Member Article

Labour criticises "unbalanced" growth as RGF misses investment target by £1 billion

Labour’s Shadow Business Secretary, Chuka Umunna is to critique “unbalanced” economic growth under the Conservatives, highlighting new figures that show Regional Growth Funding ‘has missed its investment target by £1 billion.’

Chuka Umunna will argue that Labour’s pledge to devolve £30 billion of budgets to the regions will help boost jobs and investment outside the southeast.

The £3.2 billion fund is £900 million behind schedule in attracting private investment, and £750 million of the first £1.9 billion of public money allocated to projects had yet to be drawn down, in the year to March, as a result of the slow economic recovery.

The report has also revealed that 40% of the funds allocated in Rounds 1 to 3, £750 million of the £1.9 billion total, have yet to be drawn down by the projects and programmes due to receive them.

Chuka Umunna will be speaking at an event with local businesses in the Hampstead and Kilburn Parliamentary constituency with Labour’s Parliamentary Candidate Tulip Siddiq.

Speaking ahead of the visit, Chuka Umunna MP, said: “There are now less than nine months until the next general election, and Britain faces an urgent choice between the Labour future of long-term, better balanced growth, and the Tory threat of long-term decline, low wages and insecurity at work.

“We are now into the fifth year of Tory failure. The Conservative Party came to office promising to rebalance Britain’s economy across all the regions with an export and investment led boom, and have failed.

“They abolished Regional Development Agencies without putting in place a proper replacement and their flagship Regional Growth Fund has been mired in chaos and delay. Now the government’s own figures show the scheme failing to meet its private investment target by almost £1 billion.

“We know also that businesses think in investment cycles that stretch well into the next decade, and that politicians need to do the same.

There can be no future for Britain competing on the basis of low wages and insecurity with a Tory led government focused on short-term advantage that will lead to long-term economic decline.

“If we are going to pay our way in the world and generate growth that is better balanced and benefits all, we need to take a different and much longer-term approach – that is what Labour offers to ensure people can meet their future aspirations and dreams.”

A spokesperson for the Department of Business Innovation and Skills told the Financial Times: “For every £1 of government support, the private sector puts in £5.50 [to the RGF]. This compares to just 65p of private money secured by the Regional Development Agencies for every pound they spent.”

Photo: Chuka Umunna courtesy of JocelinBec

This was posted in Bdaily's Members' News section by Clare Burnett .