Localism Bill

Debate between Alan Whitehead and Lord Jackson of Peterborough

Monday 17th January 2011 Commons Chamber

[Mr Jackson]

The big society is about empowering local people to make decisions at local level. It should be seen not as lots of disparate, discrete initiatives at local level, but within the context of the Bill’s provisions. I see the general power of competence, for example, as a key unlocking a huge amount of progressive development by local authorities. The New Local Government Network specifically praised the general power of competence and said:

“This represents both a significant philosophical shift towards local democracy and a practical transfer of power to the local level.”

That is something that Labour never did in its 13 years of power, although it promised to do so in its 1997 manifesto.

The other important issue—unfortunately, one cannot look in detail at the 406 pages of the Bill and its 201 clauses and 24 schedules in five minutes—is whether it is permissive, as opposed to prescriptive, as an approach to local government? On any objective test it is an extremely permissive piece of legislation. The general power of competence will give local authorities autonomy by unlocking accelerated development zones, tax increment financing, asset-backed vehicles and real estate investment trusts.

[Dr Whitehead]

In his exposition of the overall coherence of the Bill, is the hon. Gentleman in favour of stripping out of the Bill as it progresses through the House those 126 clauses whereby the Secretary of State can remove the powers that have been put into the Bill, if he so requires?

[Mr Jackson]

The hon. Gentleman makes a fair point. The TaxPayers Alliance, in its publication in March 2010 entitled “The fiscal and economic case for localism”, speaks to an issue that unites the whole House—the fact that we are too centralised in the power balance between central and local government. Clearly, that is the case. The UK has one of the most centralised systems of government, taxation and spending in the western world. Less than 20% of our revenue is raised locally, as opposed to a G7 average of 60%.

An econometric study in Germany found that Government efficiency increased in direct proportion to decentralisation and could drive it up by up to 10%. That would release in this country the equivalent of £70 billion. The Spanish institute of fiscal studies found that fiscal decentralisation could boost growth in the economy by 0.5%. The Bill speaks to that concern. If Opposition Members ask me whether we are going far enough in fiscal autonomy and decentralisation, the answer is no, but the Bill is a bigger and better start than what went on before.

Opposition Members will notice that we have been consistent from the publication of the control shift document in February 2009, which is the theoretical and philosophical basis for the Bill. We have been pushing the concept of localism. When I served on the Public Bill Committee with the right hon. Member for Salford and Eccles (Hazel Blears) two years ago, we did not oppose multi-area agreements or leaders boards because we believed in localism.