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Mr Jim Cunningham (Coventry South) (Lab)
I beg to move,
That this House has considered elected mayors and the future of local government.
It is always a pleasure to serve under your chairmanship, Mr Brady. You and I have known each other for many years.
I start by going back to the early 1970s, when the Layfield commission’s report was published. Some people might remember it. As a result of that report, the metropolitan authorities were set up. After about 10 years, they were abolished. Essentially, they were set up by a Conservative Government and abolished by a Conservative Government. Conservative Governments have always tinkered about with local government. When the metropolitan authorities did not work out in the way that the Conservatives wanted them to work out, they were abolished.
During and since that period, local authorities’ budgets have been capped when Governments have thought they have been spending too much, and certain powers have been taken away from local government. Last week or the week before, I tried to establish whether the Chancellor intended to create a mayor for the west midlands, but I got a vague response of, “Well, there will be discussions.” We never got a clear answer. Perhaps the Minister can shed some light on whether a mayor will be imposed or whether there will be some other system.
The Cities and Local Government Devolution Bill is an enabling Bill that dictates that each combined authority will have a unique set of powers given to it by individual order, based on negotiations with the Government. That word—“negotiations”—allows the Government not to come clean on their intentions. The Bill also stipulates that each combined authority is headed by an elected mayor. It is not yet law, so negotiations have not yet started for many combined authorities and the powers of future combined authorities remain speculation. I therefore intend to speak about the potential impact, implications and pitfalls of the Bill for the west midlands and the country as a whole. Based on the information we have at present, I will suggest things that the Government should consider carefully in taking the Bill forward. The exact powers of future combined authorities have not yet been defined due to the individual negotiations required for each authority and the lack of clarity from Ministers.
With a population of 4 million, the west midlands combined authority would be the largest by population in the UK and the second biggest economic area after London, contributing more than £80 billion gross value added to the United Kingdom economy each year. Members can understand my worry, then, when the Government remain remarkably silent on such a combined authority, while mentioning the northern powerhouse at every opportunity. The northern powerhouse was mentioned in the Budget, and I was surprised that there was no mention of the west midlands. That concerns me not because I am against the principle of devolution, but because I am against devolution occurring in an unequal, ill thought out way, with some cities and regions getting preferential fanfare treatment while others, such as the west midlands, are left in the dark. The Government must not treat the west midlands simply as an afterthought; after all, it is one of this country’s economic powerhouses, and it must be valued on its own merits. The west midlands must sit at the top table and not be sidelined, as it has been so far. All devolution must be formed into an extensive long-term nationwide plan, not a series of short-term and opportunistic one-off deals, as appears to be the Government’s intention.
In the interests of transparency, clarity and the public interest, I call on the Government to speak more openly about the deal on offer for future combined authorities, and especially for the potential west midlands combined authority. They should acknowledge the unique strengths and history of the west midlands in such areas as automotive manufacturing, the aircraft industry and many other innovative industries and ensure that the best and fairest deal possible can be reached. I also urge the Government to spell out their long-term plan for the west midlands and to clarify how that vision ties in with a future west midlands combined authority.
The Government have spelled out their intention that each combined authority be headed by an elected mayor. The idea of elected mayors is ingrained in the Bill. As it stands, it mentions the word “mayor” 209 times. I am concerned that the Government have little to no room for negotiation on alternatives. The focus on mayors is misplaced in light of recent events.
Kevin Foster (Torbay) (Con)
I thank the hon. Gentleman for his friendship since I joined the House. I can see some other familiar faces in the Chamber today. He might be aware that Torbay is one of the few unitary authorities that have an elected mayor under the scheme created 10 years ago. A referendum on continuing that system is due next year. Does he agree that the key thing is that the mayors deal with strategic issues, such as transport or the police, rather than day-to-day things, such as grass-cutting, that are perhaps better dealt with by local councillors?
Mr Cunningham
A strategic economic plan is needed at a regional level, and I have never disputed that. The big fear is that the other functions of local authorities could be taken away. The police, the fire service and that sort of thing are dealt with at the regional level at the moment. I have no problem with strategic or economic planning—there has to be some sort of plan—but the role of local authorities should not be diminished in relationship to that, nor should they lose any powers.
Colleen Fletcher (Coventry North East) (Lab)
We are told by the Government that substantial further devolution of power to combined authorities must be accompanied by the introduction of an elected metro mayor. It is not clear, however, which new powers would be available to those areas that choose to have an elected metro mayor and which would be available to those areas that choose to not have one. Does my hon. Friend agree that we need clarity from the Government on that?
Mr Cunningham
I agree with my hon. Friend. I made the point earlier that the proposals for the west midlands are vague. The idea of an elected mayor is not new for the people of Coventry. On 3 May 2012, a referendum was held in which the people of Coventry voted decisively against an elected mayor. With nearly two thirds voting against, the idea was soundly rejected. Birmingham, which is also likely to join a west midlands combined authority, voted against the same idea on the same day, but those democratic decisions now look likely to be overruled without the people of Coventry, Birmingham or anywhere else being consulted. We must not forget that the referendums were undertaken at great monetary cost to local taxpayers. If there is to be consultation, the Government should pay for it, not the local taxpayer. If the local authority in Coventry were to conduct a referendum, it would probably cost £600,000, and that money could be well spent on other services in Coventry. The Government should consult properly and pay for it.
Voters and taxpayers deserve better than to be ignored by the Government, especially when they spoke with such a strong, unified voice in the west midlands. Should the city of Coventry join a combined authority, the imposition of an elected mayor would be a worrying development that would go against the will of the electorate. I urge the Government to take into account recent electoral history when pressing forward with negotiations, not just in Coventry and Birmingham but across the west midlands and the country—wherever they want to establish the authorities. I urge the Government to allow room for flexibility in the negotiations and not to adopt a one-size-fits-all approach.
I am also worried that the new combined authorities could shift power away from councils and councillors. Any shift of power upwards and away from local representatives, who best understand the problems and challenges of local areas and can tailor solutions to local needs, would be a worrying trend, especially if power were consolidated in an imposed elected mayor.
Having an elected mayor now is one thing, but we do not know whether, in future, that mayor would be given further powers. That is one of the worrying factors that the Government should come clean about. People do not want just another layer of politicians. Any potential transfer of powers would work against the true spirit of devolution, in which powers and responsibility should be entrusted to the lowest possible level. I urge that, in this instance, the powers granted to councils be increased, rather than scaled back. They have been scaled back many times over the years. We need not go back far to see how that happened for education and social services.
I support devolution, but it must be gone about in the right way. I urge the Government to treat regions equally, and to put the west midlands on an equal footing with the northern powerhouse. A Minister for the west midlands would go some way to remedying the situation—we had one under the most recent Labour Government and some progress was made—and show a commitment from the Government to the west midlands for now and for the future. I urge the Government to drop their insistence on elected mayors, as described in the Bill, especially in the case of the west midlands, where both Coventry and Birmingham rejected the idea last time. I urge caution on Ministers regarding the project.
