Cities struggle to keep up

The twin myth peddled by New Labour, that public-sector investment could solve all problems and that the money was kept in a bottomless pit, has left towns and cities across the country braced for the inevitable contraction of the public sector that must follow. But, as a report by the Centre for Cities think-tank shows, with the boom bypassing a number of cities in Yorkshire, many areas of the region are starting from a particularly low base when it comes to building up their economies so that they are robust enough not only to survive the cuts to come but also to thrive once the recovery gets fully underway.

Today's report emphasises that the role of government now, far from building an unsustainable future through public-sector spending, is to ensure that it clears away the regulatory thickets that have been strangling the private sector and does all in its power to ensure that new businesses can start, develop and flourish.

The report also highlights the way in which New Labour wasted its boom years, choosing to wrap employers in red tape rather than ensuring that firms had the freedom and the support, where necessary, to operate in both good times and bad. Meanwhile, the Blair-Brown government failed to take the opportunity to boost the region's transport infrastructure which is integral to a speedy recovery.

The report emphasises, however, that the situation is far from hopeless. The very fact that a city such as Hull, for example, has not seen much public-sector investment, means that, with a relatively high proportion of private-sector jobs, it is well placed to benefit as long as the new Government handles the situation sensitively.

The onus is now on David Cameron to honour his promise not to "stand by" and let spending cuts damage the region, to treat Yorkshire fairly compared with other regions, to ensure that any reforms make the regional development agency, Yorkshire Forward, more, not less, effective, and to create the conditions whereby private industry can thrive.