Newcastle Upon Tyne, North Tyneside and Northumberland Combined Authority (Establishment and Functions) Order 2018

Tuesday 30th October 2018 Grand Committee

Considered in Grand Committee

16:07

Moved by

[Lord Bourne of Aberystwyth]

That the Grand Committee do consider the Newcastle Upon Tyne, North Tyneside and Northumberland Combined Authority (Establishment and Functions) Order 2018.

Relevant document: 40th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, this order was laid before the House on 4 September. At Budget 2017, nearly a year ago, we announced that we were minded to agree a North of Tyne devolution deal with the three areas which will be the constituent councils of this combined authority: Newcastle upon Tyne, North Tyneside and Northumberland. The deal will devolve major powers and budgets, including £20 million a year of devolved funding over the next 30 years, control of the 19-plus adult skills funding, and powers for the combined authority to acquire and dispose of land. The mayor will have powers to take forward compulsory purchases and establish mayoral development corporations as a foundation for the North of Tyne’s housing and regeneration ambitions. In return, the area has agreed appropriate governance for these new powers and budgets centred on a combined authority with a directly elected mayor. Such mayors can provide a focused single point of accountability for the powers and budgets being devolved, and can be a powerful voice raising the profile of their area with business, with government, and internationally, helping to promote inward investment and growth.

The order before the Committee, if approved by Parliament and made, will implement this deal—a deal which is yet another step along the way of our devolution agenda. It recognises that North of Tyne is a coherent economic area, which generates almost £17 billion in economic output, has a number of significant growth sectors and is home to more than 815,000 people. The deal will support the delivery of the North East local enterprise partnership’s strategic economic plan, which sets a forward direction for industrial growth across the north-east.

The background to this deal is that when in September 2016, the four authorities south of the Tyne—Durham, Gateshead, South Tyneside and Sunderland—chose not to participate in the agreed North East Combined Authority devolution deal, the Government were clear that they would continue to work with those authorities committed to devolution. As a result of this, the three North of Tyne authorities that supported the original deal have worked with government to agree this new mayoral devolution deal on this smaller North of Tyne geography. Although ideally we would have wished to see a deal that covered the area of all seven councils, we are clear that this North of Tyne geography is an economic area that can rightly support a devolution deal that will bring considerable benefits to both that area and the wider north-east. As my honourable friend the Minister made clear in the other place, we in the Government pay tribute to and thank the leaders of the three North of Tyne councils—Nick Forbes, Norma Redfearn and Peter Jackson—for their vision, work and commitment, which have led to this deal and the benefits it will bring to both their communities and the north-east more generally.

If approved by Parliament and made, the draft order will implement the deal. It is made pursuant to the provisions of the Local Democracy, Economic Development and Construction Act 2009 as amended by the Cities and Local Government Devolution Act 2016. It will put in place the necessary governance arrangements. It will establish a combined authority for the areas of Newcastle upon Tyne, North Tyneside and Northumberland. It makes provision for a directly elected mayor for that area, to be elected by all the local government electors for that area. The first mayor will be elected on 2 May 2019 for a term of five years, with the next election taking place in May 2024, then every four years subsequently. The initial five-year term is to bring these mayoral elections in line with mayoral elections in other city regions where there are elections of metro mayors, such as Greater Manchester and the West Midlands.

The order also makes provision for an interim appointed mayor in the period before the mayoral election takes place. This interim mayor will be appointed by the members of the combined authority, and while he or she will be chair of the combined authority they will not have any powers devolved to them. The order is equally the instrument through which certain powers, as envisaged in the deal, are devolved to the area to be exercised by the combined authority and, in some cases, by the mayor, once he or she is elected. These include local authority powers of compulsory purchase and the power to create and establish mayoral development corporations.

To allow for the establishment of the new mayoral combined authority, this order removes the local government areas of Newcastle upon Tyne, North Tyneside and Northumberland from the area of the current Durham, Gateshead, Newcastle upon Tyne, North Tyneside, Northumberland, South Tyneside and Sunderland Combined Authority and changes the name of that combined authority to the Durham, Gateshead, South Tyneside and Sunderland Combined Authority.

