Draft Liverpool City Region Combined Authority (Functions and Amendment) Order 2017

Angela Eagle Excerpts

Wednesday 8th March 2017 General Committees

[Ms Angela Eagle (Wallasey) (Lab)]

I think that this is the first time I have served on a statutory instrument Committee with you in the Chair, Mr Turner, and it is good to do so.

I want to set my brief remarks in context, as I regard this development as a small step forward in the right direction, although it is not nearly radical enough. I wish that the coalition Government had not cut regional development off at the knees by abolishing the regional development agencies, setting back devolved economic development by at least a Parliament, because it has taken local enterprise partnerships far longer to become established and get up and running. Even in the document before us today, there are only the beginnings of efforts to reassemble some of the strategic approach to regional economic development that I believe we need if we are to ensure that this country can have a prosperous future after we exit the European Union. I will not oppose or speak against this small step forward in the right direction, but I want to raise a couple of issues and ask the Minister a couple of questions.

My hon. Friend the Member for Oldham West and Royton has pointed out the rather modest nature of the funds that have been devolved to the Liverpool City Region. The amount is £30 million a year for the next 30 years which, when we do the addition, comes to £900 million over the next 30 years. However, if we look at the funding cuts that have been made to the five authorities in the city region in the past seven years and if we include, to the end of this Parliament, the cuts that are expected to continue, subject to a sudden, damascene conversion in the Budget later today, we see something very interesting.

Liverpool City Council has had to make total budget reductions of £330 million. Between 2010 and 2016, my own borough, Wirral, has cut £156 million from its budget, and it has to find a further £132 million over the next four years. Sefton has faced a funding cut of £169 million over the past six years. Halton will have lost £63 million, which is 61% of its funding, over this period, and we are talking about 57% of the funding for Wirral and 58% of the funding for Liverpool City Council. Knowsley has seen its funding cut by £86 million since 2010, and over the next three years the council has to find another £14.8 million. The general grant for St Helens will be cut by £90 million by 2020. When we add all that up over the 10 years from 2010 to 2020, it comes to more than £1 billion. We are being asked to welcome a funding settlement of £900 million over 30 years, even though we are seeing funding cuts to our local authorities of more than £1 billion in these 10 years.

That is without talking about European funding, which will be gone after 2020 because of our exit from the European Union. If we look at the European social fund and the European regional development fund, we see that between 2007 and 2020—the two funding periods that are relevant for those funds—our area will be allocated £557 million. There is absolutely no guarantee whatever that a single penny of extra assistance will be available for our city region after 2020—there has been no guarantee from the Chancellor about that. I speak as someone who grew up dealing with the devastation of our local authority areas in the 1980s, when the only money allocated for basic programmes came from the European Union social and industrial development funds. Those will be gone.

Notwithstanding this tiny step in the right direction, what guarantees can the Minister give that his Government understand the importance of continuing to support locally based economic regeneration and development in the areas of the north where there are scant numbers, if any, of Conservative MPs and which tend not to get access to gentlemen’s agreements, sweetheart deals and the things making the news at the moment? In the time that we have left, which is quite a lot, will the Minister reassure us about future funding, which will enable our local authorities and communities to do what they do best—come together to help grow economic opportunity and development from our local region up?

We have fantastic positives in our area that we can develop from. The Liverpool City Region is on the right side of the country to trade with the rest of the world; its history is as a port and an outward-looking trading part of the country. This development is a tiny step in the right direction. When we hopefully manage to get our new metro Mayor Steve Rotheram elected in May, we will have a great local champion who can help us to make progress. I am interested in what further assurances the Minister can give, apart from this very modest allocation of money that has been announced to date, so that we can help to plan and develop our own future in the Liverpool City Region.

--- Later in debate ---

[Andrew Percy]

Well, it is called local democracy. It was a Labour council in Warrington that decided to pause the deal in Cheshire, and it was Labour councils in the north-east.

[Ms Eagle]

Why don’t you talk about Merseyside?

