Economic Leadership for Cities

Baroness Hollis of Heigham Excerpts

Thursday 11th December 2014 Lords Chamber

[Baroness Hollis of Heigham (Lab)]

My Lords, as a councillor in the late 1960s, I helped woo a major company to Norwich with a package of site, planning consent, key worker housing, roads and training. Sedgwick became the second largest reinsurance company in the world. Some 15 years later, another major financial company wished to relocate in order to expand. I tried hard. I offered a site, housing and TLC, but highways and planning consent were for the county. The company did not want the hassle of negotiating with two very different authorities, so it walked. I lost 600 good jobs for Norwich and for Norfolk. What was the difference? It was the disastrous 1974 local government reorganisation, with its alpha male obsession with size. Despite our cathedrals, university, research parks, international airport and 600 years of unitary status, Norwich became a district council, the largest in the country, and larger than a dozen or so unitary authorities.

Today, we are still the regional capital of East Anglia, providing half of Norfolk’s jobs—and half of those jobs are in knowledge-intensive industries—as well as most of the leisure, retail and media services for Norfolk, Suffolk and Cambridgeshire. Our economic multiplier effect stretches far beyond our formal functions. Like other mid-sized cities, we think that we are focused, energetic, fast, innovative and entrepreneurial. We strive to do all this within the constricted boundaries, functions and revenues of a district council. We are fettered, and yet we are the key city of East Anglia.

This debate from the noble Lord, Lord Shipley, is superbly timed. Cities drive our economy. They are where things happen, but that potential is not limited to the great core cities. Mid-sized cities like Norwich and Luton are also key. They contribute £162 billion to the national economy alongside the £173 billion of the eight core cities. Some have a manufacturing or maritime identity, such as Coventry and Plymouth. Some share interdependent economies, such as Southampton and Portsmouth. Yet others are self-contained, travel-to-work centres like Norwich and Sunderland. All of us are driving growth and turning around the life chances of the deprived, the ill educated, the ill housed and the overlooked.

What do mid-sized cities such as ours need to grow our local economies? It is, of course, unitary status, as do Cambridge and Oxford, if we are to fulfil our potential to transform our knowledge economy into knowledge jobs. Who, in the recent Pfizer bid for Astra-Zeneca, spoke for Cambridge? Nobody. Combined authorities really work only where there are shared goals. Despite this, Norwich has formed a Greater Norwich Growth Board, a partnership that will drive forward our city deal to spin off new businesses from our research park, plan our wider growth programmes for 13,000 more jobs and 3,000 more homes, and attract the £2.5 billion private sector investment we need.

Over and beyond unitary status, we need additional economic powers and flexibilities, which have already been cited in this debate. First, we should localise the ineffective government Work Programme. Secondly, we need commissioning powers for the wider public services, irrespective of elected mayors, to work with the private sector and public agencies. Thirdly, all publicly held land within a city should be brought into a single property board to make the best use of development sites. Fourthly, on finance, ring-fenced funding should be removed in order to encourage new funding models, along with funding for five years for greater stability. I could go on.

Above all, we need a culture change within Whitehall and at Westminster. They need to understand that local government is about local difference, so they should respect our sense of place and encourage diverse structures, as the noble Lord, Lord True, said. They should stop being hung up on size and stop trying to impose on us the macho model of elected mayors. As a leader, I could do everything a mayor does, and consensually. Trust us: we are better at doing most of this than central government. Finally, that utterly insulting phrase, “earned autonomy”, should be banished from the Westminster and Whitehall mindset. My Lords, I wish.