Devolution and the Union

Baroness Stuart of Edgbaston Excerpts

Thursday 20th November 2014 Commons Chamber

[Ian Austin (Dudley North) (Lab)]

Now that the Scots have had their say, now that there is a London Mayor and a London Assembly, now that the Welsh have their Assembly, and now that Manchester is to get a metro mayor with new powers, people in the west midlands are asking, “What about the rest of us?” I want to argue that in this new era of devolution, the west midlands and other English regions should be granted a fairer share of public spending, as well as new powers and greater freedoms.

The truth is, first, that people in England clearly do not think that the current arrangements are fair. Secondly, the fact that our economy is so unbalanced—with business, finance, the professions and, as a result, growth and wealth concentrated so heavily in London and the south-east—shows that the arrangements do not work for most of Britain. Thirdly, there is clearly a crisis of trust in politics and government.

I think that changing one part of the system, as has happened so far, causes all sorts of problems elsewhere—tugging at one thread of our constitution risks unravelling the whole thing—which is why we need a proper constitutional convention to examine all these matters. The response to greater powers for Scotland is devolution to the English regions, with more decentralisation, more services being delivered and run by local communities, local councils and people themselves, and a fairer share of public spending.

In the west midlands, we have world-beating businesses, such as Jaguar Land Rover and JCB, and world-beating universities, but we have too many people out of work and we have real problems attracting investment for the new industries and jobs that we need to replace the ones we have lost. Output in the west midlands has lagged behind the national average since 1976. If output in the black country alone matched the national average, our economy would be £8 billion bigger. That shows that the current situation is not working for people in the west midlands.

I want the west midlands and other English regions to have wide-ranging new powers, and responsibility for public spending on strategic regional issues, such as regional transport, regional planning and regional economic development and skills. Public spending on services such as housing, regeneration and infrastructure—they are currently delivered in the region, but often by officials accountable to Whitehall—should be decided in the west midlands. I want a Minister for the west midlands with the same powers as the London Mayor, so that decisions that affect the people of the region are taken by people in the region.

I would decentralise further still. I want more services devolved to regional cities, towns and boroughs, and then to communities and individuals. Next, I want Departments moved out of London completely. Why not base the Department for Culture, Media and Sport in Manchester, the Department for Environment, Food and Rural Affairs in East Anglia and the Department for Business, Innovation and Skills in the west midlands?

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

I am very sympathetic to the idea of having a Minister for the west midlands, but why should such a Minister be appointed by a Westminster Prime Minister, while the Mayor of London, with the same powers, is elected by the people of London?

[Ian Austin]

We can look at all those arrangements, but at the very least we should start by having someone in the region who is responsible for all such powers. I must say—I would say this—that when I was the Minister for the region, I thought the arrangements worked quite well, but let me make a bit of progress.

Moving Departments wholesale to the regions would not just save the taxpayer a fortune, but would mean that civil servants were a lot closer to the communities that their decisions affect, that the economic impact of public spending and civil service jobs was spread more evenly across the country, and that pressure on public services and the overheated London property market was reduced.

We need a review of the way in which public spending is distributed, and a new system that guarantees fairness across the country. Official figures show that public spending is £8,498 per head in the west midlands, compared with £10,100 in Scotland, £10,800 in Northern Ireland, almost £10,000 in Wales and £9,000 in London. The national average is £8,788, so public spending is higher in the north-east, the north-west and Yorkshire and the Humber than in the west midlands.

I recently sent a detailed survey on all these issues to thousands of my constituents. The responses showed that there is huge support for dealing with decisions about England in a different way. Eight out of 10 people said that we need a new system. Two thirds of them supported the idea of having directly elected mayors, as my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) will be pleased to hear, who are responsible for greater powers in regions such as the west midlands, while just four out of 10 were in favour of having new English Ministers.

