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London is experiencing one of its periodic bursts of overheating. It has happened before, such as in the late 1980s, only for a recession to cool it down. This time is different. The economy is not heading into, but heading out of, a recession. Furthermore, the capital's growth is driven by globalism, the free movement of capital and labour, which did not exist on this scale 25 years ago. One similarity between now and the 1980s persists, however, namely, the inability of England's regions to benefit from the economic powerhouse that is its capital. This is not for want of trying. The last government introduced RDAs and would have brought in elected assemblies had they not been rejected by voters. The coalition, although replacing RDAs with the more anaemic LEPs, has made regional growth a priority from the growth fund through to city regions and city deals. Regional growth was even a priority of Margaret Thatcher's third government. She was famously pictured on a derelict brownfield site at Thornaby on Teesside in 1987 launching the Teesside Development Corporation. Its legacy lives on to this day. The region is dotted with North American style malls, retail sheds and housing estates. Outside Stockton is a huge Tesco. By Hartlepool Marina is a massive Asda, a Morrisons, a KFC, a McDonalds and a cinema complex. Thatcher's brownfield site is now a car park for an office development but the low price of swish new housing on Hartlepool Marina – the starting price is £85,000 – is a reminder that behind the legacy is a struggling regional economy. For despite the impact of the 1980s development corporations and the undoubted success of the core cities, all the regions bar Bristol continue to under-perform the EU average. The creation of the key cities group is indicative of the need to let wealth cascade down to smaller urban areas. So this week Ed Miliband put regional growth at the top of his party's agenda by advocating devolution to city and county regions. We will believe it when we see it. Opposition parties are notorious at pledging devolution only for the Treasury to block it but previous government efforts to boost the regions have foundered so why not try another route? Thatcher abolished the GLC and the metropolitan counties in the 1980s. A London-wide authority has been back for 14 years, yet only now do the regions have their own democratic strategic bodies in the combined authorities. Forget HS2. Devolve fiscal powers to the combined authorities and let them lead growth.

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Let the combined authorities deliver regional growth

By Michael Burton | 10 April 2014

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