David Cameron defends massive funding gap between London and North East

The Prime Minister said the Government was committed to building up the North East, but said London needed investment

Chris Radburn/PA Wire Prime Minister David Cameron
Prime Minister David Cameron

David Cameron has defended a massive gap in transport funding between London and the North East.

But the Prime Minister insisted the gap was closing due to investment in road and rail schemes which will benefit the region.

Mr Cameron was quizzed by MPs who highlighted findings by think tank IPPR North which show spending per head on infrastructure in London stands at £5,426 per head - compared to just £223 per person in the North East, the lowest rate in the country.

Asked about the discrepancy by Louise Ellman, the Chair of the Commons Transport Committee, Mr Cameron said that London needed major transport schemes such as Crossrail, a 73-mile railway running through the city, because of its global role and importance to the UK economy.

But the Prime Minister also highlighted rail and road investment in the north of England, including the North East, and suggested there would be further announcements in the Chancellor’s Autumn Statement on December 3.

The Government’s aim was to reduce the nation’s dependence on London by helping the north succeed, he said.

Architect's impression of how Crossrail Canary Wharf Station in London may look
Architect's impression of how Crossrail Canary Wharf Station in London may look

Mr Cameron said: “The London figures are affected by Crossrail which is the biggest infrastructure project anywhere in Europe.”

And he told MPs: “London is not just a city, it’s a capital city. The transport needs are huge and it has an enormous effect on the rest of the country . . . that’s in the interest of the whole economy that these things are progressed.”

But he also highlighted schemes to improve rail infrastructure including completion of the “Northern Hub”, a package of rail improvements led by Network Rail.

“The whole impetus of this government on the long term infrastructure plan, you’ll hear more about it in the autumn statement, and in the City Deals is to devolve that power and spending and to build the regions and great cities of our country.”

He added: “If you look at the infrastructure we are planning - completion of the Northern Hub, electrifcation of the trans-Pennine line, HS2 particularly as it goes north of Birmingham, you care going to see very large projects built in the North East, North West, Yorkshire and Humberside which I think do help to rebalance our country.”

The Prime Minister was speaking to the Commons Liaison Committee, which is chaired by Berwick-upon-Tweed MP Sir Alan Beith.

Berwick MP Sir Alan Beith
Berwick MP Sir Alan Beith

Mr Cameron also ruled out changes to the Barnett formula, which critics say gives money into Scotland at the expense of England.

It ensures that any increases in funding are shared equally among the nations of the United Kingdom. However, because the share of funding is unequal in the first place, the Barnett formula effectively ensures Scotland continues to receive more cash per person than England.

Public spending per head in England was £8,529 in 2012-13. But in Scotland it was £10,152.

There are also variations between regions of England, with London enjoying funding of £9,435 per person. Funding in the North East 9,419.

He told MPs: “I don’t think reform of Barnett is on the horizon.”

But he said funding would increasingly be raised by devolved administrations, which would make the formula - which applies to the distribution of funds by central government - less important.

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