Mr Graham Brady (in the Chair)
Order. Before I call Martin Vickers, it might be helpful if I let Members know that, given the number who want to speak, an eight-minute limit on speeches will help to ensure that we get everyone in.
Martin Vickers (Cleethorpes) (Con)
It is a pleasure, as always, to serve under your chairmanship, Mr Brady.
I congratulate the hon. Member for Coventry South (Mr Cunningham) on securing this debate, which is particularly timely in view of how the Government are encouraging local authorities to combine and consider elected mayors. I can understand the logic: there is no doubt that the more localised power and resources are, the more that innovative ideas come forth, encouraging growth and regeneration in our towns and cities. I would be much more radical than the Government, who are being a little too cautious. The time has come to sweep away the existing structure of local governments. Districts are dying—they are being combined, with joint offices and so on—and ultimately they will wither on the vine. Perhaps that is what the Government are looking for. We should have unitary authorities across the board. The time is rapidly approaching for us to state clearly that that would be best, and to get on and deliver it.
Combined authorities are okay, but they lack proper democratic accountability. I would like to see unitary authorities headed by elected mayors. I have always advocated having elected mayors; that would draw into local government and administration individuals who are perhaps not currently particularly enthused about becoming local councillors and—to use an example given by my hon. Friend the Member for Torbay (Kevin Foster)—determining how regularly the grass should be cut. We want community leaders who can be ambassadors for their area and be like Members of Parliament should be: another thorn in the side of Government on behalf of their local communities.
I was a local councillor for 26 years. I sat for part of that time on a district authority, and then, when Humberside County Council was thankfully swept away, on one of the unitary authorities that came forth from it. Humberside was a classic example of the Government doing things that were completely opposed by local people. The council was opposed by those from across the political spectrum, but I am afraid that representations came to naught, and we suffered 20-odd years of an authority that, quite honestly, was despised—that is not too strong a word—by most people on the south bank of the Humber. They felt that power and resources were concentrated in Hull. Local people need to be able to identify with any system of government. The reality is that, as well as having their national identity, people identify with their town, village and county. Any form of administration is best modelled on those units.
One reason why elected mayors were not enthusiastically received by the people in those towns that held referendums two or three years ago is that there was no encouragement from their local authorities. In the main, local councillors do not like the thought of elected mayors or reorganisation, because of course that would hit at their power base. That reaction is understandable, but the time has come for us to look at the bigger picture. The Government should not be trying to encourage, support and cajole local authorities into forming combined authorities with metro mayors and so on; they should be keen advocates for elected mayors and should allow local people to make the decision. I think I am right—the Minister will correct me if I am not—in saying that local citizens can effectively overrule the wishes of their local council by initiating a referendum. As far as I know, the threshold requires 5% of voters to call for one; I urge the Government to reduce that—to halve it, or make it 1% or 2%. That would encourage local people to mount their own campaigns. Perhaps individuals with their eye on the mayoralty would encourage local campaigns as well.
To conclude, I urge the Government not to mess around, but to go for the jugular and be radical. There will, of course, be difficulties, but there are difficulties in the Government’s current approach, because trying to get agreement among six, seven or eight authorities is quite a challenge. I would not compare it with the major problems throughout the world, but it is a diplomatic challenge. I am sure that the Minister is up to it, but I urge him not to mess around. He should go for it, sweep the present structure away and have unitary authorities with elected mayors. “Elected mayor” is perhaps an unfortunate choice of title though, because the British people associate their mayor with his or her civic role—wearing the red gown when meeting royalty, or in their chains of office opening the church bazaar. We are looking for an elected leader of the council. If the Government’s aim to regenerate our towns and cities is to succeed, I urge them to be a little more radical.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
It is a great privilege to serve under your chairmanship, Mr Brady.
I congratulate my hon. Friend the Member for Coventry South (Mr Cunningham) on securing this debate so decisively and swiftly. He speaks with immense experience of both local government and the midlands, and I completely subscribe to everything that he said. Yesterday’s Budget was lamentably poor in what it offered the west midlands. Different parts of England are now being treated in very different fashions. More importantly, my hon. Friend is right to say that the notion of elected mayors was rejected very recently in my home city of Birmingham and in Coventry.
If there is to be any change in England’s devolutionary arrangements, and ideas such as metro mayors are to be brought back to the table, surely those changes can come only with an absolute game-changer of an offer to devolve power from Westminster to different parts of the country. I want to offer a perspective on what that game-changing deal might look like, informed by my time as a regional Minister—the first Minister for the West Midlands—and as the Chief Secretary who created the Total Place programme, which looked at ways to bring together different areas of public spending so that, for the first time in this country, we could have preventive investment without having an eye on where the gains would flow in due course.
Let me start with the basic question why a different kind of deal is necessary, and why it is necessary in the west midlands. The answer is very simple. The past five years have been hard on the west midlands. The Government’s decision to put the recovery in the slow lane meant that average wages were reduced by about £1,500 a year in the west midlands. Our productivity performance is still among the worst in England, and our employment rate has only just come back up to the level that it was at before the recession. It is now at about 70%. That is well below the UK average. Despite the entrepreneurial energy of the region that was the home of the industrial revolution, and although there is new hope, there is a lot more progress to make.
Julian Knight (Solihull) (Con)
I do not recognise the economic picture of the west midlands that the right hon. Gentleman paints. In my constituency, unemployment has fallen by 67% since 2010. Also, I am proud to say— I am sure that many hon. Members will join me—that the west midlands is the only part of the UK with a trade surplus with the European Union.
Liam Byrne
It is also the only region with a trade surplus with China. My point is simple: the entrepreneurial energy of people and businesses in the west midlands has been absolutely extraordinary, but it is a shame they did not get more help in prosecuting their ambitions from the Government here in Westminster.
I want to offer various ideas for how the Government can get behind the midlands. I want to challenge the Minister this afternoon on whether he is serious about devolution to the new combined authority in the west midlands. Is he prepared to countenance the game-changing powers that would make a massive difference? Is he prepared to give the new combined authority in the west midlands the wherewithal to deliver what I think could be a mighty manifesto for the midlands?
I will start where the leaders of the combined authority have started: by taking aim squarely at the productivity challenge. They were right to put that in the centre of their sights. We face a challenge in the midlands: we do not have enough high-skilled jobs. If we look at the high-skilled jobs in the knowledge-intensive industries that have been created in our economy since 2009, 85% of them have been created in London and the south-east. There has been a fall in the number of knowledge-intensive jobs in the west midlands by about 2,000. In other words, despite all the progress of the past few years, the knowledge economy in the west midlands is not getting bigger, but smaller. If we want to reverse that trend, we have to do two big things. First, we must dramatically increase the scientific research base in the region, and secondly, we must build a technical education system, as they have in our competitor economies, from Berlin to Beijing.
