Labour to seek local support for £250bn ‘regional renaissance’

Labour is to begin courting regional mayors and councils over its plans for £250bn of transport and infrastructure spending, promising to prioritise projects that boost productivity and help the rest of the country catch up with London.

Speaking to the Guardian, Peter Dowd, the shadow chief secretary to the Treasury, said the party would open a series of consultations with local leaders over the coming months over its proposals to help close the regional divide.

Dowd, the shadow chancellor John McDonnell’s number two a former leader of Sefton council in Merseyside, will have responsibility for allocating the funding. He said spending decisions would be made in consultation with local areas.

Some cities, such as Stoke-on-Trent, are up to 25% less productive than the national average, which he pledged to address by allocating funds to local authorities from the transformation fund drawn up ahead of the last election.

Research from the Centre for Cities thinktank estimates that Britain’s economy would be more than £200bn bigger if all cities were as productive as the capital and the surrounding south-east region.

Ahead of the first major test of the country’s political sentiment since the general election, when local voting opens across the country next month, Dowd said: “We need to make a monumental effort for the north of England to deal with years of under investment and spark a regional renaissance for our country.”

Labour research shows government spending of almost £600 per person on transport in London to be almost fifteen times that of Yorkshire and the Humber. The proportion of construction spending in the capital is more than the entire north of England combined.

“There’s a terrible imbalance in infrastructure spending across the country,” Dowd said. “London and the south-east gets significantly more than north west, south-west and north-east regions. There has to be equality of approach for the funding.”

The government wants to close the productivity gap between London and other parts of the country through its industrial strategy, which includes a £31bn national productivity investment fund for infrastructure projects and research and development.

The slow recovery in the growth of efficiency among British workers, a measure of economic output per hour of work, has been blamed for holding back wage rises and improving living conditions since the financial crisis.

Dowd suggested, however, that austerity had acted as a drag on the recovery for parts of the country. “Some regions have been denuded of resource for years, but they’ve also been denuded of any sense of ability to influence government,” he said.