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Below is the text of a speech made by Lord (Michael) Heseltine on economic growth. The speech was made at Birmingham City Hall on 31st October 2012.

Times of great crisis evoke memories of a time when this nation stood alone. “Don’t you know there is a war on?” prodded inactivity into life. Women flocked to the factories. Land girls heavy lifted on the farms. A generation of volunteers that had never worked before reinforced the social services. Certainly we were all in it together. I remember it well. They say old men forget. None of us who lived through that time will ever forget. The sacrifice and suffering; the carnage. Ultimately, the victory.

That is why I hesitate to compare the crisis of then with where we stand today. There is another essential difference. Then the enemy was at the gate – a clear and immediate threat. A world of black and white. A focus sharper than crystal; a future ice cold.

Today’s crisis is very different. The long term competitiveness on which our wealth depends is slipping away. To secure it we need a national commitment, discipline, every individual straining every sinew. Not for a day, a week or a year, but on and on as ever more nations enhance their skills, marshal their strengths, motivate their people to grasp a larger share of the world’s wealth.

Failure has none of the trauma of occupation, of foreign tyranny, of freedom lost. Failure is measured in drift, in mediocrity, in under-performing public services and under-invested businesses. In infrastructure out of date, a nation with its head hung down, in the shadow of world events. A nation reconciled to genteel discomfort, envious of what once was, hopeless of what might have been. If we accept such a posture, the enemy would not only be at the gate, the enemy would already be within. The enemy named complacency, indifference, underused resource, waste of misapplied energy. No-one will advocate that. No electorate will vote for it.

But the question that matters is the degree to which all of us, Government, companies, institutions, people themselves, will work differently to avoid it. If we are all in this together we all need to behave and perform as though we recognise it and intend to do something about it.

It is easy in modern Britain to point to examples of excellence:

We have world beating companies in manufacturing and the services

We have academic excellence led by four of the world’s six best universities

We have a civil service free of corruption

We have a language, a history, an environment, spoken, respected and envied in every corner of the globe

So, we should take great pride. But a harsh world will judge us by wider standards. By the standards of our average. By the slowest ships in the convoy. By whether everything we do is good enough. The examples of excellence give grounds to show what we can do, what we can achieve. They are not, however, typical of national performance. They need to be seen as standards to achieve, not grounds for complacency.

I chose to make this speech in Birmingham. And no building could be more appropriate. It stands as a monument to the wealth and political power generated by the city’s entrepreneurial leaders in the eighteenth and nineteenth centuries. In those days, it was frequently filled with local people who gathered to debate the great political issues of their time. Their voices resonated across the country. The leaders they produced – of whom Joseph Chamberlain is the best known – became leaders of the nation.

But those days are a now a distant memory. The great entrepreneurs who built Britain’s great cities and who drove our country to the forefront of the industrial revolution were powerful and ruthless men. The cities they built were in time overwhelmed by the exponential growth of the industrial workforce they attracted, and by the terrible urban living conditions that resulted. Those conditions were intolerable, and the democratic process rightly demanded change. The cities themselves could not fund this, so the national government intervened.

Central funding ceded power to London. Local government focused increasingly on social provision. Councillors drawn increasingly from the public sector. The power of Whitehall grew. Ministers and civil servants concentrated on specific and individual functions – housing, transport, education, environment. Slowly but remorselessly the entrepreneurs that created the cities on the basis of local strengths were replaced by the functional monopolies of Whitehall.

However, desirable the change it reduced the emphasis on growth. Whitehall increasingly ceased to trust local leadership – and so more and more powers were drawn into Whitehall or its national quangos. National initiatives were rolled out across the country irrespective of local conditions.

I can only ever remember a Cabinet discussion that focused on place once – and that was after the Liverpool riots of 1981. My experience in Liverpool after the riots – working with the local community and their leaders to address the root causes of their problems – showed me that there is a better way.

When local partners work together, that local initiative is more powerful than anything London can produce. Sir Terry Leahy and I helped to devise a vision for the future growth a year or so ago of that great community. The response was immediate. The local people knew what needed to be done.

So, we need to reinvigorate that local leadership across our country, including greater devolution in London itself. And Whitehall’s ambition should be to do less but do it better.

Of course we don’t need to change. We could carry on as we are. I believe that would be unacceptable. I do not detect an appetite in this country for so unambitious a future. And certainly the government itself is not prepared to stand by whilst other nations overtake us. That is why we need to compete in a rapidly changing world where the competition is intensifying year by year.

We cannot hope to do that unless every part of this country is able to contribute fully to our national effort. We need to make the most of every opportunity for wealth-creation and growth. Let’s be frank – to say that is the easy bit. The government has had to tackle the worst economic crisis of modern times. The government has a radical agenda to reform education. It has an ambitious programme to get people off benefits.

There is no greater sign of the government’s confidence and strength than its willingness to encourage me to produce a report which the opportunists will use as a basis of criticism. I am no critic of this government. I am so enthused by what they have achieved to be secure in my confidence of what more they can do.

My report urges the government to build on what it is already doing, to speed up the process and to leave no stone unturned in pursuit of growth.

How then can we get there? There is no new money and no quick fix. We need a new partnership between the private and public sectors, between local communities and central government, the better use of public money and consequently the levering of private investment.

Such a statement may not sound new. It would, I think, have evoked widespread support over many years and under different governments. There have been initiatives and experiments. But what there has not been is a comprehensive long term implementation strategy to turn the thought into practice. That is why I so strongly welcome both what the government has done and, even more importantly, what it says it intends to do.

So, what has it done?

City Deals – Greg Clark, the Minister for Cities, has demonstrated what localism can look like and how it can work

Business Rates Retention – Eric Pickles’s proposals will allow councils, for the first time, to keep a proportion of business rates in their area, giving them greater control of their own funding

Nick Clegg’s Regional Growth Fund is unleashing local creativity and bringing private sector jobs to parts of the country that need it most

Patrick McLoughlin is giving local areas a greater say in the major transport schemes that their communities depend on.

In addition, it has created a framework of Local Enterprise Partnerships to reflect the strengths of both the public and private sector in a context that reflects the local economy, local identity and local pride. There are now 39 LEPs covering England. So, this country has a framework that replicates the strengths of the city states in all our competing economies. It is no longer a case of waiting for London. The army; it now has its fighting divisions. The immediate challenge is to bring them up to strength and to give them the tools to do the job.

