Appointing Lord Heseltine to lead a review of the government’s growth plan was a risky decision as not only was he always going to say exactly what he thought, but he was also going to say it from his own particular interventionist stance. It was originally a Steve Hilton idea, and the PM’s guru must be enjoying reading what Heseltine has to say from the comfortable distance of a sabbatical in California. The report, No Stone Unturned in Pursuit of Growth, is as honest as ministers might have expected, pointing out that business believe that ‘the UK does not have a strategy for growth and wealth creation’, criticising an ‘inertia’ over airport policy, and warning that ‘continuing as now is not an acceptable option. The world will not stand still – and nor must we’. He criticises a lack-of joined up thinking, saying:
‘Whitehall continues to approach these issues from the individual policy priorities of different departments as if economic issues can be effectively addressed in a placeless vacuum.’
The key points that he makes are:
- Ministers should draw up a National Growth Strategy, create a National Growth Council along similar lines to the National Security Council, and appoint a Growth Minister.
- The government must speed up decision-making on airport capacity, with Sir Howard Davies reporting the findings of his commission next year.
- £48 billion of Whitehall funding for housing, local infrastructure, jobs and business support should be pooled into a pot along with £9 billion of EU funding which local enterprise partnerships should bid for.
- A shake-up of the immigration system would make it easier for businesses to hire skilled foreign workers such as engineers.
- Foreign takeovers of UK companies should be blocked if they undermine the UK’s industrial priorities.
- The Chancellor’s ‘ambition’ for private-sector investment in infrastructure has not been realised in reality.
- Tax cuts will ‘only have a limited effect’ on confidence, which is the key blockage to investment.
- The government must set out a ‘definitive and unambiguous energy policy’ to give businesses sufficient certainty for them to invest.
- There should be a shake-up of local government, with the legislation preventing councils becoming unitary authorities being repealed, and city mayors being appointed without the need for a local referendum.
Labour will gleefully seize on the report’s suggestion that the government still has no plan for growth more than two years after the coalition formed, even though Ed Balls’ own ‘plan’ would come in for even more stinging criticism from Heseltine. And it’s important to note that he does make clear his support for the government’s economic plan, saying the Chancellor has ‘rightly focused on getting debt under control’.
But the government has been positioning itself over the past few days to leave some of these recommendations on a shelf gathering dust. Eric Pickles, for instance, is opposed to a shake-up of local government. David Cameron and George Osborne will find the recommendations on aviation particularly awkward when they had been telling Conservative colleagues in private that they’d kicked the Heathrow problem into the long grass for a few years. The Prime Minister’s official spokesman yesterday said that David Cameron had seen it, but added enigmatically that ‘it’s quite a large report’. It may well be that ministers feel they need to take a good, long amount of time to read through and read again what Heseltine is recommending, possibly such a long time that much of it gets forgotten. It will be interesting to see how many references George Osborne makes to this report in the Autumn Statement.
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