Reeves aims to shift Labour’s focus to investment in regional transport, away from austerity talk

Chancellor Rachel Reeves has unveiled a landmark £15 billion investment package to improve trams, trains and buses outside London, marking a bold attempt to reshape Labour’s economic narrative ahead of the spending review next week. The capital spending announcement is designed to reassure uneasy Labour MPs that the government is committed to investment, not austerity.

The package is part of a wider £113 billion capital programme planned for the remainder of the parliament, covering transport, housing and energy infrastructure. Reeves has been engaging with backbenchers to emphasise that these investments could only have come under a Labour government, while urging ministers to focus on the positive story of rebuilding Britain’s infrastructure.

This move reflects Labour’s growing recognition that many of its MPs, especially those in marginal seats, need a stronger economic message to counter public discontent and the rising threat from Reform UK. The government is seeking to shift the debate away from day-to-day spending cuts towards large-scale capital projects that will boost productivity and regional growth.

Significantly, much of the new capital funding will be directed to areas outside the prosperous south-east, with fresh Treasury investment rules prioritising projects that increase productivity in the Midlands and the north. Reeves will highlight this in a speech in Greater Manchester, framing the investment as a “step change” in government policy to ensure all regions get a “fair hearing” in funding decisions.

“A Britain that is better off cannot rely on a handful of places forging ahead of the rest of the country,” Reeves is expected to say. She will stress the need to tackle the wide economic gaps between regions and cities that Labour aims to close.

The package includes several major regional projects: Greater Manchester is set to receive £2.5 billion to extend tram stops in Bury, Manchester and Oldham, as well as expand the tram network to Stockport. The West Midlands will get £2.4 billion for a metro extension from Birmingham city centre to the new sports quarter, while West Yorkshire will begin building a £2.1 billion mass transit system by 2028. South Yorkshire is allocated £1.5 billion, including £530 million to renew its trams, and the East Midlands will receive £2 billion to design a new mass transit system linking Derby and Nottingham.

Some of these projects were promised by the previous Conservative government but lacked funding commitments. Labour’s announcement signals an intent to follow through on these plans and accelerate regional transport development.

The spending review process, however, remains challenging. Only three Whitehall departments—Home Office, Energy, and Housing—have yet to agree on multi-year budgets, with secretaries Yvette Cooper, Ed Miliband, and Angela Rayner pushing back on proposed settlements. Policing funding is a particular flashpoint, as senior police leaders warn that cuts risk undermining efforts to tackle knife crime and violence against women.

Energy and housing departments are also locked in tough negotiations over schemes such as warm homes insulation and affordable housing, with Labour’s social housing ambitions under scrutiny due to funding constraints.

Nevertheless, Reeves’s allies point out that Labour plans to invest £300 billion more than the Conservatives would have, including £190 billion more on day-to-day spending over the parliament, underlining the government’s commitment to public services alongside capital projects.

The emphasis on infrastructure investment is intended to demonstrate Labour’s readiness to build a “battle-ready” Britain by boosting productivity, tackling regional inequalities and delivering tangible benefits for voters across the country.

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Chancellor Rachel Reeves has unveiled a £15.6 billion investment in transport infrastructure across England, focusing on trams, trains, and buses in mayoral regions in the Midlands, North, and West Country. This funding precedes the government’s upcoming spending review, which will allocate budgets for the next three to four years.

Key projects include £2.5bn for Greater Manchester’s tram extensions, £2.4bn for the West Midlands, and £2.1bn for West Yorkshire’s Mass Transit programme. Other regions such as South Yorkshire, Liverpool, North East, West of England, Tees Valley, and East Midlands will also receive significant funding.

Reeves challenged Treasury’s Green Book rules, which she criticised for favouring London and the south-east, arguing for more equitable investment to support growth in neglected regions. The announcement has drawn mixed responses: Labour highlights the importance of regional investment, while Conservatives accuse Labour of repeating previous Tory pledges. Mayors and think tanks welcomed the funds but emphasised the need for sustainable running costs and future fare reductions for families.

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Chancellor Rachel Reeves has announced a £15.6 billion investment in transport infrastructure outside London, focusing on extending metro and tram networks in Tyne and Wear, Greater Manchester, West Midlands, South Yorkshire, and West Yorkshire. Speaking in Rochdale, she described it as the biggest transport investment by a British government in city regions and surrounding towns. Reeves emphasised a new economic model promoting growth across all regions, not just a few key areas.

However, she acknowledged difficult choices ahead in the upcoming spending review, warning that not all departments would get their desired funding. She blamed 14 years of Conservative cuts for strained public services and the economy. The spending review will also revise the Treasury’s Green Book rules to prioritise regional projects, benefiting areas like the “Red Wall” facing electoral pressure.

Despite tight departmental budgets, Reeves pledged more police funding and reaffirmed commitments to tackle knife crime and violence against women, reassuring that manifesto promises would be honoured.