Labour in 'active government' vow

Labour's Chuka Umunna has declared his intention to follow in the footsteps of Conservative Lord Heseltine by developing an "active government" strategy to boost industry.

Mr Umunna said it was clear that Business Secretary Vince Cable has realised the failure of the Government's "hands off" approach to industry and would like to follow the lead set by Lord Heseltine when he famously said he would "intervene before breakfast, before lunch, before tea and before dinner".

But the shadow business secretary said David Cameron and George Osborne were acting as "roadblocks" to the kind of active industrial policy favoured by Mr Cable. And as a Liberal Democrat minister in a Conservative-dominated Government, Mr Cable lacks the clout exercised by Lord Mandelson when he led the Department for Business from 2008-10, said Mr Umunna.

In a speech in Liverpool - where Lord Heseltine led regeneration efforts after the 1981 riots and where he will be awarded the freedom of the city on Tuesday - Mr Umunna said that building a new economy in the aftermath of the banking crisis would require "a new partnership between productive business and active government.

"Not government stepping back - as the Prime Minister and Chancellor would have it - but government stepping up: consistently, responsibly, and strategically; creating the conditions for success; supporting business in practical ways."

And he added: "That is why I have taken as my starting point the approach of Lord Heseltine... His mindset was the right one."

Mr Umunna cited last week's leaked letter from Mr Cable, in which the Business Secretary warned that the Government lacked a "compelling vision" for recovery and said that its efforts to support UK industry were "piecemeal".

This put the Liberal Democrat minister in the same position as Lord Heseltine when he stood against those in Margaret Thatcher's cabinet who "in the name of ideology argued against government activism being used to boost business".

Mr Umunna said: "In seeking to address these shortcomings through the adoption of an active government strategy, (Mr Cable) is hamstrung by the old orthodoxies of his Conservative partners who argue the best government can do is to step aside.

"The biggest roadblocks to reform and the adoption of an active government strategy are the Prime Minister and the Chancellor because, for ideological reasons, they simply do not buy into the idea of government activism."