Why the failure to elect regional mayors is bad for business.

The coalition's regional policies have been quietly disastrous.

Amidst the headlines reporting the Coalition’s trouncing in the local elections, a significant policy aspect has gone less commented upon: the almost total failure of the introduction of directly elected mayors. On Thursday nine out of ten councils voted against the plan to install mayors in major cities, with just Bristol agreeing to the idea.

For David Cameron, who talked about constituting a “cabinet of mayors”, it is a personal failure, reminiscent of John Prescott’s ill-fated (and much-mocked by the Tories) experiment with regional government. But this is also a failure for the business community.

The introduction of powerful mayors was supposed to be a stimulus for economic development outside London. The mandate from a popular mayor, it was argued, would be able to aggregate powers and responsibilities in the same way that the London mayor has since 2000. When Livingstone was first elected in the capital, the role was little more than a figurehead. However assiduous lobbying by him and his successor Boris Johnson means the role, contrary to popular opinion, now controls multi-billion-pound budgets and huge responsibilities for transport, policing, housing, skills training and planning.

The idea of similarly powerful figures for major cities like Birmingham, Manchester and Leeds is one that had the potential to be a significant boost for economic growth in those areas. The force of a personal mandate batting solely for those areas raised the prospect of smarter leadership able to respond more directly to the problems of the regional economies.

And let’s be honest, any and all help is required, because it is undeniably bleak out there. The three per cent fall in construction output recorded in the first quarter of this year will have come largely from continuing declines in the regional economies. The Olympics, Crossrail, Thameslink and construction of new office towers like the Shard in the City have been keeping the London construction economy reasonably buoyant throughout the recession, notwithstanding a few wobbles. But other than a few bright spots, construction has largely shut down outside the south east, with house prices still falling. (Prices in the North-east are still 13 per cent lower than they were before the credit crunch four years ago, in Northern Ireland they are still a staggering 40 per cent lower than they were).

The Coalition’s policies designed to rebalance the economy between London and the rest have been, so far, quietly disastrous. Scrapping the Regional Development Agencies that had supported job creation schemes across the country for a decade, and a raft of other regeneration funds, took £7bn out of the regional economies. The much touted Regional Growth Fund that replaced this money is worth just £2bn, and as of September last year hadn’t actually handed out any money. If you add to this the limited impact of the (unfunded) Local Economic Partnerships supposed to replace the RDAs, and the fact that direct government construction spend is hugely weighted toward London and the South East, and its not hard to see why the regions are struggling.

The setting up of directly elected mayors was supposed to be one positive move to turn this depressing picture around. It now looks like that spark of light has been extinguished. Expectations for this afternoon’s Coalition re-launch are very limited.

Joey Gardiner is assistant editor at Building magazine.

Photograph: Getty Images

Joey Gardiner is assistant editor at Building magazine

Getty Images.
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Tom Watson rouses Labour's conference as he comes out fighting

The party's deputy leader exhilarated delegates with his paean to the Blair and Brown years. 

Tom Watson is down but not out. After Jeremy Corbyn's second landslide victory, and weeks of threats against his position, Labour's deputy leader could have played it safe. Instead, he came out fighting. 

With Corbyn seated directly behind him, he declared: "I don't know why we've been focusing on what was wrong with the Blair and Brown governments for the last six years. But trashing our record is not the way to enhance our brand. We won't win elections like that! And we need to win elections!" As Watson won a standing ovation from the hall and the platform, the Labour leader remained motionless. When a heckler interjected, Watson riposted: "Jeremy, I don't think she got the unity memo." Labour delegates, many of whom hail from the pre-Corbyn era, lapped it up.

Though he warned against another challenge to the leader ("we can't afford to keep doing this"), he offered a starkly different account of the party's past and its future. He reaffirmed Labour's commitment to Nato ("a socialist construct"), with Corbyn left isolated as the platform applauded. The only reference to the leader came when Watson recalled his recent PMQs victory over grammar schools. There were dissenting voices (Watson was heckled as he praised Sadiq Khan for winning an election: "Just like Jeremy Corbyn!"). But one would never have guessed that this was the party which had just re-elected Corbyn. 

There was much more to Watson's speech than this: a fine comic riff on "Saturday's result" (Ed Balls on Strictly), a spirited attack on Theresa May's "ducking and diving; humming and hahing" and a cerebral account of the automation revolution. But it was his paean to Labour history that roused the conference as no other speaker has. 

The party's deputy channelled the spirit of both Hugh Gaitskell ("fight, and fight, and fight again to save the party we love") and his mentor Gordon Brown (emulating his trademark rollcall of New Labour achivements). With his voice cracking, Watson recalled when "from the sunny uplands of increasing prosperity social democratic government started to feel normal to the people of Britain". For Labour, a party that has never been further from power in recent decades, that truly was another age. But for a brief moment, Watson's tubthumper allowed Corbyn's vanquished opponents to relive it. 

George Eaton is political editor of the New Statesman.