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Heseltine report calls for action to stimulate growth Heseltine report calls for action to stimulate growth
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Former Conservative party deputy prime minister Lord Heseltine has urged the government to take bolder action to stimulate the economy.Former Conservative party deputy prime minister Lord Heseltine has urged the government to take bolder action to stimulate the economy.
In a new report, commissioned by Downing Street, he says that people think the UK "does not have a strategy for growth and wealth creation".In a new report, commissioned by Downing Street, he says that people think the UK "does not have a strategy for growth and wealth creation".
He wants to devolve power from London so local bodies can spur on growth. He wants to devolve power from London to the English regions.
In the Commons, David Cameron and Ed Milliband argued over whether the report backed or damned the government.In the Commons, David Cameron and Ed Milliband argued over whether the report backed or damned the government.
Lord Heseltine's report, No Stone Unturned, makes 89 recommendations to help industry. One of its key aims is to move £49bn from central government to the regions to help local leaders and businesses. Lord Heseltine's report, No Stone Unturned, makes 89 recommendations to help industry. One of its key aims is to move £49bn from central government to the English regions to help local leaders and businesses.
The aim, he said, was to devolve power from Whitehall and re-invigorate the big cities that had fuelled the growth and wealth that the country had enjoyed in past decades.The aim, he said, was to devolve power from Whitehall and re-invigorate the big cities that had fuelled the growth and wealth that the country had enjoyed in past decades.
Lord Heseltine, head of the Department of Trade and Industry in the 1980s, said the government should allocate growth funds through the new Local Enterprise Partnerships (LEPs) that are being established in England. Lord Heseltine, head of the Department of Trade and Industry in the 1980s, said the government should allocate growth funds through the new Local Enterprise Partnerships (LEPs) that are being established in England in place of Regional Development Agencies.
In 2010, the government invited local business and civic leaders to come forward with proposals for establishing LEPs that reflected natural economic geographies.In 2010, the government invited local business and civic leaders to come forward with proposals for establishing LEPs that reflected natural economic geographies.
Lord Heseltine believes these bodies could be key to stimulating regional growth, but said that, at the moment, LEPs did not currently have "the authority or resource to transform their locality in the way our economy needs".Lord Heseltine believes these bodies could be key to stimulating regional growth, but said that, at the moment, LEPs did not currently have "the authority or resource to transform their locality in the way our economy needs".
LEPs' powers should be enhanced, giving them responsibilities for growth and long-term strategies, and also get involved in social provision, he said.
'Inertia''Inertia'
At the national level, however, the government should show greater leadership in promoting major infrastructure projects. A national growth council should be created, chaired by the prime minister and with a cross-government focus. At the national level, however, the government should show greater leadership in promoting major infrastructure projects, Lord Heseltine said. A national growth council should be created, chaired by the prime minister and with a cross-government focus.
"Central government must retain control of important, large scale infrastructure projects. This includes our motorway network, national rail network and airports, as well as our energy networks," Lord Heseltine said."Central government must retain control of important, large scale infrastructure projects. This includes our motorway network, national rail network and airports, as well as our energy networks," Lord Heseltine said.
In all these sectors, there must be greater investment and a clearer strategy of what the UK needs. He cited the delay and "inertia" over building extra airport capacity in the south east. In all these sectors, there must be greater investment and a clearer strategy of what the UK needs. He cited the delay and "inertia" over building extra airport capacity in the south east, and called on all the political promises to make firm commitments in their next manifestos about how they will resolve the problem.
Ahead of the next general election, Lord Heseltine wants the political parties to make manifesto promises on how they will tackle the problem. But he argues that preparatory work on the various solutions - "which are known and have been widely debated" - could start now, short of actually awarding construction contracts. Lord Heseltine also backed suggestions that pension funds should provide funding for infrastructure projects. With yields on investments in stocks and shares at historically low levels "there is a well of money looking for a better return than currently available in the market," he said.
Lord Heseltine backs the chancellor's wish that UK pension funds get involved to provide funding for infrastructure spending. With pension funds' return on investments in equities at historically low levels, for example, ways could be found to provide a better yield from infrastructure spending.
He said: "There is a well of money looking for a better return than currently available in the market or only available in higher yielding equities with attendant risk."
