Heseltine calls for more action to stimulate growth

Former Tory deputy prime minister Michael Heseltine has called on the government to come up with a better growth strategy in his new report.

by Michael Northcott
Last Updated: 19 Aug 2013

In the new report, which was commissioned by Downing Street, Lord Heseltine said ‘the message I keep hearing is that the UK does not have a strategy for growth and wealth creation.’ He wants funds earmarked for supporting industry to be distributed through local government rather than through Westminster-based quangos and central bodies. The main recommendation of the report is to move £49bn from central government out to the regions to be doled out to local businesses by local leaders.

In the wide-ranging 228-page report, called No Stone Unturned, Heseltine (who is chairman of MT’s parent company, Haymarket) made 89 individual recommendations. He called for local councils to be duty-bound to promote private sector development, which makes sense – we all know private employment is the only way to recovery when the public sector is shedding jobs. But controversially, he also called for pay caps on senior Civil Service roles to be lifted in order that the best private sector talent can be attracted. His rationale is that ‘it takes too long for decisions to be made’ by government ministers and civil servants, so the assumption is that a bit of private sector experience will be better and finding ‘efficiencies’.

Heseltine said: ‘I reject the premise that regulation in itself hinders growth. Good, well-designed regulation can stop the abuse of market power and improve the way markets work to the benefit of business, employees and consumers.’ Not quite on message for the ‘cut-all-red-tape’ government spiel these days. Nonetheless, he added: ‘If you want to talk about bureaucracy, you should start looking at the bureaucracy that exists. If you want to build a house or build a road or build a school, there are immense checks and form filling and regulations, much of which could disappear under my proposals.’

Ticking some other boxes that are big news in the political landscape at the moment, Heseltine’s report also calls for some decisive action on airport expansion, closer ties between schools and businesses to simplify work experience, and a coherent energy policy. Unfortunately, solidity of approach on these policy areas seems to have evaded the government so far. Indeed, Hesletine's report is very critical of what he sees as a lack of cohesion between government functions. He said: 'My 45 years in politics have shown me that successive governments of all colours have failed to address the reality that Whitehall departments – both ministers and officials – too often pull in different directions. They can be resistant to change, take too long to make decisions, devise policy in ivory towers and create uncertainty through repeatedly changing tack.'

Apparently, prime minister David Cameron is going to look at the review ‘closely and carefully’, and George Osborne (who actually ordered the report in March this year), said: ‘I wanted Lord Heseltine to do what he does best: challenge the received wisdom and give us ideas on how to bring government and industry together.’ We’ll have to wait and see if the Cameron Cabinet is capable of listening to and acting upon the advice of its elders…

 

See the report here.

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