Tory anger over Labour fear of jobs in overhaul

LABOUR stepped up its attack on the Tories as Lord Mandelson claimed unemployment would rise as a direct result of David Cameron's plans to overhaul regional development agencies.

In his strongest attack yet on the Tories' approach to regional economies, the Business Secretary claimed that the Conservative pledge to introduce local enterprise partnerships, controlled by business and councils, would "lead directly to higher joblessness in the region".

But the intervention sparked an angry response from the Tories who accused Lord Mandelson or either a "basic misunderstanding" of their policies or "wanton scare mongering".

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Last week the Yorkshire Post revealed how two shadow cabinet ministers had issued a memo to Tory MPs clarifying the parties' position after criticism from industry figures and concern over the impact of stripping powers from Yorkshire Forward.

Conservative shadow business secretary Ken Clarke and local government spokesman Caroline Spelman insisted they would not "scrap" the RDA but overhaul it. Business leaders and councils would form local economic partnerships would "reflect natural economic areas".

But ahead of a major speech last night, Lord Mandelson said: "Breaking up the RDAs would mean less investment and higher unemployment in the regions. The Tories' policy would lead directly to higher joblessness in the regions." He claimed he was "sorry" the Tories this week reaffirmed their "senseless and unpopular policy".

Ms Spelman said: "Under Conservative plans, local economic partnerships would retain the function of helping and supporting businesses."

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