Green Book Review

Lisa Smart Excerpts

Wednesday 2nd April 2025 Westminster Hall

[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.