Ed Balls has hit out at Chancellor George Osborne’s plans to create a “northern powerhouse” – by accusing him of neglecting regions such as the West Midlands.

Mr Balls, Labour’s Shadow Chancellor, said he wanted to see a “Midland Powerhouse” with investment and increased autonomy going to Midland councils.

Speaking to the Birmingham Post at Westminster, Mr Balls welcomed plans to create a “combined authority” bringing councils in Birmingham and the Black Country together, arguing that employers wanted a body to make decisions on transport, planning or skills which stretched across local authority boundaries.

But he criticised the Chancellor for insisting that combined authorities should agree to create directly-elected mayors if they wanted a devolution package similar to the £1 billion deal agreed with Manchester, which includes a new tram line.

Labour wants every area to have a Manchester-style package – without being forced to elect a mayor, Mr Balls said.

George Osborne tells The Birmingham Post he wants a West Midland mayor

He also said that Local Enterprise Partnerships would need to have the same boundaries as combined authorities in order to be effective.

Mr Balls highlighted Chancellor George Osborne’s drive to create a “Northern Powerhouse” by improving transport links between cities in the North East and North West.

He said: “George Osborne seems to be talking about the North all the time – the North is important and I’m a northern MP but I want a Midlands Powerhouse in the East and West Midlands, I want to do this for Norwich and Ipswich and for Brstol and the West Country as well.

“The idea that we only want a Northern Powerhouse – it may be good political rhetoric for George Osborne but the reality is if we do this we are excluding huge parts of the country.”

Labour would achieve this by devolving funding and power to “city regions” and “county regions”, he said.

“We want that radical devolution – which will come when areas can come together and collaborate.

“We need Birmingham and the Black Country working together to have a sort of West Midlands combined authority, and where people come together we want to go much further on devolution.”

West Midland council leaders plan combined authority

He added: “That is now on the table and being discussed between Birmingham and the Black Country, and that is a good thing.

“We want independent LEPs aligned with those combined authorities to be real engines of growth and business support and wealth creation.

“The business community agrees that we need local authorities to collaborate because when you think about planning or transport or skills, the needs of business can’t be compartmentalised within individual local authorities.”

But he highlighted the referendums in Birmingham and Coventry in 2012 which rejected the idea of a directly-elected mayor.

“It is wrong for the Chancellor to insist on elected mayors as a condition for devolving powers and resources, not least because that’s a step that in Birmingham and other areas have been rejected in the recent past.

“To deny the freedom and resources the Government has granted to Manchester to the Midlands and across the North because they won’t agree to a Whitehall political blueprint would be unfair, and damage growth and job creation.”