That Policy Exchange report: Is Tim Leunig a closet Marxist?

The Tories and the media have missed the big story about Cities Unlimited, the Policy Exchange report on regional development policies. (You can download a PDF copy of it from the think tank's website.)

As James Graham pointed out this morning, the report's lead author Tim Leunig is a Liberal Democrat. Indeed, during my days on the party's federal policy committee he was something of a fixture on that committee's working parties.

Earlier this evening, debating the report with John Prescott on Channel 4 News, Tim said he was not a member of the Conservative or Labour parties - and said no more. He may be an academic, but he is not unworldly.

David Cameron has called Cities Unlimited "insane". My own reaction on reading it is quite different. While I like the idea of selling empty property cheaply to its neighbours and local control of development funds, it seems to me to be based on two quasi-Marxist assumptions. They are:

• contempt for piecemeal reform;
• the belief that it is the state's role to forecast how society and the economy will develop and then expedite that development.

Let me explain.

The assumption behind the report seems to be that unless regional development aid can be shown to have reduced regional disparities then it is a waste of time. The argument that it might be worth putting some effort into slowing the increase of those disparities is not even considered. Policy Exchange scorns our bourgeois liberalism: it wants revolution.

And I am puzzled by the idea that Oxford and Cambridge should be vastly expanded. Can government really predict where industry will wish to expand before industry knows itself? If government had made such decisions 25 years ago, just before the implications of information technology began to be realised, they would seem very strange to us now. How can we know that our own decisions will not look equally strange in 25 years' time?

I also wonder if this development might not be self-defeating in that it destroys the quality of life that attracts people to Oxford and Cambridge in the first place. I do not know Oxford well, but Cambridge, which was until recently a small city, has now outgrown its centre. As a result, that centre is now grossly overcrowded and I now rarely visit the place.

Of course, I may be wrong, but my point is that it is not possible for government or anyone else to know such things in advance. Therefore a less ambitious policy, not the Policy Exchange's picking of winners, is indicated.

A market economy is dynamic, and places do rise and fall. Some of the settlements where my Stiperstones lead miners lived have disappeared altogether. And Iflracombe in the late 1980s, a seaside resort abandoned by the railway and by most holidaymakers, is one of the saddest sites I have seen. Every B&B had its price in the window, trying to undercut the establishment next door.

Government cannot prevent such historical movements, but it seems to me it is worth trying to ameliorate their worst effects. And when I see a former mining village like Creswell, I cannot help thinking the fact that the most ambitious and able young people are leaving is part of the problem, not part of the solution.