Levelling-up and Regeneration Bill

Lord Heseltine Excerpts

2nd reading
Tuesday 17th January 2023 Lords Chamber

[Lord Heseltine (Non-Afl)]

My Lords, I hope I may be forgiven a certain sense of nostalgia: I was elected to another place in 1966 and, two years later, the Redcliffe-Maud report analysed the changed circumstances that the country faced. It recommended that 1,300 local authorities should be replaced by 60 unitary and metro authorities. I was a junior Minister in the Government who followed, and we reduced the 1,300 authorities to 300. I think I may claim to be the only person who has fudged and compromised for the last 40 or 50 years in the evolution of an devolution agenda.

The truth of the matter is that turkeys do not vote for Christmas: “What I have, I hold”. It is the oldest human nature of them all. Let us be frank: all of us are guilty, in one way or another. Ministers, you climbed the greasy pole, you have been elevated to positions of power and influence; do you want to give away part of your empire? Your civil servants, are they enthusiasts to create rival bodies over which you have no control? Members of Parliament—do they want to see more powerful local mayors, better paid, with more responsibility and greater prestige than them? Councillors? It is their jobs at stake. Compromise has been the nature of the progress.

I had a similar experience in the creation of urban development corporations. There was not anything very clever about that idea; it was merely taking the new town corporations and bringing them back into the dereliction that had been left by the exodus of young people and investment. Of course, everybody was against it and it ended up in a meeting in Downing Street in which Geoffrey Howe argued for enterprise zones—very much the same sort of limited initiative that today we have in freeports or investment areas, a patchwork quilt. Keith Joseph was apoplectic: “This is intervention, Margaret, on a massive scale”, and to her great credit Mrs Thatcher supported my view that we should have development corporations, because I saw the dereliction in east London. The civil servants had a final trick: “That will need hybrid legislation, Secretary of State, but we all know, of course, you will never get it through.” I asked: where is the second worst place? “Liverpool.” I said, “We will have a development corporation in Liverpool.” It was walking the streets of Liverpool after the riots that I really understood the problems of why this country has a badly overcentralised process of government.

Many noble Lords have spoken of international comparisons. They are stark and everybody knows it, but we have lived with the compromises and the fudge that have led us to our present position. The essence of development corporations was very simple: we had to have somebody in charge; we had to have planning powers; we had to have land acquisition powers. The reason I am a sceptic of small initiatives like freeports is that if you are to be an investor—somebody putting real money on the ground—you want to know the surroundings in which your investment is to be built. You are not going to put your brand-new research laboratory or your head office into an area which could be developed by a lot of tin sheds with low-grade employment. You have to have someone with a strategy and the power to implement it. That is why the development corporations have been the success that they have: all over the country, without any doubt, they are now a leading example of how you make devolution work.

The big leap forward was the creation of a mayoralty in London, for which the Labour Government in the late 1990s must take credit. David Cameron’s Government, with George Osborne and Greg Clark, developed a concept of devolution and, without the slightest doubt, we now have a situation where most of big urban England has development corporations. The framework is there; there are things that could be improved and powers that could be devolved, and doubtless the exploration of this legislation will show those opportunities.

But what about the rest of England? You cannot half-generate an economy. Sections of the economy are interdependent, so, if you really want to make a success, you have to fire it up in all directions. Yet what have we got today in this legislation? We have four different processes of county government, much of it two-tier. We are told we are strapped for cash, and we are. So why do we need 300 local authorities when 60 would do? I hope the Minister could perhaps reflect later on why it is that you need four different systems. Why is it that, after I got rid of two tiers in Scotland and Wales, there is no desire at all to bring back two tiers? Why is it that in England, where we have gone to unitary authorities, there is no demand to bring back a two-tier system? So what is the compromise and fudge in this crisis we face today that says we should not actually do what Redcliffe-Maud said should happen, and what is actually now happening—slowly, by attrition and economic pressures—as you move to a process of unitary authorities?

No one underestimates the weight of the in-tray facing the Prime Minister. He has outlined five challenges. Nobody can seriously argue with that. But underlying all those challenges is the challenge to make the British economy work more effectively; and there are clear areas in which the local partnership can play a role in doing that. We have too many failed schools, many of them north of Birmingham. We have a shortage of skills because the skills process does not involve the employers in the areas where the skills are going to be needed to the extent that it should. By distributing capital money to local authorities, as George Osborne pioneered, with a single pot, you can ensure that local authorities add to the scarce public money they are spending. It is called gearing. The more you look at what is happening when you invite local communities to design their strategies, the more you see that, for limited public expenditure, massive expenditure can follow from the third sector—from overseas investors and from and the private sector. There were opportunities built into the processes of competition between local authorities for scarce resources.

My final point, having listened to this fascinating debate today, including significant maiden speeches, is that this is a debate about devolution, but virtually all colleagues have talked about what they think we should do in local areas. This is the problem. We are telling them what our priorities are and, if you are seriously going to have devolution, you are going to have to listen to what they think their priorities are, and they may not be those of the national Government. That brings you to the central issue: what are we talking about? We are not talking about freedom for local communities. No Government are going to abandon their ability to set national standards. No Government are going to allow local, second-tier authorities to frustrate their manifesto commitments. We are talking about a genuine partnership in which locally elected people, with consultation on the constituent strengths of that area, come forward with their strategies and the Government are invited to back, criticise or add to those strategies. That is how you galvanise the enthusiasm, the support and the conviction that the nation is working together towards a common cause.

As one last aside, let me say this: I have worked with Labour authorities and Labour leaders as well as I have with Conservatives in that same position, and the jargon of party politics is irrelevant. There are problems to be solved and solutions to be found, and that can be done by dialogue and good will across the political spectrum. That is the opportunity that I believe the Prime Minister should now adopt—to throw himself behind the devolution agenda. To make it clear that Whitehall is going to reform itself—an important contribution—there needs to be a powerful committee of all the Ministers concerned. There needs to be a restructuring of local civil servants to address the nine phone call phenomenon where a local leader who has to try to find out if his strategy is acceptable nationally has to ring four, five or six government departments because there is no co-ordination of the central department at a local level. This is a subject I feel is long overdue to be addressed, constructively and fundamentally, to the benefit of the whole community.