on calculations and require publication of judgments on why conclusions have been drawn and decisions made.
Most importantly, we must not lose sight of what we are trying to achieve. It is imperative that we address regional inequality. Doing so is a moral, political and economic necessity. We have allowed some parts of the country to be left out, to the detriment of economic regeneration and social cohesion. We have overheated other parts of the country, leading to a housing crisis and even more pressure on the cost of living.
We should seize the opportunity to rebalance public spending, drive economic growth in areas that have suffered from under-investment, and use the strategic focus that comes with devolution to make investment go further. This is the moment—the opportunity—not just to talk about handing power and money to our regions, but to set the rules to ensure that that happens.
Mark Pritchard (in the Chair)
That was an excellent example of a four-minute speech, with no repetition either—well done.
Jo Platt (Leigh and Atherton) (Lab/Co-op)
It is an honour to serve under your chairmanship again, Mr Pritchard. I thank my hon. Friend the Member for Congleton (Mrs Russell) for leading this important debate.
I stand in Westminster Hall again to highlight the urgent need for a strategic, place-based approach to investment in our towns. Earlier this month, I led a debate on improving transport connectivity in the north-west, and this debate feeds quite nicely into the same narrative. As I mentioned in my last speech, growth goes where growth is, leaving towns such as ours struggling for investment. Without targeted intervention, deprivation becomes entrenched and opportunities are lost.
As chair of the Labour MPs group on local growth funding, alongside the Industrial Communities Alliance, I have worked closely with colleagues across the UK who represent former industrial communities—places that have been overlooked for too long. The Government’s mission to break down barriers to opportunity is therefore one I wholeheartedly support, but it must be backed by investment that reflects long-term, transformative impact.
Leigh and Atherton rank high on the indices of multiple deprivation, with lower life expectancy, higher unemployment and poor transport links. Our cities have deeply deprived neighbourhoods, but they also benefit from economic vitality, larger workforces and greater infrastructure investment. In contrast, smaller towns experience deprivation more acutely. Towns such as Leigh and Atherton suffer from long-term underinvestment, lower job diversity, reduced access to essential services and poor transport connectivity, making it harder to recover and attract new economic opportunities. That is why the Green Book review is so important; it must go beyond Treasury metrics and ensure that investment decisions align with the Government’s regional growth goals. A one-size-fits-all approach does not work. We need a model that recognises the unique challenges and potential of different places and improves public health, revitalises high streets, enhances transport links and creates local jobs.
There is also a lack of clarity about the extent to which the Green Book should apply within devolved regions, especially when funding comes from the devolved administrations rather than from here in Westminster. The review offers a chance to both guide and empower devolved regions and local authorities in deciding where growth funds should be allocated and to ensure that investment reaches the areas that are most in need without adding another frustrating layer of bureaucracy.
I appreciate the Government’s commitment to reassessing the Green Book. However, that should not be solely a Treasury initiative; it needs to be a cross-departmental effort that prioritises communities in the decision-making process. By doing that, we can create a fairer, more inclusive economy, ensuring that towns like Leigh and Atherton receive the opportunities that they deserve.
Kirith Entwistle (Bolton North East) (Lab)
It is a pleasure to serve under your chairship, Mr Pritchard. I thank my hon. Friend the Member for Congleton (Mrs Russell) for bringing this crucial debate back to Westminster Hall and it is great to be here with north-west colleagues again. Reforming the Green Book—the Government’s rule book for assessing public investment—might sound technical or dry, but for the people I represent in Bolton North East, it is profoundly consequential.
The Green Book is not just a document; it is a tool that shapes where investment goes, what gets prioritised and who gets left behind. Unless we change how those decisions are made, towns such as mine in Bolton will continue to be overlooked. Many hon. Members have spoken powerfully about how the Green Book favours London and the south-east, and they are right. At the heart of the problem are its outdated rules, which prioritise short-term, easily predicted returns. The rules do not ask about need or potential. They ask where we will see the biggest, fastest payback and, almost every time, the answer is the places that are already thriving—places with high wages, strong growth and well-connected transport. The result is a baked-in bias that overlooks the untapped potential of towns such as Bolton and says that our time, our housing, and our transport matter less, just because our postcode starts with a “BL” rather than a “W”.
