Green Book Review

Jeevun Sandher Excerpts

Wednesday 2nd April 2025 Westminster Hall

[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.