The Chamberlain News

Greater Birmingham campaign puts Labour high command on the spot

Shadow Business Secretary Chuka Umunna has urged Labour to pursue a radical decentralisation programme if the party wins next year’s General Election, raising the likelihood that a Greater Birmingham council would be formed to oversee transport and economic development.

Mr Umunna heaped praise on Greater Manchester, a partnership of 10 metropolitan councils which became a Combined Authority with limited tax-raising powers three years ago.

, which began more than 20 years ago as an informal way of marketing the area and helping councils to share information, was a “shining example” to other cities around the country.

He added: “In Greater Manchester we have shown what is possible, even within the UK’s centralised political economy.”

Mr Umunna also called for Local Enterprise Partnerships to be “embedded” into Combined Authorities and for LEPs to be given additional powers and budgets to create jobs and wealth.

His support for regional strategic bodies reflects a growing understanding among West Midlands council leaders of the benefits to be gained from forming a Combined Authority.

Wolverhampton Council leader Roger Lawrence recently told the Commons Local Government Committee that he felt the formation of a West Midlands Combined Authority was about two or three years away.

Even with that timetable, the West Midlands would be behind the game. Combined Authorities in Yorkshire, Merseyside and the North-east are expected to come into operation later this year.

The shadow business secretary’s uncompromising message, in which he called for cities to be “truly liberated from Whitehall control in order to fulfill their economic potential”, highlights an intense internal debate over just how far Labour should go down the localisation route.

Mr Umunna has teamed up with like-minded colleagues including John Cruddas, who is in charge of Labour’s policy review, and the former Blairite transport secretary Lord Adonis. The three are urging extensive transfer of Whitehall powers and budgets to local councils.

Their decentralising agenda has been backed publicly by leading figures from a range of left wing groups including the Fabian Society, Compass, the Policy Network and Progress.

However, it’s understood that MPs close to party leader Ed Miliband, including Shadow Foreign Secretary Douglas Alexander, are in favour of a more cautious approach with limited proposals for change in the party’s 2015 General Election manifesto.

The debate intensified following post-Budget opinion polls showing that Labour’s lead over the Tories has fallen to between one and four per cent. Mr Miliband came under pressure following a lacklustre ‘non-response’ response to the Budget in which he avoided commenting on any of the financial policies outlined by the Chancellor.

That pressure will have intensified thanks to a YouGov poll in The Times where almost two-thirds of respondents did not believe Mr Miliband to be prime ministerial material. Just over half did not believe Labour was fit for government.

In his article, Mr Umunna pointed to a which showed that eight of in 10 new private sector jobs created since 2010 have been in London. It was essential to address the unbalanced nature of economic growth in the UK.

He added: “If we set a clear direction for our economy, and if we combine stronger market competition with new means for firms to collaborate away from the market on skills, technology and supply-chain development, we can support more of our strong sectors to become world class.

“If we remove barriers to entrepreneurship we can allow more people to become masters of their own destiny, because no class or group has a monopoly on good ideas.

“Moreover if we could support our cities beyond London to perform at the level of their German equivalents this would give a significant boost to our economy. In Germany, all eight of the biggest cities outside Berlin outperform per-capita GDP, whereas in the equivalent eight cities in Britain only Bristol does.

“Some of this change requires a stronger centre, to set a clear direction and to hold that direction for the long term. But some of it requires the centre letting go.

“We have seen a drift towards greater autonomy for cities, with the Government’s City Deals building on earlier initiatives from Labour in the same direction. But if we want truly to liberate our cities so that they can fulfil their economic potential, we have to go faster and we have to go further.

“We must not repeat the mistakes of this Government by tearing up Local Enterprise Partnerships as they did the Regional Development Agencies. The Tory-led Government said they said they would devolve radically but in practice this hasn’t happened – Local Enterprise Partnerships still don’t have access to the budgets and powers they need to drive local growth and concerns remain about their lack of accountability and whether they represent the diversity of the business community.

“So we must find new ways of embedding the voice of business that LEPs represent into the democratic structures of combined authorities to get the best of both. Here the politics pulls in the same direction as the economics: giving power back to our cities will be good for our economy, but putting real decision making power closer to the people will be good for our democracy too.”

Any attempt to form a Combined Authority around the geography of the Greater Birmingham and Solihull LEP would fail under current legislation. Combined authorities cannot consist of a mixture of metropolitan councils and shire districts.