Devolution: English Cities

Lord Bishop of Newcastle Excerpts

Wednesday 17th July 2019 Grand Committee

[The Lord Bishop of Newcastle]

My Lords, I thank the noble Lord, Lord Heseltine, for securing this debate on an important issue. I congratulate him on his fascinating and significant report.

I speak with some trepidation because many of the noble Lords taking part in this debate bring to it so much experience of government, both local and national. I do not have any of that. What I hope to bring is experience of over 30 years in ministry, where, unlike many professions, I live where I serve. It has been my privilege to have been involved in the lives of people in Stevenage in Hertfordshire, in south-east London and now most recently as a bishop in the north-east.

I have loved reading this report. That is something I do not say very often about reports of this nature. At the heart of it for me is the noble Lord’s reflection on the three weeks he walked the streets of Liverpool following the Toxteth riots in 1981, to which he referred in his opening speech. He said that that journey opened his political eyes. He saw the unhappiness and lack of ownership and engagement of people in their communities. He saw the frustration and despair of people whose futures are decided by people who live 200 miles away and who, as the noble Lord writes,

“have never experienced your life”.

Out of this experience the urban development corporations were born, and in Newcastle, as beneficiaries of this in 1987, many of us rejoice today in the transformation this brought about on the quayside in the heart of our city. The mechanisms of investment and leadership through the UDCs and investment and leadership through devolved combined authorities are very different, but underlying both initiatives is a concern to address the effects of the chasm between London and the rest of the regions in England—a chasm which the noble Lord believes, and I agree, contributed to the social unrest and riots in Liverpool in the 1980s and which in our time is contributing to the toxic divisions in our country over Brexit.

I support the noble Lord’s 20-point plan and vision to empower English regions, and I am pleased that since its inception in November last year the North of Tyne Combined Authority gives my part of the world a chance to be a part of this. I will be even more delighted if the combined authority can reach its full potential, with the inclusion of Gateshead, South Tyneside, Durham and Sunderland, which I hope will happen. As the noble Lord, Lord Beecham, said, the investment by the Government that the combined authority has attracted, although welcome, is very modest. The private sector is making a greater impact and showing greater confidence. In the North of Tyne area, which is the one I know best since it is exactly coterminous with the diocese of Newcastle, we have over 30,000 businesses that provide 415,000 jobs between them. To give just one example of this private sector confidence, at the beginning of this month technology giant Sage announced plans to move its flagship offices to Cobalt Business Park in North Tyneside, which is the largest out-of-town letting ever recorded in the north-east.

However, the story in the public sector is much less encouraging. The extra funding afforded to the northern powerhouse has been more than offset by the reduction in public sector jobs. Research from IPPR North marking the fifth anniversary of the northern powerhouse shows that across the north of England we have experienced a 2.8% fall in public sector employment since 2014. The north has suffered a £3.6 billion cut in public spending, leaving 200,000 more children in poverty. Office for National Statistics data shows that between 2012 and 2018 the number of civil servants in the UK as a whole fell by 7%, but in a stark example of the chasm between London and the rest of the country, this cut has not fallen uniformly over the country. The number of civil servants in London over this period rose by 12%.

In the light of this, I was encouraged to read John McDonnell’s interview with the Manchester Evening News in which he advocated moving a Treasury unit to the north of England. As the report written by the noble Lord, Lord Heseltine, points out, it has often been in the power of the Treasury to help or hinder continued devolution, so it would seem fitting if that department took the lead in encouraging devolution in this way. At present, as the noble Lord, Lord Heseltine, notes, London is too powerful and takes too many everyday decisions. This report offers a cogent and imaginative plan to change that. I urge the Grand Committee to note it.

I hope that the Government will consider the recommendations very seriously indeed. This report and vision speak not just to economic flourishing, which is important and we must have at least that, but go beyond it to the very nature of the society we seek to build.

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

Lord Bishop of Newcastle Excerpts

Tuesday 30th October 2018 Grand Committee

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.

Housebuilders

Lord Bishop of Newcastle Excerpts

Thursday 11th January 2018 Lords Chamber

[The Lord Bishop of Newcastle]

My Lords, it may be no coincidence of timing that as we debate the performance of the major housebuilders, every day this week in the financial press we have seen the trading results of many of these major companies, the latest being Barratt this morning, the country’s largest housebuilder. There is a consistent picture of extraordinarily high levels of profit and cash being returned to shareholders. However, my first point is that past history tells us this will not last. Housebuilding is a highly cyclical industry and when the next recession comes, new house sales will plummet, as they did in 2003 and 2008. Housebuilders, especially the smaller ones, will fail, and there will be high unemployment in the building trades. Indeed, in 2009, Barratt, which is doing so well according to the press this morning, lost over half a billion pounds and resumed paying a dividend only in 2013. This high level of risk is one of the reasons why so many smaller firms have disappeared and we now have a dysfunctional housebuilding sector that, as the noble Lord, Lord Best, pointed out, is alarmingly oligopolistic.

Government interventions could help, such as guaranteeing bank loans to small housebuilding firms and setting a requirement for local authorities to reserve a proportion of their planning permission grants for land owned or optioned to small builders. Such interventions are worth making but we delude ourselves if we think that, important as it is, sorting out the housebuilding industry is the answer to all our problems. Therefore, my second point is that we already have some outstanding analysis of the complexity and dysfunctionality of the housing market, and, more importantly, we have some answers in the excellent report of the Economic Affairs Committee, Building More Homes, which we debated in this House in March last year. The truth is that our housing crisis cannot be solved by the private sector alone.

In my own area, there are over 22,000 households on council housing lists in the Tyne and Wear region and over 8,000 in the county of Northumberland. This represents tens of thousands of people, including children, without a home that feels like a home. The report highlighted that this country can create enough new homes only when local authorities get back into the business of building them. Key to this is removing the restrictions on local authority financing and borrowing to build homes, as has been mentioned by noble Lords. Therefore, I join them in asking the noble Lord, Lord Bourne, to tell us whether any progress is being made with the Treasury in this area.

My third and last point is that this crisis is not, at heart, about buildings; it is about people. It is about not just housing supply and quantity but, as the noble Lord, Lord Best, indicated, quality. If we are truly to solve the crisis, we need to build communities where people can put down roots and thrive. All too often, our housing developments sit at two ends of a spectrum. At one end is new social or affordable housing, usually very small units—too small for families—that are cramped, with very limited space, and sometimes shoddily built. At the other end sit developments of luxury homes priced beyond the reach of local households. We are witnessing the hollowing out of communities along the fault lines of social class and income. We need to preserve the diversity of our communities, which is such a cherished feature of this nation.

I am delighted that the noble Lord, Lord Best, secured this debate, because it is about something far more important than just the performance of our housebuilding companies. It is about people, and it is on our watch. I hope that we will find the personal determination and that we will support and encourage the Government to work towards honouring the human dignity of every man, woman and child in this country by creating the homes and communities that our children and grandchildren deserve.