Most importantly, to ensure the continuity of the delivery of integrated transport arrangements across the two combined authorities across the north-east, the order also makes provision for the establishment of a joint transport committee. The new combined authority will appoint three members to this committee, one of whom must be the mayor unless the mayor decides that he or she does not want to be a member. The existing combined authority will appoint four of its members to this new joint transport committee. The new joint committee will exercise all the transport functions of the two combined authorities. It will produce a joint transport plan covering the area of both combined authorities. As with all combined authorities, an overview and scrutiny committee, as well as an audit committee, will be established for this joint committee.

In laying the draft order, we have followed the statutory processes specified in the 2009 Act as amended by the 2016 Act, which I mentioned. Establishing a combined authority is centred on there being a triple lock: a combined authority can be created only if the councils concerned consent, the Government agree and Parliament approves the necessary secondary legislation. The three councils that will be the constituent councils of the new combined authority—Newcastle, North Tyneside and Northumberland—have consented to the provisions in this order that will create the combined authority. The original combined authority and the three councils leaving it have consented to the change of that combined authority’s area. All seven councils and the original combined authority have consented to the establishment of the joint transport committee and the associated constitutional changes that this order brings.

We have considered the particular circumstances of this proposal in relation to establishing a new North of Tyne combined authority and the changing of the boundaries of the existing combined authority, as the law requires. We have concluded that all the statutory conditions are met. We also consider that it would be appropriate to establish this combined authority while having regard, as the 2009 Act requires, to the need to reflect the identities and interests of local communities, and to secure effective and convenient local government.

16:15

Finally, we have considered the public consultation carried out by the three North of Tyne authorities on the proposals, and we are satisfied that no further consultation is needed. I can confirm to the Committee that we believe that the conditions have been unambiguously met and therefore seek the approval of the Committee to this draft order today. In short, when it is approved and made the order we are considering, which has already been approved in the other place, will establish a mayoral combined authority to which will be devolved wide-ranging powers and significant budgets. It opens the door to a new era for the area to promote economic growth, to improve productivity and, as the area itself believes, to lead to the creation of 10,000 jobs. I therefore commend this order to the Committee and I beg to move.

[Lord Beecham (Lab)]

My Lords, I refer to my interest as an elected councillor in Newcastle, and one who will be seeking re-election next May. Next Sunday will be the 14th anniversary of the referendum on the proposal at that time to create an elected regional authority for the north-east. Forty-eight per cent of the electorate cast their votes and, I am sorry to say, resoundingly rejected the idea by 77% to 23%. Disappointing as it was to those of us who saw in the concept a real opportunity to create a body capable of promoting the interests of the region as a whole, the result was not a great surprise. Local rivalries have never been confined to the football pitch.

In the mid-1960s, at a time when local radio was being promoted by the BBC, the then leader of Gateshead Council declared that nobody in Gateshead could possibly be interested in anything broadcast from Newcastle. In the mid-1990s I wrote a paper advocating the establishment of a north of England councils’ association, incorporating the counties of Northumberland, Durham, Cumbria and Tyne and Wear—the latter of which has since vanished—and their constituent city and district councils. Knowing that if such a proposition was seen to have emanated from Newcastle its prospects of success would have been negligible, I passed it to the then leader of Northumberland County Council, who circulated it without attributing its source. The association was accordingly established with Hugh Little of Cumbria as its first chairman. When Cumbria departed, it became the North East Assembly and when Tees Valley in turn departed, it became the Association of North East Councils.

It is unfortunate that the four councils south of the Tyne have so far declined to join the new combined authority—I should add that part of Northumberland is south of the river but will be within the boundaries of the new authority. I can understand some of their concerns. The new structure will be led by an elected mayor, a requirement imposed by the Government on all new combined authorities. Newcastle itself voted 62% to 38% against having an elected mayor when it was compelled to hold a referendum—for just the city itself—in 2012. This time, people are being denied a voice completely on that issue.

Moreover, the much-vaunted investment by the Government of £600 million over 30 years, which is all of £20 million a year shared between three councils, is frankly pitiful. Newcastle alone is facing cumulative cuts which, by next year, will amount to £280 million annually, and there is no suggestion from the Government that there will be any benefits flowing our way under any changes in the local government finance system. The same would apply to the neighbouring authorities.

There are, however, some promised changes which are welcome. These include local control of the budget for adult education, with enhanced powers to promote development, and a joint committee to manage public transport. Can the Minister say whether the latter will include a role in relation to rail transport, including the east coast line? Can he give any assurances about the future of the region’s airports? If, as has from time to time been suggested, the Scottish Government abolishes air passenger duty, will the region’s airports, and in particular Newcastle Airport, be able to follow suit?

