Tory former deputy PM urges coalition to to boost economic growth across regions by shifting power away from Whitehall
David Cameron has praised Lord Heseltine's "excellent report" into economic growth and denied it criticises current government policies.
The Tory former deputy prime minister urged the coalition to go "further and faster" to boost economic growth across the regions by shifting power away from Whitehall.
In his Downing Street-commissioned report, published on Wednesday, Heseltine claimed too much power was focused in London and called for public money to "mobilise the potential" of provincial English cities.
Cameron said: "This is an excellent report. What he is saying is that over decades in our economy, it became too centralised, regions and nations of our countries fell behind, manufacturing halved as a share of national income during the last government, and, for instance, during the boom years in the West Midlands there were no net private sector jobs."
But speaking at prime minister's questions, the Labour leader, Ed Miliband, told Cameron: "You say Lord Heseltine's report says you're on the right track; goodness knows what his report would have said if he had said you're on the wrong track.
"He said there was no strategy for jobs and growth, business had no confidence [and] deregulation – your chosen approach – is not the answer."
Unions and the business lobby were united in backing Heseltine's critique of the government's economic policy. The TUC welcomed the review of regional growth in the UK but warned that it needs to be backed across government to make a difference. The CBI said the review identified a "wide range of levers" to promote growth and was a "thoughtful contribution to the growth debate".
Heseltine's proposals include a call for a major restructuring of local government and handing £58bn of Whitehall cash to city-based engines of growth, co-ordinated by businesses and local councils.
The chancellor, George Osborne, said he would study the report "very carefully", but Labour's Chuka Umunna claimed it was likely to be shelved by the government because the recommendations were at odds with current thinking in the Tory parliamentary party.
TUC leader Brendan Barber said the "refreshing new strategy for growth" proposed underlined the interdependence of the public and private sectors and must be embraced across government in order to work.
"The TUC shares Lord Heseltine's vision of collaboration between the public and private sectors, with unions and employers working together to promote growth," he said. "But he will have his work cut out in convincing ministers of this new approach, who are going to have to change their attitude towards civil servants, public bodies and unions if they want this strategy to succeed."
John Cridland, director general of the CBI, also welcomed the review. "It identifies a wide range of levers capable of promoting growth, which the CBI has been calling for for some time, from education to infrastructure, and from planning to access to finance. It is a thoughtful contribution to the growth debate," he said.
"His key point is that we need more local action and leadership, which must be right. To successfully rebalance the economy towards private sector growth, every part of Britain needs to grow – we mustn't just rely on the usual suspects of London and the south-east. Lord Heseltine's review highlights the need for powerful governance structures to support private sector growth throughout the UK."
Responding to the review, originally commissioned at the initiative of Cameron's then strategy adviser, Steve Hilton, Osborne 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. This is a report bursting with ideas and we will study it very carefully."
Vince Cable, the Liberal Democrat business secretary, said the independent report raised "a number of important issues that impact on the government's ability to interact effectively with business throughout the country".
He said: "That is precisely why the chancellor and I asked Lord Heseltine to conduct this root and branch review, and I thank him for it."
Umunna, Cable's shadow counterpart, expressed fears that the recommendations could be "kicked into the long grass" because of an ideological chasm within the Conservative party. He said Labour would implement many of the recommendations if it returns to power in 2015.
Umunna told Sky news: "I think it's quite right to identify the real ideological chasm that exists between what Lord Heseltine is proposing, which is very much an active, activist approach by government, and a laissez-faire approach which was very much of course promoted by his old adversary Margaret Thatcher."
He went on: "I think it's fair to say that the majority, almost all of the parliamentary Conservatives in the party right now, are very much in the Thatcher mould when it comes to their thinking around economics. So I think this [Lord Heseltine's report] is likely to be kicked into the long grass and that means if we win back the support of the British people and get elected at the next general election it will be for a one nation Labour government who implement many of Lord Heseltine's ideas."