Bolton does not just need fair treatment from London, it needs it from Greater Manchester, too. Even when public investment comes to Greater Manchester, the same pattern repeats. Time and again the Green Book prioritises funding into Manchester, where the numbers look better, and leaves Bolton behind. On the ground, the consequences are obvious: fewer jobs, slower trains and many more missed opportunities. Look at the business case to extend the Metrolink to Bolton. It has strong local support, clear economic value and huge potential to drive business growth, unlock investment and boost productivity. However, under the Green Book, the business case falls short because it does not account for induced demand. Infrastructure does not just respond to growth; it creates it. The Green Book neglects the homes that would be built, the businesses that would invest, and the people who would finally be connected to opportunity. That holds Bolton back, both in ambition and in growth.
Between 2007 and 2022, Manchester’s economy more than doubled, while Bolton’s grew 40% less. In the last five years alone, Manchester’s economy grew by a third, but Bolton’s by just 12%. That is not because we lack talent or ideas, but because the Green Book rewards places that are already well-resourced and overlooks Bolton’s potential. Here is where the frustration sets in. We are told that the numbers do not add up, but I say that the system does not add up. We are being asked to play a game that we were never meant to win, judged by rules that we did not write. I look forward to hearing from the Minister about how the Green Book can be reviewed so that towns such as mine feel the difference, and no longer feel left behind or overlooked.
First, I hope that we can adjust the appraisal formula, so that £1 of benefit in Bolton is not judged to be worth less than £1 in London or Manchester. Secondly, I hope we ensure that business cases reflect long-term impact—not just what can be delivered in year one, but what can be delivered over five, 10 or 20 years. Finally, I hope we can ensure that public investment allocated to Greater Manchester reaches towns such as Bolton.
Bolton does not lack ambition; it lacks backing. It does not lack ideas; it lacks investment. Public investment should open doors, but the Green Book, as it stands, is locking towns such as mine out of the future. It is about time that that changed.
Connor Naismith (Crewe and Nantwich) (Lab)
It is a pleasure to serve under your chairship, Mr Pritchard. I thank my neighbour, my hon. Friend the Member for Congleton (Mrs Russell), for securing the debate.
As we have heard, the Green Book is the document that sets the framework for deciding where public investment goes. That means it is a subject that is not often spoken about—it is under-spoken about—but it is crucial, and it should be crucial to all our constituents.
We live in a society with grotesque place-based inequality. London enjoys productivity at 170% of the UK average, and that productivity gap has widened over time. The access that my constituents have to public transport is incomparable even with that in central Manchester, never mind the other planet that, frankly, we experience here in this city. Health outcomes and life expectancy are inextricably linked to having a thriving local economy and a place that people can be proud of.
Addressing this grotesque place-based inequality will require place-based investment. The status quo simply represents a game rigged against my constituents. It is baffling that there is a train station in my constituency that is unrivalled in terms of its capacity to connect the north and the midlands through genuine, 360° connectivity, but that we have struggled to secure the investment—frankly, Crewe station is dilapidated—to match the needs of projected future passenger growth. That is simply unsustainable, and it is not acceptable to my constituents and the many people who use that train station every day.
The status quo also forces talented people in my constituency and across the country who may wish to build a life for themselves in their own community to move to where the jobs and opportunities are, which is often not the place they would naturally choose. The place they would naturally choose is often the place where they grew up.
It does not have to be this way, but we have to change the rules if we are to see real change. I welcome the commitment to a review of the Green Book. The 2020 review made a number of recommendations, including placing greater emphasis on the strategic objectives of the Government of the day; deploying a place-based analysis to ensure that the needs of specific regions and sub-regions are taken into account; considering transformational interventions, which have the potential to bring significant long-term benefits to regions; and, crucially, as other colleagues have touched on, reducing the focus on cost-benefit ratio as a measure—a narrow focus that simply compounds regional inequalities. I would welcome the Minister’s reflections on the implementation of the recommendations made under the previous Government; they certainly do not seem to have brought any benefit to my constituents or to have delivered that Government’s so-called levelling-up agenda.
We have to stop treating towns across our country as if the people living in them are somehow fundamentally different from the people who live in metropolitan cities—as if they are less deserving of strong local economies and communities with access to quality jobs, public transport and amenities on their doorstep. A further review is welcome, but it must deliver real change.
Phil Brickell (Bolton West) (Lab)
It is a pleasure to serve under your chairship, Mr Pritchard, and I thank my hon. Friend the Member for Congleton (Mrs Russell) for introducing this important debate.
I rise today to make the case for communities such as mine in Bolton West to be placed at the heart of the Green Book review. The Government’s laser-like focus on growth is welcome, but I know from talking to businesses in my constituency, such as Woodall Nicholson in Westhoughton, Scan Computers in Horwich and Cohens Chemist in Lostock, that they face real obstacles to expansion and job creation. Some of that is a result of a lack of central Government co-ordination. The Green Book has consistently reinforced an economic model that prioritises investment in parts of the country that are already more prosperous, such as the south-east, rather than constituencies like mine.
Despite the expensive self-congratulation from the previous Government, levelling up did not amount to all that much in Bolton West. Indeed, under the last Government, Bolton West simply did not get a fair deal on funding. Time and time again, our towns lost out—a situation played out across the north. The result is that inequality has become entrenched and high streets across the north-west have become ghost towns, with young people having to leave their communities to find work, just as many of my peers had to when I was growing up.
The review is the perfect opportunity to fix this fatal, regressive flaw and ensure that investment decisions consider the wider benefits to our communities: job creation, skills development, better transport and improved public services. Crucially, investment in Greater Manchester cannot just mean investment in Manchester city centre; it must mean investment in the towns and communities that make Manchester the innovative economic powerhouse it has become.
We are at the cutting edge of the cyber and digital industries in Greater Manchester, and Bolton is a key part of that, with a growth corridor that stretches out across to Wigan. Bolton and other surrounding towns, however, have yet to be given the tools to harness that immense opportunity. After years of the Conservatives failing to put their money where their mouths were, we now see more investment into connecting Bolton to these high-growth sectors through training, infrastructure and partnerships, which bring those opportunities to my constituents’ doorsteps.
In my constituency, despite having a number of brilliant small and medium-sized enterprises, including the pioneering Blackedge brewery around the corner from my office in Horwich, I worry that many smaller firms still struggle to access the finance they need to grow. Too often, our local businesses struggle to secure the funding they need to expand, innovate and compete. We must ensure that businesses across the UK, including those in Bolton West, can access the capital they need to succeed.
If we are serious about driving economic growth, Government must invest and build the appropriate infrastructure. We must also work with the private sector to empower our entrepreneurs and local businesses, and not leave them battling a system that is stacked against them. The Green Book review must lead to real, tangible change that rebalances our economy and puts regions like ours at the heart of national prosperity. Never again should we live in a country where people’s futures are too often determined by their postcodes.
Lisa Smart (Hazel Grove) (LD)
It really is a pleasure to have you in the Chair today, Mr Pritchard. I add my congratulations to the hon. Member for Congleton (Mrs Russell) for securing this important debate.
Our communities deserve responsible Government. That means a stable economy, support for green innovation and ensuring that no one is left behind. In its current form, the Green Book holds us all back. It is time for a smarter and fairer approach that invests in and for every community. The country needs to move forwards from the last Government’s fairly reckless approach to public finances and backtracking on climate commitments that left our country decidedly weaker.
The Green Book’s framework continues to entrench regional inequality. The reasons for that are clear and twofold. It relies too heavily on blunt and limited cost-benefit analyses, and it fails to adequately factor in broader socioeconomic benefits to proposed spending. Placing disproportionate weight on cost-benefit ratios based on existing economic activity means that proposed spending that would invest in communities where wages and prices are lower is disadvantaged, because the short-term economic benefits appear to be lower. The Green Book therefore directs funding to areas that are already enjoying high levels of economic activity—namely, London and the south-east.
Projects in areas such as my own in Greater Manchester, by contrast, can struggle to compete on paper, even when the real-world need for investment is clearly greater. By focusing disproportionately on direct economic output, the Green Book often misses the wider socioeconomic benefits of investing in less affluent regions. Those benefits include wellbeing, job creation, community cohesion and long-term sustainability. Without a national strategy to prioritise regional equity, too many good projects in the north fall through the cracks.
The Liberal Democrats believe that all communities deserve a fair shot, not only the ones that already happen to be thriving. We need a framework that looks beyond simple economics and recognises the human, social and environmental value of infrastructure investment. It is not just a philosophical argument; in practice, the current system leads to under-investment in projects that could transform struggling communities.