On the housing front, I understand that the current chairman of Homes England is to chair a housing land board. Can the Minister explain how this will work in relation to the role of the councils in the provision of social housing? Will it be possible for the councils to provide more social housing for rent? Who will determine the size and nature of local housing provision and the provision of the necessary services for residents?

There are ambitious claims for job creation and new housing, with apparently 9,500 people to be helped into employment and 10,000 houses to be built. Can the Minister indicate over what period these goals are expected to be achieved? How many of the 10,000 homes will be provided respectively by local authorities, social housing providers and for sale?

Transport is an important issue for the whole region. It is to be hoped that both the new combined authority and the four councils which will remain from the existing authority will continue to work together through the joint transport committee.

The Metro, which serves Newcastle, North and South Tyneside, Gateshead and Sunderland, is a critical service covering all the authorities in the currently established set-up. There is clearly a potential to expand the service, not least to the west end of Newcastle, one of whose wards I represent. Will the department invest in this important area? It is a modest task in the light of the vast amounts being spent on Crossrail and HS2.

Will the Minister’s department put pressure on the Department for Transport to tackle the dreadful performance of the laughably misnamed TransPennine Express in the service between the north-east and the north-west, a more important project in the eyes of many of us than HS2?

The region is one of 10 bidding for funding from the £1.7 billion transforming cities fund. Six mayoral authorities have already shared £840 million. Given the problems facing the north-east, which are threatening to worsen after Brexit, it is vital that we secure investment of this kind. I understand we are looking for funding in the range of £50 million to £100 million. I hope the Minister will support our bid from the region.

There are some issues which cross the boundaries between the new combined authority and the four south of Tyne authorities. Two further education colleges, on either end, in effect, of the Tyne tunnel, are now combined. One will be in each of the two combined authorities hereafter and I am not clear what the implications of that will be. I do not know whether the noble Lord is in a position today to respond to that. He may need to consult the Department for Education. However, there will be services which cross the river, as it were, which will not apparently be affected directly by the new authority structure and there will have to be arrangements to deal with that.

It is similar in the National Health Service. We have, for example, a Newcastle and Gateshead clinical commissioning group which also crosses the boundary of what will be the two combined authorities. Is it envisaged that any change will be made in the NHS area, given the changing boundaries within local government and the important connection between local authorities’ social care provision and the NHS?

The justice system is another area which merits consideration, especially the probation service, which hopefully is to be restored as a single service in the light of the systemic failings of the split between probation and Chris Grayling’s community rehabilitation companies. Will the combined authority have oversight of both the custodial and probation services in its area and, indeed, of the court system, where court closures are having a serious impact on the working of the courts? It may well be that at least oversight of these areas could well be placed within the province of the new combined authority.

Many of us are hoping that, whatever doubts we may have about aspects of the changes in bodies in the order, they will help the region to address the serious problems it faces, constantly exemplified for me by the presence in the council ward that I have represented for the past 51 years of the busiest food bank in the country. I look forward to the evolution of a North East Combined Authority with the determination and resources to help transform the life chances of our citizens. I endorse the conclusion of the Secondary Legislation Scrutiny Committee’s report:

“It will be important that all involved keep under review the success of cooperation between the new mayoral Combined Authority and the other councils, against the objective identified by DCLG in 2014 of promoting more effectively economic growth and prosperity for the area concerned; and that the Government should be ready to adapt arrangements in the light of experience”.


We are in a period of change. There is real potential for improvements to be made, but it will not be enough simply to rely on that reorganisation, not least in relation to the necessary funding to address the very serious economic and social problems that the area faces. This is a step forward. There is still a long way to go to transform the life chances of people living in the north-east, and in particular in the area covered by these changes.

[Lord Shipley (LD)]

My Lords, it is always a pleasure to follow the noble Lord, Lord Beecham, in a debate. He reminded us of the history of devolution and of some of the current problems in public investment and governance across the wider north-east. I agree with him that this proposal is a step forward. He used the word “unfortunate” to describe the fact that the four councils south of the Tyne have refused to take part. I think I might have used a stronger word, but for the moment “unfortunate” will do. Indeed the Secondary Legislation Scrutiny Committee said:

“Progress towards establishing a mayoral Combined Authority in this part of the North East has not been straightforward”.


