Yorkshire leaders' hopes for 'levelling up' after Exchequer Secretary Kemi Badenoch indicates changes to Treasury's Green Book

The Treasury yesterday gave its clearest indication yet of revisions to a system that could allow major projects to be signed off more readily in the region.

Exchequer Secretary Kemi Badenoch confirmed that an update to her department's Green Book - the guidance issued by the Treasury on how to appraise policies, programmes and projects - would be published when the Government conducts its Spending Review later this month.

The Mayor of the Sheffield City Region, Dan Jarvis, meanwhile, called on ministers to unlock a "New Deal for the North".

Politicians across party lines see a rewriting of the Green Book as key to bringing about profound economic improvements to the North and to the Government's "levelling up" agenda because, they argue, the guidance currently favours short-term projects concentrated in areas of existing economic growth, high productivity, and high house prices such as London and the South-East.

Ms Badenoch made her statement in response to a speech by Don Valley MP, Nick Fletcher, in a Parliamentary debate on the Northern economy called by Mr Jarvis.

Conservative Mr Fletcher, one of various so-called 'Blue Wall' Tories who swept up a Labour seat in Yorkshire at the last General Election, said that "it's nothing short of a scandal that failure to reform the Green Book by successive Governments has led to a lack of infrastructure and investment in the North for decades".

He added: "Treasury ministers should now look at how they can completely rewrite the Green Book so the formula no longer rewards big investment projects to places which already enjoy good economic growth and high productivity.

"The over-concentration and quick economic returns has only exacerbated the North-South divide and needs to be totally reworked.

"Otherwise, the Green Book will continue to give the same answer to any infrastructure proposal in the North: the computer says no."

Mr Jarvis, who is also Labour MP for Barnsley Central, told the debate that the number of people in South Yorkshire claiming benefits related to unemployment is now higher than at any time since the mid-1990s when its communities were blighted by pit closures.

Despite the region having a "storied history of manufacturing prowess", he said, "we're at risk of undoing a quarter of a century of painful progress".

"The brutal reality is that the North is now on course for levelling down, not levelling up," he said.

Mr Jarvis called on the Government to extend the Local Growth Fund - resources for Local Enterprise Partnerships to develop economic strategies - but said that was "only enough for us to stand still.

"A transformation needs something much more like a New Deal for the North."

He said: "The Government should make some critical, structural changes, especially reforming the Green Book to reduce the in-built bias toward more affluent areas in Government investment decisions and following through on proposals to move significant parts of the Civil Service."

Last night Lord Jim O’Neill, vice chairman of the Northern Powerhouse Partnership, welcomed the news of potential changes to the Green Book.

He said: “By targeting investment at projects that drive up productivity - such as the promised new Northern Powerhouse Rail line from Manchester to Leeds - we can start to tackle the crux of the North-South divide.”

The Green Book was last revised in March 2018 to take greater consideration of environmental issues.

Jake Berry MP, the former Northern Powerhouse minister who now chairs the Tory-led Northern Research Group (NRG), said: "During the Covid crisis it was our constituents who put their shoulder to the wheel.

"There was no furlough for them, they were going into factories doing shift work. It was our constituents who have worked so hard in the economy doing difficult jobs to make sure that we continue to trade during Covid.

“The September Purchasing Managers Index stats that show that every part of the North of England was growing faster than London.

"That is a testament to the strength of our manufacturing base and the huge amount of work our constituents have done.

“We have formed the NRG to pay tribute to our constituents and I press the minister, we need a Northern Economic Recovery Plan – we need a northern economic recovery fund – so we can ensure that we are levelling up our communities across the North.”

Ms Badenoch told the debate that the Government is committed to "protecting the livelihoods of people across the country", highlighting £200bn spent through the Coronavirus Job Retention Scheme.

She told Northern MPs congregated in Westminster Hall that the Chancellor of the Exchequer, North Yorkshire's Richmond MP Rishi Sunak, is "very much on your side".

Mr Sunak resolved to conduct a one-year Spending Review on November 25 in order to prioritise the response to Covid-19.

It will set his department’s resource and capital budgets for 2021 to 22.