This is already government policy. 20 of the 39 LEPs are now involved or will be involved in City Deals. As the Deputy Prime Minister’s speech on Monday of this week clearly indicates this has the potential of a dynamic national policy. I agree with him. There is no case that these new ideas apply to only a part of the framework the government itself has created. There is no case to argue that part of the country should be helped to surge forward whilst the other half is held back.

So much for my analysis. Let me turn to some of my proposals and expand on them.

Making it happen

I think we need a National Growth Council, chaired by the Prime Minister, should be established, comprised of secretaries of state and outside experts in the model of the National Security Council.

The government should set out a comprehensive national growth strategy, defining its view of its own role and the limits of that role, together with those of others in local authorities, public bodies and the private sector in the pursuit of wealth.

As well as a clear strategy, the government needs the means by which it can deliver it. Far too often Ministers pull the levers, only to find they are connected with elastic. And so initiatives come and go. And a collective cynicism gathers as to the limits of what a government can actually achieve. It breaks inertia.

But this government is making positive moves.

It has recruited Paul Deighton fresh from his brilliant achievements in delivering the olympics to manage its infrastructure agenda

It has pulled the cities work into the Treasury, under the continued leadership of Greg Clark

The Treasury has sponsorship of the financial services industry.

The vehicle for implementation thus already exists. The new National Growth Council, would have oversight of the Growth Strategy, and would be responsible for approving the plans of individual departments. Underneath that a shadow Growth Council, under the leadership of the Commercial Secretary to the Treasury, which would bring together Permanent Secretaries of the Whitehall departments.

Departments

Each department would be expected to set out its contribution to the growth strategy, including how it will work with the wealth creating sectors it sponsors.

Many departments do not see that they have a role to play in the growth agenda. A central vision for wealth creation can only be properly achieved when all departments single-mindedly pursue it. Growth can not be led out of the Treasury or the Business Department alone. It requires Whitehall as a whole to sign up.

It is easy to see how this applies to some departments:

The improvements in our railways and our airports self-evidently Transport

The investment in thousands of new homes, DCLG

The procurement of billions of pounds worth of military equipment at Defence.

But the link to growth is less obvious elsewhere.

It’s welfare policies that get people back to work

The education of our young people, ensuring they have the basic skills to survive in the workplace

The challenges of keeping an ageing population healthy and independent.

Non-executive Directors

Just as local places need private sector input into decisions, to ensure they are consistent with growth, so too does central Government.

The Non-Executive director network, led by Lord Browne is a strength to be built upon. My plans formalise their role in many ways:

Non-executive directors should be given an enhanced role within departments

In addition there should be a NED presence on the National Growth Council

They should have a strengthened role in the development of departmental business plans, ensuring growth commitments within them go far enough

They should be able to advise Secretaries of State in the appointment of permanent secretaries

Crucial to the ability of NEDs to fulfil this expanded role will be two key changes:

First, and most simply, they need a secretariat to support them in their duties

Second, they need access to a proper Management Information System.

Such a system would not only be of use to NEDs as they scrutinise the business of departments, but would be critical to secretaries of state and their permanent secretaries in the running of their departments. All major companies collect and use management and finance data. That ought to be obvious. How can one know what is happening without such a wealth of information at one’s fingertips? A comprehensive management information system will allow departments to see what they do well, what they could do better with more resource, and what they could stop doing.

Sectoral activity

All sectors should be offered a formal relationship with government through the most appropriate department. The automobile and aerospace relationships that exist in BIS are good examples. This together with the sponsorship role of UKTI should be extended across departments.

Our major companies can play a key role in raising the performance of business across Britain. Many of them already do so – nurturing and investing in their supply chains, providing advice, skills and even finance. We need to ask that more of them follow the example of the best.

The business community is like a rain forest – many smaller companies depend on the canopy that big firms provide. Rolls Royce supports almost 3,000 UK-based suppliers. Jaguar Land Rover; nearly 2,000. Take away the canopy and the infrastructure is exposed to unsustainable threat. It would be a mistake to expect government to focus solely on the start-ups and small firms, even though they provide much of the dynamism and innovation of our economy.

Government should continue to work with our large and medium-sized companies as well if it is to strengthen our wealth-creating capacity effectively. This requires a deep understanding of business and the capability for a professional dialogue and partnership with business. The civil service culture needs to embrace an experience of the private sector. In this way we can ensure that we have a world-beating public sector which can play its full part in realising our national potential.

Our cities

Local Enterprise Partnerships should be given the resource to develop local economic plans. I propose £250,000 for each of them for two years. They should then be invited to use these plans to bid competitively for part of a national single pot of public money, available to them from 2015. The single pot should consist of those parts of current departmental allocations that could support growth. The pot could amount to over £49bn over four years, plus other sources such as European funds. Government needs to set a framework for this competition, a framework in which it sets out its principles and priorities.

A new government might have different priorities. That is the expression of democratic choice. But change has a price. Investment is long-term. Investors are increasingly internationally mobile. To the extent that a message of consistency and continuity is possible, the more certain is the investment climate.

We should be able to agree on the need for growth. To seek growth without the enthusiastic partnership of the private sector is a mirage. Different governments may have different priorities for the new wealth, but we must first work together to create it.

Central government needs to bring together the funding it applies to individual initiatives supporting growth – spending on skills, on local transport infrastructure, on housing and regeneration – and turn them into a single fund which can be put to work with local contributions to support the growth strategies of local communities.

But government can not simply hand out the money and walk away. Democratic accountability would not allow it. We are talking about a new concept of partnership. As part of that, I believe local government will increasingly need to create simpler structures which are more efficient and easier to deal with. Scotland and Wales moved to a structure of unitary counties decades ago. Many English counties have adopted a unitary structure. Nothing should prevent others from following. In the great cities I welcome the development of conurbation authorities and would welcome the prospect that they should elect a mayor to lead them.

Local wealth creators

The Government and the private sector should work together to create a strong, locally based business support infrastructure. Central to this would be a determination to help chambers of commerce attract larger local membership.

What can government do to help? There are many things government can do which underpin the national economy – setting taxation policy, regulating markets, investing in infrastructure, skills and the research base. It needs to do each of those things excellently and professionally.

But government cannot advise business on how to grow. For that we need a world class business support infrastructure that is private-sector led, that is accessible in every community, and has deep reach into the business community.