Let us all agree with that. I have been very critical of this and of the failure of local councils across the wider combined authority area to speak with one voice. As the Secondary Legislation Scrutiny Committee reminded us, key business stakeholders appear to view the latest proposal as a second-best option. It is the only option on the table. It is a second-best option, but the final sentence in the Secondary Legislation Scrutiny Committee’s comment is,

“the Government should be ready to adapt arrangements in the light of experience”.

I very much hope that the Minister will be willing to confirm that that is exactly what the Government plan to do.

I support this proposal because I believe that the north of the Tyne should not be left behind because of the approach taken south of the Tyne. Indeed, there are powerful combined authorities elsewhere across the north of England that have mayors. They give focus to strategic planning and to the delivery of growth, jobs, higher education and skills standards. For that reason this proposal should be supported. It is a very great pity that the area to the south of the River Tyne decided not to take part.

The Minister referred to the transport arrangements. It is true that the current structure will remain in place. There will be a statutory joint authority to bring all the councils and passenger transport executives together on key issues. The seven local authorities are said to be confident that these arrangements will work. Well, they need to work. There will have to be an agreed clarity of purpose for the whole subregion, because this could come unstuck when a critical decision has to be made.

16:30

I noticed recently, for example, that Nexus has parked the issue of where future investment in the Tyne and Wear Metro system might go. At some point, a decision will be needed on whether the first extension of the system will be into south-east Northumberland or towards Washington. Such a decision on priorities will need open public debate. The decision will need to command general support based on evidence, for without that it is likely to cause differences of opinion where we need to speak with one voice to ensure that the necessary funding gets to the region.

Whenever we have debated the combined authorities, I have been concerned that the issue of scrutiny and the openness of meetings should always be foremost in our minds. There are proposals for a scrutiny system, which I understand will be all-party, as it needs to be. That system needs to be open. The scrutiny process is only as good as the issues that it is able to discuss. It is important that, in the scrutiny system, officer support is available to the scrutiny members, so that they can put things on the agenda and do their job properly. Decision-making also needs to be open to the public. In other words, there needs to be media access. It would be a bad thing if this new North of Tyne mayoral combined authority began to be perceived as a secretive organisation that did not explain what it was doing and why it was doing it. For that reason, I hope that great attention will be paid to how public scrutiny will work.

Let me also express a concern about hyperbole in the expectations of what will apparently be achieved if the combined authority comes into existence. I give two examples from briefings that I have received. The first says:

“The new body will have a £600m investment fund, worth £20m a year over 30 years, which is expected to generate £1.1 billion for the local economy, create 10,000 new jobs and leverage £2.1 billion in private sector investment”.

I hope that I am not the only Member of this Committee who thinks that these are big figures to commit oneself to for £20 million a year, which is not a substantial sum. I therefore exercise a note of caution. Delivery could well be difficult. It will probably be made more difficult by the consequence of Brexit, if it happens. Even if it does not, it is difficult to see how such figures can be achieved.

There is then a further piece of hyperbole:

“The minded-to North of Tyne devolution deal represents value for money to Government”.

Of course, giving only £20 million a year probably is value for money for the Government. The briefing goes on to say that the deal represents,

“a cost effective contribution to rebalancing the national economy by … Generating almost three quarters of a billion pounds (£734m) in income tax and NI contributions to HM Treasury … Saving £93.9m in welfare payments as more people move into employment”,

and,

“Increasing business rates by approximately £298m”.

It would be marvellous if all these figures came to pass. I just issue another note of caution that achieving these sorts of figures is difficult from additional spending of £20 million a year. Somebody might hold the North of Tyne combined authority to commitments of this kind. I urge a note of caution on big numbers that common sense suggests might be difficult to deliver.

The North of Tyne combined authority needs to be open and honest in its objectives; it needs to win public support—given that 38% of those consulted opposed its creation; and it needs to be seriously focused on delivery. If it does these things well, it can build public support. But it will need to: ensure that it addresses public concerns; bring together urban and rural; ensure local accountability, not top-down decision-making from a centralised mayoral office; and ensure the fullest consultation on all its plans. Having expressed those concerns, I very much hope the North of Tyne combined authority will be a success and I wish it well in its endeavours.

