Ed Miliband will tomorrow (Tues) unveil the conclusions of a major report into how British business and every region of Britain can succeed together.
He will declare his determination to mend long term fractures in Britain’s economy which have been untreated for too long.
And he will set out further details of One Nation Labour’s plan to help business in every part of Britain create a new era of shared prosperity – through big reform, not big spending.
On a visit to Leeds, Mr Miliband will endorse the key principle of the Adonis Review to tackle chronic regional imbalances in growth by creating strong city and county regions.
He will point out how, unlike the review conducted by Lord Heseltine for the Government, Lord Adonis has produced a plan to use tax as a lever for raising levels of regional growth.
He will tomorrow accept the key recommendation of the Review to give control over full revenue from business rates to powerful new city and county regions which come together in combined authorities.
This historic reversal of a century of centralisation would lead to:
- The creation of more Combined Authorities modelled on that which already exists for Greater Manchester to tackle the chronic problems of poor skills, infrastructure and economic development.
- These regional economic powerhouses would receive additional Business Rates revenue generated by growth to invest in building further success. This would be revenue neutral – offset by reductions in grants – but would mean that any additional income generated by growth would be invested locally.
- Local Enterprise Partnerships would be strengthened to give businesses a direct say over growth strategies and priorities, backed by a substantial single pot of funding to invest in economic development.
- More than £30bn of funding identified by the Adonis Review could be devolved to combined authorities, existing local authorities and LEPs over the course of a parliament – three times more than is planned now. This would include funding for housing, transport, business support, employment and adult skills.
Labour will accept the Adonis Review’s proposals for a long term innovation strategy in science and research. This will help create new products and improve the UK’s record of underinvestment in R&D.
- Setting a long term national funding framework for innovation policy similar to that which was put in place by the last government for science, and giving small innovative firms greater access to government research budgets for all departments.
- Labour will also consider proposals to expand of the number and capacity of Catapult Centres which help to commercialise research in key growth areas such as manufacturing and cell therapy.
The Adonis Review makes a series of recommendations for using the power of government to nurture the growth of small businesses and support exporters. These build on policy already announced by Labour and are being developed by the policy review for the next manifesto. They include:
- Setting a target for 25% of all government procurement contracts to go to SMEs both directly and through supply chains.
- Establishing a new Small Business Administration whose primary task would be to drive policy and practice to meet this target, as well as providing support for SMEs across government.
- Creating a regional network of Small Business Investment Companies in line with Labour’s policy on introducing regional banks
- Offering better support through LEPs for business hubs to spread apprenticeships and help start-up businesses
- Reforming UK Trade & Investment and UK Export Finance so they give better support to business.
The Adonis Review makes further recommendations to address the UK’s near record levels of youth unemployment and persistent skills shortages. Measures being considered include:
- Expanding high quality apprenticeships – with a threefold increase in those for school leavers in Science, Technology, Engineering and Maths.
- Establishing at least 100 new University Technical Colleges and create a new “Teach Next” organisation for successful career switchers to teach maths and science.
- Giving teenagers clearer navigation towards work or an apprenticeship by appointing directors of enterprise and employment in schools.
Mr Miliband will say:
“There are long-standing problems in our economy which we have known about for decades but not tackled.
“The global financial crisis represented a moment when the tide went out and the rocks hidden beneath were exposed.
“These problems began long before the Crash and will not be solved simply by the belated end of the recession.
“Our response must be to grow the wealth of our country - not by big spending - but by big reform of our economy.
“It is a One Nation vision. If we are to create the wealth of the future and solve the cost of living crisis, we must help create high-quality private-sector jobs not just in one part of Britain, but in every part of Britain.
“Independent experts say four fifths of all the new private sector jobs created since 2010 are in London. We know that’s not good enough. And we know what made for successful towns and cities in the past. It is what businesses, universities and civic leaders are trying to recreate here in Leeds.
“A clear mission for the future backed by investment in infrastructure, world-leading education, science and research, gold-standard apprenticeships.
“But it cannot begin unless we give you the power to make it possible.
“The Adonis Review sets out plans to devolve £30 billion worth of funding.
“And 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 thanks to the efforts of you and everyone in this great city 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 – and you.
“So that you can help build and share in a more successful and prosperous Britain.”
Lord Adonis will say:
“My review has a simple goal: creating better jobs in your area.
“Britain’s industrial revolution changed the world. Innovation in technology, production and manufacturing transformed the lives of millions, first in Birmingham, Manchester, Leeds, and other towns and cities, and then beyond our borders. Having once led the world, Britain is struggling to keep up.
“On education, infrastructure, regional growth, productivity and living standards, the UK lags much of Europe and North America. Having once been the world’s dynamo of new products, ideas and processes, British firms struggle to grow, find the skilled workers they require, and export.
“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.
“Whitehall needs to hand down budgets and powers for this purpose – not just talk about handing them down, as the Coalition has done since the Heseltine Report. England’s business leaders and local governments need empowering to invest in infrastructure, skills and economic development.
“While big numbers dominate discussions about economic growth, the real story exists in the company, or the cluster, or the school, or the city.
“My overriding aim is to promote a smarter, not a more expensive, state. We need to build on the best of Britain and be optimistic that the best is yet to come.”