Cities and Local Government Devolution [Lords] Bill

Debate between Andrew Gwynne and Clive Betts

Wednesday 21st October 2015 Commons Chamber

[Mr Betts]

I would not want to second guess the motives of the Secretary of State, so I will use my own arguments to resist what the Government are trying to do.

Apart from the inconsistency of approach, the proposals are confusing. That takes me back to the point I made in my intervention on the Minister. In the Sheffield city region the economic powers, which are important and cover skills, economic development and the infrastructure associated with it, are to be devolved to the combined authority, which will cover nine districts—four metropolitan and five non-metropolitan districts. But as I understand it from the deal, the mayor will have responsibility for just transport. So the mayor is to run transport, and the combined authority is to run economic development. The public want some consistency of approach on these matters. I do not believe that the combined authority, the district, would naturally have come forward with a proposal that broke up the responsibilities in this way.

[Andrew Gwynne]

My hon. Friend is making a powerful case. The difference between his deal and the Greater Manchester deal is that the Greater Manchester deal is within a single metropolitan county, so functions such as police and eventually fire and rescue can also be devolved to the Mayor’s office.

[Mr Betts]

There is a big difference in the Manchester case. I am not arguing that Manchester should have a mayor imposed on it. If Manchester wants that, that is a matter for it, but it is different. In Sheffield we have hybrid devolution, with transport going to the mayor, but the mayor is not going to cover the nine districts. The mayor will cover only four districts—the old south Yorkshire districts—so how are people to understand the devolution deal, which has one set of governance arrangements for economic powers and skills, and another set of governance arrangements for transport, where one set of governance arrangements covers four authorities, whereas the other set covers nine?

The whole purpose of combined authorities is to bring local authorities together on a voluntary basis to cover a travel to work area—the natural economic entity—yet transport, the mayor and the associated powers will not cover the whole travel to work area of Sheffield. This is a real dog’s dinner. It is not going to work, and it is certainly not going to be understood by the public.

That leads me on to my second point. There is a problem with mayoral imposition, which in Sheffield’s case will not cover all five areas. Other districts can choose to join the arrangements for mayors if they wish. My understanding—I may be wrong—is that the districts of north Derbyshire and north Nottinghamshire, which are part of the Sheffield city region, are going to join the combined authority, which they are part of, for the economic powers. However, for transport powers to be devolved to those areas through a mayor, those districts will not merely have to agree, but they will have to get the county, which is the transport authority, or two counties, to agree as well. Does the county have a veto over what happens to devolution in the Sheffield city region?

This is not workable. At the same time as the Sheffield city region has a mayoral possibility, Derbyshire and Nottinghamshire are looking at having a joint combined authority, which would have a mayor as well. As I understand it, the mayor can exist for the districts of north Derbyshire and north Nottinghamshire only if those districts agree to the county mayor for Derbyshire and Nottinghamshire being created. So they have a veto over that. At some stage, surely, Ministers have to take some responsibility for coming forward with proposals to sort out this mess, or it will stop devolution working effectively in these areas.

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[Mr Betts]

I agree with what my hon. Friend the Member for Nottingham North (Mr Allen) said about the need for a wider constitutional settlement. That was apposite, and at some point we will have to address those issues. I agree with his points about subsidiarity and taking that below the level of an individual local authority, and about encouraging the process down.

Fiscal devolution is a challenge, and Members have reflected different perspectives from different parts of the country. It is a challenge, but not one that we should duck. I am Chair of the Communities and Local Government Committee, on which the hon. Member for Carlisle (John Stevenson) sat in the previous Parliament. He made important and valuable contributions to our report. We found a way to take on board proposals from the London Finance Commission about the wider devolution of property taxes, while recognising the need to protect areas that will perhaps struggle to raise business rates and other property taxes easily, or to get back money from areas that simply watch property prices rise and receive enormous windfalls. We must have balance in the system.

The Committee has begun an inquiry into the workings of devolution and the Bill, but since then the Chancellor has made his announcement about the full localisation of business rates. The Committee will want to come back and look at how that will be done. I think most Members would support the principle behind such a move, but how will we implement it to ensure protection for poorer areas? How will we devolve more powers to local government to take account of the extra money made available as part of that process?

[Andrew Gwynne]

My hon. Friend is right to say that the Select Committee must consider business rates retention in detail. One possible solution for devolved city regions might be the pooling and sharing of business rates. For example, parts of Greater Manchester are key drivers of economic growth, and that wealth should be spread across the whole conurbation for the benefit of all.

[Mr Betts]

My hon. Friend is right, and the Committee made that recommendation in the previous Parliament. It is a way that we can devolve the redistribution process to more local areas. That does not work everywhere, but it would probably work well in areas such as Manchester that have a spread of different local authorities