Our universities today have the second lowest share of research spending in the United Kingdom. Only 3.6% of our universities’ income comes from research funding. That is the lowest fraction of any university in the country. As Mike Wright, chief executive of Jaguar Land Rover, pointed out recently, as a country we are producing 40% too few engineers each year. That means we have to import skilled people from abroad because we do not train enough of them here. I am afraid to say that our region has the lowest proportion of 19-year-olds achieving five good GCSEs, including English and maths. We are an incredibly entrepreneurial region, but we have a profound productivity challenge, and we will not break out of that unless we transform the research base of our region and build a technical education system, which is eminently doable.
Mark Pawsey (Rugby) (Con)
The right hon. Gentleman said that we did not have enough high-technology jobs in the west midlands, but then went on to say that we did not have enough high-technology skilled workers.
Liam Byrne
We are trapped in a low-pay, low-skill equilibrium, as the OECD calls it. We have to break out in two ways. First, we must build a bigger research base. Where we have done that—in places such as the advanced manufacturing centre at Warwick—we have shown that we are capable of soliciting and securing the most extraordinary new investment, but alongside that new investment there must be an effort to build a technical education system. If we are to build a new generation of technical university trusts across the region that would allow young people to study on an apprenticeship track up to a degree level of skill, the region must take control of funding that is currently locked up in Innovate UK, the Higher Education Funding Council for England, the Skills Funding Agency and the apprenticeship budget. That is the only way we can line up academies and university technical colleges with a new careers service, a region-wide apprenticeship agency, more specialisation in our further education system and a new partnership between further and higher education that would allow apprentices to go on to study to a degree level of skill. I hope the Minister will tell us that they are all powers that are within scope.
Secondly, there have to be changes in how the Department for Work and Pensions works. Combined authorities have to acquire more power over the way in which the Work programme works, because that is the only way that we will be able to line up our skills system and our back-to-work system for the first time. Most Work programme providers are not doing a great job and will say that they could do a much better job if they were able to get their hands on skills funding.
Thirdly, there must be new powers over transport infrastructure. The argument for the west midlands is well rehearsed. Some 90% of UK businesses are within four hours, but the transport system is shambolic. There are big new investments coming in, but we have to take powers over both bus and train franchising if we are to deliver the integration that is possible. Crucially, we need the Highways Agency and Network Rail to give us the latitude to control prioritisation within their investment programmes in the years to come.
I have two more points. The fourth set of powers that the combined authority needs are around culture. The west midlands boasts the greatest British cultural brand in the world: William Shakespeare. That is why I hope that the combined authority brings Stratford-upon-Avon into its ambit as quickly as possible. Stratford-upon-Avon is not a big council; it is small. It does not have the investment required to unlock the potential of that brand. The region is so disjointed that if someone goes to tonight’s performance of “Volpone”, which finishes at about 10.40 pm, it is impossible to get the train back to Wolverhampton or Sandwell, and if someone wants to get the train back to Coventry, it will take 1 hour and 40 minutes. They can get the train to Solihull or Birmingham after the curtain falls, but in most of our region we cannot go to the glorious new theatre in Stratford-upon-Avon and make it home after the final performance.
Finally, I want to make a moral point. Our region is scarred by some of the worst child poverty figures in the country. About a third of children in Birmingham, Sandwell and Wolverhampton grow up in poverty. About a quarter of children in Coventry and Dudley grow up in poverty.
Liam Byrne
Unless we are able to integrate the budgets differently, we will not make progress on that challenge.
Mr Graham Brady (in the Chair)
Order. I have been generous with the right hon. Gentleman, but we need to move on.
Julian Knight (Solihull) (Con)
I congratulate the hon. Member for Coventry South (Mr Cunningham) on securing this important debate.
My constituency of Solihull is at the epicentre of the debate over devolution and elected mayors, or at least it feels as though it is when I walk down the streets of my constituency. I am actually stopped in the street and asked about it. The question that often comes to mind is: why do we need to be a part of a combined authority? I can understand where the people of Solihull are coming from in that respect. Solihull is the jewel in the crown of the midlands economy. The unemployment rate is 1.6%, which, as most economists would tell us, is below frictional unemployment, so it is effectively full employment. There are currently 1,000 job vacancies in Solihull. For every 1,600 vacancies, there are 1,000 applicants within the local area, which means we are bringing people in from across the west midlands to work in our successful economy in Solihull.
Solihull jealously guards its independence. It is a small authority that was nearly abolished in the 1970s, but managed a stay of execution. It is a very well run authority. We have frozen our council tax for five years and we are recognised across the region as offering very good value for money for our taxpayers. However, when I am stopped in the street and asked about the combined authority, I say that there are things we can do together that we cannot do on our own.
I envisage devolution being slightly different from how it is sometimes portrayed in the media. There are opportunities in our economy—what I would call the economy-plus model, with skills, as the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) made clear in his speech, and apprenticeships, particularly with the new apprenticeship levy introduced by the Chancellor in the Budget, which should bring exciting opportunities for the region to harness the skills of our young people.
On transport, I agree that we are not currently as well served as we might be in the region. Solihull is lucky with its train links, but there are problems with the bus links, such as in north Solihull, where buses are infrequent—up to one an hour in certain parts of the constituency. Something similar to an Oyster card for the midlands would be a good idea, as well as being a positive step towards economic integration and in getting people to the jobs that they need.
A combined authority would also bring the ability to pitch for more European Union cash. Local enterprise partnerships are not recognised by the EU, and although we still get some money, it would be much easier for a combined authority to pitch for EU money to bring about the infrastructure and other improvements that we all wish to see within the region.
The idea is not to lose powers or, in effect, to see the well-run local council evaporate, but to gain powers to overlay existing ones—devolution from the centre. Solihull stands ready to deal with our neighbours to grasp the opportunities, although I caution against any top-down approach and I commend the Government for looking for a bottom-up approach.
When devolution comes, I genuinely believe it should come according to the culture of the area, rather than from some top-down perspective. For example, we have to recognise the fact that the body politic of the Greater Manchester area is culturally more cohesive than that of the west midlands. Therefore, the idea of allowing us to come together, however difficult that might be, and to design something attuned to our region and our populace, and to our particular economic challenges and outlook, is more sensible, although it might take longer than we would wish.
Solihull, as I say, stands ready. We want to avoid a 1970s-style from-on-high reform. Reform has to come from us all. We are all elected officials in the areas that might wish to form a combined authority. I echo the words of the right hon. Member for Birmingham, Hodge Hill, that Stratford-on-Avon would be welcome in a combined authority, although people do not want to feel that the process is in effect a takeover by the major conurbations of Birmingham and other areas. We have to understand that that is a genuine concern. It would be better to have a much wider perspective and a more inclusive combined authority that brings together many more people and opportunities for the region. Furthermore, there is the potential over time for further powers to be devolved. What we achieve now might only be a staging post. More things coming down the line might allow us to manage things even better and more locally.
I have always been sanguine about elected mayors. If substantial powers are transferred from the centre to the regions, greater local accountability is necessary—in effect, there has to be someone for the voters to sack. Obviously, they can get rid of our council leaders and of us as Members of Parliament for mistakes made, but at the end of the day it might be difficult in a large combined authority to lay the blame at the door of one council leader rather than another. It would be much better if there was a figurehead, or a body, that was directly accountable to voters, because people could take their ire there, if they so wished.
