Both the Tories and Labour are paying a political price for the failure to rebalance Britain's economy across the regions
A clear and compelling link can be made between the rejection of mainstream parties by voters in Bradford West last week and George Osborne's budget – and it has nothing to do with pasties. Rather, it has more to do with something David Cameron put his finger on almost two years ago, in his first big speech as prime minister: "We have been sleepwalking our way to an economy that is unsustainable, unstable, unfair and, frankly, uninspiring ... Can we rebalance economic power across our regions, across different industries, so that more people have a stake in our success?"
This was the promise of rebalancing the busted British economy, away from London and south-east and finance, and towards other regions and other sectors of the economy. It was a promise also made by Nick Clegg and Vince Cable. And it is a promise that the coalition is failing to deliver on. That much is clear from the numbers, which show that in both jobs and housing markets London and the south-east are bouncing back from the City's crash, even while the rest of the country founders. But it is clear too from last month's budget, in which the confusion of this government's policy on industrial and regional development is laid bare. The cost of this confusion is not just a matter for Whitehall. More importantly, there is a vast human toll, in chronic unemployment. And there's a political price, as George Galloway's success demonstrates. Sure, wars and poor campaigning played their part – but the fact that only four out of 10 voters in deindustrialised Bradford West plumped for a mainstream party should also tell Westminster what happens when all three parties pay a region's economic development only lip service.
Yet lip service is precisely what Mr Osborne has gone in for. Sure, the chancellor has always been happy to talk about the "march of the makers". But beyond rhetoric, the coalition's industrial strategy boils down to the belief, familiar to anyone who lived through Thatcher or Blair, that the main role of government in stimulating private business through tax cuts was to get out of the way. Such a hands-off approach was never going to succeed in rejuvenating economies that have been hollowed out over decades. Perhaps it's no surprise, then, that last month's budget marked a decided shift. The old policy could still be spotted in those corporation-tax cuts, but there were also Gordon Brown-style giveaways to the video games industry, and for British films. Most telling was this line in the chancellor's speech: "We shouldn't be shy about identifying our successful industries and reinforcing them." This, from the politician who used to sneer at picking winners, and from the government that cancelled Peter Mandelson's loan to Sheffield Forgemasters.
The truth is that no minister minds picking winners – it's backing losers they find painful. The chancellor happily took credit for GlaxoSmithKline opening up a factory in Cumbria, thanks to his implementation of Labour's new low taxes on British research. Yet he is only slowly drawing the lesson that smart state intervention can pay off. The coalition's policy on industrial development is now stuck somewhere between a lazy Thatcherism and Michael Heseltine-lite.
Nor are ministers under much pressure from Labour. For all their promising speeches, shadow frontbenchers remain deeply conflicted about how to address New Labour's record on regional policy. The good bits, such as regional development agencies, are overshadowed by the rest. Yet Labour should be pressing the government on its lack of economic rebalancing. Labour should also argue for directing funds towards those sectors that can best provide decent jobs in industries and regions outside the south-east. It should do that through the public banks, as Vince Cable suggests, and through directed tax cuts. Ed Miliband can either set the terms of the debate about how Britain rebuilds its busted economic model, or risk appearing an irrelevance to voters in plenty of other seats besides Bradford West.