Cities

Lord Liddle Excerpts

Thursday 19th January 2012 Lords Chamber

[Lord Liddle]

My Lords, on behalf of the Opposition, we welcome this debate about cities and thank the noble Lord, Lord Storey, for tabling this Motion. It is a tribute to the Lords that in this short debate we have had very informative contributions from former leaders of three great northern cities—Bradford, Liverpool and Newcastle. We have also had very good contributions from the noble Baroness, Lady Randerson, with her deep experience of circumstances in Wales, and Cardiff in particular; and the noble Baroness, Lady Sharp, with her great knowledge of universities, and of the knowledge economy and its relationship to economic development. We also welcome the government paper published in December, Unlocking Growth in Cities, which I think is a response to cross-party pressure from all sides of this House and elsewhere suggesting that our great urban centres need more power to shape their own destinies.

This has never been more needed. I have welcomed the fact that the Liberal Democrats chose this subject for debate. However, on this side of the House we have to put on record that our big English provincial cities in particular need these powers to facilitate growth and to generate dynamism and momentum because the current austerity programme, which the coalition is pushing through too far and too fast, is hitting disproportionately hard those very English provincial cities that the Liberal Democrats have been speaking of so eloquently today. It hits them hardest in terms of public sector jobs cut, in youth employment and in welfare cuts that will cause real social misery and pain. We are facing this challenge because of that austerity programme.

That has to be said, but there is here a bigger and longer-running issue which has nothing to do with party politics. Given the intense feeling that a lot of people have that we are as a country too centralised and need to be more localist, why has that not happened? I have just a few thoughts on that. I have been a localist all my life—I have spent 10 years in local government—but my thinking on the role of the city in localism was greatly affected when I did an exercise for the president of the European Commission in Brussels, looking at the social challenges facing Europe. I came across the work of a US urban theorist called Richard Florida, who had written a very good book called The Rise of the Creative Class. The core proposition in that book is that metropolitan regions with high concentrations of technology workers, artists, musicians and lesbians and gay men exhibit a higher level of economic development than do other places. You could say that this is a flawed piece of academic punditry, and certainly some of it goes a bit over the top. Professor Florida, for instance, produced an index of what he called “high bohemian” cities. But it does to an extent at least accord with the reality of what is happening on the ground. I saw this when I came back from Brussels in 2007 and became chair of Cumbria Vision and involved in regional development. Our great northern cities were undergoing a remarkable renaissance. They had been devastated by the austerity of the 1980s, although they were rescued in part by the great vision of the noble Lord, Lord Heseltine. But our cities have had to spend the last quarter century finding new drivers of economic activity. To an extent, those have been found. Look at higher education and the contribution made to Tyneside, for example, by the expansion of universities in Newcastle, with the new Northumbria university. Look at how the UCLan, in a much smaller city space, has made a big contribution in Preston. Look at the explosion of sport as a driver of economic activity and how important it is, particularly to Manchester and Liverpool. Look at culture, with the Tate in Liverpool, the Lowry in Salford and the Sage in Gateshead. It is a great flourishing of culture, a celebration of diversity and a triumph of the creative spirit, acting as a magnet for sources of dynamism in our society.

I am really proud of what the Labour Government contributed to the transformation of our cities in the past 15 years. It has become the stock in trade to knock the regional development agencies and what they did. Of course, they had their faults; everything does. They were over-bureaucratic, and the regional political dimension to complement them was never put in place. But what they did and contributed to makes me immensely proud of what my party did in its period of government, including the regeneration of Liverpool Docks, Media City at Salford Quays, the bringing together of the new university at Manchester, which will be world class, and the Daresbury science complex—as well as a new university with a campus even in a place like Burnley. This is the fantastic urban development that took place.

The coalition chose to toss away the achievements of the regional development agencies, which was a wilful destruction of the capacity for economic regeneration at the time when that capacity was never needed more. Therefore, the coalition will have a heavy price to pay for job losses and increasing regional equalities—I say to the noble Lord, Lord Henley—that are occurring in this country under his Government’s stewardship.

What are we to make of the latest initiative to fill this gap? As I have said, we have seen lots of initiatives in the past for greater localism. When I was first a special adviser working for the noble Lord, Lord Rodgers of Quarry Bank, in the Callaghan Government in the 1970s, I remember writing lots of memos for him on the work of the Layfield report and how it was going to introduce more decentralised local government. Well, that did not come to pass.

It is tempting to blame the Civil Service for seeing off localism and local government, and I know from personal experience that there is deep-seated control- freakery in parts of Whitehall departments. I see quite a bit of this lurking in the language of the December paper. But our politics is also responsible for the centralisation of our country. In sections of my own party, people are deeply committed to Fabian centralisation, and in the Conservative Party you have Mr Eric Pickles proclaiming his commitment to localism. As one of the noble Baronesses opposite pointed out, he is introducing the fiercest regime of rate-capping and control of council budgets that has ever been in place. It is not just on the central issue of finance that he is controlling; he deems it proper to decide how often councils should collect their bins. There is no consistency. What you do not have is genuine commitment to local decentralisation. What you have there is commitment, frankly, to populism.

When I look at the latest paper, published in December, my fear is that it is ersatz decentralisation. Anyone who has served government knows the tell-tale signs of these things. The paper is very good on symbols; a Minister for the Communities is being created, the excellent Mr Greg Clark, for whom I have great admiration—he is an excellent Minister. A new unit has been established in the Cabinet Office, the Cities Policy Unit. We have had a lot of Cabinet Office units of various types in the past. There is a new ministerial group under the Deputy Prime Minister to drive the agenda forward—very good, three cheers for that. It is excellent, if I might say so, that the noble Lord, Lord Shipley, has been recruited as an adviser in this latest drive for greater localism.

There are, however, important gaps in the prospectus, and I would be grateful if the Minister could explain how the Government propose to deal with them. If she is not able to do it in her speech, I very much hope that she will be able to send me a detailed reply. First, we are talking not about full-scale decentralisation but about decentralisation by exception to a limited number of cities. That is clear from paragraph 1.12 of the paper, which declares clearly,

“we are not looking to dismantle national policy frameworks”.

I dare say that Whitehall departments were very insistent on getting that sentence in.

Secondly, while I welcome measures such as the introduction of a single capital pot for participating cities, to an extent that was what the RDAs had as well. Some government departments look as if they are not going to play ball with this decentralisation; for instance, the Department for Work and Pensions, where the business of active labour polices to get people into jobs is so important for city development, is keeping its distance, as is BIS on skills. The example of the noble Lord, Lord Shipley, of the experience in the north-east shows how, when you have a nationally run target programme of skills training, it just does not work in terms of regional skill needs.

To me, there is an obscurity about the financing aspects of these proposals. What is the Treasury’s position on business rates and tax increment financing? There also seems to be confusion about governance. There are going to be referenda for elected mayors in a lot of these cities—at least we think there are. At the same time, there is a lot of talk in this paper about the role of the local economic partnerships, which are wider than cities. What is the relationship between the LEPs and the mayor? Where is the idea of the “metro mayor”—the mayor for Newcastle or for Greater Manchester, not just for the city, which is a tiny part of the area? There are real questions about how this is going to work and whether it is real decentralisation.

One of the most revealing bits of the paper is figure 1 on page 12, a graph that shows how cities do according to the national income of their countries. The country that has by far the most prosperous cities is Germany, and second is Italy. Why is that? It is because, particularly in Germany, there is a real political decentralisation of power.

We welcome this initiative but we want to know what it really represents. We wish the noble Lord, Lord Shipley, well, but I think he is going to have a mountain to climb if he is going to succeed in his ambitions.