Labour will oversee an “irreversible shift” in the centre of political decision-making from London to the North, John McDonnell is expected to vow in his first big speech of the 2019 general election campaign.
The Shadow Chancellor is set to pledge an additional £150bn in a new ‘social transformation fund’, which will be established to “upgrade and expand our schools, hospitals, care homes and council houses”.
Labour plans to spend this fund over the first five years of being in power, McDonnell is expected to announce at the campaign event in his home city of Liverpool.
The key leadership figure will say that Labour’s new ‘national transformation fund’, a “powerful section of the Treasury” will be set up and based in the North of England.
“Our aim as a Labour government is to achieve what past Labour governments have aspired to,” McDonnell will say. “An irreversible shift in the balance of power and wealth in favour of working people.
“That means change means investment on a scale never seen before in this country and certainly never seen before in the North and outside of London and the South East.
“To achieve that objective also requires therefore an irreversible shift in the centre of gravity in political decision making and investment in this country from its location solely in London into the North and regions and nations of our country.”
The Shadow Chancellor will also set out how Labour intends to devolve decision-making from London to the North by breaking up the Treasury, saying: “We’ll carve out part of our national transformation fund for a local transformation fund in each of England’s regions. With money for the devolved governments as well, of course. And that money will be ring-fenced for infrastructure projects decided and developed at a local level.
“With decisions made transparently and democratically in each region about how their fund is allocated. And regional offices of government departments overseen by a board of local county and city council leaders with that board publicly accountable to open meetings of local councillors, trade unions and business representatives. They will be supported by a national transformation fund unit of the treasury.”
“I can confirm that this powerful section of the treasury unit will be based here in the North. At the same time my treasury ministerial meetings will no longer be solely in London. Labour’s treasury ministers will meet outside of London and will have a ministerial office in the North. The centre of gravity of political gravity is shifting away from London.”
“This is where the investment is needed and this is where those decisions on investment need to be made on the ground. Power is coming home. Back to the people. We can only deliver the real change we need by putting power into the hands of communities. Of the people who know their local area best, like those who came up with the tidal barrage idea for the Mersey, which we’ll build.”
McDonnell will explain that the scheme does not solely concern public investment but also the private finance sector, which must be “pulling its weight too” and “be brought in line with the rest of us”.
He will hail “an end to short-termist thinking… that only prices in risks associated with an investment here and now, rather than the potential for a dramatic change in the price of carbon investments leading to significant stranded assets”.
Labour has outlined that the national transformation fund will be funded through issuing government long-dated bonds and spent on capital investment that raises the productive capacity of the UK economy. It will include a Green Transformation Fund and a Social Transformation Fund.