Andrew Gwynne
Main Page: Andrew Gwynne (Labour (Co-op) - Gorton and Denton)Cities and Local Government Devolution Bill [Lords]
Andrew Gwynne Excerpts(9 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Greg Clark
The hon. Gentleman makes an excellent point. It is important that both back-bench councillors and Members of Parliament have the opportunity to exercise scrutiny of any elected officials, whether they be chairs of combined authorities or members of the cabinets put together by combined authorities or boroughs.
Greg Clark
Let me finish answering the question from the hon. Member for Bury South (Mr Lewis).
Having a prominent and identifiable figure can, I think, help that scrutiny. Both the recent Mayors in London have been prominent individuals, and I dare say that they would both say that they feel pretty well scrutinised by Members of Parliament, elected members and indeed by public opinion. Under the Bill, it is open to different authorities to put arrangements together. In the case of Greater Manchester, strong powers exist for the constituent authorities, which have a long track record of working very well together to exercise scrutiny over the elected mayor. Members of those councils, of course, are linked in through that. Different arrangements are possible in different places.
Greg Clark
I am going to make some progress, but after I have done so, I will of course give way to Members who wish to intervene.
That is partly why we have decided to develop bespoke arrangements, but we also respect the fact that every place is very different. Greater Manchester, for instance, is a very different place from Liverpool. [Hon. Members: “Hear, hear.”] Indeed, the difference is to be celebrated. Vive la différence! They are both proud cities in their own right.
One of my regrets about the periods during which those two great cities, and others, were subsumed into the region called the north-west, which I do not think enjoyed a fraction of the identity, recognition, affection and, indeed, power they had enjoyed, is that they were sublimated, and our approach gives expression to that regret. I have been delighted, but not surprised, by the response of civic and business leaders across the country, and not just in our cities. They have demonstrated their enthusiasm for investing in a greater prominence for cities, towns and counties that can boost the economic prospects of the whole country.
Andrew Gwynne
May I return the Secretary of State to the issue of identity? People will obviously not identify with the new office of mayor and the combined authority unless they feel that they have some buy-in. The Local Government Act 2000, which introduced the cabinet system to local government, provided for two important functions. One was the call-in procedure, and the other was the provision that key cabinet decisions must be made public and must be publicly scrutinised. Does the Secretary of State expect the same powers to apply to the office of the mayor and the combined authority?
Greg Clark
Yes, I do. I think that the arrangements we require should have the potential to be equally transparent, although they may not need to be identical. We must consider them, debate them and ensure that they achieve the purpose that the hon. Gentleman has in mind.
I will now give way to the hon. Member for Birmingham, Erdington.
Andrew Gwynne
My hon. Friend is making an important point about local government finance. Certainly, the two councils in my constituency are suffering very badly from the reductions in funding. Does he also recognise that, with the devolution of powers such as health, there is a complex situation starting to develop in which health budgets are ring-fenced, except public health, which has been top sliced, and adult social care, which has been decimated? There is still an overall budget deficit in the health and care system.
Jon Trickett
That emphasises my point. As much as the Bill may offer a form of devolution, the truth is that whenever financial decisions are made by the Treasury, true devolution will not be achieved. That is what should be in the Bill, and that is why the point I am making is so important.
My third reason for why the Bill is not satisfactory refers to something that is happening at No.11. It was announced at conference that business rates are to change, which must be a good thing, but, as always, the devil is in the detail. No clear announcement was made about how the redistribution between richer and poorer councils would take place. Some £26 billion is collected in business rates, £2 billion of which goes to Westminster council. We need more information in the Bill about how such a scheme will work. Let me say to Members, many of whom represent suburban areas in London, seaside towns, rural communities, shire districts, market towns and all the wonderful places that make up England, that they should be seeking answers to these questions. The Bill is silent on all these matters.