The clear point is that the vast majority of my constituents feel that if it is right for Scotland, right for Wales and right for London, then the 5 million people in the west midlands and its cities, towns and boroughs should also have a greater say over public spending and public services in their region. They are asking why people in Westminster who have never lived or worked in the west midlands should make decisions about our priorities.

--- Later in debate ---

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

Let me pour a bit of oil on this heated debate and remind us of its title, “Devolution and the Union”. All of us bring to these debates some personal experience. For the first 18 years of my life, I lived in a federal state, not in a union. Those who talk about federalism need to be reminded of just what it means. I also spent 18 months on a constitutional convention, so I know what that means, too.

Let us consider three terms. First, what does devolution mean? No one could argue that Labour has not been the architect of genuine devolution within these British Isles. In many ways, the one piece of unfinished business has been devolution in England outside London. We must reflect on that, because we cannot have devolution in the constituent parts of the United Kingdom unless there has been proper devolution in the largest part of that United Kingdom.

The second issue, a puzzling one, arises when we talk about money. I think we have completely forgotten the purpose of transfer payments. The centre collects money in order to redistribute it to the regions according to need. That is the nature of our Union. It is not a vehicle for increasing separatism and it is not a vehicle for increasing special pleading: it is a vehicle of unity, a vehicle of bringing disparate parts together in a fair and proper manner.

The third issue is how our electorates in a United Kingdom and a Union relate to that. What I find really troubling about this whole debate is that those who are strong advocates for devolution sometimes use it as a means of breaking up the Union. If people do not want a Union and they want federalism, they should be clear about what that would mean. As a structure in which one part is disproportionately larger than the others, federalism does not work. People say, “Isn’t it great how Germany works as a federal state?”, but speaking as a German who grew up in Germany, let me remind the House that the only time federalism worked in Germany was after Prussia had been broken up. I would not recommend the Prussian model as one to follow. If people want to follow it, okay, but they should be very cautious.

Federalism in the UK would be deeply divisive. The rest of Europe looks at the model of the Union in the UK as something that this country got to a couple of hundred years before everybody else did, and they admire and envy us for having done so. I find it quite extraordinary that some are trying to go back on that. Let us remind ourselves that the transfer of money is in order to represent the United Kingdom as a Union—

[Mr MacNeil]

Will the hon. Lady give way?

[Ms Stuart]

I am reluctant to do so. I found the hon. Gentleman’s speech irritating because he was so ill-tempered and ill-informed. If he promises to make an informed and well-tempered intervention, I will allow it.

[Mr MacNeil]

I promise the hon. Lady that if my speech appeared like that, it was because of the barracking and level of discourtesy I had to deal with from Labour Members. I apologise to her, and doubtless she would want to apologise for her colleagues. She talks of money transfers, so let me ask her in which direction she thinks these transfers are going.

[Ms Stuart]

When my children used to behave badly, they blamed their big brother, but it always takes two to pick a fight. I would have thought that the hon. Gentleman was too big and too grown up to be goaded by anyone, so let us come back to the transfer, which is what we are arguing about at this stage. It does not matter what we call it. I have to say that the impetuous behaviour of the Prime Minister after the referendum brought about much of this trouble, and I wish that he had been a little more grown up and reflective.

Arguments about money involve equal and fair distribution and democratic representation. Scotland had a referendum, for the second time in my lifetime. Some Members may be too young to remember the first referendum, but I do. This is the second occasion on which the Scottish people have spoken decisively on where they wish to be. There must come a point at which we must simply accept what the people have said.

I agree with my hon. Friend the Member for Dudley North (Ian Austin) that devolution in England outside London is unfinished business. I think that we must look much more closely at taxation powers for the city regions. Ultimately, however, when we argue about money, we should bear in mind the fact that it should be used as a mechanism to bring people together and to bring greater fairness. It should not be used as the divisive mechanism for which I think some Members are currently trying to argue, because that would be a very, very bad way of going about things.