Coalition doing too little to deliver growth, warns Lord Heseltine

Tory grandee castigates Government over energy policy, Heathrow and 'dysfunctional' Whitehall

The Government is today accused by the former Deputy Prime Minister Lord Heseltine of failing to deliver a clear and coherent strategy to help Britain out of recession and restore Britain to sustained growth.

In a some parts highly critical report, which was commissioned by ministers, Lord Heseltine castigates the Government for delaying a decision for a third runway at Heathrow and failing set out a “long term” energy policy to encourage investment in green technologies.

He also calls for mass devolution of spending decisions from “dysfunctional” Whitehall departments to local communities and advocates a new system of local Government fit for the “demands of the 21 Century”.

While ministers publicly welcomed his 235 page report and 89 separate recommendations in private they are concerned it will just provide succour to the Government’s critics by contradicting and implicitly criticising some of the efforts made so far by the Coalition to promote growth. 

They suggested they while there were some “good ideas” in the report which will be taken forward the more fundamental and controversial recommendations will not followed up.

Lord Heseltine was commissioned by the Chancellor George Osborne and the Business Secretary Vince Cable earlier this year to carry out the review with a remit to investigate how the Government could more effectively create growth and wealth in the UK economy.

But rather than focus on narrow economic policy recommendations Lord Heseltine’s report entitled ‘no stone unturned’ is effectively a blueprint for entirely new relationship between central and local government.

In it he recommends:

* Devolving up to £50 billion worth of central Government spending to councils and Local Economic Partnerships while at the same time restructuring local Government to abolish district and country councils and replace them with unitary authorities. He also recommends holding whole council elections once every four years to encourage long term decision making.

* Abolishing the Coalition’s arbitrary civil service pay ceilings to attract talent from the private sector while strengthening and formalising relationships between business sectors and that department’s that regulate them.

* Creating a new National Growth Council chaired by the Prime Minister, supported by a dedicated secretariat and with a minister appointed to ensure that the Council’s decisions are implemented on the Prime Minister’s behalf.

But it is Lord Heseltine’s criticism of current Government growth policy which is likely to cause most disquiet within the Cabinet.

He criticises the decision to delay a report into airport capacity in the South East until after the next election which he says sends a message to business that there will be “at least three years more inertia” before “any indication of direction is provided”.

He also attacks delays to formulating a “clear and consistent” energy policy.

“Without real certainty private investors simply will not risk the enormous sums of capital required to build our energy infrastructure,” he says.

“These problems will not go away. Just as with major infrastructure projects, clear decisions are needed now.”

He also appears to contradict current Government policy on immigration by calling for firms to be able to recruit workers from overseas to fill key skills gaps immediately. Currently business has to work within a total cap on immigration set by ministers.

“Britain is desperately short of skills,” he says. “Its manufacturing base is being held back and export orders are being turned away because our companies haven’t got enough engineers. There is no short-term way to train engineers, so the only thing to do is to import them.”

By calling for an “overarching and long term national growth strategy” with a new National Growth Council Lord Heseltine will also be seen to be implicitly criticising the Government’s growth strategy so far.

He says Mr Osborne’s attempts to encourage investment from British pension funds in British infrastructure are being thwarted by complex regulations.

“Although the need is clear and urgent, progress since last December has not matched the Chancellor’s ambition,” he writes.

“Traditional attitudes may be holding back progress and existing negotiations might benefit from an injection of urgency and external support.”

In his response to the report Mr Osborne was careful not to bind himself to any of the finding saying only he would “study it very carefully.”

“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.”

But Rachel Reeves MP, Labour’s Shadow Chief Secretary to the Treasury, said it provided proof that despite its rhetoric the Government had yet to formulate a growth plan.

“It's a damning indictment of this government that, half way through this parliament, a former Conservative cabinet minister is still calling for a plan for growth,” she said.

“Instead of more complacency from Ministers we need a proper growth plan to catch up the lost ground of the last two years, make families better off and strengthen and sustain economic recovery.”

Start your day with The Independent, sign up for daily news emails
Life and Style
love + sex A new study has revealed the average size - but does that leave men outside the 'normal' range being thought of as 'abnormal'?
Arts and Entertainment
The Palace of Westminster is falling down, according to John Bercow
voices..says Matthew Norman
Steve Bruce and Gus Poyet clash
Have you tried new the Independent Digital Edition apps?
ebooksA special investigation by Andy McSmith
Graham Norton said Irish broadcaster RTE’s decision to settle was ‘moronic’
Arts and Entertainment
Jake and Dinos Chapman were motivated by revenge to make 'Bring me the Head of Franco Toselli! '
arts + ents Shapero Modern Gallery to show explicit Chapman Brothers film
Arts and Entertainment
Kurt Cobain performing for 'MTV Unplugged' in New York, shortly before his death
music Brett Morgen's 'Cobain: Montage of Heck' debunks many of the myths
Life and Style
Brendan Rodgers
football The Liverpool manager will be the first option after Pep Guardiola
Amazon misled consumers about subscription fees, the ASA has ruled
Arts and Entertainment
Myanna Buring, Julian Rhind-Tutt and Russell Tovey in 'Banished'
TV Jimmy McGovern tackles 18th-century crime and punishment
Arts and Entertainment
Paul Whitehouse as Herbert
arts + ents
2015 General Election

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Lettings and Sales Negotiator - OTE £46,000

£16000 - £46000 per annum: Recruitment Genius: This is an opportunity to join ...

Recruitment Genius: Home Care Worker - Reading and Surrounding Areas

£9 - £13 per hour: Recruitment Genius: This is a great opportunity to join a s...

Recruitment Genius: Key Sales Account Manager - OTE £35,000

£25000 - £35000 per annum: Recruitment Genius: Have you got a proven track rec...

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn