Cities and Local Government Devolution Bill [HL]

Baroness Hollis of Heigham Excerpts

Monday 22nd June 2015 Lords Chamber

[Lord Campbell-Savours (Lab)]

My Lords, I have developed huge respect for the noble Lord, Lord Heseltine, over the years following the work that he did in Liverpool Toxteth and his overseeing of that very significant project, which I was able to visit some 25 years ago. But I want to speak specifically to the wording in this amendment because I am unable to understand why the noble Lord takes exception to it. Amendment 3 says:

“The Secretary of State may”—

I stress, may—

“refuse to make an order under subsection (1) if he believes that the proposal made by the appropriate authorities … does not provide sufficient democratic accountability … does not have the support of local authority electors … or … would risk the proper functioning of local government”.

It does not say that the Secretary of State will refuse if the proposal made by the authorities does not provide sufficient democratic accountability. All that is happening here is that the Secretary of State is being given discretion to make a judgment, based on whatever information is brought before them. They are not required to do so because suddenly the electorate in an area are saying, “We demand that this procedure does not take place”. It is for the Secretary of State to make a judgment and to use his or her discretion. If the noble Lord, Lord Heseltine, had read the amendment in that light, I would have thought that he may have taken a more flexible view of it.

[Baroness Hollis of Heigham (Lab)]

My Lords, I, too, would like to support the remarks of my noble friend Lord Beecham and to challenge, with some trepidation, the history of local government over the last 30 or 40 years which was offered to us tonight by the noble Lord, Lord Heseltine. I think I would not be unfair to him if I suggested that he made two main arguments: first, that local government was in disrepute and, secondly—with the implication that this was a consequence of the first point—that there had been increased centralisation because local government could not be trusted or did not have people of sufficient quality or merit to carry out the functions of local government. I remind the noble Lord, although I am sure that he knows this perfectly well, that actually he has it the wrong way round.

What we have had since 1974 is several reorganisations and a poll tax which took millions of people off—and effectively destroyed—the electoral register. Then, within the course of the same Parliament, that was reversed and there was a new form of funding: the council tax, which had its own inadequacies. We have had the effective nationalisation of the business rate—although it was not effective but ineffective, with some seepage back to local authorities on the grounds of “earned autonomy”. I find the arrogance of such a statement appalling. Even in the last five years, we have had our resources cut by some 40%. Then the noble Lord, Lord Heseltine, wonders why local government does not have the same effectiveness and high standing in the community that it had in the 1960s and 1970s. We could even go back to Joe Chamberlain in the 1880s and the like. The noble Lord has got it back to front. Central government—my party is guilty as well—has had a campaign, in the name of the sovereignty of a parliamentary, united system, to bring the powers back into central government.

The reason is that whichever Government are in power, over the course of a few years the battle in local government swings to the other party. Then we had Mrs Thatcher telling local government, “Take your tanks off my lawn”. She said it to the universities and the lawyers, and she said it to local government. That political will was matched by the Treasury’s will to turn local government into what were essentially post-boxes—agencies for central government wishes and responsibilities. That is what happened. It is not that we were in disrepute and, as a result, tried to make amendments and take powers to the centre. Since the 1970s, central government has sliced and sliced away at local government’s responsibilities, finance and functions, and its standing in the community. Central government must take responsibility for what it has done. I will give way to the noble Lord although I have not quite finished.

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[Baroness Hollis of Heigham]

I do not disagree that Redcliffe-Maud was a sizeable problem. I did quite a lot of work on this and thought that the Senior minority report looked at one stage as if it was going to be the main way through. As the noble Lord, Lord Heseltine, will also remember, before that there was the Kilbrandon report on regional government, which some of us were also involved with. So we both have long memories of what has happened to local government, going right back to the mid-1960s. The point I am trying to establish—and I am not trying to say that it is one party especially, rather than the other—is that by taking slice after slice of local government authority, responsibility, functions and resources, central government have knowingly and with collusion undermined the local government that we all want to see. I am sure that the noble Lord is right that we want to see that local government revived. That is healthy and appropriate, but what you should not do is to say, “You can only have that revived local government on my terms, of having an elected mayor, if you want that earned autonomy of the combined authorities”.

