Labour has quietly gutted funding for Britain's struggling regions it's an economic and political disaster | Larry Elliott

"The Welsh valleys have some of the highest numbers of people claiming incapacity benefits in the whole of Britain. In Abertillery, Maesteg and Merthyr Tydfil, getting on for a quarter of the working-age population is not employed in large part due to long-term ill-health. If the government was serious about reducing the growing welfare bill, it would be starting here and in the other parts of the country blighted by deindustrialisation and poverty."

"Yet instead of devoting more money to regional economic development, ministers are doing the opposite. In one of its less-publicised policy moves, Labour has quietly gutted the fund designed to create jobs, a scheme inherited from the Conservatives. The silent demolition job on regional policy is laid bare in a new report by Steve Fothergill, national director of the Industrial Communities Alliance, an umbrella group for the local authorities worst affected by the hollowing out of Britain's industrial base and the closure of the coalfields."

"The remarkable thing about the demolition of regional policy is that it has never been a deliberate political decision, Fothergill says. Rather, it is an outcome that has developed incrementally over a decade, involving decisions by both Conservative and Labour governments that for reasons at the time probably seemed pragmatic. It's the cumulative effect of these decisions that's now so worrying for the less prosperous parts of Britain."

The Welsh valleys show very high rates of incapacity benefit claims and large pockets of long-term ill-health, leaving nearly a quarter of working-age populations unemployed in towns such as Abertillery, Maesteg and Merthyr Tydfil. Targeted investment in the most affected areas of Wales, Scotland and northern England could reduce welfare costs and boost local economies. Instead, funding for regional economic development has been cut, including the removal of a jobs fund inherited from the Conservatives. Longstanding support for less prosperous areas has largely been withdrawn. The erosion of regional policy has accumulated incrementally over the past decade through decisions by successive governments.

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