That is what all our competitors have. I have set out the comparisons in detail in my report:

The Paris chamber of commerce has 400,000 members. The London chambers have 9,500

When a German company goes to India, it finds a chamber with 110 staff and 6,000 members

When a British company goes to India, there is no chamber.

If we are going to compete in the world’s markets, we need to fill that void. Our chambers of commerce can do it, but we should all help them rise to the game. That means – central government, local government, and – above all – local business. I realise that my proposals to enhance the status and capability of our chambers are controversial. If we intend to galvanise our cities and their communities I see no better way.

As an annex to my report I publish our findings of the support other competing economies have in place to support their companies.

I accept the vital role local authorities can play in wealth creation but I believe that they are stronger with private sector partners. The private sector is divided between competing organisations and, added together all of them represent only a fraction of the million or so companies that might benefit from the enhanced services other countries provide and upon whom our export targets depend.

Government has set up quangos to undertake activities and provide services that could more effectively be private sector and locally led. Let us be frank. Some will say the chambers are not strong enough. My reply is that we should help them – not force them – to acquire that strength not undermine their localism with an ever widening quango world.

Trade associations

They can play an important role. But there are over 3,000 of them. There is a need to up their standards. That means rationalisation.

Deregulation

Regulation should be carried out in such as way as to have growth at its heart. This means a restructuring of the regulatory regime in this country in order that the economic consequences of regulation are properly thought through. The report includes a number of other proposals.

Planning

Our planning system should be injected with the needed urgency to speed up the decision making process. This could include a new power for the planning inspectorate to call in applications after six months. I do not seek to change the nature of those decisions. Rather I seek to inject a degree of urgency into the process.

Procurement

There is one particular opportunity which government should grasp to help our companies to compete effectively across the world. Government procurement can be improved by bringing in specialists, and paying them at a rate that is compatible with the private sector.

Government places £238 billion of contracts with external bodies every year. In 2010, two thirds of those contracts were running over time or over budget or both. That is a national scandal. Not just because of the waste of our hard-earned national wealth. Much worse is the way that culture saps the competitiveness of British business. No company which relies on surviving in that sloppy environment will find it easy to win contracts abroad.

The Government has started work to drive professionalism into its procurement functions.

Conclusion

My report makes 89 recommendations. Some will see them as criticisms and exploit them as such. That is exactly the wrong approach. To invite criticism is a sign of strength. To accept it is a demonstration of confidence.

We are all too close to the economic crisis. There is opportunity on a grand scale. Is this glass of water before me half full or half empty? It is an attitude of mind. To me it is half full:

Huge infrastructure demands and hungry institutional funds – link them

Excellence in industry, commerce and academia – extend it

England’s cities pulsing with energy – unleash it.

Every one of us needs to rise to the challenge. There is no more insistent or compelling motive for human kind than the instinct to provide for and protect our children. To feed them, house them, educate them, and give them a start in life with the hope that they will be able to do better than we have done ourselves.

So let our reaction to this report be judged by the legacy we bequeath to our children and grandchildren. We should earn their appreciation for the legacy they will inherit by the commitment we made.

The below speech was made by Michael Heseltine on 30th September 2007.

When parts of our cities erupted in riots a quarter of a century ago, I asked the Prime Minister to release me to walk the streets of Liverpool.

After three weeks of listening, questioning, it became clear how politically impoverished our great cities had become.

There was no shortage of opportunities or ideas. What was missing were people willing and able to take responsibility.

For decades after the Second World War power had shifted remorselessly to London.

Nationalisation had turned powerful provincial industries into London bureaucracies.

Inflation and confiscatory taxation had wiped out much of our independent enterprise.

That same punitive tax regime effectively choked off the ability of the enterprise system to renew and revitalise.

Takeovers had undermined the independence of large and resourceful companies loyal to our cities. The dependency of the branch office was no substitute for local owners.

Local government underwent a similar centralising process. As Governments did more, spent more so more control followed the expenditure.

Those of us who served our party through this period, remember all too well the influence of the Labour Party in this process of centralisation.

The reversal of this process culminated in the great battles of the 1980’s and 1990’s.

The return of British industry to the competitive market place.

Tax levels that enabled enterprise to flourish.

Council house sales that enfranchised a million families.

The Trade Unions brought within the rule of law.

In the longest apology note in political history the Labour Party tore up its historic manifesto, accepted our agenda and pursued our reforms as though they had thought of them in the first place.

I have perhaps become too tolerant as the years went by.

But my tolerance is stretched to breaking point as I listen to the announcement of one more Labour initiative, another name change, as yet another Tory idea is relabelled and recycled.

Today they have learnt a new language.

But language is no substitute for action.

When it comes to action they are unable to distinguish between public expenditure and quality of service.

Every crisis has its new grant, every newspaper headline its ministerial initiative, every cock up its spin.

Not only do few of these things work, even more insidious is the consequential public disbelief. It is a question of trust. Time and again on my TV screen I hear members of the public say “you can’t believe a word they say”.

Take education.

Ten years of Labour Government.

Ten years at the end of which over one in four of all children in primary schools are unable to read, write, and add up properly.

And those are the Governments own figures. God knows what the truth is!!

Ten years of Labour Government and our examination system is so discredited that an increasing number of schools – independent schools which have the freedom to choose – are opting out and moving to internationally respected standards.

Tony Blair said it in these words Education, Education, Education.

Gordon Brown is now repeating it.

Tomorrow, Tomorrow, Tomorrow.

Translated into Spanish I think that reads Manana, Manana, Manana.

It is no surprise that Gordon Brown managed to speak for over an hour without once mentioning our inner cities.

There lies opportunity for our party.

The renaissance of the enterprise culture in the 80’s and 90’s flowed because we restored freedom to the enterprise society.

But millions of our fellow citizens work for Government, local authorities, ‘not for profit’ organisations.

They also long for responsibility and the chance to use their initiative in solving local problems.

Reforming the public sector remains a huge challenge.

David Cameron asked my task group for a report on reviving the cities.

About empowerment of local communities.

About rebuilding the great powerhouses of provincial England.

Cities are the centres of human enterprise and endeavour.

They are the great engines of our economy.

They can sustain the infinite variety of human talent upon which a sophisticated society depends.

They provide choice and diversity in academia, the arts, culture, sport, entertainment and the quality of life.

I have proposed to David a vision for a new partnership.

Central Government cannot abandon its responsibilities for the proper use of taxpayers money.

