Economic Leadership for Cities

Lord McFall of Alcluith Excerpts

Thursday 11th December 2014 Lords Chamber

[Lord McFall of Alcluith (Lab)]

My Lords, I welcome the introduction by the noble Lord, Lord Shipley, of this important debate, and the maiden speech of the noble Lord, Lord Goddard of Stockport, which was very thoughtful and amusing. I am sure that he will make a great contribution to the House.

My reflections will be on the issue of the Scottish referendum and from my experience as a Member of Parliament in the other place for 23 years. In Scotland, the most important question was that of the currency. The SNP proposals were described by Jim Sillars of that party as “stupidity on stilts”, and Paul Krugman commented:

“If Scottish voters really believe that it’s safe to become a country without a currency, they have been badly misled”.

We can see that today, with oil at $65 a barrel—the White Paper had Scotland breaking even at $115 a barrel.

Yet almost 45% of people in Scotland voted yes, and there were many reasons for that. In my campaigning, I found a few: first, people wanted a fairer, more socially just Scotland; they thought, “We couldn’t do any worse, so why shouldn’t we vote yes?”; and they had lost faith in the ability to bring change through the ballot box. The fundamental issue is that there is an increasing distance between the political process and the people, but the referendum demonstrated that people are interested in politics—we saw tremendous turnouts of 85% to 90%. So there is a clear desire for increased devolution and a recognition of the special characteristics of other nations and regions in the UK.

However, there is a remoteness to our politics, whether in Westminster, Holyrood, Cardiff or Stormont. What I have witnessed, with Holyrood, is devolution to Scotland but not devolution within Scotland. Let me give my own experience of how difficult devolution within Scotland is. As MP for West Dunbartonshire, I witnessed the closure of the J&B bottling plant in 1997. Instead of letting Diageo depart simply with warm words of regret and a cheque for the local community, I held its feet to the fire and established a task force, which I chaired, comprising local enterprise companies, local authorities, trade unions, local companies and the community, as well as Diageo.

Tying down that local public/private partnership was not without its difficulties, but in 2011 I departed, after 14 years as chair, of what has become known in the local area as Lomondgate. What is the audit of that? Four hundred and thirty jobs were lost by the J&B closure; at the end of 2013, the audited accounts showed that we now have 702 full-time equivalent jobs on that 40-acre site—that is 2% of West Dunbartonshire’s resident workforce. We have contributed £182 million gross value added regionally and £65 million nationally. The major achievements include: attracting the BBC to us as a production location for “River City”, which is Scotland’s equivalent of “EastEnders”; attracting Aggreko, a company that started almost in a back room in Dumbarton in the 1980s but is now a FTSE 100 company, with 400 jobs; and bringing in housing and leisure investment of more than £40 million, accompanied by capital investment of £62 million.

Independent economic forecasts estimate that, by 2019, there will be 1,971 gross full-time equivalent jobs accommodated on that site. That is a net cumulative regional gross value added of £510 million, plus £192 million contributed nationally. What does that mean in terms of public funding? Public funding for that project was less than £500,000, so the net return on investment is more than £1,000 for every £1 of public money. That is a tremendous outcome.

And what are the lessons? This would never have been achieved if it had been left at national level. The public/private partnership had to be locally devised and driven, and Diageo had to fulfil its community responsibility. If Westminster or Holyrood—or even the local authority—had been running it, they would have been too remote and that would not have happened. To end up with this successful outcome, day-to-day project management was needed to drive it. This is not just about satisfying local needs; it is about powering those with the ambition for their areas, and the skill sets to realise their potential. I conclude by saying that if we take the concept of subsidiarity to its natural conclusion, we will not end just with devolution to cities alone.