I was a local authority leader, first as a councillor in the county borough and then the district. I was also a county councillor, et cetera. I say to the noble Lord, Lord Heseltine, that as the leader of my local authority, directly elected in my ward by my constituents and, further, directly elected by other councillors, there was nothing I could not do that I could now do as mayor. In addition, I had the support of a majority group, I could share power and devolve it down through committee structures, which a mayor would not so easily be able to do, and I had the full financial backing of that local authority. As a leader, and with consent, I effectively had more power, potential and resources than any elected mayor as presently prescribed by Whitehall would have. So I say to him that one model does not fit all and we cannot decide that we want autonomy and bottom-up, local decision-making in some territories and not in others. If individual local authorities or groups of local authorities want an elected mayor, I will cheer them on. If they decide that it is not right for them, the Government in London, and the noble Lord, Lord Heseltine, should give them the respect and dignity of their choice. That is what localism is about.

[Baroness Warsi (Con)]

My Lords, you will be pleased to know that I am not going to get into this discussion about what happened in the 1960s. My memory certainly does not stretch as far back as that, having been born in the 1970s. I would like to speak about what business is looking for from local decision-makers. My interests are noted on the register of interests. As somebody who in her real life—before life in politics—started and ran three businesses, of which I am still involved in two, it is important for me to have heard today from the Federation of Small Businesses that its members are in a robust mood. It did a survey and two-thirds of small businesses are hoping to grow moderately or rapidly over the next year. That is great news and, to some extent, is a response to the policy that has been pursued in this area over the last four or five years.

I pay tribute to the noble Lord, Lord Shipley, and my noble friend Lord Heseltine for the tremendous amount of work they did under the last Administration to make sure that the building blocks were put in place, with the benefits that we are seeing today. Much of the work on devolution had already been started. Certainly in West Yorkshire, where the businesses I am involved in are based, the first agreement on devolution was already in place. Indeed, as we scrutinise the Bill, agreements and discussions are ongoing about what that devolution deal will look like now for West Yorkshire or the much broader Yorkshire region. Those decisions have still to be made.

The only question I would raise is this: is what we are going to create, or what we are asking for, going to assist or get in the way of business? Is the extra bureaucracy that we want to put in place in the name of democratic accountability going to help create jobs, which is what ordinary people want, or delay their creation? Is the consultation that we think is so vital before we put these structures in place going to help businesses to grow, or is it going to slow things down and therefore detract from this robust mood that small businesses up and down the country are showing?

Time is of the essence. I know from my own involvement with the regional growth fund and its payment to businesses in Yorkshire—I am involved in two manufacturing businesses, which manufacture furniture and ingredients respectively—that when an order comes through the door, no one waits for you to get your act together and discuss it with the LEPs and the RGF, and for them to make a decision and come back to you to tell you about timescales and ensure that everything has been properly consulted on. These opportunities do not come along often. Therefore, we should not stand in the way of these structures being created quickly, of local decision-makers being able to respond quickly, of getting money into businesses and getting them to invest more in expanding and—playing upon this robust mood that the Federation of Small Businesses is talking about—creating the very jobs we need for the economy to keep growing. Speaking from a user’s perspective, in scrutinising this legislation, let us enable, rather than creating further layers of bureaucracy.

[Lord Woolmer of Leeds (Lab)]

My Lords, I agree with every word just said by the noble Lord, Lord Scriven. I return to the remarks of the noble Lord, Lord Heseltine, who has almost provided the framework in which we have discussed this amendment. I seem to recall that it was not a Labour Government who brought forward the legislation following up Redcliffe-Maud.

[Baroness Hollis of Heigham]

Peter Walker.

[Lord Woolmer of Leeds]

It was Peter Walker in the Conservative Government, but that is history. If I have understood the argument of the noble Lord, Lord Heseltine, it was that over the years local government has fallen increasingly into disrepute and lost the confidence of the people, and that is why everything went to the centre. Now it has been decided that we are going to devolve some real powers back to these discredited bodies that no one has any confidence in, but we are not going to give them the power; we are going to create one elected person in each area, called the mayor. In place of dozens of discredited local councillors—in the vision of the noble Lord, Lord Heseltine—there will be one credible, powerful mayor.