Fourthly, the Bill threatens to do a great disservice to the very backbone of England and English democracy. It is a puzzle to me why a Tory Secretary of State should ignore this. The market towns, the county villages, the shire counties, the county towns, the suburbs and some of the smaller freestanding cities are the backbone of England—the great cities are wonderful, but they are not the backbone—and they have been offered a second-class form of devolution. Why should that be? I was once privileged to lead the great city of Leeds, which is one of the most powerful economic and cultural engines in the north, and even in England. Indeed, the renaissance of English cities, mostly under Labour control, has been one of the great successes of the past 20 years—I have always thought that this should be added to the checklist of the enduring achievements of Labour in government—but this Bill risks neglecting all the areas that are not in those great urban centres. The potential for growth and enterprise lies elsewhere in England, which is a rich, diverse country that we all love. The Bill is almost silent on the matter. The Chancellor’s ambassadors who were running around the country did not bother to call in to the market towns and the shire towns of the country; they went to the big cities.
The bottom line for me is that the same powers should be on offer to both urban and rural areas of England. For example, whatever powers are available to metro mayors to raise business rates—by the way, it will not be possible to raise business rates unless an area has a metro mayor—should also be available to the smaller towns and the rest of England, too.
Mr Brady
I agree with the hon. Lady. It would be regrettable if, in seeking to devolve power, we ended up taking some decisions further away from people and making it harder for their voices to be heard.
My second concern is about the distribution of powers. I hear my right hon. Friend the Secretary of State’s assurance that this can only be about bringing powers from central Government, but I do not think that is really clear in the Bill, so I would welcome much more clarity as we proceed in Committee. Clauses 8 and 9 make provision for the exercise of statutory functions in relation to an area to be transferred to a combined authority. Clause 5 makes it possible by order for any function of a mayoral combined authority to be a function exercisable only by the mayor. Therefore, I do not think that it is as clear in the Bill that power can move only in one direction as many of us would want to see. We might return to that at a later stage.
My third concern, which was raised with me by my local authority, relates to the possibility that this deal amounts to a one-way commitment. It relates to those local authorities that have made a commitment to the combined authority. The Greater Manchester agreement will place obligations on the local authorities, and certain expectations are being placed on the Government, but there is no mechanism by which the local authorities can hold this Government, or indeed any future Government, to account to ensure that they meet their obligations as part of the deal. I invite my right hon. Friend the Secretary of State to consider whether we might find a way to tighten the provisions and make it clearer that the Government’s obligations will be observed.
My fourth and final concern—in a way, this could provide a solution to all the other concerns—is about what happens if the arrangements do not work. What happens if a local authority reaches the point at which it regards the agreement as a mistake and thinks that the powers have been vested in the wrong place? It is the question of final resort. What are the terms under which a local authority could choose to walk away from a deal? What happens if it says, “This clearly isn’t what we bought into”— possibly a microcosm of a bigger debate that we might have by the end of 2017? It is about a local authority being able to leave a combined authority without penalty.
A deal that transfers spending from central Government to the local level is very welcome, but the mechanism set out in the Bill for allowing local authorities to leave a combined authority is very messy. Rather than the local authority simply deciding to opt out, the combined authority must decide to dissolve itself and then reform with the other authorities that wish to remain. The mechanism makes no provision for ensuring that a local authority can leave on fair terms and without penalty.
Andrew Gwynne
The hon. Gentleman makes an important point about how one might unpick the constitutional arrangements of a combined authority. One example is the pooling and sharing of business rates. For instance, if Trafford decided to leave the combined authority, it would be very difficult to unpick that. Another example is the health devolution arrangements.
Mr Brady
I am grateful to the hon. Gentleman. These matters will need to be made clearer during the passage of the Bill.
In conclusion, as I said at the beginning of my remarks, I think that the principle behind the Bill—the Government’s evident desire to transfer spending and decision making closer to the people—has very wide support, and I think that few Members of the House would differ from it. I will certainly vote enthusiastically for that principle today, although I anticipate having interesting debates and discussions in Committee. I am grateful to the Secretary of State for the assistance and engagement that he has already offered in that regard.
