Cities and Local Government Devolution Bill [HL]

Baroness Warsi Excerpts

Monday 22nd June 2015 Lords Chamber

[Baroness Hollis of Heigham]

I do not disagree that Redcliffe-Maud was a sizeable problem. I did quite a lot of work on this and thought that the Senior minority report looked at one stage as if it was going to be the main way through. As the noble Lord, Lord Heseltine, will also remember, before that there was the Kilbrandon report on regional government, which some of us were also involved with. So we both have long memories of what has happened to local government, going right back to the mid-1960s. The point I am trying to establish—and I am not trying to say that it is one party especially, rather than the other—is that by taking slice after slice of local government authority, responsibility, functions and resources, central government have knowingly and with collusion undermined the local government that we all want to see. I am sure that the noble Lord is right that we want to see that local government revived. That is healthy and appropriate, but what you should not do is to say, “You can only have that revived local government on my terms, of having an elected mayor, if you want that earned autonomy of the combined authorities”.

I was a local authority leader, first as a councillor in the county borough and then the district. I was also a county councillor, et cetera. I say to the noble Lord, Lord Heseltine, that as the leader of my local authority, directly elected in my ward by my constituents and, further, directly elected by other councillors, there was nothing I could not do that I could now do as mayor. In addition, I had the support of a majority group, I could share power and devolve it down through committee structures, which a mayor would not so easily be able to do, and I had the full financial backing of that local authority. As a leader, and with consent, I effectively had more power, potential and resources than any elected mayor as presently prescribed by Whitehall would have. So I say to him that one model does not fit all and we cannot decide that we want autonomy and bottom-up, local decision-making in some territories and not in others. If individual local authorities or groups of local authorities want an elected mayor, I will cheer them on. If they decide that it is not right for them, the Government in London, and the noble Lord, Lord Heseltine, should give them the respect and dignity of their choice. That is what localism is about.

[Baroness Warsi (Con)]

My Lords, you will be pleased to know that I am not going to get into this discussion about what happened in the 1960s. My memory certainly does not stretch as far back as that, having been born in the 1970s. I would like to speak about what business is looking for from local decision-makers. My interests are noted on the register of interests. As somebody who in her real life—before life in politics—started and ran three businesses, of which I am still involved in two, it is important for me to have heard today from the Federation of Small Businesses that its members are in a robust mood. It did a survey and two-thirds of small businesses are hoping to grow moderately or rapidly over the next year. That is great news and, to some extent, is a response to the policy that has been pursued in this area over the last four or five years.

I pay tribute to the noble Lord, Lord Shipley, and my noble friend Lord Heseltine for the tremendous amount of work they did under the last Administration to make sure that the building blocks were put in place, with the benefits that we are seeing today. Much of the work on devolution had already been started. Certainly in West Yorkshire, where the businesses I am involved in are based, the first agreement on devolution was already in place. Indeed, as we scrutinise the Bill, agreements and discussions are ongoing about what that devolution deal will look like now for West Yorkshire or the much broader Yorkshire region. Those decisions have still to be made.

The only question I would raise is this: is what we are going to create, or what we are asking for, going to assist or get in the way of business? Is the extra bureaucracy that we want to put in place in the name of democratic accountability going to help create jobs, which is what ordinary people want, or delay their creation? Is the consultation that we think is so vital before we put these structures in place going to help businesses to grow, or is it going to slow things down and therefore detract from this robust mood that small businesses up and down the country are showing?

Time is of the essence. I know from my own involvement with the regional growth fund and its payment to businesses in Yorkshire—I am involved in two manufacturing businesses, which manufacture furniture and ingredients respectively—that when an order comes through the door, no one waits for you to get your act together and discuss it with the LEPs and the RGF, and for them to make a decision and come back to you to tell you about timescales and ensure that everything has been properly consulted on. These opportunities do not come along often. Therefore, we should not stand in the way of these structures being created quickly, of local decision-makers being able to respond quickly, of getting money into businesses and getting them to invest more in expanding and—playing upon this robust mood that the Federation of Small Businesses is talking about—creating the very jobs we need for the economy to keep growing. Speaking from a user’s perspective, in scrutinising this legislation, let us enable, rather than creating further layers of bureaucracy.