But taxpayers money does not have to be channelled through the quangos of central Government.

Ten thousand million pounds a year goes through the Housing Corporation, the Regional Development Agencies, English Partnerships and the Learning and skills councils.

To achieve value tax payers money should recognise local priorities, local initiatives, local ambitions.

I say this not in any way to criticise the motives, integrity or ability of Whitehall and its civil servants.

I say it because I don’t believe that there are simple, national solutions to complex and infinitely varied local challenges and opportunities.

But that is what centralisation does. It creates an intellectual straight jacket.

Solutions are devised.

Rules drawn up.

Circulars issued.

Guidelines promulgated.

But Birmingham is not Manchester

Leeds is not Liverpool

Bristol is not Coventry

And none of these cities are Scottish or Welsh.

If the English tax payer has to pay for the new freedoms of Scotland and Wales there should be choice, diversity, opportunity and, yes, experimentation in the relationship between Whitehall and Town Hall.

Each city has a different history, different strengths, different opportunities.

We believe in trust for the people.

We should also recognise that same spirit of independence in the governance of provincial England.

We should never forget that the majority of us live in or are affected by what happens in our cities.

I know of no country like ours that so suffocates its cities. In Europe and the United States they are respected for the great human powerhouses that they are.

Of course, there are difficult issues to be faced.

Chief Executives of major cities are paid around £150k to £200k per annum placing then amongst the highest paid in those cities.

But they are not held to account by local people.

The leader of the Council works at least the same hours, faces public and press scrutiny, and is paid a fraction of the Chief Executives salary.

I believe it’s time to combine these two jobs.

I believe cities should elect leaders held democratically to account every four years.

The constituency should be the whole city and not a small part of it that is often socially unrepresentative.

It is tempting in politics to present ideas in the most dramatic and innovative way possible.

Tempting but misleading.

Most initiatives are evolutionary not revolutionary.

I advocate changing the balance. The interests of provincial England were heavier in the scales yesterday than today.

Indeed we created the greatest empire the world has ever seen at a time when Mancunians proclaimed “what Manchester says today, the rest of England says tomorrow”. There may be an element of controversy in that statement but no one would quarrel with the pride and self confidence it revealed.

Britain of past centuries thrived, on its dispersed dynamic centres of enterprise and municipal pride.

The legacy lives on in the majestic buildings, the rich endowments, the museums and art galleries. Too much of that independence has been snuffed out.

London has become one of the world’s pre-eminent cities.

Paris maybe more beautiful.

New York richer.

Washington more powerful.

But add history, culture, politics, finance, commerce, sport, music, the arts, and the rule of law… and London has no equal.

We all gain from this but it creates great pressures on London and the South East.

Too many in the provinces feel left out. They want their chance to thrive.

We should offer it to them.

Let us think about the changes that follow an elected Mayor.

The first change requires a bonfire of central Government circulars, targets, ring fences and all those hidden persuaders that tighten central Government’s grip.

Next, we must ask – what powers should a Mayor have?

First, existing local Government responsibilities such as education, transport, housing, planning, remain.

Next, policing. Nothing is of greater concern to our citizens than effective policing.

There are no simple solutions to lawlessness, drunkenness, violence and a range of criminal behaviour.

But people want these issues tackled. And they want an accountable person in charge.

Our party has rightfully recognised this. Our policy for the election of local sheriffs to break the Home Office monopoly over the police is an imaginative response.

Any such new power should be vested in an elected Mayor.

Next, the huge sums of money spent by Central Government quangos.

These powers were largely removed from local authorities and should be restored.

Next, there are imaginative ideas that could enhance local democracy.

Over my four decades in the House of Commons I was very aware of changing public attitudes to the Health Service.

There remains overwhelming support for our National Health Service, and great admiration for the men and women who often provide extraordinary service and skill.

But when things go wrong the scale of the machine, the remoteness of responsibility, the feeling that there are more excuses than answers argues for local not national accountability.

Next, we should look at the administration of education.

Study the statistics of crime.

Examine the background of our prison population.

You will find educational failure.

That is the extreme.

But look at the long-term unemployed. You will find educational failure there too.

Ask any employer if they can recruit the people they need with adequate education and proper training.

You will get an emphatic “no”.

The lost opportunities are immeasurable.

There are too many overlapping authorities each with a finger in the educational pie.

A wider education authority could also have responsibility for much of the positive aspects of employment policy.

Getting people back to work is often about the failures of education.

In the pursuit of raising national education standards we should empower local people to devise local solutions.

I have spent too much ministerial time wrestling with local Government finance to believe there are easy or acceptable alternatives.

But there are changes that are possible.

Authorities could keep additional business rates created through new development.

They could have access to the capital bond market with no Government guarantee.

Finally, we should build on our City Challenge ideas of the 1990’s.

We proved that if central Government offered to help finance local development plans, then local communities were enthusiastic to respond.

In every city there are organisations whose interests can coincide. Imaginative leadership can bring them together.

Such plans would be rewarded on their merits.

Yes, some cities would get more.

The others would try harder.

That is how you drive standards up.

The simplest example are the housebuilders who will build houses on brown field sites if the public sector first eliminates toxicity from them.

Such interrelationships are endless.

Clean-up canals and tourist facilities flourish.

Specialist universities bring business parks.

Roads open up development.

Better environment encourages new jobs.

It is about building on local strengths, creating communities of self interest, letting people own their cities.

We all know we have a fight on our hands.

We have to fight in the cities because we can’t return to Government without their enthusiastic support.

We know it can be done.

We control Birmingham, Coventry, Bradford, Trafford, Dudley, Solihull, Walsall and a range of London Boroughs.

Winston Churchill once famously rallied our country with his exhortation to fight on the beaches, the fields and the streets.

In very different circumstances and with very different weapons.

We must fight with ideas.

We must offer a new, a fairer, an exciting partnership for tomorrow.

Set the people free.

Let us start by giving our cities back to the people.

Below is the text of the speech made by Michael Heseltine on 7th April 2006.

It is very rare in public life to be given the chance to revisit previous responsibilities. Having served on three separate occasions in the Department of the Environment – twice as Secretary of State – I am delighted that David Cameron asked me to look again at the opportunities to stimulate the regeneration of our cities.

I can bring experience to the task but with that experience come the opinions that arose from that experience.

I should stress that whatever I may believe should not be confused with what a future Conservative government may do.

I act rather as a headwaiter.