[The Lord Bishop of Newcastle]

My Lords, I welcome this proposal for a North of Tyne combined authority. I was present when the minded-to agreement was signed and there was a real sense of purposeful energy around the room. I agree with my noble friends Lord Beecham and Lord Shipley who talked about the level of investment that this combined authority will pull in; it is good, but very modest. I hope that nobody, including the Minister, will feel that this is anything like a sufficient answer to the critical lack of investment in the north-east. This development is a necessary but not sufficient condition for a proper level of investment in the north-east economy.

I hope, however, that I can offer some encouragement in the face of undoubted disappointment that we are looking at three authorities joining together in this combined authority, not seven. Most people would absolutely have preferred it to be seven. The governance review decided that there is an economic coherence between the three authorities that have been brought together; I agree with that. I share a bit of hope that, beyond economic coherence, there is also social and cultural coherence.

Towards the end of the 19th century, the Church of England and Parliament looked at the structure of Church of England dioceses to see whether they were fit for purpose for the development of new areas of industrial and manufacturing population. In 1878, an Act of Parliament created two new dioceses in the north of England—Liverpool and Newcastle dioceses. The area of the proposed combined authority was at that time part of Durham diocese. The diocese of Newcastle, which came into being in 1882, is almost exactly coterminous with the proposed combined authority. When my diocese came into being, St Nicholas Parish Church in Newcastle became Newcastle Cathedral; Queen Victoria then granted a royal charter and Newcastle became a city, so there is a real coherence.

In the life of the diocese, which has existed since 1882, we have found that, when it works, it works because there is a real sense of identity in these three areas. It works only when we recognise a degree of mutual dependence and support, one for the other. When we look to our own interests in either Newcastle, North Tyneside or Northumberland, we are not served—but in the sense of belonging together there is enormous strength, far greater than any of the three areas have separately.

I am well aware of the degree of political risk in this proposal. I commend the real commitment from all sides of the political spectrum to accept that risk but to set it aside and come together around what everybody believes will be to the benefit of the communities in the new proposed combined authority. I want to honour those who have shown such political leadership. I hope the Minister will assure us that the Government too will honour this genuine commitment to flourishing, which, in the region, is a sign of hope for us.

[Lord Beith (LD)]

My Lords, I admire the optimism of the right reverend Prelate, which she has brought to her work; she is a welcome arrival in the Newcastle diocese.

When asked which of the two would have a more profound impact on the region, this measure or Brexit, most people I talk to in the north-east are pretty clear that it is Brexit. An awful lot of people recognise that, unless we bring the Brexit process to a halt or somehow get a miracle deal that allows the just-in-time provision of spare parts to the Nissan factory and further investment in the north-east by firms from abroad, there will be a profound and adverse economic effect that will put what we are discussing today very much in the shade. Viewed from rural Northumberland—the vast area of north and western Northumberland that forms part of this combined area—it all seems a bit distant. I doubt whether many people there are even aware that it is happening.

One thing that many people will remember, as we were reminded of by the noble Lord, Lord Beecham, is that there was a referendum on whether there should be a regional structure for the north-east. It was a referendum under which the proposed body had too little power, and that was a powerful criticism made by its opponents. But those opponents, of course, included many prominent people in today’s governing party, the Conservative Party, who said that they did not want another tier of government in the north-east or any addition to the structure, and did not want any more politicians. But this order provides specifically not only for a mayor but for the mayor’s political adviser —the only two jobs you can be certain will be created as a result of it. So here those people are bringing before us what I think is a deeply defective scheme. It will be a miracle if real good can be achieved by it.

The scheme’s fundamental failure is that it slices through the middle of what it is supposed predominantly to be dealing with: transport and other urban issues in the conurbation of Tyne and Wear. We talk about having a system of government that is accountable, but how are people expected to understand a system that, to simplify government, brings together three authorities which will still exist and carry out their functions but will be part of a combined authority? Just as you have grasped that, you are then told that that combined authority will also be a member of a joint committee made up of two combined authorities, and that only this joint committee can deal with the transport issues because of the folly of creating an authority that exists on only one side of the river and goes right through the middle of the integrated transport system, the Metro.