There is also an important environmental angle. The UK has legally committed to net zero emissions by 2050, but our appraisal framework has not caught up. The Green Book still applies discount rates that undervalue the long-term benefits of green investment, making it harder to justify climate-friendly projects with slower financial returns. If we want a green economy, we need green tools, and right now, the Green Book is steering us away from the very infrastructure—whether that is renewable energy, public transport or nature restoration—that will power our net zero future. We need to realign our economic models with our environmental goals.
The 2020 review, undertaken by the last Government, was a missed opportunity. While it nodded to levelling up and net zero, it failed to make the structural changes that are needed. The think-tank Centre for Cities has argued that the Green Book should empower local leaders to choose the best projects for their regions, rather than leaving the Treasury to pick between places. I am interested to hear from the Minister what the thinking of this Government and the Treasury is on that.
As it stands, the Green Book holds back the north. It stifles green investment and ignores the full value of infrastructure investment. My constituents are living with the consequences of that every day. There are many examples of transport infrastructure upgrades in Hazel Grove that would have a transformative effect on their lives. Direct rail links from areas such as Romiley and Marple to Stockport would save my constituents a lengthy and unnecessary trip via Piccadilly. Level access at stations in Woodley and Romiley would ensure that those with physical disabilities can get on the train, and a bus link to the Bredbury industrial estate would promote job growth and reduce the number of people driving to work.
In debating the Green Book, a framework for investment decisions, we should not forget that it is not just about numbers—it is about people’s everyday lives. It is about their health, jobs and opportunities. We cannot let technical frameworks stop us from doing what is right. The Liberal Democrats are calling for bold reform: a system that promotes long-term prosperity, tackles inequality and delivers on our environmental commitments. We should all be working to build a country in which every region and community has a proper chance to thrive.
Richard Fuller (North Bedfordshire) (Con)
It is a great pleasure to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Congleton (Mrs Russell) on calling this debate, and the nine other speakers on speaking with great passion about the potential of their constituents and their constituencies, as well as about the role that the Green Book review—a rather obscure topic—can play in seeking to unlock that potential. I note that they spared the blushes of the Chancellor. When she announced the review, to unlock the potential of which those hon. Members are so hopeful, she announced further growth measures in the south and south-east of the country. That shows the difficulties there are in achieving some of the objectives. The hon. Member for Mid Cheshire (Andrew Cooper) was kind enough to say that those objectives were the intention of the 2020 review: levelling up this country.
I am, perhaps, an ironic choice to respond in this debate. If I may stretch your tolerance, Mr Pritchard, I will mention some things about the area of the country that I represent, North Bedfordshire. To give hon. Members some sense of the disparities, let me enumerate some of the growth potential projects going on in my county: our housing growth rate is already two and a half times the national average; we have a proposal for a solar farm in my constituency, which will be seven times the size of the largest one in the country; we have the country’s largest road project at Black Cat roundabout on the A1; we have a proposal for a railway line, which will be the third largest railway construction project in the country; and we have the doubling of the capacity of Luton airport to bring people into the country. We are also awaiting, when the Treasury finally pulls its finger out, a potential £10 billion investment for Europe’s theme park from Universal Studios, which will then start a whole new range of investment potential in the south. The hon. Member for Congleton has the right person responding from the Opposition to answer some of her points—because frankly, that is too much for one area to take at one time.
The 2020 review mentions some points that have been repeated today, and the allegations were: systematic bias towards London and the south-east; the tyranny of benefit-cost ratios; overlooked unmonetised benefits; no allowance for transformation or other complex effects; and that guidance was responsible for strategic policy faults with no focus on where, or by whom, effects are felt. Those allegations have been echoed today, but I have to say to Members that the findings were that there were no systematic methodological biases in the process. However, there were significant problems in understanding of the Treasury’s five case model, leading to significant poor practice in the application of the Green Book, and some changes have been made as a result.
As I thought Members would raise the issue of disparities in expenditure, and whether those changes had any effect, I went to table 9.4b of the “Public Expenditure Statistical Analyses 2024”, which enumerates the public expenditure on services per head in real pounds between regions. It splits that between current expenditure and capital expenditure, which is the focus of today’s debate. I have to tell Members that, if we look at those statistics between the years 2018-19 to 2022-23, real capital per head went down by 3% in the east and by 5% in the south-east. Real capital per head did go up by 20% in London, but it also went up by 25% in both the north-west and the north-east, by 24% in the west midlands and by 22% in east midlands. That is not to say that everything is done, but it is important to build on the progress that is being made. There is a lot more commonality here than we perhaps think.