I can produce a menu.

It is for David and his colleagues to decide what, if any thing, they will consume from it.

My task is also partial. Inner city policy embraces an agenda that touches on virtually all domestic issues. I am concerned with structure and physical regeneration. John Gummer and Ian Duncan-Smith with their policy groups carry the demanding work load concerning human relations and social provision.

Today we look forward to important local elections.

Let us be clear about one thing.

We are not here today to take part in a wake to remember the glorious past of Conservatives in urban Britain.

We have an altogether more optimistic purpose.

Already we control Trafford, Dudley, Solihull, Walsall and many other authorities.

We control nine London boroughs and we run Birmingham, Bradford and Coventry.

There is one clear message.

We have taken the beach heads.

Now to advance.

Let our cry be – if we can do it there, we can do it here.

Wining control of more authorities are skirmishes in the battle of the next general election.

Stepping stones to power.

The chance to serve.

As we bring the skills of good administration to more and more authorities let us remember politics is not all about fact, statistic or spinning the truth.

It is also about passion.

If you want to understand why Labour is bad for Britain walk about the deprived parts of Britain’s cities.

After nearly a decade of power what has New Labour actually done for the forgotten people?

What does that most overblown phrase of modern politics “Education, Education, Education” actually mean to those kids leaving our sink schools barely literate?

Do the elderly feel safer?

Is the litter picked?

Is there a glimmer of hope shining through the drab concrete world that is as far as the horizon stretches?

Walk around.

Feel the insecurity.

Absorb the squalor.

Understand what it’s like to lose hope.

Ten years of excuses, ten years when new Labour forgot a generation who simply missed out.

What a challenge here for our party.

With: the right policies,

the right candidates,

the right language,

and, above all, an unswerving allegiance to the Churchillian vision of a net of civilised living above which all are free to rise, below which none may fall.

Time and again the Tory party has leapt the simple barriers of class to bring hope.

Lord Shaftsbury took the women out of the mines and the children out of the chimneys.

Disraeli gave the working man the vote.

Rab Butler was responsible for universal education.

Mrs Thatcher’s government enfranchised the council tenant.

In forgotten Britain there are challenges today of such historic scale.

Do not for one moment think that these problems are self contained, affect only that proportion of society that actually live in urban deprivation.

There is high unemployment in deprived areas.

That is a human tragedy.

It is a tax payers bill.

The education is inadequate.

Illiteracy impoverishes someone for life.

To the drug barons it is an opportunity. It is a recruiting ground. The drug peddlers do not restrict their sales to inner cities.

Low or no education standards, drugs, here is the cauldron from which criminals come.

But the crimes threaten us all.

So it is our problem too. Less personal. Just as important.

Expensive

Dangerous

Threatening

I began by saying that it would be quite wrong for me to make statements that sound like policy decisions. I would like therefore to cover just three themes today.

First

What were the critical changes and consequences for the regeneration of our cities of the Thatcher and Major governments?

Second

Are local governments capable of carrying greater responsibility for their destinies?

Third

Why should a conservative government pay particular attention to the regeneration of our cities?

First, the critical changes.

The sale of council houses and the transfer of much of the remaining stock into self administering trusts was a social revolution of historic proportions.

Well over a million families became homeowners.

Many millions more were enabled to exercise a more direct influence over their housing conditions.

I give Tony Blair credit for making fashionable the concept of stakeholder.

It was a very good way to describe the property owning, share owning society we had already created in the teeth of Labour opposition.

Second, Geoffrey Howe’s, Nigel Lawson and Ken Clarke’s budgets created the conditions whereby the enterprise system could regenerate itself.

Everywhere today there are flourishing new companies creating local wealth and jobs.

We made that possible.

Third, less conspicuous but equally profound, our policies broke the barriers of prejudice and bitterness between the public and private sectors.

Both have their strengths.

We created the incentives to forge those strengths into formidable partnerships where the old enmities were replaced by constructive co-operation.

You may ask what do all these changes, now centrepieces of modern government, have in common?

I will tell you.

Every one was opposed by the Labour Party.

In the dark corners of deprived Britain which had been their fiefdom for decades, they had become the custodians of deprivation, the champions of mediocrity.

We let the light in and there grew an urban renaissance on a scale and quality not seen since Victorian times.

Let me be specific. Take Manchester

GMex the great exhibition centre

The concert hall

The velodrome and other great sports stadia that came from our support for the Commonwealth Games

The redevelopment of Castlefields

The transformation of the Hume estate

After the bomb outrage the recreation of the City centre itself

The list goes on.

It can be replicated in City after City.

London, Liverpool, Leeds, Birmingham, Newcastle, Cardiff, Glasgow. Many others.

I come to my second question.

Are local authorities capable of carrying greater responsibilities for their own destinies?

Well let’s say something rather uncomfortable.

The chief executive of a major city is paid in the order of £150-200,000pa.

He or she will be amongst the highest paid people in most cities.

If they are not capable of doing the job, there should be a system to replace them by someone who is.

If they are capable, why should Whitehall double or triple guess every decision they make?

We should give them real freedom to serve local people as local people determine.

But let me say something else uncomfortable.

You will say to me “but surely the leader of the council runs the show, why are they paid a fraction of the Chief Executive’s salary?

And anyway why do we need two Chief Executives?

One badly paid and answerable to an electorate and one extremely well paid and enjoying a tenure far removed from public accountability.

I believe that the time has come to combine these two jobs.

I believe great cities should elect great leaders and hold them to account.

They should be elected by the constituency of the whole city and not just a constituency that is often an unrepresentative part of it.

There is a second part to my question as to whether cities are capable of carrying greater responsibilities.

It is this.

Would central government ever devolve real discretion to local authorities?

Anyone who has any experience of the relationship between central and local government is familiar with what happens.

Ministers legislate.

Officials get at it.

Circulars prescribe in detail after detail what the law means, what it entitles an authority to do or not do.

When I first became Secretary of State I discovered that a housing authority had to answer 80 questions about the detail of any scheme before they would put a brick on the ground.

And councillors thought they were free!

We changed much of that, but the culture remains.

Central government pays for 80% of local expenditure, so it controls the details of that expenditure as well.

The money comes in labelled packages each with its own detailed prescription and set of rules.

Rules mean Whitehall knows best.

Whilst Whitehall checks its forms, questions the detail, imposes its remote perspective, it also creates delay, generates cost and, even worse, encourages a culture of drab conformity and stifled initiative.