Many other Members wish to speak, so I will sum up. The opportunities before us are exciting, and I am pleased that there is at least a cross-party willingness to co-operate on such matters throughout the region. We must also understand that the approach has to be bottom-up and staged. We are not Greater Manchester—we are not a Greater Birmingham and I recognise no such construct—but we are a strong region with real challenges and real skills. I urge all hon. Members and anyone watching the debate to come together to sort out a bottom-up approach to present to Ministers. Then we can move the project forward.
Rebecca Long Bailey (Salford and Eccles) (Lab)
I congratulate my hon. Friend the Member for Coventry South (Mr Cunningham) on securing this important debate, which is all the more timely given the announcements in yesterday’s Budget statement.
It has been interesting for me to listen to the concerns and experiences of colleagues throughout the midlands. In my constituency, however, we are already familiar with the concept of combined authorities and elected mayors. Ian Stewart, whom many of my hon. Friends will have known as the Member for Eccles until 2010, went on to be the first elected mayor of Salford. He has used the powers of the executive mayoralty to great effect. Salford City Council became a living wage employer long before the Government became a convert to the term. Similarly, we were the only council to offer up to 25 hours of free childcare, and we pioneered the integration of public services. Unfortunately, however, much of that is under threat—not from changes to local government structures, but from the relentless cuts imposed on the council by the Government. I will save those details for a debate on local government finance, but suffice it to say that a discussion on structure without one on spending will not lead to a balanced solution.
That brings me on to the ongoing debate about creating another layer of local government, the so-called “devo Manc” package for Greater Manchester. We do not yet know the final shape of the proposal. The sooner Ministers update the House the better, given the limited details the Chancellor revealed in the Budget statement yesterday. If we had the ability to extend the living wage—the genuine version, rather than the one announced yesterday—across Greater Manchester, that would certainly be a good thing for all our constituents in the region. Similarly, integrating our public services and perhaps better regulation of public transport would be welcome advances. All that, however, needs resources, and I greatly fear that in Greater Manchester we are far from being fiscally self-sustaining. We are not London and do not command high council tax or business rate returns. Ultimately, for devo Manc to become truly viable, resources must follow responsibilities.
Similarly, when much of the Government’s agenda is market-driven and creates fragmentation, we have found that being granted the power to preserve and integrate public services is key. Any devolution settlement for Greater Manchester must allow the mayor to integrate across public services without being impeded by commissioning or contractual relationships. I hope that any Labour mayor of Greater Manchester would commit to public sector organisations being the preferred provider of the services, and I would welcome Government clarity on whether mayors will have such a power. In addition, the Greater Manchester agreement and memorandum of understanding do not suggest any change to the employer for those who work in the services in question. It would therefore be helpful if the Minister confirmed that no such change is envisaged by the Government.
On the subject of the national health service, many of us noted the comments of the Secretary of State for Health regarding charging and GP visits. I stress to the Minister that that would not be the right way to go for devo Manc, and I hope charging for services will not be part of the final package. It should also be noted that the memorandum of understanding refers to a new Greater Manchester strategic health and social care partnership board, which appears to have the lead role on health and social care. There is little detail, however, so perhaps the Minister will clarify the exact relationship between such a board and the proposed mayor. Also, most importantly, which health services will, despite the drive towards integration that I described previously, ultimately remain under the overarching control of the NHS?
Finally, I come to the way in which the mayor was proposed. Salford’s mayoralty was the result of a referendum in which local people had their say. They will now find that another layer has been inserted above their own mayor without any such legitimacy. At the heart of devolution must be true democracy, which I am sure is the Government’s intention, so I hope the Minister can promise more of that rather than less.
Mr Geoffrey Robinson (Coventry North West) (Lab)
It is a pleasure to serve under your chairmanship, Mr Brady, as always. I congratulate my hon. Friend the Member for Coventry South (Mr Cunningham) on securing the debate, and I thank Mr Speaker for granting it. It is an important one and an opening for many more, although there will probably be more local than national debates. It is important for us to realise that elected mayors affect local, not national, government.
It would be far better to take a practical or bottom-up approach, as others have described it, to the problem than to go for the jugular, as recommended by one of the participants in the debate. Perhaps he should put his own jugular on the line first and see how it feels before he recommends that we collectively do the same, but that is for him to decide. It would be fatal to rush into this blindly. That suggestion shows no understanding of the reality of the complex organisation that we are about to create, or of what it is like in the private sector, let alone the public sector. In the private sector, the shareholders are seen once a year, which can be a pain or a pleasure, depending on how the organisation has done. With this type of organisation, however, there is regular accountability through newspapers and other means all the time, quite rightly, and through weekly party and council meetings. It is a completely different kettle of fish from a private sector organisation.
We learned a lesson from the 1970s that you may remember, Mr Brady—I don’t think you were in the House, but you may have studied it. I was not in the House either but I studied it from quite close up—from Smith Square, where I was at the time. The then Prime Minister, with great executive thinking, brought a private sector approach to things. He said, “We’re going to do this, and we’ll do it from the top down. We’ll impose it and have a nice blueprint.” The then Secretary of State, who had a very distinguished service record in the public sector and a very successful record in the private sector—rather like Lord Heseltine—thought, “We’ll do a proper merger, have a blueprint and make sure that we do it exactly as we have told them.” It was a theoretical blueprint that bore no relation to the different sets of circumstances, and as my hon. Friend the Member for Coventry South and my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) both said, within 10 years it broke down in the reality of the complicated democratic processes that Governments have to work with in the public sector.
We should forget all that. Let us deal with the situation as it is, and take a practical approach. I speak as one who is second to none in my admiration for Lord Heseltine, and indeed Lord Walker before him, who did the ill-fated 1970s reorganisation. Let us be practical people, with a depth of experience of the public sector and its needs, when we come to deal with this very difficult task.
Some of us in Coventry feel two things. It could well be that we have been slightly behind the game and have not joined in or been promoting this idea early enough or strongly enough, as a west midlands entity, but that is because we have never really felt the same identity of interest with Birmingham and the black country as we perhaps have with Warwickshire, which is our more natural—
Mr Robinson
I would, but we are all limited by time, and the hon. Gentleman, whom I know very well and share many interests with, will have time to make his own speech in a moment.
Coventry is a proud city in its own right. I have told the House before how some decades ago, when I was first selected as a candidate, my party chairman took me to one side and said—I had just been selected, Mr Brady, and you know what local parties can be like—“Now Geoffrey, you have to understand one thing.” I was fairly new to Coventry at the time. He said, “The most important point you have to understand as a Coventry MP is that there is only one good thing that comes out of Birmingham. Do you know what that is?” I had no idea. I suggested cars, machine tools, motorbikes and so on. He said, “No, no. It’s the Coventry road.” That was a silly, parochial approach, and we are no longer— thank God—bound by those sorts of considerations. I would certainly never dream of giving that advice to anybody who might succeed me in decades to come. However, Coventry is a proud city and I believe that Wolverhampton, which has gained city status more recently, feels as Coventry does in many ways.