Richard Fuller
I am afraid that I am very short on time. I would love to give way, but I know Mr Pritchard, and he will not give me any more time.
The view that focusing on the BCR as the answer is incorrect. East West Rail, which goes through my constituency, has a BCR of 0.3. It loses money, but the Treasury still wants to push ahead with it—that is another question for the Treasury. There is not sufficient quantification, so we do not understand what those benefits may be for people.
I have one final question for the Minister, as I have only a little time—I do have some other questions, which I will send to him. Can he look at the implementation of the Public Services (Social Value) Act 2012? Getting that done is really hard for small businesses and social enterprises in particular.
Mark Pritchard (in the Chair)
Order. I am sure the Minister knows this, but I remind him that he has 10 minutes. He can leave a minute or so at the end for the mover of the motion, but it is entirely up to him.
The Parliamentary Secretary to the Treasury (Torsten Bell)
It is a pleasure to have you overseeing us today, Mr Pritchard. Like everybody else, I congratulate my hon. Friend the Member for Congleton (Mrs Russell) on securing the debate. I also thank all Members for setting out their views, which are in themselves important contributions to the Green Book review that His Majesty’s Treasury is undertaking, and which is our focus this afternoon. Before I respond to the specific points raised, I will spell out what the Green Book is and what it is for.
The Green Book is a technical guidance on how to assess the costs and benefits, and the opportunities and risks, of different options to achieve Government objectives. It is not a decision-making algorithm or a test that must be passed. It is a framework for identifying and assessing different options. It is an important framework but, as lots of Members have rightly pointed out, it should be just one input into decision making. It is ultimately for Government, both national and regional—who are held to account by this place, in our case—to decide on policy objectives and spending choices. We must not evade our responsibilities behind technical frameworks.
This Government have listened to the concerns raised about that framework, such as concerns from our mayors, including my friend Steve Rotheram, and Members present today. That is exactly why the Chancellor announced a review in January: to ensure that all regions get a fair hearing when it comes to the allocation of public funds. The review is looking at potential problems with the guidance itself, as well as how that guidance is being applied by the Treasury, and how it is being applied by other Departments or public bodies. Since January, the Treasury has been in conversations with a whole range of organisations and individuals, regional and national, and this debate offers us the opportunity to hear the well-considered views and perspectives of Members. I assure all Members that what they have said today will have been heard in the Treasury, and will influence that review as it is finalised ahead of the spending review in June.
The frustration that many people feel on this subject is entirely understandable. It is rooted ultimately not in technical questions about cost-benefit analyses, but in unacceptable outcomes, not least flatlining wages for the UK as a whole over the past decade and a half—and, for some areas, abandoned during the 1980s and sidelined during 2010s, for far, far longer.
The frustration is understandable, when low investment manages to combine being both the cause of this economic decline and a visible sign that it is taking place, not least when our roads are riddled with potholes, our trains—whether they are Pacers or not—are unreliable and our housing stock is deeply inadequate. Public, not to mention private, investment has simply been far too low for far too long. It has too often not reached every part of the country, as my hon. Friend the Member for Warrington South (Sarah Hall) set out and as any rail user in Wales—particularly in Swansea, since the electrification does not reach our great city—will say.
For this Government, growth in every part of the country is the goal, because Britain is scarred by deep regional inequalities, as my hon. Friend the Member for Crewe and Nantwich (Connor Naismith) set out eloquently. Our shared growth is the goal, and higher investment is a necessary, if not sufficient, condition for it. That is why we have ended the public investment boom-and-bust cycle, with £113 billion higher investment this Parliament, sustaining public investment at levels not seen since the 1970s. We will work side by side with our mayors, local leaders and devolved Governments to support all regions to achieve their potential, investing for the long term in the infrastructure, transport and housing needed to ensure that all parts of the UK benefit from growth.
We are supporting empowered local leadership with the publication of the English devolution Bill, which my hon. Friend the Member for Congleton mentioned, and we are moving away from the short-termist, competitive approach to local funding so that we can instead support local leaders to drive growth in their areas. That includes implementing this month the first integrated settlements for Greater Manchester and the West Midlands combined authorities, ahead of the roll-out to other mayoral areas.