Jeff Smith (Manchester, Withington) (Lab)
Before I came to this House in May, I had spent 18 years as a city councillor in Manchester, and I am very proud of what we achieved for our city in that time. We have shown how good civic leadership can help transform a city and create partnerships that really help to improve the lives of our citizens. We led the way not just in leading the demands for devolved powers, but in demonstrating that local government has the capacity and the vision to use them.
Local people know their communities best and how best to deliver for them, so I welcome the principle of devolution of powers in the Bill. Indeed, I welcome the deal that has been agreed for Greater Manchester. Devolution is a Labour value, giving power to people and communities who know what is best for them.
I have two concerns about the Government’s plans. First, funding needs to follow powers, and that is in the interests of not just local government, but national Government as well. I spent three difficult years as executive member for finance on Manchester City Council having to make incredibly tough decisions on cuts to services as a result of the unfair funding cuts imposed by the coalition Government. We had to take £250 million out of our budget over the course of the last Parliament. If Members consider that that reduction took our budget down to about £550 million, they will understand the scale of the problems we faced.
We dealt with that very effectively through improving efficiencies and revolutionising the way in which we deliver services, and devolution of powers will allow us greater freedom to do that. That level of cuts, however, is not sustainable, and local government, as many are aware, faces a struggle to keep non-statutory services going if those cuts continue. Even worse, some local authorities face the real possibility of becoming financially unviable. Local government could become unviable as a result not of its own actions, but of the actions of the Government in starving deprived areas of funding. If the Government carry on with that level of cuts, it is their own devolution project that will be at risk. Devolution simply will not work without proper funding. We cannot devolve responsibilities without the resources to fulfil them.
Secondly, the one-size-fits-all approach is not the way forward. A few years ago the people of Manchester decisively rejected the idea of an elected mayor. I believe that was because they did not see the need for it. Good civic leadership can come in many different forms, and Manchester—under the excellent leadership of Sir Richard Leese and, before that, of my hon. Friend the Member for Blackley and Broughton (Graham Stringer), as well as that of the Greater Manchester combined authority—has shown that we have not just a successful council, but a model for the use of devolved powers across Greater Manchester that has been developed by Greater Manchester.
Andrew Gwynne
The citizens of Manchester were not given the option of a metro mayor; the proposal they rejected was, in effect, to directly elect the council leader. Some of the critics of the metro mayor model clearly do not understand the difference between an elected council leader and what is now being offered for the conurbation.
Jeff Smith
That is absolutely right and I thank my hon. Friend for his intervention. I was just coming to that point. The imposition of an elected mayor on Greater Manchester and on other areas is unnecessary. I am not necessarily against an elected Greater Manchester mayor, but it really should be for Greater Manchester to decide. It should be for local communities to develop evidenced proposals on the best way to organise themselves to use those devolved powers. That would be true devolution.
Local government can and does deliver great things for its citizens. I welcome devolved power to create jobs and growth opportunities; to invest in desperately needed new housing; and to allow health and social care to work together for local people. Personally, I would like devolution to include some powers of oversight over education, because at a time when we are devolving powers over other services it seems counter-intuitive that power over education is, in effect, being centralised. Local government in areas such as Manchester has shown that it deserves the powers and resources to deliver. Let us give it the freedom and the resources to do so.
Mr Graham Allen (Nottingham North) (Lab)
This is a great day. It is the beginning of what will be a very long journey. I think that we will probably have two more Bills on devolution before the end of this Parliament, but at the general election in 2020 we will look back and all the anxieties about the detail in the Bill—some of which we disagree with, of course—will have become irrelevant as most local authorities in England will have devolved to some extent or another. That will be the future. I must put on record again that I think that the Secretary of State has been foremost in introducing the Bill. He has a fantastic record of working with local government and with Labour local government, in particular, through his work with the core cities and on the cities agenda. The Bill is part of a line of progression.