Mr Robinson
I will, but I will make some progress first, if I may.
The point that I am trying to make, in a very unsubtle way, is that we have interests, as proud cities representing proud peoples, in a way that perhaps does not apply to Manchester. We also came late to the game and therefore need more time than Manchester. That does not mean we should not get on with it, and I must say that under the dynamic leadership that Councillor Lucas has brought to Coventry, we are running quickly to catch up and she is pushing the west midlands to get going.
However, one thing is clear: what is behind all this. I want to quote from an article in the Coventry Telegraph this week, following the publication of a remarkable document on the west midlands combined authority on 6 July, which makes a very strong case for going down the route of a combined authority for the west midlands. It is a strong case and we should not ignore it at all, and I am sure that Coventry is right in on the act and pushing to develop it. However, we want to say one or two things to the Government about what is lurking behind all this. Let me quote from the article, which deals with the issue of the metro mayor—the first big thing we have to deal with. The article states:
“The issue has left an unsightly rash on the face of the newborn WMCA, and the sooner it is treated, the better.”
The article goes on to say that Coventry and Birmingham rejected the idea very decisively as recently as a couple of years ago and makes the case that we are looking at the re-imposition of the same formula next year. It could be as early as that, and it just does not stack up. It is not what the people will go along with. We have to get the democratic agreement of all concerned. What Councillor Lucas and we are all saying is: could we just have time?
The Chancellor properly said—I realise we are time-constrained, Mr Brady—that for the moment he thinks it is the best way forward. He made that clear again in the Budget this week, emphasising that he believes that elected metro mayors are the best—if not the only—way forward. However, he is open to us putting our proposals to him, and he has very kindly agreed a meeting in principle with the Coventry Members, so that we can explain Coventry’s circumstances to him. We should take him up on that and put the case for a transitional set of arrangements to him.
We will accept the mayor in principle—I am sure we can do that—but let us have a transitional period in which look at how the thing would work and at balance sheets and financial responsibilities. How will the different units be brought together, in terms of their balance sheets? They are all separate accounting bodies, with immense responsibilities. I am no expert on local government finance or organisation, but I can imagine that the difficulties are enormous when a tier of government above is responsible for some of the funding. The importance of skills was rightly emphasised by my right hon. Friend the Member for Birmingham, Hodge Hill, and there is also transport and other areas where real money is coming to a new authority or a new power—a new channel for it.
The most important thing is the need for properly organised transitional arrangements. We are giving that a lot of thought—sadly, I do not have the time to get into that today—and we will put those proposals to the Chancellor. We should say, “We don’t want to go down the 1970s route again. Give us time. We are going in your direction and we are catching up fast. Just bear with us.” We can put that to him when we meet.
Mike Kane (Wythenshawe and Sale East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Brady, and not just because you are a neighbouring MP of mine. I congratulate my hon. Friend the Member for Coventry South (Mr Cunningham), who has such experience in these matters, on securing the debate.
Disraeli said—if I can pay tribute to at least one Tory Prime Minister—that
“what Manchester does today, the rest of the world does tomorrow”.
He said that on the steps of the Free Trade Hall 200 years ago. I cautiously welcome the Cities and Local Government Devolution Bill, but it is almost as though the present Government are being brought kicking and screaming behind the innovative approach of Manchester and Greater Manchester. We are leading the way—there is no doubt about that—in the debate. The new plans for the Greater Manchester combined authority will involve it taking the reins on transport—integrating our buses and public transport system—and housing. We need to start building 10,000 houses a year across our conurbation. It will also take the reins on planning, policing and public health to drive up prosperity within our region. As I mentioned policing, I would like to place on record my tribute to Sir Peter Fahy, who has announced his retirement as chief constable today. He has served our conurbation with honour over many years and has made a real difference.
We are leading the way in bringing together health and social care budgets. That is a combined total of £6 billion. That will put in the hands of local people the power to decide what sort of health services they need and will suit their needs. This will not be an easy process, as we know from Healthier Together, but it is necessary. The task ahead is to bridge the gap. Between 2004 and 2013, the number of businesses in cities in the south grew by 27%—almost twice the 14% growth seen in cities elsewhere in the UK.
The Manchester Independent Economic Review found that, outside London, Manchester is the city region that, given its scale and potential for improving productivity, is best placed to take advantage of the benefits of agglomeration and increase growth. To criticise the Government, though, how do we get agglomeration and increased growth when we start pulling schemes such as the Leeds-Manchester electrification, or even the midland main line electrification, which would drive traffic to places such as Manchester airport in my constituency? Greater Manchester has the potential to be a net contributor to the national economy. When a mayor is elected by the people of the region, he or she needs to maximise investment in our growth priorities by supporting the private sector to drive growth and by helping businesses to do better.
In Greater Manchester, we spend about £22 billion on public services, yet we raise only about £17 billion in taxes. The key is bridging that gap. There is no doubt about it: if we want to be a powerhouse in the north, we have to close that gap. That will be the key priority for the interim mayor—and, when we go forward after the election in 2017, the full-time mayor. We need to become a fiscally self-reliant city. Austerity has not worked for us. We spent £22 billion in 2010 and we are still spending more than £22 billion today. The current Government have blown welfare budgets and other budgets through the roof. We can deal with this better locally than nationally.
Independent forecasts have shown that, with devolution powers, cities alone could deliver £222 billion and add 1.16 million jobs to the economy by 2030 if we get this right. We must reform the way we do public services. We must reduce barriers to productivity and reduce the need for spending on reactive public services.
In Greater Manchester, there is a significant opportunity for the Government and the region jointly to develop and deliver an approach that will have a long-term and permanent positive impact on the UK as a whole, as well as Greater Manchester. For the plan to work for the people of Greater Manchester and other combined authorities, local authorities must work together. That has been the key to this. If anybody thinks that it has been easy in Manchester, they are wrong. Our two great cities of Salford and Manchester and the other eight boroughs have had to work together and across political divides. That has been not been easy, so I pay tribute to the leaders who are putting this together. I hope that the Minister will reflect that in his comments.
Greater Manchester will be empowered, through larger devolved budgets, to promote better skills, infrastructure and economic development in return for growth plans. Through the retention of our business rates growth, we can develop our constituencies within our cities even better. We have an enterprise zone that has not quite got off the ground yet; the zone, announced in 2011, is at Manchester airport. We need to push to ensure that in our spatial planning, we are getting the industrial strategy right so that we can increase our tax base. Manchester airport has just announced £1 billion of investment for the duration of a 10-year transformation plan. As you know, Mr Brady, we are moving from 23 million passengers to 55 million passengers a year over the next 10 to 20 years, so the potential is huge.
We have announced an interim mayor, Tony Lloyd. I wish him every success and pay tribute to him and the 10 leaders for their co-operation in bringing this agenda to the Government’s attention, and for securing the package that they did in the Queen’s Speech this time round.