We are investing in economic infrastructure across the country: we are committed to the trans-Pennine upgrade—the largest investment in northern rail for decades, with a further £415 million announced last week; we are backing West Yorkshire mass transit; and £4.8 billion for the strategic road network will deliver critical road schemes across the country. We are working with Doncaster council and the Mayor of South Yorkshire on their plans to reopen the south Yorkshire airport. There are places outside the north-west that will also classify themselves as being in the north and feel left out by this discussion, so I am getting some of them in too; we will set out further details of our plans for infrastructure across the whole UK in the 10-year infrastructure strategy, which is to be published in June.
My hon. Friend the Member for Leigh and Atherton (Jo Platt) and the hon. Member for Hazel Grove (Lisa Smart) both rightly noted that we must care about a wider range of social factors, including deprivation, when making investment decisions. They are both right.
My hon. Friend the Member for Congleton raised the issue of consultants—an issue that is emerging again in the review that is under way. Of course, while there are times when the use of consultants is value for money, more needs to be done to improve the capacity of local government in this area, and by national Government to ensure that their asks in that regard are proportionate and sensible.
Other Members, including my hon. Friend the Member for Cramlington and Killingworth (Emma Foody), have made a powerful case for specific projects, particularly transport projects. I am sure that they will continue to bend the ears of each and every Department for Transport Minister, or, in some cases, the Mayor of Greater Manchester, where they are the appropriate decision maker, and I was glad to hear that everybody recognised that that should happen within important public spending constraints.
Andrew Cooper
Does the Minister agree that in recent years we have seen such a reduction in local government funding that local governments have lost the capacity to develop long-term transport projects and a pipeline of projects, so when the Department for Transport comes along and says, “We’ve got 20 million quid burning a hole in our pocket—what can you spend it on?” many authorities are not in a position to be able to do that? Is that something he thinks needs to be rectified as part of the comprehensive spending review in the 10-year transport plan?
Torsten Bell
My hon. Friend is completely right about both points. We need to address that, partly by providing decent funding for local government. Members will have seen that being laid out over the last few months since the autumn Budget, but it needs to continue. We need to make sure that, instead of setting out short notice, competitive pots between areas, we empower local leaders to decide the right answers for their areas—and that is exactly the approach we are taking.
My hon. Friends the Members for Loughborough (Dr Sandher) and for Bolton North East (Kirith Entwistle) rightly noted that we need to consider the dynamic effects of investments—a point also powerfully made by Diane Coyle in recent years. I agree. There are questions about whether the implementation of the 2020 review has been followed through in that regard. I can reassure my hon. Friend the Member for Loughborough that the Department for Transport does use the same value for commuter time for all parts of the country. He may think it is not enough or that it is too much, but it is the same pounds and pence in every part of the country for commuter times specifically.
I can reassure the hon. Member for Hazel Grove that the Green Book is not preventing this Government from delivering a step change in green investment. If the hon. Member for North Bedfordshire (Richard Fuller) had had time, I am sure he would have said that we are investing too much in green projects—or at least his party’s leader would.
My hon. Friend the Member for Mid Cheshire (Andrew Cooper) noted that there are real dangers of overreliance on BCRs. He is right: decision-making should always be rooted in strategic objectives, or what he called, “What are we trying to achieve?” Closing regional gaps is exactly what our objective should be, and it is for this Government.
The shadow Minister, the hon. Member for North Bedfordshire, took his life in his hands by listing the investments happening in his part of the south—broadly defined—although he may have saved himself by pointing out that maybe it was excessive. I look forward to his letter.
As we have heard, investment matters, and it matters that all parts of this country get a fair hearing when it comes to infrastructure investment. This Government understand that, which is exactly why we are acting to support growth across all regions. Once again, I congratulate my hon. Friend the Member for Congleton on securing this debate.
Mrs Russell
I thank everyone who has contributed to the debate. I absolutely accept that, underlyingly, we need a framework for evaluating projects. I am immensely looking forward to the 10-year infrastructure strategy, which is a real opportunity for the Government to grasp and fundamentally change how we are investing in the north of England; that is encapsulated by the point made by my hon. Friend the Member for Warrington South (Sarah Hall). We need to stop our communities being seen as low-return risks rather than high-potential communities. I want growth to stop going to where growth already is, as my hon. Friend the Member for Leigh and Atherton (Jo Platt) said; I want growth going where people are, in the north-west of England.
Question put and agreed to.
Resolved,
That this House has considered the Green Book review.