[Lord Scriven (LD)]

My Lords, I have listened to the noble Lord, Lord Heseltine. Like the noble Baroness, Lady Warsi, I cannot recall the 1960s; I was born in that decade, so my period is rather similar.

The noble Lord has always been a big figure in local government during the entire time that I have risen up and been involved in it, but I have to say that I think his analysis on this is wrong. I say that because my starting point is that, although some people might say that this is just semantics, the Bill is not really about devolution but about decentralisation. It is fundamentally a decentralisation of responsibilities from certain bodies to a combined authority or a mayor. The noble Lord talked about international comparisons, whether it be the Länder in Germany or the cities in the US, or elsewhere, where they have not just a nameplate saying “mayor” but real fiscal powers. When I was leader of Sheffield City Council it would have made no difference whatever whether my nameplate said “leader” or “mayor”; I would have been pulling levers with nothing attached because all the fiscal powers were in Whitehall. That is the important point that is missed by the Bill.

While I agree that it is a step in the right direction, we should not kid ourselves that under the present fiscal arrangements a mayor will be the silver bullet that will give local areas the autonomy and power to be authors of their own destiny in the way that some are suggesting in this debate; something more fundamental is required. Having said that, if we are going to go ahead within the boundaries of the Bill as it stands, then nothing in the amendment of my noble friend Lord Shipley would stop a mayor or powers being created if that was what the local area, along with the Secretary of State, so wished. As the noble Lord said, all that the amendment says is that the Secretary of State “may” refuse an arrangement that has been proposed if it,

“does not provide sufficient democratic accountability”.

What is wrong with strong democratic accountability? We have it here in this Parliament, and I would expect it in local government. All that the amendment says is that not only would strong economic powers be taken into consideration but there would be strong democratic oversight of the powers invested in, possibly, one person. That is reasonable.

In the amendment, the second reason why the Secretary of State might refuse a proposal would be that it,

“does not have the support of local authority electors”.

To go ahead without the support of the electors would be rather strange in my part of the world, where only a few years ago the electors rejected a mayor but now it would be imposed upon them if they wished to have these powers. I hear the Minister when she says that a mayor would not be imposed, but I ask her about the report in the Birmingham Mail on 1 June about the Chancellor saying to the leaders of the West Midlands that,

“only elected mayor will guarantee full funding and powers for West Midlands”.

If that is not a prescriptive approach, what is? So there is prescription within this if you are going to get full funding powers. How would the people of South Yorkshire and Sheffield feel, having said that they, including businesses, did not want a mayor, only to have one imposed in order for limited powers to be decentralised from Whitehall to the area?

There is a third reason in the amendment why the Secretary of State may refuse a proposal. Wherever powers are devolved or moved within the existing structures, whether from national or local government, that should not destabilise local government. There is nothing wrong with that. There are still functions that councils will have when there has been the shifting of the existing chairs on the deck, which is all that the Bill actually does. If there were some fiscal powers, then it would be a devolution Bill. However, if those chairs are going to be moved, it is really important that some of the functions are kept with each individual council. It does not mean that financially they cannot continue to carry out what will be significant statutory functions.

The final subsection proposed in the amendment is about the mayor. I have already spoken about this: a nameplate is not going to change how a place is governed. If it was so significant, why have some councils that had already moved to a directly elected mayor moved back? It has not been the panacea that some would suggest. I advise the Minister to think very carefully about a Bill that puts so much reliance on a name without thinking about significant fiscal powers being moved downwards—which, after all, is what makes a difference.

I end by saying that I think the noble Lord, Lord Heseltine, argues my case for me. He talks about the powers of local government in the past, the engines of economic growth and social change. However, they did not have mayors or a single democratically elected person; they had the powers that central government has taken over. I accept that some of those responsibilities and powers will go, but without looking at the fiscal powers that make the difference we will be back here in five or 10 years’ time having the same discussion, because that is the key that will make the change, not the name on a nameplate.