Of course, we cannot have perfection in the first Bill, but those who have some sort of aldermanic sclerosis and believe that we will not move anywhere unless we get absolutely everything right are throwing the baby out with the bathwater. It is important that we move on devolution now in a way that previous Governments, regrettably, did not. This is the most fantastic opportunity, in my opinion, for all of us who care about the principle of devolution, enabling people to make decisions as closely as is humanly possible to where they are and where they live.
It is the beginning of the end of possibly several hundred years of the imperial view that Whitehall knows best and that only the man in Whitehall can tell people whether they should have double yellow lines on their high streets or be allowed to have a betting shop on their street corner. What nonsense! It is treating one’s own country as if its people are slaves, rather than liberating them to make a genuine economic contribution, in times of austerity and at other times, as well as a social and political contribution locally. Even with the distinguished colleagues around me, I do think our politics is over-blessed with too big a gene pool. Why should not the leader of our capital stand to be leader of one of our great parties? Why should not the leader of Greater Manchester, Nottingham, Newcastle or anywhere else push our politics forward with a lot of local experience? This is something of which many Governments in the recent past have been bereft.
This is the beginning of a journey. I personally would rather we did not have a mayor—Nottingham voted not to have a mayor. However, if we continue this journey and have another Bill and another one after that, I am sure that we will devolve to such an extent that we will liberate people in the localities to choose their own system of governance and method of election. That will be a definition of devolution achieved.
Andrew Gwynne
Part of that choice on localism is the level at which it is most appropriate to make decisions. Forty-odd years ago, my constituency was a patchwork of urban district councils and small municipal boroughs, and people still very much identify with those neighbourhoods. Is it not right that we also seek to empower those communities again?
Mr Allen
The movement from Whitehall to town hall is very welcome, but then we must go the extra mile. I am sorry that the hon. Member for Glasgow Central (Alison Thewliss), an SNP Member, is no longer here, because we do not want to go the way of pushing power from Westminster to Holyrood, only for the latter, instead of dispersing some of that power, to suck it up and create a national view on everything, rather than liberating the talents in Scottish local government. There are many lessons to learn from Scotland—we should be humble about that experience and learn everything possible—but that is probably one exception to the rule about listening to how the SNP has done things in Scotland.
There will then be a broader picture. Once we have embedded devolution and organically we have made a start, when it is proving its worth and we can demonstrate that we will add value to every single pound, we can move to the next stage, which is the one outlined by the Opposition Front-Bench team. It is to see it as part of the broader jigsaw of a constitutional convention that will consider local government’s role, as part of the debate about devolution in England, an elected second Chamber and a written settlement, among other things.
It is important that what Whitehall giveth, Whitehall does not taketh away. As the Secretary of State is aware, that will mean at some point entrenching the progress we make so that it can never be reversed. That will mean super-majorities in the House, hiding stuff behind the Parliament Act 1911 and so on. There are lots of ways to make it difficult for the wrong sort of Secretary of State to suck these powers back up.
Andrew Gwynne (Denton and Reddish) (Lab)
I will start by breaking the habit of a lifetime and agreeing with some of the contribution made by the hon. Member for Bury North (Mr Nuttall). I also urge the Secretary of State not to get too carried away with identity, and I will let him into a secret: I am a proud Mancunian by birth, and also a proud Dentonian. I suppose I am a Greater Mancunian, because I was born two months after the local government reorganisation. Many of my constituents will have allegiances to their old historical counties. Someone who lives in Denton and Audenshaw in my constituency is Lancastrian, but someone who lives in Dukinfield is from Cheshire and proud of it. Someone who lives in Reddish, Heaton Chapel or Heaton Norris in the Stockport part of my constituency has dual identity, because they started off in Lancashire in the 20th century, and were transferred to Cheshire when the area became part of Stockport county borough. People identify with their old historical communities as much as they do with the reality of local government administration on the ground.