I think we should breathe freedom into local authorities.

We should welcome the diversity of policies that would flow.

We started in the early eighties to link government grant to the after use of reclaimed land. By such linkage local authorities had to find private sector partners who in turn added more investment on land reclaimed at public expense.

City challenge was the logical next step.

Government grant was available for local authorities with the most attractive proposals involving local communities of up to 30,000 people and partnership across public and private sectors.

This simple idea made local authorities’ officials much more inclined to work together as a team as opposed to their traditional role as outpost of their sponsoring Whitehall department.

Times have moved on but the lessons remain.

I think that such ideas could be extended to cover whole authorities and not just parts of them.

Directly elected local leaders would prepare an overall plan for the administration and development of their authority.

The scale of central finance would relate to the quality and imagination it contained.

Local leaders would be rewarded for the vision they conceived, the partnerships they formed and the co-operation they secured at local level.

In any competitive allocation of funds not every authority would win.

Those that lost would have a choice.

Moan about the result or try harder next year.

I think they’ll try harder.

It worked with City Challenge.

It would work on a larger scale.

I understand the arguments about public accountability, but this should be the job of the Audit Commission. I do not believe that our public services are so well administered by the present rigid control that we should deny authorities the freedom to experiment, diversify, set their own priorities, design policies that reflect local needs as local people see them.

Our party places its faith in choice, initiative, individual responsibility. Why should we apply these inestimable human qualities only to the private sector?

We have to encourage the public sector to adopt similar attitudes and approaches.

The way to do that is to devolve responsibility not impose restraint.

I come to my last question. Why should a conservative government pay particular attention to the regeneration of our historic cities?

Cities are the great engines of our economy.

They can sustain the infinite variety of human talent upon which a sophisticated society depends.

They can educate and train a workforce without which investment drains away.

They provide choice and diversity in academia, the arts, culture, sport, entertainment and the quality of life.

They are the great centres of human enterprise and endeavour.

They were built on the enterprise of countless generations

As the party of enterprise we have so much to give.

But there is another answer to my question.

Just two words.

One nation.

Someone once said to me “why do you bother with inner Liverpool? There are no votes for us there.”

No Tory can accept that.

I do not see this nation as packages of voters, some to be cherished, others discarded because they vote another way.

I do not pretend to know from which school some great academic originally came or from which part of society a world class entrepreneur may emerge.

I only know it is our responsibility to give to each and all the best start in life we can.

I believe passionately in the free enterprise system as a creator of wealth, but markets know no morality.

It is our responsibility, as it has been the tradition of our party throughout its long and distinguished history, to bring a balance to the books of life.

To recognise that, if we fail to educate our people, we will pay for their unemployment benefits or, worse, fill our prisons to overcrowding.

If we let large parts of our cities become the preserve of the low skilled, the elderly, the dependent, then have no doubt that one day society will pay the price of dereliction and decay.

We must fight to regain a place in our cities because by any standards I understand they will be better run if we do.

It is right to do so.

What is morally right cannot be politically wrong.

Below is the text of a speech made by Michael Heseltine at the Cavendish Conference Centre in London on 23rd November 1989.

I would not pretend to be a scientist. But there are very few ministerial positions in government in which one is not brought face to face with the government’s role in research and development.

I have been fortunate in having held several such positions. At the Department of the Environment in the early 1970’s, I saw something of the work of the Road Research Laboratory in the furtherance of safety measures. As Minister of Aerospace I took over responsibility for the crisis surrounding Rolls Royce, the last development phase of Concorde, and I initiated the fusion of ELDO and ESRO into the European Space Agency.

I was responsible for Britain’s part in the European Airbus and had the task of setting up many of the Industrial Requirements Boards designed to give effect to the Rothschild principle of customer-contractor relationships. As Secretary of State for the Environment in the 1980’s and then as Secretary of State for Defence, I was responsible for the research programmes in a variety of different fields: in nuclear waste, disposal of toxic wastes, the construction industry and many others. As for Britain’s contribution to research and development in the defence field, that is a major source of controversy, perceived as pre-empting a disproportionately large share of our available scientific and technological resources.

Although I have never held responsibilities directly for the university or educational world, it is, I think, reasonable to claim that I have seen, both at home and abroad many of the complex issues which fall to Ministers to address. And I recognise that, for all the brave words, the range of government support and the means by which it is administered look markedly similar today to those that I first encountered.

I would like to thank you for inviting me to make this speech because it has provided me with an opportunity to think back over those earlier experience and to address, in the light of them, the implication behind your invitation: that British science needs saving.

Saving British Science?

The first question that occurs to me is, why should we be pre-occupied to save British science? If in the market place, people move into non-scientific activities, if people choose to pursue their careers in the arts, literature, or languages, if people are content to gravitate increasingly to the service industries – using other people’s scientific abilities, purchased in the market place – why should we be concerned about that?

There are, I believe, ready answers to these questions. First of all, because of the value of increasing knowledge and understanding for their own sake: mankind is inherently driven by curiosity and must be free to explore the limits of his mind and experience

Secondly, there is wider social purpose. An ever-widening base of knowledge is the hallmark of a civilised and civilising society in a very practical sense – diseases, disasters help for the disabled, safeguards for the environment, a whole raft of ever-emerging problems – require scientific knowledge. And I would say to our young people, reluctant – as it seems – to persevere with science at school or university, the pursuit of science and scientific research is not just the foundation of our future wealth as a nation but is the source of the safety of the planet at large.

In the final analysis, the advanced nations of the world are more than ever dependent on science-based industry. Investment in science, the training of their most talented young people in science, and the enhancement of the technological base of industry, are to all of them national priorities of the first order. To be part of the technological revolution sweeping through the modern world necessitates a strong science base.

So, if the arguments are conclusive and we come to the same conclusions as all other similar, advanced nations that we will compete in this arena, where should the emphasis of policy lie? There is, of course, a chicken and egg situation. If you have not got facilities of the first order, if you cannot demonstrate achievements at the exciting frontiers of knowledge, you will not attract new generations of young people by example. And it follows, if you do not attract the talented new generations, you will not develop a scientific base from which excellence can emerge.

