Levelling Up minister Michael Gove has promised to harness the “spirit” of Thatcherism to help the north of England, with Labour promising to go much further in devolving power out of London.

Mr Gove cited the “active” government of Margaret Thatcher and her 1980s transformation of the London docklands as inspiration for levelling up – the plan to narrow economic and social disparities between the North and South.

The Secretary of State for Levelling Up, Housing and Communities was speaking at the Convention of the North, a major gathering of political and business leaders in Manchester.

Other guests include the Mayor of Greater Manchester, Andy Burnham, Oliver Coppard, Mayor of South Yorkshire, Tracy Brabin, Mayor of West Yorkshire, Steve Rotheram, Mayor of the Liverpool City Region, and Jamie Driscoll, Mayor of the North of Tyne.

Labour’s Lisa Nandy, the shadow levelling up minister, told the convention the UK was in a “national malaise” and its political system, “broken”, that had to “change or die”.

She promised a significant expansion of devolution under Labour, with local authorities, not Whitehall, deciding how government money is spent – Town Halls having powers over housing, transport, energy, childcare, skills, employment support and training.

Earlier, in a wide-ranging 40-minute speech, Mr Gove summarised the Government’s Levelling Up agenda, speaking of the “enduring and entrenched geographical and social divide” – while calling London a “priceless asset” of the economy.

He cited Mrs Thatcher’s administration in the 1980s, a decade marked by the closure of coal mines and industrial strife in the North, as a model for elements of levelling up.

He said: “And the experience of successful economic transformation demonstrates that growth is not secured by absent government but by active government.

“A government that plays a strategic role, irrigating the soil for growth as Mrs Thatcher did, specifically in the Docklands.

“When the Thatcher government took office in 1979, London’s docklands were a derelict economic desert.

“The original vision for regeneration of the area, from the Treasury of the time, was simple: just cut taxes and deregulate and a thousand flowers will bloom in the dusty and contaminated soil of the docklands.”

But he said Mrs Thatcher helped set up deeper government intervention through the London Docklands Development Corporation, bringing jobs and housing and transforming that area of the capital.

He said: “Government created the environment, the private sector created the jobs. London Docklands today is an economic success story.

“One of the most signal successes we owe to Mrs Thatcher’s government, and it is that spirit that animates our levelling up policies: active government.”

Mr Gove said he wanted to see devolution powers deepen and expand to other areas.

Ms Nandy said Labour would pursue devolution “everywhere” and decried the current “begging bowl” approach of council’s bidding for cash from central government.

She said: “A Hunger Games-style system where ministers choose who gets a leisure centre, some picnic areas and traffic light improvements from behind a desk in Whitehall.

“We can’t go on like this. Time is up. We’re going to do things differently.”