Owen Thompson (Midlothian) (SNP)
I, too, commend the hon. Member for Coventry South (Mr Cunningham) for securing the debate. Obviously, my colleagues and I in the Scottish National party pass no comment on the structures of local government in England. That is ultimately a matter for the people of England, local government being devolved to Scotland, so although the structures are of interest to us, we will reflect on our experiences in Scotland, rather than making suggestions. However, I hope that some of my comments will prove useful in a consideration of the further development of devolution relating to local government for England.
In Scotland, there have been a number of approaches over recent years. The Scottish Government pursued the “Our Islands, Our Future” campaign. We are seeing far greater discussion and agreement on devolving direct decision making to the island communities around Scotland. Local communities will be able to have a say over the incomes from the Crown Estate and 100% of the net income from the seabeds will be passed to island communities. There will also be island-proofing when legislation goes through the Scottish Parliament. As a former council leader, I have always felt that the best decisions are those taken closest to the people who are impacted by them. The Community Empowerment (Scotland) Bill, which has progressed through the Scottish Parliament, is also designed to pass greater decision-making powers to our local communities.
We have heard a lot of talk about the northern powerhouse—and, today, the midlands powerhouse and the Greater Manchester area. I have to confess that every time the northern powerhouse is mentioned, I think of the Aberdeen and Aberdeenshire city deal proposals that are moving forward; I suppose my geography is slightly different. However, Aberdeen City and Aberdeenshire are not the only two councils in Scotland looking to progress with city deals. The Glasgow one has been in place since August 2014. Beyond Aberdeen, Dundee is also making progress, and my former authority, Midlothian, is working with the other authorities in the Lothian region on an Edinburgh city deal.
My perspective is that I come from the second smallest local authority in Scotland, where I was initially very resistant to any approaches involving what felt at times like being swallowed up into the massive great beast of Greater Edinburgh, because that was always a threat. It was a big advantage that, since reorganisation, Midlothian was a council in its own right. Having worked through the process and worked closely with the leaders of Edinburgh City Council, East Lothian, West Lothian, Fife and the Scottish Borders, I could see the benefits. Other speakers have touched on how important infrastructure is in the development of any proposals to benefit from a city deal arrangement. Certainly I was able to see the huge benefits that Midlothian would have been able to achieve through a city deal arrangement, so I very much hope that that work, which is continuing positively, will go on for the benefit of our communities, because ultimately it is our communities that we are all here to represent. Often on these issues, the geography becomes the battle line, rather than any political allegiance. People are looking to get the best results for the town that they are from and that they represent. They are looking to ensure that local people’s say and outcomes are as strong as possible.
We saw yesterday another Budget of cuts and continued austerity. Over a number of years, I have compared the impacts on parts of local government in Scotland as I waited annually to see what settlement my former council got. We have been very fortunate in Scotland, because the cuts to local government have not been as severe as in England. The Scottish Government have done everything possible to protect local government’s share of the Scottish budget, in line with the levels from 2012-13. Over three years, cuts in Scotland have equated to 6.3%, whereas in England it has been 18.6%. I can only imagine how difficult some of the decisions have been that had to be taken in local authorities in England. Thankfully, the Scottish Government have done what is possible to protect and help local government, because local government is a key part of driving forward any agenda. It is the frontline for most of our communities; it is the first contact that most people have with elected representatives. As a former councillor, I think that we should encourage more and more people to get involved in it.
The cuts made so far are hitting the most deprived areas hardest, and the cuts that are to come will do the same. The Joseph Rowntree Foundation identified that the scale of cuts in England is greatest in deprived areas and least in the most affluent. According to the foundation, the largest cuts have been to spending on the most deprived areas, at around £220 per head of population. That is a worrying illustration of the wrong priorities being followed by the Government. I hope that over time, we can persuade, cajole and push to get that changed. Investment in the frontline must continue to ensure that the priorities of any Government can be delivered. Thankfully, the Scottish Government’s action has ensured that local government budgets have been protected, and they are doing everything possible to tackle inequality.
In Scotland, the SNP and the Scottish Government have not taken a position on elected mayors, and we do not feel that the case has been made yet. Ultimately, to come back to the theme of many contributions, such a proposal has to come from communities; it cannot be top-down. Any decisions about the future of elected mayors or devolution to other areas, whatever their shape or size, must come from communities. That has to be the first priority.
I have mentioned “Our Islands, Our Future”. In Scotland, there has also been the Commission on Strengthening Local Democracy, which the Convention of Scottish Local Authorities developed with civic society, local government and the Scottish Government. The commission looked at what measures could be taken and what avenues could be explored for further devolution of powers to local government and then on to local communities. I commend the commission’s report to any Member who is interested. It is fascinating reading, and it is a great example of how to take forward ideas for devolution to local authorities from a community level.
Mike Kane
The SNP, from what we have seen, has had a massive centralising effect in Holyrood. Take the Police Service of Scotland, which it has effectively nationalised. If we talk to colleagues in Glasgow and other cities, we find that they have felt excluded by the SNP Government at Holyrood from the decision-making process in Scotland.
Owen Thompson
I am delighted that someone has given me the opportunity to bring this up, because it is a common misconception. The SNP Scottish Government have done more to pass decision making, accountability and authority to local authorities, rather than taking it in to a central point.
The hon. Gentleman gave the example of the police and fire services. I was a member of Midlothian Council for almost 10 years, and from 2007 to 2012—before the single police and fire forces—Midlothian Council got two representatives on the Lothian and Borders police board and fire board. There was no scope for anyone in opposition to have any say whatsoever. Now that we have a single force, each local authority has its own police and fire scrutiny set-up, which includes six members of our authority and other partners who can scrutinise and challenge the police and fire service. There is far more local accountability of police and fire services than ever. Sadly, in Midlothian, two of our Labour colleagues do not take up the current opportunities. To me, this is a far better means of local decision making.
Alison Thewliss (Glasgow Central) (SNP)
In my experience on the Strathclyde fire board, when members—regardless of whether they were from Labour or the SNP—attempted to raise local issues, it was thrown back at us that the fire board was not the appropriate place to raise local issues. Does my hon. Friend share that experience?
Owen Thompson
Very much so. I have seen decisions being taken by the bigger regional bodies, as a small part of what they do, and the large city authority would always get its way, no matter what anyone wanted. Rather than centralisation, there has been far more local decision making and input.
Mr Steve Reed (Croydon North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Brady. I congratulate my hon. Friend the Member for Coventry South (Mr Cunningham) on securing this important and timely debate, and I thank the many Members who have made significant contributions. I hope that the Minister has listened carefully to what they have had to say, and I look forward to his response to their points.
We have heard this afternoon about the huge benefits that can flow from devolution when it is done properly and with sensitivity to the needs of the regions to which it is applied. We have heard about the benefits for economic growth, jobs, skills, health and housing. We have heard how much better and more efficient almost all the services that have historically been controlled from the centre in Whitehall can be if there is more control in the hands of local people and if decisions are taken closer to the people whom they affect.