I disagree with the hon. Member for Bury North in that when the Government of the late Baroness Thatcher abolished the old Greater Manchester Council—along with other metropolitan county councils and the Greater London Council across the river from here—she did not do so to create a patchwork of unitary government. The then Government recognised that it was impossible to create unitary government in the metropolitan counties because some functions had to be carried out at county-wide level. We ended up with a hotch-potch of joint boards: the Greater Manchester passenger transport authority, Greater Manchester waste disposal authority, Greater Manchester fire authority, and Greater Manchester police authority. There were still functions at county level.
The difference was that in many respects those bodies were less accountable than the old Greater Manchester Council which, for all its faults, at least had directly elected representation. The problem with joint boards—we see this today with Transport for Greater Manchester—is that although they include councillor representatives, the district councils do not hold those councillors or that joint body to account. In some respects, having some level of direct accountability at city region level makes sense.
My concern is about the accountability of the individual. I accept that the mayor will be accountable to the electorate every four years in local elections, but the difference between the London model and that proposed in Greater Manchester is that a small Assembly at London level holds the Mayor of London to account. It has a call-in procedure and can question the Mayor, but I do not see where that function lies in the Greater Manchester model. I was pleased to hear the Secretary of State say that he expects the call-in procedure and key procedures on cabinet decisions at local government level to apply to the mayoral model for metro mayors, and I look forward to him fleshing that out.
Part of the problem with a combined authority—certainly the Greater Manchester model—is that each of the 10 council leaders in Greater Manchester will have an executive portfolio. They are the Executive, and there is nobody to hold them to account. There is no clear process to call in cabinet decisions that affect one or more metropolitan districts in Greater Manchester.
Barbara Keeley
My hon. Friend is making excellent points, as did the hon. Member for Bury North (Mr Nuttall), with whom I found myself in agreement for the first time in my 10-year parliamentary career. The key point is the lack of accountability, which will not be improved in the ways we are looking for. Transport for Greater Manchester has been doing a major infrastructure project, and my constituents are at the end of their tether about the lack of accountability. They and I do not know who to go to, and it has been a disaster. My hon. Friend’s point about joint bodies is right.
Andrew Gwynne
I am glad my hon. Friend mentions Transport for Greater Manchester. One of the functions that will be passed to the mayor is transport and the regulation of the bus network. I very much welcome and look forward to that. I have to say, however, that I hope it is done in a better way than some of TfGM’s current franchising arrangements. We have a deregulated bus system, but one area over which TfGM has responsibility for setting a network is school buses. Just this term, we have the bizarre situation whereby TfGM has awarded the school bus contract for Fairfield school—where, incidentally, my daughter studies—to Stagecoach for the mornings and Belle Vue buses for the evenings, and neither will accept the other’s tickets. TfGM has set that contract and I think it is absolutely barmy. Quite frankly, if it cannot get it right with a school bus service I really worry about its capacity to set the whole network in Greater Manchester. I therefore hope we get better accountability and decision making.
On devolution of health, my one concern is this: who is ultimately accountable for the NHS in Greater Manchester? It is not clear from the memorandum of understanding signed between the Association of Greater Manchester Authorities and the Government. The mayor seems not to be part of that memorandum at this stage and I hope very much that that is reviewed. If I were an NHS provider in Greater Manchester, to whom do I look to make the decisions? Is it NHS England, the combined authority, the mayor, or am I looking in all directions? That lack of clarity really needs to be sorted out, so we have clear levels of responsibility.
Mike Kane (Wythenshawe and Sale East) (Lab)
My hon. Friend, a fellow Mancunian, is making an excellent impassioned speech about devolution. We are in favour of the devolution package, and the interim mayor, Tony Lloyd, will have powers over transport, business rates, skills retention and spatial planning. However, the problem as it stands is that the people of Greater Manchester do not know where the health portfolio is going to sit. Who will be accountable? At the moment, it will be one of the 10 local leaders. The devolution deal, as currently put forward by the Government, is not joined up.
