GEORGE Osborne must ignore “powerful” voices urging him to concentrate investment spending in London and redirect it to the North, Lord Heseltine said yesterday.

The Conservative peer warned that economists put pressure on the Chancellor to favour the South-East corner, because it was believed to deliver a bigger economic boost.

But, he told a parliamentary inquiry: “It is entirely a political decision as to where the weight of the money is spent.

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“There is a danger we must not lose sight of. There will be those articulate, and with powerful slide rules, arguing that, if you want the fastest growth, spend the money in the South-East.

“Personally, politically, I don’t believe that is either desirable or practical - but are we looking at this as politicians, or as economists?”

Asked if it was a matter of political will to redirect spending away from London, Lord Heseltine replied: “There have to be political priorities - there’s no escape from that.”

The Northern Echo reported last year that an extraordinary gulf in transport spending between London and the North was widening further.

The capital enjoyed spending-per-head of £644 in the last financial year, far more than the North-East (£223) and Yorkshire (£251), Treasury statistics showed.

The capital now uses an astonishing 34 per cent of transport cash - yet has just 15 per cent of England's population - compared with the North-East (four per cent) and Yorkshire (nine per cent).

A separate study, of the government’s National Infrastructure Plan, found London and the South East will grab an extraordinary 84 per cent of all spending - and the North-East a miserable 0.04 per cent.

Lord Heseltine, giving evidence to the Commons Business Committee, also revealed that he expected an announcement soon on his call for the regions to be handed huge spending pots.

The former Cabinet minister called for an end to decades of power-grabbing by Whitehall, by handing over control of skills budgets, infrastructure funds and job creation schemes.

Lord Heseltine said a response to his report - recommending Local Enterprise Partnerships (LEPs) bid for large ‘single funding pots’- would accompany the Budget, on March 20.

Asked f the Chancellor backed the plans, he replied “yes”. The peer added: “They have accepted the principle, but - as to the scale and breadth - we will have to see.”

However, he added, of other government departments: “Will there be resistance? Of course.”

Lord Heseltine also dismissed protests that business-led LEPs lacked democratic accountability, telling the committee: “I have given a lot of thought to this.

“No LEP can bid without local authority agreement or partnership. The democratic process is alive and well in this process.”