It cannot be disputed that economic growth and development across England's regions is uneven. It is no red herring that the South-east is increasingly overpopulated (reflected in rises in house prices and levels of traffic) compared with other regions, or that inflationary pressures, employment and economic growth are significantly higher in the South-east.
The implications for macro-economic policy are considerable, as the Bank of England's Monetary Policy Committee knows only too well - setting a suitable interest rate for the whole of the country is increasingly difficult.
The purpose of regional policy throughout Europe (including the EU's structural funds) during the 1990s has not been to marshal subsidies into ailing industrial enterprises or increase welfare benefits. Rather, it has been to improve regional infrastructures and labour skills so as to encourage indigenous economic growth and attract footloose global capital. Regional development agencies are better suited for this role than central government because it is they who are familiar with regional conditions.
The idea of elected regional assemblies, therefore, is to democratise economic and social development.
Department of Government