Keir Starmer calls for Budget watchdog to monitor regional inequality in challenge to Boris Johnson’s ‘levelling up’ agenda The Labour leadership favourite is demanding a new role for the Office for Budget Responsibility

Britain’s Budget watchdog should be required to track regional inequality as well as the public finances, Keir Starmer says.

The Labour leadership frontrunner has proposed a new role for the Office for Budget Responsibility (OBR) in a bid to combat the Conservatives’ “levelling up” agenda which is designed to win support in less wealthy areas.

He hit out at a “pernicious postcode lottery” which encourages inequality and suggested the OBR was perpetuating the austerity agenda by concentrating solely on the deficit and national debt.

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The intervention came as his closest rival in the race to become the next Labour leader, Rebecca Long-Bailey, formally made it on to the ballot paper thanks to an endorsement from the Fire Brigades Union. The FBU nominated Richard Burgon for deputy leader, ensuring that he will also be on the ballot paper sent to party members next month.

Mandate for change

Sir Keir said that the average Londoner earns more than £200 a week more than people living in the North-East in a sign of increasing gaps between the prosperity of British regions.

He promised that if he becomes Prime Minister, he will change the OBR’s mandate so that when it produces economic forecasts twice a year, it must also include estimates of regional inequality levels. Sir Keir also said he would give local regions greater power over transport and industrial policy, as well as setting up regional investment banks.

The shadow Brexit Secretary said: “The UK is one of the most regionally unequal countries in the Western world. There is a pernicious postcode lottery that dictates people’s wealth, opportunity and life chances. It’s an economic and social injustice that the Tories have simply failed to get to grips with.

“The mandate for the Office for Budget Responsibility was drawn up by George Osborne. We need to move on from the era of austerity and put addressing regional inequality alongside the management of the public finances as the highest priorities of our macroeconomic policy. It’s time to put the regions first and at the heart of the post-Brexit industrial strategy.”

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A leaked version of a report compiled by the Labour leadership has concluded that Brexit rather than Jeremy Corbyn was to blame for the party’s disastrous election performance. The dossier also blamed the media for Mr Corbyn’s poor ratings with the public.

A separate review carried out by an independent group of MPs and activists is currently under way and is conducting focus groups with members of the public who previously backed Labour but have switched to the Tories. A source involved with the inquest said the voters involved had “a genuine sense of relief that we didn’t win” because of their dislike of Mr Corbyn.