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.”

News
Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
Sport
sportDidier Drogba returns to Chelsea on one-year deal
News
people
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Louis van Gaal would have been impressed with Darren Fletcher’s performance against LA Galaxy during Manchester United’s 7-0 victory
football
Voices
The new dawn heralded by George Osborne has yet to rise
voicesJames Moore: As the Tories rub their hands together, the average voter will be asking why they're not getting a piece of the action
Sport
Dejan Lovren celebrates scoring for Southampton although the goal was later credited to Adam Lallana
sport
News
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Arts and Entertainment
Jo Brand says she's mellowed a lot
tvJo Brand says shows encourage people to laugh at the vulnerable
Life and Style
People may feel that they're procrastinating by watching TV in the evening
life
Sport
Rhys Williams
commonwealth games
News
Isis fighters travel in a vehicle as they take part in a military parade along the streets of Syria's northern Raqqa province
i100
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
Life and Style
fashionLatex dresses hit the catwalk to raise awareness for HIV and Aids
Travel
travel
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Senior Risk Manager - Banking - London - £650

£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

Commercial Litigation Associate

Highly Attractive Package: Austen Lloyd: CITY - COMMERCIAL LITIGATION - GLOBAL...

Systems Manager - Dynamics AX

£65000 - £75000 per annum + Benefits: Progressive Recruitment: The client is a...

Service Delivery Manager (Software Development, Testing)

£40000 - £45000 per annum: Ashdown Group: A well-established software house ba...

Day In a Page

Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform