Labour bids to mean business

Shadow Business Secretary John Denham will today launch a fierce attack on the coalition Government’s decision to slash funding for economic development outside London and the South East and to dismantle the current network of regional development agencies, including Yorkshire Forward.

Speaking ahead of his conference speech, Mr Denham admitted the agencies – which spent billions of pounds trying to boost regional economies and create new jobs – had achieved mixed results but claimed that rather than working to boost growth Government policies have “made things worse”. He will not promise a return to the old structure, but said “properly funded organisations” would be needed and stressed that agencies in the North had been more popular.

He will also criticise Ministers for being too slow in handing out grants through the flagship Regional Growth Fund – specifically designed to finance projects which can create thousands of private sector jobs – and say that Labour will make the case at the next election for Government taking an “active” role in business.

But Mr Denham will make his speech against the backdrop of a stinging attack by a former Treasury Minister on the Shadow Cabinet for failing to understand or trust business and failing to move on from “inept” policies.

Lord Myners, the former Marks & Spencer chairman made City Minister by Gordon Brown in 2008, said Ed Miliband’s top team had almost no direct experience of the sector and suggested relations would not improve and effective pro-growth policies were unlikely to emerge unless the changed. “Labour’s Shadow Cabinet needs to acknowledge that it doesn’t understand business, has almost no direct and relevant experience and, accordingly distrusts and is distrusted by business,” said Lord Myners in a newspaper interview.

“This needs correcting. If this is done we might see the emergence of more serious pro-growth policies than some of the inept and inconsequential nonsense that previously masqueraded as business policy.” Mr Denham said he would “quibble” with Lord Myners’ assertions, and said the party had more than three years to put together its plan for business.

“Over that time we will get that confidence and that support,” he said.

Labour has been highly critical of the coalition’s decision to axe regional development agencies, and Mr Denham claimed Business Secretary Vince Cable had gone back on a pledge made to the Yorkshire Post last year that Yorkshire Forward would be able to continue “more or less” in its existing form if there was local support – only for Ministers to announce weeks later that all agencies would be scrapped.

During their 10-year existence the agencies divided opinion, with supporters claiming that they created or saved thousands of jobs but critics saying they were bureaucratic and inefficient.

The four business and council-led Local Enterprise Partnerships (Leps) in Yorkshire – designed to create private sector jobs but with little money available – are still in their infancy but Mr Denham claimed they lack powers and funding to make a difference.

Mr Denham said: “We are obviously going to have to see how regional organisations develop and Leps develop over the next four years. They’ve had a pretty unpromising start.

“We’ll have to look at how city regions, and mayors and so on take off. But we have been quite clear properly funded organisations need to exist in each region that can help co-ordinate development.”

He said a Labour government would build on what was there when they took power rather than “scrap everything for the sake of it”, which he accused the coalition of doing.

Mr Denham’s speech comes after Labour leader Ed Miliband kicked off the party’s annual conference in Liverpool yesterday by saying David Cameron must “start showing some leadership” over Britain’s ailing economy and “change course” as he declared the coalition’s austerity measures were “not working”.

And he unveiled plans to dramatically reduce the cap on student tuition fees.

In his most eye-catching policy announcement since winning the leadership a year ago, Mr Miliband said Labour would limit university fees to £6,000 a year – down from the £9,000 maximum introduced by the coalition.