Here, perhaps I can pay passing tribute to my noble friend Lord Rodgers of Quarry Bank, who has either just celebrated or will soon celebrate his 90th birthday. It was he who signed off on the Metro, in his Labour governmental days, many years ago. What a valuable feature it is of the north-east and how valuable it would be to see it extended into south-east Northumberland and Washington to bring more unity to the conurbation. Other aspects of transport that we want to see integrated in the conurbation—both its heavy-road system and its bus system—require a lot more work. The joint committee will be busy if it is going to address that. But it remains absurd to split the conurbation in this way.

The point I most want to make is this: in rural Northumberland, we are still suffering the consequences of the loss of accountability at district council level. Local government already seems extremely remote—it is 50 miles away from people living in Berwick or Bellingham and beyond. It is very distant indeed.

16:45

Now we discover that certain functions will no longer be exercised at that level, but at one of two levels further up. This is really a new three-tier system of local authority, combined authority and joint committee. Things such as the transport issues faced in rural areas are distant from the world of the conurbation. Whether your bus pass gets you from Berwick to the Borders General Hospital outside Melrose is a world away from discussing cross-Tyne transport issues. Whether there is a bus at all to travel on between villages in the Cornhill area to get into town is a rural problem that seems very distant. It looks unlikely to be resolved satisfactorily by a mayoral system in which power is concentrated in one person, who will no doubt owe his or her election primarily to what happens in the urban area where the votes are and will feel under constant pressure from that area.

I find it sad that we are having to approve a structure which no one has sought to defend logically simply because of things that come with it. The Minister had difficulty keeping a straight face when he started reading out a list of the names of the two authorities and their details. Nobody will come along and defend this as a structure. We have got into it because the Labour Party north and south of the river could not agree, and a much more determined attempt should have been made to arrive at a more rational structure.

My noble friend Lord Shipley has made it quite clear that this structure will be tested against the extraordinarily optimistic claims that have been made of large numbers of jobs and large amounts of investment. If that has to be achieved in the context of Brexit, it will be an even more difficult task. I would like this structure to succeed in those aims, and I would like it to ensure that it attends to the needs of rural areas, not just urban areas, but I have to have the optimism of the right reverend Prelate the Bishop in order to think that.

[Lord Wrigglesworth (LD)]

My Lords, I declare my interest as chairman and shareholder of the Durham Group and a former chairman and shareholder in UK Land Estates, which, among other things, owns Team Valley, still the single biggest industrial estate in the UK, with some 800 acres of businesses of all sorts.

I speak in this debate not just from that point of view but from having been the regional chairman of the CBI and of the Northern Business Forum. I was a member of the board of the Northern Development Company, which succeeded in bringing Nissan, Fujitsu, Komatsu and a variety of other businesses to the region in years gone by. I was delighted and honoured to be the founding chairman of the NewcastleGateshead Initiative as a result of an invitation from the Labour leaders of Gateshead and Newcastle city councils. As a result of an invitation from Gateshead Council, I was chairman of the Baltic Centre for Contemporary Art, which was in financial difficulty and which we managed to pull back from the brink.

I have also been chairman of the Port of Tyne. It dominates a large part of the business life of the region. All the cars from Sunderland are exported to the rest of Europe and other parts of the world from the Port of Tyne. It is the fourth-biggest import- export car terminal in Europe. It is the biggest trust port in the country. It is bigger than Dover. It makes an enormous contribution to the whole of the subregion.

Colleagues will understand that in all those different roles I have had a fair amount of interest in and experience of dealing with local authorities and other bodies in the Tyneside area. Although I support what the Government are doing and I have every sympathy with the Minister in trying to bring these things about, it is a tragedy for the area that we have not been able to bring all the authorities together as was envisaged. It would have been better to have had a separate Wearside LEP and a separate Wearside combined authority, with Sunderland and Durham working together. There has been an historic problem of Sunderland being overshadowed by Newcastle and the Tyneside area, which seems the natural conurbation for the region, rather than including Wearside in it. If we had been able to get a combined authority for the whole of the seven authority areas, it would have been very much to the advantage of the region. This is very much a second-best solution.

It is also in sharp contrast with the success that there has been on Teesside, which includes my home area and which I represented in the other place for many years. There, the Conservative mayor and the Labour local authorities are working extremely well together, bringing resources to the area, developing the area and working together for the benefit of the whole region in a way that I have never seen in my lifetime in the north-east. The contrast between what is happening in the south of the region and what is happening in the north of the region illustrates the damage that is being done by the parochialism and the antagonism across local authority boundaries by the leadership of the local authorities in the southern part of Tyneside.

