A Labour government would spend £150bn on improving the country’s schools, hospitals and low-cost homes under new plans that take the party’s promised investment in infrastructure to £350bn in five years.
John McDonnell, the shadow chancellor, will announce the massive new spending pledge during a speech in Liverpool on Thursday.
He is expected to say that a government led by Jeremy Corbyn would ramp up borrowing to launch a £150bn Social Transformation Fund to upgrade schools, hospitals, care homes and council housing after years of austerity.
Some of the funding, which would be spent over a five-year period, would be earmarked for spending in each of the UK’s regions and administered by local officials.
The new investment would be in addition to a £250bn Green Transformation Fund that would be spent on environmentally friendly policies including insulating homes, building offshore wind farms and the new Crossrail for the north.
Sajid Javid, the chancellor, compared Mr McDonnell and Mr Corbyn to anti-vaccine conspiracy theorists, claiming that they “reject the treatment needed to heal our economy”.
In his first speech of the election campaign, Mr McDonnell will promise that Labour would deliver an “irreversible shift in the centre of gravity in political decision-making and investment” from London to the north of England.
The Independent understands that this would include moving part of the Treasury to Liverpool and tasking it with delivering the combined £350bn National Transformation Fund.
Mr McDonnell is expected to say: “On the scale of change-investment needed I can tell you today that Labour’s National Transformation Fund will be bigger than we promised at the 2017 election. For areas that haven’t had their fair share for years, we’ll deliver £250bn of investment here and around the country over the next 10 years through our Green Transformation Fund.”
He will add: “But it’s not just the natural world that’s been neglected. So we’ll also commit to an additional £150bn in a new Social Transformation Fund.
“Spent over the first five years of our Labour government, the Social Transformation Fund will begin the urgent task of repairing our social fabric that the Tories have torn apart. A hundred and fifty billion pounds to replace, upgrade and expand our schools, hospitals, care homes and council houses. To deal with the human emergency which the Tories have created, alongside the climate emergency.”
Announcing that the money would be administered by a new Treasury unit in the north, Mr McDonnell will promise “an irreversible shift in the balance of power and wealth in favour of working people”, adding: “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.”
In an interview with The Independent ahead of the speech, the shadow chancellor revealed that Liverpool was the most likely base for the Treasury unit.
The announcement that Labour would increase borrowing by even more than it pledged in 2017 was seized upon by the Conservatives, who claimed that it would threaten the fragile economic recovery following years of austerity.
In a speech in Bolton on Thursday, Mr Javid is expected to say: “Jeremy Corbyn and John McDonnell are like the anti-vaxxers of economic policy.
“Not only did they reject the treatment needed to heal our economy and get the deficit down by four-fifths.
“They now want to take every step imaginable to make the country sick and unhealthy again. There are serious consequences to these fantasy economics.”
And Rishi Sunak, the chief secretary to the Treasury, said: “Jeremy Corbyn’s tax rises and reckless spending would do irreversible damage to the economy.
“Their extreme plans would mean economic disaster for Britain – raising taxes to their highest level in peacetime history, hitting hardworking families up and down the country.”
Elsewhere, the Liberal Democrats will unveil plans to insulate all low-cost homes by 2025 and ensure that 80 per cent of all UK energy is generated from renewables by 2030.
The party claimed that retrofitting 26 million homes would cost £15bn and would save the average household £550 a year on energy bills.
Wera Hobhouse, its climate spokesperson, said: “The Liberal Democrats are the only party who have a clear, ambitious plan to cut harmful emissions by 2030 and get to net zero by 2045. We would raise efficiency standards of every home and more than double the amount of electricity we generate from renewables.”