Andrew Gwynne
My hon. Friend is absolutely right. We need absolute clarity from the Department of Health. I understand that the Secretary of State for Communities and Local Government will be having those discussions, but before devolution takes place Greater Manchester MPs need clarity.
On fire and rescue, the intention in Greater Manchester is for police and crime commissioner functions, and, eventually, fire and rescue, to go to the mayor. That might require an amendment to the Local Government Act 1985, which set up the Greater Manchester fire and rescue authority. I do not see anything in this Bill relating to that. Perhaps it can be dealt with by a statutory instrument. I hope the Secretary of State will confirm that the intention is still to devolve them.
I want to make a plea about local government funding. Greater Manchester has agreed to a pooling and sharing of business rates. I very much support that, because some parts of Greater Manchester have more potential to grow the economy than other districts in the county, and it is right that we share that wealth across the whole of the conurbation. The funding is still very important, because we have a low council tax base. Unless there is a stratospheric increase in business growth, we will not fill the gap. That is where Ministers’ plans might fail.
Angela Rayner (Ashton-under-Lyne) (Lab)
Like hon. Members across the House, I too welcome further devolution. I commend the incredibly constructive tone of the debate among Members on both sides of the House who have made some incredibly detailed speeches, much of which I concur with. As a former trade unionist, I know that not everything is perfect when it is set out, but I acknowledge that the proof of the pudding is in the tasting, and at least we have a pudding to taste. I commend the Minister’s work on devolution. I also commend the leaders of the local authorities in the Greater Manchester area who have been heavily involved in devolution there.
Many hon. Members have focused on process, and rightly so, but I would not be me if I did not focus on people as well. I would like to talk about the time that I had as a home carer and a trade unionist. I looked after people in need and worked in partnership with local authorities to develop the services that we need. I am particularly proud of the role I was able to play in integrating health and social care services, which is a crucial part of any benefit from devolution in the area. I will focus on that in my speech.
Let me tell you a story about Edwin that was relayed to me by his family. It is about his experiences in the last few months of his life. He was a very proud man who had served his country and was going strong until he reached his late 80s. A number of age-related illnesses soon changed his quality of life, and the independence that was second nature evaporated. Like many in my community, Edwin had worked hard, played by the rules and paid his taxes, and the island of support—the island of social care—was now needed for him and his family. Unfortunately, local services were and are stretched to breaking point. While the language of “devo Manc” and the northern powerhouse is often spoken by the Chancellor, the reality on the ground is somewhat different. Budgets to my local authorities have been cut by over 40% since 2010, with even more to follow, and the biggest-spending departments, such as adult social care, have been hit particularly hard.
Edwin and his family had a prolonged wait for his assessment, and then he was hospitalised with pneumonia. The care from the medical staff and nurses was second to none. Edwin’s only criticism was that there were not enough of them; they were overstretched. All he and his family wanted was for him to get better and return home for his end-of-life care, with support. Unfortunately, he did not make it; he was not helped by the insecurity due to the lack of social care support in the community. If the ultimate goal of an integrated health and social care service is to improve health and quality of life outcomes—making Edwin’s experience a thing of the past—then count me in, but please do not use the devolution agenda as a smokescreen to hide draconian cuts and to devolve the political pain to local areas. In Tameside and Greater Manchester, we are ahead of the game.
Andrew Gwynne
My hon. Friend will know that there are now advanced plans for an integrated care organisation in Tameside. Is she as concerned as I am that that is not in itself a silver bullet? There is a massive deficit in the social care budget and a massive deficit in the NHS budget, and integrating the two will still leave a deficit. Is it not time that we told it as it is—social care cuts are NHS cuts?
Angela Rayner
My hon. Friend has a considerable expertise and intelligence in that area, and I absolutely concur with him.
