Ed Miliband: Set our cities free to drive prosperity

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BRITAIN is the country of the Industrial Revolution. But the country of the Industrial Revolution has ignored the lessons of its own history for far too long.

The country that once built its prosperity on the great towns and cities, like Birmingham, Bristol, Liverpool, Leeds, Manchester, Glasgow and Cardiff, has become a country which doesn’t do enough to build prosperity in England outside one great capital city: London.

We need a prosperous London. But we need to build prosperity outside it too. Devolution to Scotland and Wales has clearly benefited those nations. But today, every region in England outside London is below the national average when it comes to productivity, while London and the South East are 40 per cent above it.

More than half the growth of the whole of our country is taking place in London and the South East, leaving other areas behind.

Cities like Birmingham, Manchester and Leeds have brilliant people, companies, and talent. And individual cities have made huge strides in the last two decades, compared to the dark days of the 1980s.

But we could be doing so much better than this. Just look at the great and successful economies around the world. Like Germany, where many of the cities outside the capital consistently perform far better than the national average. Cities like Munich, one of Europe’s most economically successful.

How has it done it? With a city authority which has worked with local universities and small and medium sized businesses. Why are we not realising this kind of potential in our own country?

It is rooted in one thing: the century-long centralisation of England. Because governments of both parties have not done nearly enough to give the tools to the brilliant people, talented individuals, dynamic businesses of our great towns and cities to do the job they want to do. Including creating those middle-income jobs that so many people need.

That means ambitious businesses who want to locate and expand in our towns and cities can’t get answers to the most basic questions: What’s the plan to get the skilled workers I need? And is it controlled here by someone I can work with or by a quango in London? Is there a plan for new local roads, railways, or other transport links in the area? And who can I talk to about that plan? And what’s the vision for long-term economic development here? And who gets to shape it? And please don’t send me to Whitehall.

Without answers to these questions, businesses don’t have the support, conditions or confidence to create new prosperity, including the new generation of middle-income jobs we need.

This Government had an opportunity to make a difference. Lord Heseltine’s review called for massive funding to be devolved to Britain’s cities. But David Cameron and George Osborne allocated just £2bn for a Local Growth Fund in their Spending Review. Just a fifth of what Michael Heseltine asked for.

Labour’s message at the next election will be clear: Devolving power from Whitehall to our towns and cities is essential to generate the new jobs we need. Cities and towns that come together with local businesses will be given historic new powers over transport, housing, skills and economic development. We are determined to make our great cities and towns the powerhouses for the creation of jobs.

And our towns and cities will have greater control over the funding of skills including, with local businesses, having a direct say in the funding of apprenticeships for the first time.

They will be able to deliver the Work Programme, with city and county-regions able to use their local knowledge to help get people back to work.

They will be given clear incentives too: by being able to share in the proceeds of growth in their area.

Ed Balls and I are writing to every local government leader, every Local Enterprise Partnership and every university asking them to work together and prepare for this devolution. We will be inviting them to demonstrate the real economic leadership we need to see.

Each and every authority which can bring forward plans of this sort in the first year of the next Parliament, will receive powers and access to resources from Whitehall – the like of which we have not seen in living memory.

Real powers for Britain’s towns and cities to make the difference that they are capable of making.

Ed Miliband is leader of the Labour Party and the MP for Doncaster North. This is an edited version of a speech he made in Birmingham yesterday.