My party and I would like more ambition from the Government over devolution. We would like devolution by default, so that things are devolved to a more local level unless compelling reasons are raised, here or in the communities that will be affected, why they should not be. Devolution should be on offer to every part of England, not only to parts of it. That is why there is so much frustration in the House and beyond about the fact that the Chancellor insists on doing one-off deals behind closed doors without opening up the conversation to the areas and communities that will be affected by the decisions.
My hon. Friend the Member for Wolverhampton North East (Emma Reynolds), the shadow Secretary of State, has called for more ambitious devolution to every part of the country. There should be no one-size-fits all approach. Too much of what the Government are offering consists of trying to squeeze everything into boxes of the same shape. Hon. Members have focused on the unique characteristics of the west midlands in particular and of the other regions that have been discussed. They have concentrated on the need for any devolution offer to fit the characteristics and priorities of the local area. No area can be left behind. We need a much more open approach from the Government about what is on offer and under what circumstances.
We have not heard so much about towns and counties, but they cannot be left behind. I fear that that is what will happen if the Government make mayors a condition of devolution, however. A mayor for a large county region would feel entirely inappropriate to its residents, who may not feel the necessary commonality or identify in such a way as to make a mayoral model work.
On the question of mayors more widely, I hope that the Minister will explain why some areas will get new powers only if they accept a mayor. I hope he will explain why his idea of localism involves telling local areas how they will be governed. Taking decisions from the centre, imposing those decisions on localities and telling them that it is localist does not feel very localist to those on the receiving end.
Mr Jim Cunningham
Many years ago, I used to chair the seven districts. For people who do not know what I mean by that, it was seven local authorities that worked together. If we had not been able to work in that way, we would not have had Hams Hall, because we had an issue about it with British Rail at the time. If it had not been developed, freight would have gone up north and no investment would have gone to the midlands. Birmingham airport was another area that we developed. The point I am trying to make is that we do not need an elected mayor to do things like that.
Mr Reed
My hon. Friend’s comments emphasise the fact that discretion over the model of governance should be in the hands of the local community and the local area affected, not in the hands of a Minister who takes such decisions centrally here in Whitehall. That is not just a Labour view. The cross-party Local Government Association, which is currently led by a Conservative, believes:
“People should be free to choose the appropriate model of governance for their community.”
In reality, however, the Government claim to be committed to devolution but insist on telling communities how they will be run and governed. There is a clear contradiction in that, which I hope that the Minister will resolve for us.
Mark Pawsey
I beg the hon. Gentleman’s indulgence in pursuing the local issue raised by the hon. Member for Coventry North West (Mr Robinson). We are talking about local people having the right to make the decision, and I want to dwell on what is best for Coventry. I argue that Coventry would best be served by working with Warwickshire, just as the two areas have come together under the local enterprise partnership. I agree with him about the need for more time, because Coventry seems to be in a rush to join the combined authority. Does the shadow Minister agree that there needs to be an effective discussion in Coventry and Warwickshire about the merits of a Coventry and Warwickshire solution, rather than Coventry leaping into the combined authority?
Mr Reed
My view of localism is that that decision should be debated and determined locally, rather than by politicians here in Whitehall.
Just three years ago, which is not so long, the Government defended having referendums on metro mayors because
“it ensures local people ultimately decide”.
What has changed in the intervening three years for the Minister to stand up and say the polar opposite, as I suspect he will today? It might be because most of the areas that were asked whether they wanted a metro mayor voted not to have one and the Government now wish to override those democratic decisions, but it might also be because the Government are looking for a political fix to advantage their own side. The Government have seen how people voted in many of the great conurbations across the country and how few Conservative councillors are being elected, and they are clinging to the hope that, if they are able to impose a mayor, there will be at least one last chance to get some Conservative control over areas that have consistently rejected local Conservative rule.
Finally, devolution will not work if resources are not devolved along with decision making, so that local people are able properly to exercise their powers. The areas that have been identified for the first round of devolution tend to be those that have suffered the greatest cuts, and there is a fear in those areas that they are being set up to fail, although they welcome devolution. The Government are centralising funding decisions in Whitehall but seeking to localise the blame for cuts on the combined authorities or localities where decisions will be taken on how those cuts are to be implemented. An important opportunity is coming up in the spending review for the new Secretary of State to change course and protect those communities, given that they have already borne the brunt of the national cuts made by Departments over recent years.
I invite the Minister to explain why he will not end the “Whitehall knows best” culture and let local areas choose how they want to be governed and why he will not stop putting artificial barriers in the way of devolution where local areas want it and where it would offer many benefits.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
It is a pleasure to serve under your chairmanship, Mr Brady. I congratulate the hon. Member for Coventry South (Mr Cunningham) on securing this debate. Members have raised a number of important points about the future of local government and our plans for devolving functions and powers to those who seek them.
In his speech to the Local Government Association annual conference last week, the Secretary of State for Communities and Local Government clearly said that
“local government has the ability to transform the prospects not just of our cities, towns, counties and districts, but of our whole country; that powers annexed by central government over decades should be returned to local government; and that the time for that change is now.”
We have made it clear that that is the case. The Cities and Local Government Devolution Bill will, once enacted, establish the primary legislative framework to allow unprecedented devolution across the country and reverse 150 years of centralisation. Over the years, powers and functions have become more centralised. I am sure we can agree that that is not sustainable and that we must re-engage with our towns, cities, councils, districts and urban and rural areas. We began that process in 2010 through our decentralisation programme. We supported the development of local enterprise partnerships, concluded city deals with 27 cities and took £12 billion out of Whitehall and put it in the hands of local people through growth deals, thereby giving local areas more control to drive their own growth.
The devolution deal agreed with Greater Manchester will also give local people greater control over their economy and powers over transport, housing, planning and policing. Greater Manchester has agreed to a directly elected mayor, who will be responsible for exercising key functions such as housing investment and strategic planning. The directly elected mayor will also exercise police and crime commissioner responsibilities for the Greater Manchester area and chair the combined authority.
Colleen Fletcher
The hon. Member for Solihull (Julian Knight) said that, if substantial resources and money are devolved to combined authorities, one person, an elected metro mayor, should be accountable. What is the tipping point? A combined authority will be forced to introduce an elected metro mayor after taking on what additional powers?
Mr Jones
The important point that a number of right hon. and hon. Members have missed is that it is for local authorities and areas that seek devolution to make proposals. The amount of democratic accountability that the Chancellor seeks will be determined by an area’s ambition, and the deal going through at the moment is an example.
Concerns have been expressed about what is seen as the imposition of metro mayors, to which the hon. Lady alludes. In 2012, a number of cities, including Coventry, voted against introducing a directly elected mayor. I wish to make it clear that, to be successful, decentralisation must be about not only devolving powers and budgets but having the necessary leadership in each place, which brings me back to my point. We need governance and accountability so that powers can be exercised properly and effectively, for the benefit of all.
