31 October 2012 Last updated at 04:55 ET
Lord Heseltine, the former Conservative party deputy prime minister, has challenged 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”.
He wants the funds used to support industry to be distributed locally, rather than through central government.
Labour said his message was “a damning indictment” of the government.
His review 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.
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 UK had experienced in past decades.
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I have told it as I see it, but I have told it in a way that is very supportive of the government”
End Quote Lord Heseltine
Chancellor George Osborne said he would “study it [the report] very carefully”.
Lord Heseltine, a former head of the Department of Trade and Industry in the 1980s, said the Government should allocate growth funds to new Local Enterprise Partnerships (LEPs) over the next few years.
He said LEPs’ responsibilities should include wealth creation as well as focus on social provision.
The current climate was “the worst economic crisis of modern times”, he said, arguing that local business and political leaders are best placed to invest the money.
The main points of the report, called No Stone Unturned: In pursuit of growth, include:
- a major devolution of funding
- making a smaller and more skilled government machine
- enhancing the standing of Local Economic Partnerships (LEPs) to bring together private and public sectors
- more government leadership for major infrastructure projects
- a role for employers in education
‘Pulsing’
When in office Lord Heseltine was well known for promoting intervention to back business and the regeneration of urban areas.
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This is a war cry from the man whose golden locks and virtuoso performances earned him the nickname Tarzan”
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The report is presented in a highly individual style, fronted by a cartoon of Lord Heseltine shining a torch under a rock, with the caption “In search of growth”.
He calls it “one man’s vision”, and says “there is opportunity on a grand scale”.
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 wanted to “unleash the power of our big cities. London did not make the UK. London has acquired too much power. Cities like Manchester and Birmingham made the UK. We need to mobilise the skills of provincial England,” he told Radio 4′s Today programme. “I want to shove power out of Whitehall, into the provinces.”
Asked whether his conclusions might be at odds with thinking in the Treasury, Mr 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.”
‘Challenge received wisdom’
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He will have his work cut out in convincing ministers of this new approach”
End Quote Brendan Barber TUC
Mr Osborne said the report provided food for thought.
“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,” he said.
Business Secretary Vince Cable said he would also be considering the report and would respond in the coming months.
Shadow business secretary, Chuka Umunna, said aspects of Lord Heseltine’s report chimed with Labour’s own industrial policy.
“Labour has led calls for an active government approach to support business and underpin regional growth – it is good to see Lord Heseltine echoing this in his report. We will examine his proposals and consider which ones we can take forward,” he said.
“We hope that ministers will take Lord Heseltine’s proposals seriously.”
Business backing
Lord Heseltine: “It is a shift and in a sense it is a criticism of Whitehall”
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.”
Lord Heseltine will formally launch his report later on Wednesday at an event in Birmingham.
BBC News – Business
Heseltine issues growth challenge
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