The international context

We have to cut into this circular arrangement. It is obvious that, if we do not educate and train our young people to the standards of our competitors, the likelihood of decline is greatly increased. There can be no argument that the British are incapable of scientific excellence. For over a hundred years we have been at the forefront of the scientific revolution that has transformed peoples lives. Only the United States surpasses us in the number of Nobel prizes. Where we have been less successful is in the exploitation of our knowledge. There is no substitute but that we educate and train on the scale that will enable us to remain in the race.

Sadly, of all the OECD nations, the numbers in the UK involved in research have for some years been in decline. Not enough of our best brains pursue science at school or in higher education. Applications for science and engineering places are falling, with a serious knock-on effect on the pool for top rate post-graduates. The latest official forecast of science and engineering graduates and post-graduates contained in the January 1989 public expenditure White Paper projects an increase of only 2,000 to 46,000 by 1991-92. Thereafter, numbers are expected to level off before rising again towards the end of the 1990’s. Clearly there will be intense competition for this limited pool of talent.

After twenty years of debate, Britain is at last adopting a core national curriculum. The significance of this reform should not be underestimated in providing a deeper grounding in science and technology for all young people. But at the route of the problem must surely be the shortage of inspiring science teachers who could pass on their enthusiasm to future generations. We shall need to recognise the market value of such people. We shall have to consider what salaries will be needed if we are to ever to address this problem seriously. Too many who can teach science can rapidly move into more lucrative areas of business.

Sir Monty Finniston vividly identified a mare basic failing in his Royal Commission Report, “Engineering:  All our Future”, that there has been in this country, for many generations, a cultural hang-up about all things technical. But I also suspect that a basic distrust of science is engendered from an early age. There has long been a British prejudice in favour of the arts, grounded in the early traditions of classical education. In Japan, Germany and France technologists assume a more significant role in business and government.

It must follow that for us to devote resources to achieving the highest standard of skills is not with the philanthropic intention that Britain shall export our talent to other nations’ industries or universities with our talent. We are doing it, not just four our citizens as young people, but because we believe that by investing in them in their formative years, they will deliver the wealth and stimulus from which we can all benefit.

Spending and infrastructure

So the next step follows: that in a free society, the market place will buy the talent. And the talent will be attracted by both the financial rewards on offer, but also by the quality of scientific opportunity on offer. You simply will not keep top-class scientists by doubling their money and halving their research budgets.

You will not attract the best academic minds to work in the worst scientific conditions. So the facilities matter and we therefore need to ask whether, in both the public and private sector, the opportunities for young British people, hopefully educated and trained to the highest standards are such as to persuade them to fulfil themselves in our laboratories, universities and companies. And how best can we direct public and private resources to that end, for staying on the frontiers of research cannot be done on  the cheap.

A growth economy needs to invest in its intellectual assets. Though from the mid-1970’s we went through a period when university laboratories were, in large measure, living off the 10% annual growth of the 1960’s, the government has now given new importance to the funding of basic and strategic science. The Science Budget over the next three years is now planned to increase by £178m more than in previous projections. By 1990/91 it will be 27% higher in real terms than it was in 1988/89.

The turn-around is dramatic when one considers that in 1987 the forecast was for a 4% annual reduction up to 1991. Sixteen government departments, other than the Ministry of Defence, contribute £1.1bn directly to the nation’s research effort; the MOD’s expenditure is over £2.25bn; the five Research Councils pay out £641m in addition to the contribution of the University Funding Council. This is by any standard a major and influential commitment by the British government.

I draw a conclusion from all of this. It is that common sense prevails. The larger the pool of scientific resources you create, the larger the fish that will swim in that pool. There is, of course, a caveat. It is no use simply throwing money at the problem.

What should be the disciplines? Indeed, are there practical disciplines which can apply to the frontiers of scientific knowledge? Is not blue-sky research desirable of itself: the right to know, the right to explore, the right to pursue the unknown? You cannot put a price tag on so amorphous an objective. You cannot measure the returns in terms of dividends or wealth-increase. In many cases there is more gamble than risk. There may be no returns at all.

But the pool, of course, is not infinite. The government must define the scale of the public’s contribution to it, while companies are limited by the scope of their balance sheets. Judgements are unavoidable. Priorities have to be established.

And there is yet another dimension. For we do not live or trade on a desert island. But the closer one examines the realities, the more one discovers the relationships between mighty companies and the public procurement programmes of the governments behind them. Competition there certainly is. But the idea that it is competition on the level playing fields of the corporate sector is unrealistic, as it is foolish to behave as though it is the case.

Slowly, by patience – as the European Commission is attempting to do – we may change the rules. But we must be very clear that we do not in the meantime put our industry where, by the time the rules have been brought to common form, the strength of our industry has been eroded

We need to understand the scale of British expenditure.

UK research investment

The first fact is that gross expenditure on research and development has risen by over £1bn since 1981. The latest figures available to me show that in 1987 we spent £8,703m compared with £7,677m in the earlier year.

Can it be argued that by international comparison this is too low? In 1987, the last year for which I have complete statistics, Britain spent the same proportion of her GDP on research as France at 2.29% and considerably more than Italy at 1.19%. We do not, however, match the Americans at 2.71%, the Germans at 2.81% or the Japanese at 2.87%.

But of course these figures do not reveal the full picture. They ignore the critical factor: the size of the respective gross national products. Then the investment gap becomes evident.

OECD figures reveal that in 1987 Britain and France spent virtually the same at £9.4 and £9.5 billion. Germany spent £13.3bn, Japan £26.7bn and the United States £70.3bn.

Whereas in the case of our competitors, the percentage of GDP devoted to research has steadily risen (for example, in France from 1.97 in 1981 to 2.29, and in Germany from 2.42 to 2.81) the UK percentage has fallen from 2.42% to 2.29%.

As a result – as you know only too well – half of the “alpha” research proposals submitted to most of the Research Councils in 1987 and 1988 were underfunded. Britain’s output of scientific achievement remains outstanding, but the truth is that others are catching up.

There is, of course, the question  of why we have not been very effective at moving research results into product development, but it is no solution to that problem to reduce the level of fundamental research.

Industrial R&D

Higher profits in recent years have been reflected in higher R&D spending in the private sector in the last two years but there is a sizable leeway to make up.

These figures throw out their own questions.

What philosophy should the government adopt to the money it does spend?

Has the government got the balance right between military and civil expenditure?

How do medium-size countries such as ours give the sort of support to their industries as is available to our overseas competitors?