Mayoral governance is an internationally proven model of governance for cities. Hence, as the Chancellor has made clear, we will devolve major powers only to cities that choose to have an elected metro mayor, but the Chancellor has also made it clear that we will not impose a metro mayor on anyone. Our Bill therefore provides for metro mayors, while also making provision for devolution and governance changes in circumstances where a metro mayor is not seen as an appropriate governance arrangement. The Bill allows for local governance to be simplified, but only with the consent of affected councils and the approval of both Houses.
The crucial point is that all the Bill’s provisions are to be used in the context of deals between the Government and places; nothing is being imposed. I reiterate that where there is a request for the ambitious devolution of a suite of powers to a combined authority, there must be a metro mayor, but no city will be forced to take on those powers or to have a metro mayor, just as no county will be forced to make any governance changes.
In that context, I congratulate the seven metropolitan councils of the west midlands on the launch of their statement of intent to establish a combined authority, which is the first stage in a process of consultation and engagement with other councils in the area. We welcome that development, and we are determined to hand as much power as possible to places with a clear, strongly led plan. With their proposal, the seven west midlands councils are showing what can be achieved by working together to bring greater opportunity to their area. We look forward to working with them as they develop their proposals.
In yesterday’s Budget—this answers a point raised by several hon. Members—the Chancellor strongly welcomed the statement of intent for devolution in the west midlands, which he sees as a proposal for a strong and coherent west midlands combined authority. He has shown great ambition for the midlands, and he sees the “midlands engine” as an integral part of the Government’s long-term economic plan.
Mark Pawsey
The Minister is making a strong case for the urban areas of the west midlands to come together. It is a big engine and could be a powerhouse of development. May I tempt him to comment on the appropriateness of shire counties on the periphery of such an urban area being involved? Should they, too, be pulled into that move?
Mr Jones
Locally elected leaders and members must decide whether they want to be part of any particular configuration of combined authorities. It is for local people to put proposals to us in the Department, rather than having a top-down solution imposed on a county area such as my hon. Friend mentions.
I will respond to some of the points that the hon. Member for Coventry South made. My hon. Friend the Member for Torbay (Kevin Foster) hit the nail on the head—the principle of combined authorities is perhaps being confused a little. Many people want to paint it as an amalgamation of councils and their current governance arrangements. Actually, we are talking not about breaking down the structure of the authorities in the west midlands but about devolving the additional powers that those authorities are seeking. My hon. Friend the Member for Solihull (Julian Knight) made that very point.
On whether the west midlands will have a mayor, as I said, that is a bottom-up process. It is for the west midlands to come forward and tell us the level of its ambition. It has set out an initial document, but it is early days. It was implied in the debate that the Government are leaving the west midlands behind. That is certainly not the case, and we are encouraging people from across the west midlands and the wider midlands area to think about how power can be devolved. As I said, my right hon. Friend the Chancellor made it clear in his Budget that he welcomed the initial work being done in the west midlands.
The hon. Member for Coventry South mentioned the devolution arrangements that were previously made for the west midlands. Those arrangements were made many years ago, but funding and powers to carry out the projects that he mentioned were never directly devolved. They were very much directed by central Government, which is why the scenario being suggested now is different.
Mr Jim Cunningham
I think the Minister is referring to the metropolitan council, which I mentioned earlier. That was funded by grants and a precept; I do not know whether he was around then. I refer back to my question to him earlier: if we went ahead with the arrangements that the Government want, would the authority have the power to levy a precept on local authorities?
Mr Jones
What the hon. Gentleman refers to is not necessarily the situation that we are discussing. We are considering authorities coming together and taking additional powers and funding from the Government; we are not considering adding to the precept that people will have to pay.
My hon. Friend the Member for Cleethorpes (Martin Vickers) said, I think, that we should go for the jugular. I am afraid I must disappoint him. We are not into top-down solutions; we are very much into bottom-up solutions and local areas coming together to put their packages of ideas to the Government.
The right hon. Member for Birmingham, Hodge Hill (Liam Byrne) was looking for a game-changing deal for the west midlands. If that is what he is looking for as a local MP, I urge him to speak to his local leaders and encourage them to put forward a game-changing package to the Government. As I said, local areas must bring solutions to the Government, not the other way around. We would welcome an ambitious package from the west midlands, because we want it to move forward.
I must disagree with the right hon. Gentleman’s assessment of the west midlands; I think that it is a place on the up. Things are going in the right direction. Unemployment is decreasing, and £5.2 billion in funding for infrastructure is going into the region at the moment. I was glad that my hon. Friend the Member for Solihull backed up that view and was willing to speak up for the west midlands and shout about our achievements in the area. He also mentioned, with some enthusiasm, that he would support such devolution arrangements if they were ambitious and related to skills, infrastructure and the like. That seems to be the type of proposal coming from the west midlands, which I hope will please him.
I was slightly disappointed by the tone of the hon. Member for Salford and Eccles (Rebecca Long Bailey); it did not seem to correlate with the tone of local authority leaders in her area, which is extremely positive. She asked about the structure of health services and how they would work. That will come from her local area in the proposals that it is making to the Government. Obviously, there will be a negotiation process with officials and Ministers; the Secretaries of State for Communities and Local Government and for Health must both be satisfied that the arrangements are strong on accountability. On whether mayors are elected and how much credibility they will have, the hon. Lady will know that although they will be appointed on an interim basis, they will have to stand for election at the end of that period.
Mr Geoffrey Robinson
It is still not clear to what extent an elected mayor is an absolute precondition. The Minister mentioned the key phrase “additional funding”. That is what it all seems to be about. In a period of tight local government expenditure—everybody in the House accepts that—the Government are promising additional funding if local authorities come together as single authorities and if we have a metro mayor. Can the Minister confirm that the Chancellor and the Secretary of State for Business, Innovation and Skills are open to considering alternative interim accounting authorities rather than metro mayors, while still making the additional responsibilities and funding available on an interim basis as we bring the authorities together and work out a sensible, workable, long-term solution—on the basis of a metro mayor if necessary?
Mr Jones
As I said, it is clear that if the west midlands wants to put together a package as extensive as Manchester’s, for example, it will certainly need a metro mayor. I think local leaders realise that if the west midlands is to be as ambitious as the right hon. Member for Birmingham, Hodge Hill wants, a metro mayor is required. However, it is up to them to decide exactly what they want in that sense.
It was interesting that the hon. Member for Coventry North West (Mr Robinson) mentioned that he wants things to be bottom-up. They certainly will be, so I am sure that he will be glad that his party is not in government, because it seems to want to impose a situation on local areas by making them come together.
I was heartened by the enthusiasm of the hon. Member for Wythenshawe and Sale East (Mike Kane), who seems to be on the same page as the enthusiastic cross-party leaders in Manchester. I welcome his comments, and I pay tribute to the leaders who are coming together to take forward an ambitious devolution deal.
I say to the Opposition Front-Bench spokesman, the hon. Member for Croydon North (Mr Reed), that this is certainly not a one-size-fits-all situation. It is for each individual area to come forward with proposals that it thinks suits that area, which the Government can then consider. We need to ensure that in considering any proposals, we consider carefully how governance is managed.
Motion lapsed (Standing Order No. 10(6)).