POLITICS

Ed Miliband Unveils Plan For 'Regional Powerhouses' In Britain

01/07/2014 09:52 BST | Updated 01/07/2014 13:59 BST

Labour is calling on local councils in England to come together to form a series of "regional economic powerhouses" in an effort to boost growth and close the "vast " inequalities in wealth between the different parts of the country.

Ed Miliband will use a speech in Leeds today to call for the creation of more "combined authorities" - like that which already exists in Greater Manchester - to tackle entrenched problems of poor skills, infrastructure and economic development.

He will say that under a Labour government, the combined authorities would receive any additional business rate revenue generated by growth to reinvest locally.

While party officials said the measure would be "revenue neutral" - being offset by reductions in other grants - it would ensure that any additional revenue created would stay in the region.

The plan is one of a series of recommendations in a review into ways generating growth carried out for Miliband by the former transport secretary, Lord Adonis.

In all, Labour said that under Lord Adonis's proposals, more than £30 billion could be devolved to local authorities - including combined authorities - and local enterprise partnerships over the course of a parliament.

This would include funding for housing, transport, business support, employment and adult skills.

In his speech, Miliband will say: "The next Labour government will ensure city and county regions, like this powerhouse economy in Leeds, get control of business rates revenue so that any extra money raised here ... can be invested here.

"I know the next Labour government cannot solve every problem by pulling levers in Whitehall. We can only do it by working with, harnessing the energy, the ideas and the dynamism of great businesses, cities, county regions."

Other proposals in the Adonis report being considered by Labour include the creation of at least 100 new university technical colleges, expanding apprenticeships and establishing a long-term innovation strategy in science and research.

Lord Adonis said his aim was to promote "a smarter, not a more expensive, state".

"Growth is unbalanced. The link between growth and living standards has been broken, exports are weak, young people widely lack the opportunities they deserve and inequality is vast, both between people and between regions," he said.

"England's business leaders and local governments need empowering to invest in infrastructure, skills and economic development."

Lord Adonis's proposals received a cautious welcome from business leaders.

Adam Marshall, policy director at the British Chambers of Commerce, welcomed the call for more power and funding to be devolved from Whitehall but said that accountability to local business needed to be strengthened.

"Decisions on local growth are best taken when businesses and councils decide what arrangements work best for their areas, and deliver these accordingly," he said.

"In a world where more funding and tax revenues are devolved, however, businesses need the strongest possible say over both local economic plans and how money is spent."

Ed Miliband's Wars Against British Business

For the Conservatives, business minister Matthew Hancock said: "Labour are planning tax rises on businesses, tax rises on jobs, and yet more government borrowing - risking wrecking our economy all over again.

"It's just the same old Labour: Ed Miliband has no plan for our country's future, can't stand up to his union bosses, and is simply not up to the job."

Treasury minister David Gauke pointed to the reducing number of people on the dole in Miliband's Doncaster constituency to argue that jobs were being created outside of London.

The Tories also warned that Miliband's claim that "four-fifths of private sector jobs created since 2010 are in London" was two years out of date, as figures from the Office for National Statistics said the opposite.

"Labour’s blunder shows that they have no plan for jobs – and no amount of twisting the facts can hide it," they added.