The concept about which Lincoln spoke a time long ago—Government of the people, by the people, for the people—could pave the way for a first-class health and social care service in our localities, but as the local and regional press in Greater Manchester have pointed out, first-class services shaped by our people in Greater Manchester need a fair deal—a fair devo deal.
When the Government devolve the health and social care budget of £6 billion, please will they be clear and transparent about the £2 billion deficit that the combined authority will inherit? When they devolve further education budgets, why slice 25% off them before transferring them to Greater Manchester councillors? When they talk about electrifying the Northern Rail network, will they stop centrally turning the electric light on, off and on again—we want a powerhouse, not a disco? That is at the heart of our concerns today. The Secretary of State has yet to assure us that he is not just looking to pass the buck and hold on to the bucks.
Mr Kevan Jones (North Durham) (Lab)
Devolution, localism or whatever we call it is a bit like apple pie and motherhood—it is something that everyone admires and thinks should be sought.
The hon. Member for Bromley and Chislehurst (Robert Neill) suggested that the Secretary of State is a Chamberlain-like reformer and likened the Bill to the great reforms to local government in the 19th century. That is not what is on offer here. What we have here is a clear political agenda from the Chancellor of the Exchequer for a small-state, Conservative Britain. The Bill is part of that process.
The hon. Member for Dudley South (Mike Wood) just said that the process is being driven by local areas. I have to disabuse him of that idea because it is not. The Government will still control 75% of the funding for local authorities and the Government are still dictating the local government settlement. The hon. Member for North Cornwall (Scott Mann) praised Cornwall. Well done to Cornwall for getting its devolution settlement, but there is no insistence on a mayor, as there is in the north-east. The north-east is being told, “Yes, you can have devolution, but you’ve got to have an elected mayor first.”
The hon. Member for Hazel Grove (William Wragg) made a very good speech, in which he asked where the people are in decisions on this process. If in 2004 we had proposed elected regional assemblies and imposed them without allowing local people to decide, there would have been a hue and cry from Conservative Members. What amazes me is that many Conservative Members from the north-east who fought strongly against regional assemblies are now as quiet as mice when accepting the Secretary of State’s proposals. When the Secretary of State meets council leaders in the north-east and they ask him why they must have an elected mayor, the usual response is, “Well, George wants an elected Mayor.” This is not about true devolution and making decisions at local level; this is about moving responsibility to local councils and so on without the resources to carry that through.
Let us imagine that a city is devolved to a Mayor or council in the north-east. Funding for further education will come with a 10% cut, just as public health spending did when it was devolved to local councils. It will then be down to local politicians to make difficult decisions, and what will be the position of the Chancellor and the Secretary of State? It will be, “It’s not our fault guv, it’s a local decision”—except that it will not be, because they will still hold the purse strings.
At the Tory party conference the devolution of 100% of business rates to local councils was announced as a great move forward. [Hon. Members: “Hear hear.”] Members say, “Hear hear,” but in London more than 300,000 properties have an average business rate of £54,000. In the entire north-east there are 54,000 properties with an average rateable value of £30,000. Unless there is some redistribution in that mechanism, all that will do is benefit areas that are already booming and do not need the assistance that is required in areas such as the north-east. People are fooling themselves if they think that the devolution of business rates is a panacea for growth in those areas.
Andrew Gwynne
My hon. Friend touches on a real concern because his area, like mine, has a low council tax base. Given cuts in funding, and local authorities’ inability to raise more finance through council tax, does he share my concern that we will need something like Chinese-style growth to fill that gap with business rates?
Mr Jones
I will give one topical example. Redcar has just lost one of its major sources of local business rates, so how will that be replaced? Westminster City Council and other areas would be able to do it, but without resource reallocation of business rates, areas such as Redcar will not be helped. That has added to what we have seen over the past five years of this Government and the movement of resources from poorer areas to wealthier ones.