Shadow Chancellor Rachel Reeves has pledged to reform the Treasury's investment rules if Labour wins the next general election, aiming to unlock billions for long-term infrastructure and green energy projects.
In a major economic speech, Reeves criticised the current Treasury framework for prioritising short-term savings over sustainable growth. She argued that outdated fiscal constraints are holding back vital investments in transport, housing, and renewable energy.
Breaking Down Treasury Barriers
The proposed reforms would adjust the Treasury's Green Book methodology, which currently evaluates projects based on narrow cost-benefit analyses. Reeves claims this approach disadvantages regions outside London and the South East.
"We need investment rules fit for the 21st century," Reeves stated. "By reforming how projects are assessed, we can deliver better value for taxpayers while tackling regional inequalities."
Key Proposed Changes:
- Longer assessment periods for major infrastructure projects
- Greater weighting for regional economic benefits
- Stronger emphasis on environmental sustainability
- Revised calculations for social value and productivity gains
The announcement comes as Labour seeks to position itself as the party of fiscal responsibility with a growth agenda. Business leaders have cautiously welcomed the proposals, though some economists warn against relaxing fiscal discipline.
With the UK economy showing sluggish growth, Reeves' intervention sets the stage for a key political battle over economic management ahead of the next election.