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[Baroness Williams of Trafford]

My Lords, technically the noble Lord is right—it is down to four people—but they are elected by their local council groups, and their local councillors are elected by the electorate. This was explicit in the Conservative Party’s manifesto for the general election, whether anybody read it or not—although I hope that some people did.

Going back to what I was saying—which makes the very point that the noble Lord raised—this means that those who have been democratically elected by the local authority electors are making this decision on behalf of those who have elected them. That is representative democracy, which is the bedrock of our local democracy. In devolving powers and reaching devolution agreements with areas, it is right that the Government deal with those elected to represent the area—those with a democratic mandate—rather than in some way trying to go over the heads of the elected local representatives and reach their own view on what the local electorate want.

[Baroness Hollis of Heigham]

My Lords, I am still not clear on this. If, for example, out in shire England, three local authorities of different political persuasions are working together in what is effectively a city deal and an extended partnership, and they seek to have greater powers devolved to them, would that be compulsory, or would the Secretary of State have the power to insist that they can do that only if there were an elected mayor?

[Baroness Williams of Trafford]

My Lords, if that situation arose, those three local authorities would enter into a discussion with the Secretary of State in the same way that Greater Manchester did, or any other area might do. They would reach agreement with the Secretary of State as to what the appropriate level of accountability was for the level of powers being devolved. There would be a separate conversation that would happen with each area; it is a bespoke deal with each area. That is why the legislation is enabling in the way it is, because nobody will—

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[Baroness Williams of Trafford]

My Lords, there are powers available under other local government Acts. For example, the Localism Act can provide such a thing that the noble Baroness alluded to. I hope that in some way answers her question.

[Baroness Hollis of Heigham]

My Lords, forgive me, this is Committee stage and I would not behave like this on Report but I am still not clear. If the Minister is saying that this could be a condition, then across a lot of southern England there will not be combined authorities with urban centres under one political control, surrounded by rural areas under a very different control which may outnumber them numerically, and where that would be reflected in the election results, but where the energy is coming from the city. In combined authorities where currently three leaders on relatively equal terms negotiate, agree and work with each other and the system works, at least some of them will not be willing to go that step further into a combined authority with an elected mayor who has the backing of only one party and in which the energy is disjoined from the voting numbers. I can assure the noble Baroness that not that many combined authorities will be able to generate the economic growth that she wishes to see if that is the price they have to pay.

[Baroness Williams of Trafford]

My Lords, this Bill provides for combined authorities. Perhaps I originally misunderstood what the noble Baroness was referring to. Other local government Acts would provide for other types of powers to be devolved down but not in the way that this Bill provides—for example, through the Localism Act. It is important to understand that nothing would ever be imposed on a local area. The area would have to want it to happen. It would have to be a combined authority under the terms of the Bill and everyone would have to agree.

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[Baroness Williams of Trafford]

My Lords, I cannot be more clear that that was the system that Greater Manchester and the Secretary of State agreed would be the accountable model.

[Baroness Hollis of Heigham]

I know that the Minister is doing her best and this is absolutely no criticism of her, but we are getting very discordant messages from the Commons end and the Lords end. I am no more clear now than I was an hour ago whether, if an area wishes to be a combined authority and exercise certain powers to promote the national agenda of economic growth, a mayoralty may be a condition imposed on it by the Secretary of State.

[Baroness Williams of Trafford]

My Lords, it may well be a condition that is agreed to rather than imposed. I hope that that makes sense.

[Baroness Hollis of Heigham]

I am sorry, but will the Minister tell me what the difference is between imposing something in return for getting those powers and actually coming to a genuine agreement on the model and the powers?

[Baroness Williams of Trafford]

My Lords, imposition is different from agreement—I think we can all agree. No combined authority will have anything imposed upon it. It will have to agree mutually that that is what is to be the accountable model.

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[Baroness Hollis of Heigham]

If it does not agree, it will not be a combined authority with those powers. Therefore, it is an imposition.

[Baroness Williams of Trafford]

My Lords, it is not an imposition. It has to be agreed. The Secretary of State does not want to impose anything on anyone, but he does want to see full accountability for the full devolution of powers.