[Andrew Percy]

The hon. Lady shouts about Merseyside. The shadow Minister asked me very directly about Cheshire and Lancashire, and I am answering the point—I should have thought that in this place that would be cause for congratulation. I will move on all the same, not mentioning the Labour councils in the north-east who pulled the deal, which has denied the people £1 billion of extra funding.

The hon. Member for Wallasey talked about the abolition of regional development agencies. Having spent 10 years on a city council in Yorkshire, I do not have quite the same positive view as she does of regional development agencies, although I accept that they did many very good things. They have not simply been abolished. They were replaced with local enterprise partnerships, which many people would conclude have been better at giving a voice to their area on a more local geography. All I can say is that we should look at the evidence, which is that we are seeing foreign direct investment in the north of England growing at twice the UK average. We have seen bigger economic growth in large parts of the north than in the south of England. We have seen record low unemployment rates. In my own constituency—

[Andrew Percy]

Yes, Mr Turner, but I was asked those questions, so I was just trying to respond to them.

[Ms Eagle]

What about Merseyside?

[Andrew Percy]

I am talking about the LEPs versus RDAs, which were an England-wide policy, and that is what the hon. Lady asked me about. In terms of EU funding for Merseyside, we have been quite clear on that as well, with the commitment until 2020. At the end of the day, all European funding is British taxpayers’ money because we are a net contributor. If the hon. Lady has read the industrial strategy, she will see that we have been really clear. We have committed in the industrial strategy to looking at what will replace European funding and local growth funding. That commitment is there in the industrial strategy and work is ongoing on that at the moment.

[Ms Eagle]

Is the Minister giving a commitment that the kind of support we have had—£0.5 billion in the two previous rounds of European funding—will be maintained by the Government, and that the Government see the importance of ensuring that whatever replaces the European structural and investment funds and the European social fund will be targeted at those areas most in need?

[Andrew Percy]

We have a very strong record on investing in local growth and infrastructure, through the local growth fund and transport funding more generally. The beauty of holding a consultation, which is what the industrial strategy Green Paper proposes, is to seek people’s views on what they want to see us progress on.

Yes, there is work ongoing on what the future of local growth funding should look like. That is in the context of local growth funding ending. We have gone through the third round, which was always going to be the final one. That is in the context of our exit from the European Union, for which the people of the north voted strongly.

[Ms Eagle]

rose—

[Andrew Percy]

I will give way one more time, but then we must move on.

[Ms Eagle]

We have plenty of time to discuss these issues, so I appreciate the Minister giving way. I shall press him again. In the development process for these new funds, does he agree that areas of need that are in need of economic development because they are poorer than other areas of the country ought to take priority when the Government decide their new process of regional development assistance?

[Andrew Percy]

I have made it absolutely clear that there is a consultation with a Green Paper, in which we have made absolutely clear that the Government are looking at how to replace both local growth funding, which is our domestic programme, and European funding. There is a range of European funding streams that have to be replaced. We are looking at that—it is all part of the consultation. I am sure that the hon. Lady has already responded to the industrial strategy Green Paper with her views on the matter, which is important. She made a point about need, but we need to look at what happened with the recent iteration of growth funding, which was very generous to the north compared with some other parts of the country where, perhaps, there is greater need.

The hon. Lady mentioned sweetheart deals. The idea of sweetheart deals has been widely panned. I think we all know which council the hon. Lady refers to.

[Ms Eagle]

Really? We have heard the audio.

[Andrew Percy]

I am sorry. She can keep saying a line but, when everybody has panned this being from our side or from the council itself in the case of Surrey, she should bring forward evidence of a sweetheart deal. I tell the Committee that all Surrey has asked for is exactly what Liverpool is already getting, which is a pilot for business rate retention. The difference is that the Liverpool City Region will get it a year earlier. Unless we have done a sweetheart deal with Liverpool, we have not done a sweetheart deal with anybody else. The Opposition should stop peddling that particular line.