I do not see how it is possible to argue that the government’s withdrawal from near market research and the transfer of responsibility for this to the private sector can be questioned in theory. That is not to say that industry should not be encouraged to sub-contracting to our universities and polytechnics. The private sector will be more disciplined in the use of resources, will cut off false trails more quickly and exploit new developments more effectively. And quite frankly they are more likely to exploit them in their own plants and laboratories than public research organisations who can be more orientated to the publication and dissemination of ideas than their exploitation.

I do not say this as a matter of doctrine because I know enough of the workings of government to know that in practice most governments are deeply involved in making judgements every day about the use of public funds in support of specific projects, though certainly automatic grants are today the creatures of the past.

The requirement for government support is now invariably a large private sector commitment, and preferably collaborative projects.

Industrial strategies

Across the world this trend to “privatise” the research and development programmes in the new market is discernible. But no one should confuse privatised research and development with a genuine market place. The United States, with far and away the largest commitment, operates a protected market for its hi-tech industries, offering generous partnerships for co-operation where an overseas partner has the technological lead but rigidly imposing the technology transfer provisions of national legislation in all other circumstances.

Japan has transferred much of the former government funding of MITI to its private sector but just look for examples of where any overseas company is allowed to gain access to the ownership of one of those companies and you will see a protected market at work.

It is within this real world of industrial politics that any British government must assess its priorities. But the real world contains another dynamic. The decade ahead is going to see the completion of the regional market of Western Europe. Its precise form or scale is secondary to the consequence for industry and our research programmes. The consequence will be mergers on a European scale. They may be driven by American partnerships pr they may be furthered by Japanese investment but ten years from now Europe will not think of national research programmes, for the simple reason that such programmes will not be able to match in scale or sophistication the American or Japanese challenges.

The more we continue to duplicate or triplicate our invention of the wheel in the nation states of Europe, the less competitive we will be with the two giants.

So company merger in Europe will bring together the research resources of the European countries. Competition for scarce national scientific resources will lead to collaborating but also specialisation at the academic level across the universities and research laboratories of Europe. Governments will be forced by the logic of the market place to follow this pattern.

I have set out my support for the view that industry is best trusted with the application and exploitation of research. It is the servant of the market place and its disciplines.

Government as a customer

But what of the circumstances where governments are themselves the market? The scientific and technological consequences in such cases can be profound. It is not so much a case of the jobs involved, rather the attainment of a technological base and the ability to set standards that flow from the availability of public procurement funds.

It is here that governments cannot avoid decisions about their role in support of their industry. And none of them, in practice, do.

Let me give five examples where in the pursuit of public policy, the government – as customer or in the discharge of its own responsibilities – has opportunities to enhance the technological base of our industry:

1)      Euro-control for the management of our airspace. An area in which British industry has a direct stake in the British Government taking a lead is in the creation of a Europe-wide air traffic control system. As the largest single source and destination of all flights in Europe this is a major national interest. It won’t be easy, as the system must go wider than the twelve and countries over which planes fly have different priorities from those like us where they begin and end their flights – which is why only governments can create the necessary frame work.

But the prize is great. And not just in terms of quicker flights and less delays. A whole new market at the leading edge of technology, in the telecommunications, computer and other equipment industries would be opened up. The potential fillip to European industry is enormous. The Americans and japans will certainly challenge for the contracts. The French, Italians and Dutch, with the support of their governments, are gearing up. If the British Government plays its hand skilfully, British companies could have a major role as well.

2)      The European Space Agency. There has been much questioning of Britain’s role in space. I believe we are wrong to remain apparently detached as our competitors commit growing resources. There is an unquantifiable but inescapable message in such a policy. Younger generations need not just the prospect of financial reward in their choice of career, they also need intellectual stimulus and vision. If we want them to see the broad field of engineering and scientific research as the outlet for their energies, the exploration and conquest of space offers a unequalled challenge for the enquiring mind.

But Britain cannot afford such a journey alone. Indeed, it would be a massive waster of our resources to explore what others already know. The European Space Agency was a British initiative. We secured, from its creation, a European lead in communications satellites. We achieved in partnership what, alone, the limitations of our resources would have denied us.

3)      The management systems of government. I have long been one of those pre-occupied to improve the efficiency and effectiveness of management in government. In a recent report, published by P.A. Management, we argued how far there is to go in converting Whitehall’s paper-based management information systems into the state of the art technology. Better value for money and improved public accountability are now on offer, but only following an investment in the latest equipment and programmes. As a parliamentarian, I am interested in how we use the taxpayers’ resources and account for them. Pace-setting contracts to equip Whitehall with the sophistication that a major multi-national company would take for granted, could present industry with a turn-key to world markets.

4)      The relocation of civil servants. Decisions about the siting of head offices, the location of staff, where they are to live and work affect the distribution of wealth. We should disperse the civil servants from the South-East, not in a mean and penny-pinching way to the backstreets of provincial Britain, but to offices built as models, as exemplars of what dispersed and decentralised offices can be like – equipped for the space age rather than the steam age.

5)      The relocation of our public sector research laboratories. There are no government research laboratories in the North West, yet the growth potential that centres around research laboratories is enormous. In March the government announced its plans to move the MOD Quality Assurance Division from Woolwich to Teeside by 1995. The Division is going north before companies it monitors move south. Some 1500 jobs are involved, of which 650 would be scientific and engineering post and 250 would be apprentices. But is had taken five years just to get the decision announced. And it is taking another five years to implement it.

I would like to see the use of the proceeds of the sale of expensive land in the south to build centres of excellence in the North. North West is the heart today of Britain’s booming aerospace industry. The heart, that is, of Britain’s private sector aerospace industry. But think what we could do to build on that. Why does Farnborough have to be in the road-congested, air-congested South East? Why not use that site for activities that have to be in the South and move Farnborough to the North West? Why not encourage local universities and polytechnics to direct more of their courses towards the pursuit of such technical excellence? Industry-sponsored science parks located near to universities would benefit enormously from the academic input. Why not, indeed, go further? Britain could encourage its space industries to locate around a Space Centre in the North West. Far and away the most important contribution to all this would be a dynamic private sector. But the concept and its initiation would have to involve a partnership in which the government, as the most important customer, recognised an enabling and sponsoring role.

Conclusion

In each of the examples I have given the government’s interest is an improved service or a more effective economy.

In each case the private sector has a massive role to play.

In each case government can improve our competitive ability and achieve better value for money.

Our scientific values would be enriched, our citizens better served, our industry strengthened.