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Lord Heseltine: ‘Devolution of power will start new industrial revolution’

Tory grandee Lord Heseltine says handing funding control to local authorities will allow regions to decide their own economic fates

The former deputy Prime Minister told a dinner in London that the move by the Chancellor George Osborne to allow local authorities to control the way funds are spent was a “restoration of the dynamic of the 18th and 19th centuries, where place-based economics, based on the strength of local communities, become the driving force in the way that money and public sector support are allocated”.

Lord Heseltine has long been a champion of Northern cities and is credited with driving the regeneration of Liverpool after riots there in the 1980s.

Lord Heseltine is credited with driving the regeneration of Liverpool after the Toxteth riots  Photo: Rex Features

He made the remarks during a speech at Management Today’s Britain’s Most Admired Company awards dinner on Thursday night, where guests included easyJet chief executive Carolyn McCall.

He went on to say that although devolution was inspired by George Osborne’s pledge to create a “Northern Powerhouse”, the focus on the North was “misleading”.

This is about how England is to be governed, and is about as dramatic as you can conceive
Lord Heseltine

According to the 82-year-old, Britain’s wealth creators have been handed the opportunity to decide the fate of their own communities.

“Those who make the money have the chance to design the allocation of funding in their own areas for the first time,” he claimed.

Power is too centralised in Westminster , according to Lord Heseltine  Photo: PA

“The partnership between the wealth creators, people like you, and the local authorities, will have their own economic strategies, they will have submitted those strategies to central Government and they will have been allocated resources to implement that on the basis of what they themselves have chosen, and on the basis of the extra resources they will add to what the taxpayer can pay.

“That is the way that all advanced economies actually operate – the dynamic comes from the bottom up.”

The effects of devolution could be felt as early as next year, he claimed, fuelled by the competition that will naturally be fostered between neighbouring communities. “It forces a community of self-interest, in order to propose plans and ideas that are more exciting than the neighbouring economies with which they are competing,” he said, citing the Government’s decision to allow councils to decide their own business rates as an example of how local government would vie to conceive a winning strategy.

“I have become almost obsessed with the over-centralism and dominance of London in the management of our economy,” he said.

“Of course London was important in our 18th and 19th century evolution as a world power but so was Bristol, Liverpool, Manchester, Newcastle, and Birmingham,” he concluded.

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