Although I am happy to support this first step—as it has been described—we should not in any way underestimate the damage that this mix-up and this weird split of the north part of the north-east into these two areas—north and south of the Tyne—will have. As I said, I was chairman of the NewcastleGateshead Initiative, the destination marketing agency for both sides of the river, which made an enormous impact. We put in a bid for European Capital of Culture. It has had a massive impact in the area on both sides of the river. How is the NewcastleGateshead Initiative going to work with a combined authority on one side of the river and the other authority on the other side of the river? It is going to be extremely difficult at times. It will certainly make life much more complicated, as it has been in the past.

The Port of Tyne, on the north bank of the River Tyne, straddles both sides of the river. On the north side is the international passenger terminal, with 30 cruise ships every year, paying visits and bringing an enormous amount of money and economic activity to the area. There are car and other activities going on on the north bank. On the south bank, we have the major dock facilities, with all the cars and the exports going out of there. There are wood chips and coal coming in, a whole pile of scrap being exported, and tea and a whole range of goods being imported on the south bank of the river, where the port will have to deal with South Tyneside. Instead of dealing with one authority for the whole area, the port will have to deal with a combined authority on the north bank and two authorities on the south bank. It will make the best of it, but this illustrates the difficulties when there is such a split of responsibilities and staff.

I mentioned the Team Valley. For 25 or 30 years, I have been developing factories and offices, probably creating more jobs throughout the region than I have ever done in Westminster. You have to work with the economic development departments of different local authorities. If I build a big shed in South Tyneside and I want to let it to somebody, I will have to go to the LEP, to the combined authority and to Gateshead Council. I will have I do not know how many economic development departments to deal with in trying to fill that factory with people working there for a company. If I am going to embark on a project like that, I will have to work with all those bodies to make a success of it. That makes life very complicated.

I do not know what will happen with representations from the area on economic regeneration. I think of MIPIM, the great property event in Cannes in the south of France every year, and more local ones here in London. Are all the authorities going to be sending representatives down? They probably will. But if there were one combined authority for the area, we would have one group of people and one strategy and everybody would know who they were dealing with. Frankly, it would also be much cheaper for the rate payer and taxpayer if that were to be the case.

Although I support what is happening as a first step, it is a tragedy for the area that we do not have a single united authority. I would prefer one for Tyneside and one for Wearside. We already have the successful one on Teesside.

The transport issue illustrates the problems—it will be the same on housing and other areas—where all the bodies have to work together and staff will have to be employed to carry out the work in different bodies. It will be less efficient and less effective and it will not have the impact of one authority for the whole area.

I support the regulations with a heavy heart. I shall be interested to hear from the Minister if any discussions are going on with the authorities south of the river to try to bring them to their senses and join in, so that everyone knows where they stand, with one authority for the whole area.

[Lord Bourne of Aberystwyth]

My Lords, I thank noble Lords for their contributions and I shall seek to deal with the points that have been raised.

No one on the Government side seeks to suggest that this is an ideal arrangement. We would have much preferred the councils south of the Tyne to participate in the deal. I agree, therefore, with the points that have been made by all speakers—with differing amounts of stress—that this is not the first choice. That said, it takes us forward. Again, most participants would agree with that, with the possible exception of the noble Lord, Lord Beith. I do not think that he was fair in suggesting that I was not keeping a straight face about this—it was probably said tongue in cheek; he is normally very fair—because I have no doubt that this is a good step forward for the region. I emphasise that, given the circumstances, this is the best way forward.

I shall try to deal with some of the points that were made. I agree with the noble Lord, Lord Beecham, that this is not the most desirable arrangement and that anyone who did not know would think that Gateshead and Newcastle were as remote from each other as Sydney and Melbourne, rather than being connected by the Tyne Bridge. It is a mystery to me, but that is where we are.

I do not want to suggest that £600 million over 30 years—although we should not underestimate the amount that will be put into the deal—will solve all the problems of the north-east. That is clearly not the case. Nor is it the sum total of the investment that goes into the north-east. Significant amounts, for example, go into the LEPs and the borders growth deal, of which the noble Lord, Lord Beith, will be aware. The Northern Spire Bridge attracted £82 million of government money and the International Advanced Manufacturing Park is another example. I shall come on to the money earmarked for the Metro system.

