David Cameron must be spitting tacks. The Tories’ favourite think tank, Policy Exchange, has put out a report urging the government to - in effect - abandon the north.

Why bother using money to prop up dying conurbations on the fringes, the report asked this morning? Wouldn’t we be better off concentrating on London, Oxford and Cambridge? The latter two university towns could expand in the way that Manchester and Liverpool (pictured below) did in the 19th century, it argues.  

But people in the north have votes. And they don’t like being told that their communities are doomed and therefore should be abandoned. As far as Labour is concerned, this is an open goal.

Peter Kilfoyle, Labour MP for Liverpool Walton, said the report was “utter nonsense”. “It doesn’t ring true economically, socially or politically,” he said.  

The timing is dreadful for Mr Cameron, who has just embarked on a two-day tour of marginals beyond the Watford Gap, where the party’s support is still patchy. He has wasted no time distancing himself from the independent report, which he today described as “insane”.

“Regeneration of our northern cities has been a key Conservative theme over the past three years, and one of the first things I did as leader was to set up the Cities Taskforce to look in to how we can further renew and regenerate our great cities,” he said. “The authors of this report have themselves admitted it is barmy, it isn’t, it is insane.”

 The report has also gone down badly in the South-east, where the idea of accepting another million incomers would put further pressure on transport, housing and green spaces.

Ideologically, however, the debate is not unique to the UK. In Brussels, a team of academics led by Belgian economist Andre Sapir - from the think tank Bruegel- recently put forward a similar argument re European funding. Sapir argued that the money should be used to target areas, industries and projects which are already successful. This would better improve the EU’s overall competitiveness, he argues, citing projects such as Airbus and Galileo.

Perhaps unsurprisingly, the idea hasn’t gained much traction in the EU either. 

August 13, 2008 2:30pm in Conservatives, David Cameron, Housing, UK economy, UK politics | Comment