Could Labour bring HS2 to North East?
SHADOW CHANCELLOR UNVEILS TRANSPORT PLANS
LABOUR Shadow Chancellor John McDonnell promised a massive programme of new and improved transport schemes in the Midlands and the North.
Speaking at Labour’s annual conference in Brighton, he said a Labour government would back plans for new rail and metro schemes drawn up by local councils, metro mayors and Local Enterprise Partnerships, the business-led bodies set up to promote economic growth.
He also highlighted Labour plans to extend the HS2 high speed rail line, currently due to run from London to Birmingham, Manchester and Leeds, so that it extended further north and up into Scotland.
This is likely to mean extending the line up the east coast and through Newcastle, though no route has been specified.
The speech also included an announcement that Labour would take PFI contracts, used in the past to fund new hospitals and schools, into public ownership.
It sparked a furious response from business group the CBI, which said this would mean investors were unwilling to work with the Government in the future.
Mr McDonnell said Labour was determined to end the historic unfairness of governments spending far more on transport schemes in London and the south than in the North and Midlands.
He told the Labour conference: “In our investment strategy, we will no longer accept the disparities between investment in London and the Home Counties and the rest of the country.
“This Tory government plans to invest in the north just one-fifth of what it will spend on transport per head in London.”
Labour would pass laws ensuring that investment was shared fairly across the country, he said.
And the party would build a scheme called Crossrail for the North, a new rail line linking the North East and North West which is backed by local political and business leaders.
Labour would also fund transport plans drawn up by leaders in the East Midlands and West Midlands who have formed a transport authority called Midlands Connect.
This would include improving rail services from Birmingham to Nottingham and Birmingham to Leicester.
Mr McDonnell said: “We will legislate for a fair distribution of investment. We’ll devolve decision making through the Regional Development Banks, our Mayors, and regenerate the powers and resources available to local councils.
“We’ll build Crossrail for the north, connecting our great northern cities from west coast to east, and extend HS2 into Scotland. We’ll deliver the funding for Midlands Connect, overhauling transport across the Midlands. And we’ll overturn decades of neglect and lack of investment in the South-West. We’ll electrify railway lines from Cornwall right through to London.”
In a major announcement, he said Labour would nationalise Private Finance Initiative (PFI) deals. Many of these were agreed under the last Labour government, and involved private firms building new schools or hospitals and providing management services in return for regular payments.
The allowed the government of the day to say it was improving public services quickly, but although the initial cost to taxpayers was low – with private investors effectively paying the up-front costs – it left schools and hospitals with expensive contracts to pay off over decades.
Mr McDonnell told his audience: “Over the next few decades, nearly two hundred billion is scheduled to be paid out of public sector budgets in PFI deals. In the NHS alone, £831m in pre-tax profits have been made over the past six years. As early as 2002 this Conference regretted the use of PFI.” He added: “We’ll put an end to this scandal and reduce the cost to the taxpayers. How? We have already pledged that there will be no new PFI deals signed by us. But we will go further. I can tell you today, it’s what you’ve been calling for. “We’ll bring existing PFI contracts back in-house.” Think tank the Nuffield Trust has estimated that winding up PFI contracts could cost more than £50bn. But a spokesman for Mr McDonnell said shareholders would be compensated in the form of government bonds and Parliament would assess the appropriate level of compensation to pay. It means investors could receive far less than they expected when they made their initial agreement with the government. CBI director general Carolyn Fairbairn said the plan would damage the economy. She said: “Forced nationalisation of large parts of British industry will send investors running for the hills, and puts misplaced nostalgia ahead of progressive vision.”
We will no longer accept the disparities between investment in London and the rest of the country John McDonnell