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Labour MPs revolt over Miliband's economic policy
Updated 10:36am Tuesday 17th June 2014 in News
ED Miliband is facing a damaging revolt by North-East Labour MPs who believe his economic rescue plans for the region are feeble and doomed to fail.
Senior MPs argue a ‘growth review’ – led by Lord Adonis, the former transport secretary – will repeat the Coalition’s blunders and fail to deliver the power and money badly needed.
They are urging Mr Miliband to bring back a slimmed-down development agency and, crucially, install a powerful figure in Government to “drive forward” key North-East revival projects.
But they also fear their pleas are being ignored by the Labour leader’s top team – condemned as a “Corpus Christi Oxbridge crowd” by Nick Brown, the former ‘Minister for the North-East’.
Mr Brown, the Newcastle East MP, said: “It will end up with the councils simply asking for money for specific projects - and that’s the worst possible position to be in.
“What’s needed is a development agency that can identify specific projects and drive them forward, working with a figure in the government with specific responsibility for that.”
Mr Brown said his concerns were shared by the majority of North-East Labour MPs, but added: “I’m not convinced our message is being listened to at the top level of the party.”
The criticism was echoed by Kevan Jones, the North Durham MP, who said: “The Adonis review lacks vision and ambition.
“The problem is that it is all about structures, when we need direct action and a minister at a senior level. We can’t expect councillors to pick it up, when their budgets are being squeezed as well.”
The revolt follows Mr Miliband’s acceptance, in April, of Lord Adonis’ draft growth report, with a final set of proposals due to follow next month.
The blueprint adopts the Coalition’s strategy of devolution to ‘combined’ authorities - such as the one covering Durham, Tyne and Wear and Northumberland – and poorly-funded local enterprise partnerships (LEPs).
The pill was sweetened by a pledge to devolve twice as much cash - £4bn a year – as well as extra responsibilities for welfare, apprentices and housebuilding, but not over inward investment.
Mr Brown said the key weakness was that the structure lacked a focus on economic development, as well as an ability to ensure key projects go ahead.
Recently, the outgoing head of the North-East LEP warned it had just six core staff yet it had responsibility for six, mainly £100m-plus projects.
Similarly, the Tees Valley LEP has warned it may have to abandon economic growth initiatives, because funds are not available.
Mr Brown said: “The means has become the ends. We have got the structures, but it is not delivering for the region – and nor is it likely to.
“If Labour simply picks up from where we are with the existing structures, we will continue to see the poor outcomes for our region that we currently see.”
He said he was not arguing for reviving the One North-East development agency, but a smaller body, chaired by a minister, “so the civil service takes it seriously”.
Mr Miliband has promised to bring back regional ministers – axed by David Cameron in 2010 – after MPs and councils protested they had nowhere to go, to raise crucial issues.
However, Mr Miliband’s office rejected the criticism, insisting there were significant differences with the Coalition’s approach.
A spokesman said: “The key difference is that Andrew Adonis is looking at devolving significant cash and economic powers. This would mean people don’t have to beg ministers for cash - as they have to now.”
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