Heseltine report calls for action to stimulate growth


Ed Miliband taunted David Cameron with quotes from Lord Heseltine's report on growth and energy

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".

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.

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.

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.

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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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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".


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.

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.

Lord Heseltine

Lord Heseltine
  • Self-made millionaire as founder of publishing firm Haymarket
  • Nicknamed Tarzan after waving the mace above his head in House of Commons
  • Dubbed Mr Merseyside after promoting regeneration in the area following the Toxteth riots
  • Introduced Enterprise Zones which contributed to the creation of the Canary Wharf financial district in London

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.

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 told the Today programme.

"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.

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."

Lord Heseltine: Towns and cities ''need to have a bigger say in the way that money is spent''

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.

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 quotes

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."

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."


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  • rate this

    Comment number 331.

    This report rightly acknowledges that the Regions made Britain the "Workshop of the World" in the 19th Century.
    These very regions, like the North West and North East of England, with the Clydebank area of Scotland made GB the richest nation on earth.
    Now govt concentrates on London only, (the recipient of the early 20th century cash stimulus).
    Heseltine is right.
    Today govt should listen.

  • rate this

    Comment number 115.

    How are people expected to go out and spend money if most of us have pay freezes at best and are very lucky to be in work, whilst energy bills, food and the cost of living are soaring way above the rate of inflation?

  • rate this

    Comment number 113.

    Someone needed to sound the alarm bell. The UK needs to turn its economy on it's head and hasn't got long to do it. A first class transport, education, information and energy infrastructure is vital to help us become competitive. Everything else, including petty bickering and ideological gamesmanship, needs to be put aside.

  • rate this

    Comment number 52.

    I don't always agree with Heseltine but he is right on this matter.

    It is not enough for the government to come up with soundbites about rebalancing the economy, they must actually have a strategy & actually do something to help industry

    The problem is that we have nobody in the Commons on any side of the house who has worked in industry, they are virtually all career politicians

  • rate this

    Comment number 46.

    Yesterday's man! With yesterdays thinking.
    Whilst we suffer the current fiscal crisis, there cannot be any credible growth policies until the UK sovereign debt is under control and budgets restrained.
    That doesn't happen quickly and the "tipping" point has not yet been reached. There will come a time for growth but it has to be instituted when the global economy is on the rise.


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