'Pulsing'
He said that throughout the regions there was excellence in industry, commerce and academia, which should be extended and that cities were "pulsing with energy" that should be unleashed.He said that throughout the regions there was excellence in industry, commerce and academia, which should be extended and that cities were "pulsing with energy" that should be unleashed.
He backed the government's economic strategy, and said it was taking the right path to recovery. But later, in an interview with the BBC, Lord Heseltine said there was "an urgency" about stimulating growth. "Across the world there are emerging economies that want our jobs and our wealth," he said. He backed the government's economic strategy, and said it was taking the right path to recovery. But later, in an interview with the BBC, Lord Heseltine said there was "an urgency" about stimulating growth. "Across the world there are emerging economies that want our jobs and our wealth," he told the Today programme.
He wanted to "unleash the power of our big cities", like Birmingham, Newcastle, and Manchester, which had generated the growth of past decades. "London has acquired too much power", he told Radio 4's Today programme. "We need to mobilise the skills of provincial England. I want to shove power out of Whitehall, into the provinces." "We need to mobilise the skills of provincial England. I want to shove power out of Whitehall, into the provinces," he said, adding that "London has acquired too much power".
'Received wisdom'
Lord Heseltine admitted his ideas would go down like a "lead balloon" in parts of Whitehall because he was suggesting government departments should lose some of their power.Lord Heseltine admitted his ideas would go down like a "lead balloon" in parts of Whitehall because he was suggesting government departments should lose some of their power.
Asked whether his conclusions might be at odds with thinking in the Treasury, Lord Heseltine said: "I do not work for the Treasury, I work for George Osborne. And George has been behind this initiative."Asked whether his conclusions might be at odds with thinking in the Treasury, Lord Heseltine said: "I do not work for the Treasury, I work for George Osborne. And George has been behind this initiative."
He added: "I have got baggage, they know my views. There are bound to be things where they say, 'oh my god, here he goes again'. I have told it as I see it, but I have told it in a way that is very supportive of the government."He added: "I have got baggage, they know my views. There are bound to be things where they say, 'oh my god, here he goes again'. I have told it as I see it, but I have told it in a way that is very supportive of the government."
In the Commons, the Conservative and Labour leaders disputed the report's sentiments. Mr Milliband said that Lord Heseltine's comment that people believe there is no growth strategy was damning.In the Commons, the Conservative and Labour leaders disputed the report's sentiments. Mr Milliband said that Lord Heseltine's comment that people believe there is no growth strategy was damning.
But Mr Cameron cited the report's conclusion that the coalition government was "on the right track". He added that it was an "excellent" report, and told Mr Milliband that it was pointless to just trade quotesBut Mr Cameron cited the report's conclusion that the coalition government was "on the right track". He added that it was an "excellent" report, and told Mr Milliband that it was pointless to just trade quotes
Business backing
Chancellor George Osborne said he would "study it [the report] very carefully". He said: "I wanted Lord Heseltine to do what he does best: challenge received wisdom and give us ideas on how to bring government and industry together. He has done exactly that."Chancellor George Osborne said he would "study it [the report] very carefully". He said: "I wanted Lord Heseltine to do what he does best: challenge received wisdom and give us ideas on how to bring government and industry together. He has done exactly that."
Business Secretary Vince Cable said he would also be considering the report and would respond in the coming months. The Institute of Directors (IoD) business group welcomed the devolution of power to the local. The TUC also supported the report, but said that ministers are going to have to change their attitude towards civil servants, public bodies and unions if they want this strategy to succeed."
The Institute of Directors (IoD) business group reacted positively to the broad thrust of the report's proposals.
"We welcome the idea of encouraging more devolution to the local level, and ensuring business has the opportunity to make heard its priorities on local issues," IoD director general Simon Walker said.
"Business leaders and the various business organisations have long experience of co-operating to encourage a positive business environment in the UK, and we are committed to continuing that work."
Meanwhile the TUC also backed the report but warned that it needs to be embraced across government in order to make a difference.
"The TUC shares Lord Heseltine's vision of collaboration between the public and private sectors, with unions and employers working together to promote growth," said general secretary Brendan Barber.
"But he will have his work cut out in convincing ministers of this new approach, who are going to have to change their attitude towards civil servants, public bodies and unions if they want this strategy to succeed."