Devolution and Growth across Britain

Catherine McKinnell Excerpts

Wednesday 3rd June 2015 Commons Chamber

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I sincerely thank you, Mr Speaker, for calling me to speak in this debate on what I believe will be one of the defining issues of this Parliament. I commend the hon. Member for South Suffolk (James Cartlidge) for his excellent maiden speech. I can assure him that I have recently been using Avent bottles, for my newborn baby, but I must confess that we are a Tommee Tippee household.

I remember my maiden speech five years ago, which focused heavily on regional development, a subject to which we return once again today. For cities like Newcastle and regions like the north-east, the way in which we devolve meaningful powers and real funding from Whitehall to local areas is absolutely key to better supporting and funding private sector growth and creating skilled, sustainable jobs. While our region has so much to offer the UK, we still have the highest regional unemployment levels and the highest number of young people out of work. It is little wonder that far too many of our young people still sadly feel they need to leave Newcastle and our region to fulfil their potential, despite the opportunities they should have. That is one of the things that drove me to stand for Parliament back in 2010, to ensure that children in my part of the world and, indeed, my own children—I now have a third since I last spoke in this Chamber—have the same opportunities as children in any other part of the country. As the North East Chamber of Commerce emphasised:

“Whitehall has shown itself to be incapable of delivering an approach that benefits the whole county and that is why we must ensure the North East has the chance to make those decisions for itself.”

That view is clearly shared by local people. When the Chronicle asked readers about general election policy, they said that their No. 1 priority was more devolved spending.

What is the Government’s response to that pressing call for change? We have heard many warm words from the Chancellor about a northern powerhouse, but we are yet to find out whether it means anything at all for north-east England. The Under-Secretary of State for Communities and Local Government, the hon. Member for Stockton South (James Wharton), is the Minister for Local Growth and the Northern Powerhouse, to give him his full title, and I hope he will be able to convince the Chancellor that the north of England extends north of the Pennines.

The Cities and Local Government Devolution Bill was announced in last week’s Gracious Speech and its headline measure is to

“devolve powers and budgets to boost local growth in England”,

but—and it is a pretty hefty but—only for those cities that agree to have a directly elected, so-called metro mayor. Indeed, the Chancellor set out how deadly serious he is about this condition in a speech in Manchester last month, saying:

“So with these new powers for cities must come new city-wide elected mayors who work with local councils. I will not impose this model on anyone. But nor will I settle for less.”

He is clearly ignoring the 68% of voters in Newcastle who voted against a mayor only three years ago. That is an interesting take on localism by centrally mandated diktat. We will be allowed to find a mayoral model that works for us, but only as long as it involves

“a city-wide elected executive mayor.”

The famous Henry Ford phrase,

“You can have any colour as long as it’s black”,

springs to mind.

Given the Government’s determination on this issue, it would be really helpful if the Minister set out how he sees it working for the north-east. The Chancellor talks of devolving power to cities, but does he mean cities or areas covered by local enterprise partnerships? He goes on to describe city-wide, directly elected mayors, but how would that operate in the North East LEP area, which has three cities—Newcastle, Sunderland and Durham—as well as the conurbations of Gateshead, North Tyneside and South Tyneside? The Chancellor frequently refers to metro mayors, but how does that proposal apply to those other areas that the North East LEP encompasses—Northumberland and County Durham —which include some of the most rural and sparsely populated parts of England? Some clarity is needed on those issues, and it is needed quick.

Meanwhile, in a development that appears to have slipped under many people’s radars, the Government have agreed to remove a significant amount of power from regions in the very policy area under consideration. Like many other parts of the UK, the north-east benefits significantly from European Union money through the European regional development fund and the European social fund. However, until very recently, we faced the prospect of losing £724 million, because the coalition removed regional development agencies without ensuring that something was put in their place. Hundreds and millions of pounds of funding intended to address unemployment, support business growth and provide training in the north-east were put in jeopardy because the LEPs lacked the appropriate powers, resources and accountability necessary to unlock that funding. Instead, in order to prevent further hold-ups, it was agreed by the Government that, while LEPs will now have an advisory role, the actual decisions on how that money will be spent will have to be taken in Whitehall. That is a complete contradiction of the idea of decentralisation and empowering local areas.

Of course, that is set against the backdrop of massive cuts to local government, which I spoke about at length in the previous Parliament and I will continue to do so in this Parliament. Who are these powers for? They are for the communities and people we represent, who risk being so hollowed out by the cuts to local government funding that, even if they have those powers, they will not be able to deliver on them.