Labour plans to move Treasury north

Labour would break up the Treasury and create a new £250 billion devolved unit in the north of England responsible for national infrastructure, the shadow chancellor has revealed.

In an interview with the Manchester Evening News, John McDonnell said the Treasury needed to acknowledge the mistakes of the past and overhaul the way it thought about spending outside London.

“We’re going to break up No 11. Part of No 11 is going to the north,” he said.

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“People think it isn’t important, that it doesn’t matter where they’re located. Oh yes, it does. People need to know what lives people are living in those areas.”

Challenging claims the move was just a gimmick, he said “it isn’t just relocating the unit, it’s relocating decision-making as well. But actually the relocation of parts of No 11 I think is significant, because you do want the civil servants meeting up with businesses and civic leaders and others.”

The new unit will be known as the National Transformation Fund, with a decade-long infrastructure pot, “which could be used to bolster the northern transport system”, says The Independent.

The Guardian says McDonnell is “yet to draw up detailed plans about how decision-making over infrastructure would be devolved to local areas, or where the unit would be based”, although he is due to meet the region’s metro mayors to discuss the plans in the coming weeks.

The proposal comes five years after David Cameron and George Osborne announced their Northern Powerhouse initiative to rebalance the UK’s lopsided economy.

The results have been mixed, with a recent report by the Institute of Public Policy Research (IPPR) North think tank concluding its progress has been “undermined” by austerity. However, plans to reorientate how and where money is spent away from the south east have seen growing support from across the political spectrum.

In June, the Yorkshire Post and 33 other local newspapers teamed up to promote the Power Up The North campaign.

Labour have also mooted the idea of moving parts of the Bank of England to Birmingham, while both Boris Johnson has said he would beef up the role of Northern Powerhouse minister in his Cabinet.

Meanwhile, the Brexit Party’s new manifesto sets out billions of extra spending to help boost the UK’s most deprived regions, to be paid for by scrapping what its leader Nigel Farage calls the “ludicrous” HS2 rail link.