We cannot both say “Let us set up this devolution deal” and “What is the Government’s policy on x, y, and z?” It is for the combined authorities and the mayor to decide. It will not have escaped everyone’s attention that, although some metro mayors are Conservative, they are not all Conservative. This one—although I have no doubt it will be a close run thing—may not be a Conservative. I remind the noble Lord, Lord Beecham, that we are giving significant power to the mayor and the combined authority to decide on policy in the areas that we devolve.

The noble Lord mentioned the airport and air passenger duty. That issue will not be devolved. The Government are looking at that to balance all the needs of the different parts of the UK. He is right to refer to the problems of Scotland in competition with Newcastle; similar problems are felt in relation to Bristol and Wales. The Davies review has formed some of the policy in this area.

There is a significant housing element here, but that will not affect, for example, the existing provision for social housing, nor the £2 billion that the Prime Minister recently announced from 2022. There is no doubt that that will be bidded in for.

Adult education is not devolved by this. I agree with the noble Lord about the need for authorities to work closely together, as they do at the moment in many cases. The NHS is also not devolved by this arrangement—of the metro mayors, I think only the Mayor of Greater Manchester has that devolved power. Similarly, justice will not be devolved and so probation will not be directly affected, but I agree with him about the need to work across borders and to adapt arrangements in the light of circumstances. That is a fair point and we will approach it very much on that basis. The noble Lord asked about investment in the Metro system. In Budget 2017, £337 million was announced.

17:00

The noble Lord, Lord Shipley, expressed many of the same concerns as the noble Lord, Lord Beecham. I bow to their combined experience in the north-east. Indeed, everybody who has spoken has massive experience in the north-east and I thank them very much for participating in this debate so that we are able to get a flavour of what is happening on the ground and what some of the concerns may be. The noble Lord, Lord Shipley, said that this is a second-best arrangement. It is—there is no getting away from that. He also gave fair warning about hyperbole. We need ambition and aspiration, but we should not overreach ourselves and I do not think that it would be wise to suggest that this solves all the problems of the north-east. That said, it will contribute to success.

To pick up the point made by the noble Lord, Lord Wrigglesworth, on the experience in Teesside, this can generate work across parties for the greater good of the area. We have seen that with many of the metro mayors. None of them has solved all the problems of the area, but in all areas we can see some successes. They are making a significant difference to governance in their area.

The noble Lord, Lord Beith, commented on another layer of administration. Still on the subject of hyperbole, I think that we have to be a little careful here. He said that we are introducing an elected mayor and a political adviser, but we are not adding an extra layer of politicians; it is people from the combined authority participating in the way that things are governed. However, I agree that that is a concern that has to be guarded against. This is not the only money going into the north-east, although a significant amount will, and I agree that it will not solve all the problems.

I thank the right reverend Prelate for her contribution. It is always good to hear from someone with her experience and knowledge of the challenges in the north-east. I thank her for the encouragement that she has given and agree that it is important that we seek to make this a success by working together for the good of the area in facing the challenges that there are. I had not appreciated the history of the diocese and it was extremely interesting to hear about Newcastle. As I recall, a similar thing happened with the university: Newcastle University was initially an offshoot of Durham and is now very much a proud university in its own right.

The noble Lord, Lord Beith, spoke in the other place with massive experience of his area, rural Northumberland, and is still a powerful voice for the interests of Berwick and that area. I therefore take seriously the points that he makes. He is right to say that this is a joining of two very different traditions and areas: rural Northumberland, which is massive, and urban Newcastle. However, there is a shared economic, cultural and social interest, so we look to this being driven by the three leaders, who have so far shown real political leadership.

The noble Lord talked about the challenge of transport for the joint committee. It is a challenge. I have travelled on the excellent Metro system many times and know that it works very well now, as I am sure it will in the future. That is why we have provided for the committee, which needs to meet those challenges.

The noble Lord, Lord Wrigglesworth, has great experience in the north-east—as he said, more in Teesside than Tyneside. I thank him for the business analysis that he provided on the importance of ensuring that the areas work well together. That is the essence of the success of metro mayors: they bring people together at a regional and local level to work well together. I do not seek to suggest that this is a panacea that will solve everything overnight, but I think that it is a constructive way forward and I think that that view is shared. Once again, I thank noble Lords for their contributions.

Motion agreed.