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National
Jonathan Walker

Labour and Tories are both targeting the North with promises to spend hundreds of billions of pounds

Labour and the Conservatives both set out plans to spend billions on infrastructure in an attempt to turbo-charge the economy in the North and Midlands, if they win the December 12 general election.

Shadow Chancellor John McDonnell said Labour would invest £150bn over five years on schools, hospitals, care homes and council houses - on top of the £250bn over 10 years previously announced to upgrade transport, energy supplies and other key infrastructure.

And region will have a board of local county and city council leaders to oversee the work of Government departments in their part of the country, potentially marking a major shift of power away from London and into the regions of England.

Meanwhile, Chancellor Sajid Javid announced an end to the Conservative focus on keeping borrowing down - announcing the party would take advantage of “historically low borrowing rates” and “borrow some more to invest”.

Shadow Chancellor John McDonnell. (Adam Gerrard / Daily Mirror)

While he also insisted a Conservative Government would avoid “excessive debt”, he said that as Chancellor he would spend billions on “new hospitals, schools, roads, railways, better broadband” in order to “level-up the entire United Kingdom”.

It means both major parties are putting promises to close the huge wealth gap between the South East and the rest of the country at the heart of their election campaigns.

And they are both promising to spend large sums of money in the process.

And it comes as newspapers and websites in the North of England step up their “power up the North” campaign, by getting behind a manifesto published by the North’s political leaders calling for more investment and more autonomy.

The new announcement from Mr McDonnell brings his spending pledges up from £250bn to £400bn.

And he portrayed it as part and parcel of a drive to move decision-making power out of London.

The £250bn National Transformation Fund will include “a Local Transformation Fund in each of England’s regions,” he said - as well as funding for Scotland, Wales and Northern Ireland.

He added: “That money will be ringfenced 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.”

Chancellor of the Exchequer Sajid Javid (Peter Summers/Getty Images)

At the same time, the fund will be overseen nationally by a team of Treasury officials. But they will not be based at a location in the North of England, to be decided, rather than at the Treasury offices in London.

That’s just part of Labour’s plan to shift power away from London.

Each region will also have a board of local county and city council leaders, which will oversee the local offices of Government departments. The board will in turn be accountable to local councillors, trade unions and business representatives.

Mr McDonnell said: “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.”

He added: “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.”

Meanwhile, a Labour Government would change the way that borrowing is measured, effectively allowing the Government to borrow more.

He said this would mean “adding to the Government’s debt but also adding to the Government’s assets and strengthening our public sector to deal with the future.”

The Shadow Chancellor chose Liverpool to set out his plans. On the same day, Chancellor Sajid Javid was delivering a speech in Liverpool.

He also announced plans to change the way the Treasury viewed debt, allowing more borrowing.

He didn’t go into as much detail as his Labour shadow but appeared to say that more would be announced once the Tories published their election manifesto.

Some estimates put Mr Javid's proposed spending at around £100bn.

Mr Javid said: “In our manifesto, and at our first Budget in the new year, we will announce new plans to level-up the entire United Kingdom, from Manchester to Midlothian, spreading opportunity and renewing the fabric of our nation.

“There will be new hospitals, schools, roads, railways, better broadband, New connections and opportunities in every part of our nation. So I can confirm today we will borrow some more to invest.”

He said the Treasury’s new rule would be that borrowing for infrastructure could not exceed 3% of GDP, while at the moment it’s around 1.8% of GDP on average.

“That represents a huge step-change in what we currently invest. It means billions of pounds more to spend on the infrastructure revolution this country needs.”

The spending pledges come during an election that could be won or lost in the Midlands - traditionally a key battleground - and the North, which in the past has often been seen as a Labour heartland, although there have always been Conservative MPs in the North of England.

Conservatives hope that Labour’s ambivalence towards Brexit and doubts about party leader Jeremy Corbyn will lead some traditional Labour voters to abandon their party.

That doesn’t mean, as Tories admit, that they would necessarily choose to vote for Boris Johnson’s party instead.

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