Chuka Umunna
Main Page: Chuka Umunna (Liberal Democrat - Streatham)Department Debates - View all Chuka Umunna's debates with the Home Office
(9 years, 5 months ago)
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Mr Chuka Umunna (Streatham) (Lab)
I beg to move an amendment, at the end of the Question to add:
“but regret that the Government has offered piecemeal measures which threaten to leave some areas behind; recognise that devolution needs to be part of an ambitious UK-wide plan not simply a limited series of one-off deals done by the Chancellor; note that the Government has failed to offer an economic growth package including new powers in transport, housing and skills for all areas, including for county regions; further regret that the Government is not offering all combined authorities in England the ability to retain all business rate revenue growth; further note that the Government has failed to offer a comprehensive strategy to build the homes, including the badly needed affordable homes, that our country needs; note that the Government has pledged a funding floor for Wales, but is concerned that fair funding will be contingent on an income tax referendum; note that, whilst the timeline of the cross-party agreement reached through the Smith Commission has been met and the Scotland Bill will make the Scottish Parliament one of the most powerful devolved parliaments in the world, the Government has failed to confirm that the Barnett formula will be protected and welfare provisions do not go far enough; and resolve that devolution should be delivered without leaving Scotland worse off.”.
May I associate myself with the comments that you, Mr Speaker, made about Charlie Kennedy? Our thoughts go out to his family, his loved ones and his friends.
It is good to see you, Mr Speaker, back in your place not only re-elected to serve the people of Buckingham but re-elected as Speaker of this House. We meet this afternoon to discuss the Queen’s Speech and, in particular, its impact on devolution and growth across the UK.
Before I dive in, I would like to welcome the Business Secretary and his new ministerial team to their places. I congratulate him on his appointment. I am glad that, while the Business Secretary has changed, the right hon. Gentleman carries on the tradition that I and his predecessor appear to have set for those doing this brief in having little or no hair. I also welcome the new Communities Secretary and his ministerial team to their posts. Finally I would like to welcome all new Members to this House. I look forward, in particular, to hearing those who will deliver their maiden speech today. It is an honour and privilege to serve in this place, and all the more pleasurable when one gets to deliver a speech without intervention—my advice would be to savour the moment.
I turn to the Queen’s Speech and the relevant Bills. Of the 21 Bills, clearly, the cities and devolution, Scotland, Wales and Northern Ireland Bills are all of direct relevance to this debate and, when exploring growth, the enterprise and housing Bills too. Arguably, the European Union Referendum Bill, the tax lock Bill, the energy Bill and high speed rail Bills are also of relevance to our debate today, but there have been opportunities and will be another tomorrow to discuss those issues. For the purposes of our debate this afternoon, we will focus on the six primary Bills that I have mentioned; in closing, the shadow Secretary of State for Communities and Local Government will go into more detail about housing in particular.
I start by setting out the rationale for the official Opposition’s position on devolution. Why devolve? We are one of the most centralised countries in the western world. Some 70% of spending is done by central Government, compared with the OECD average of 48%, and the GDP per capita of all but one of our largest eight main cities is below the national average, which serves to show how we are missing out on the full benefits that every region can bring.
It is fair to say that in the last Parliament a growing consensus evolved around the need to change and devolve more power down. Some see devolution as a useful vehicle for shrinking the state. They are happy to cut what the Government do at the centre, but they are not too keen on Government action at any level. Devolving power is not really their goal; they simply want to hack off chunks of what Government do to support people and provide them with a platform to get on. That is not our approach.
Some talk a good game on devolution, and a shrinking state is not the be all and end all for them. However, when it comes down to it, they are happy to devolve power, but less happy to provide the resources to make such power meaningful. In the last Parliament, we heard a lot of talk about localism, but that came with a 60% cut in the Communities and Local Government budget. The Communities Secretary’s predecessor sought to park blame for the lack of resources with our local authorities, when blame properly rested with the last Conservative-led coalition and will rest with this Government if they press on with the extreme cuts that, during the election campaign, they said they would pursue. Again, that is not our approach.
Finally, some see devolution as simply a stop on a journey towards breaking up the United Kingdom and pursuing independence. If that were not the case, why do we hear so much about devolving power to the Scottish Parliament, but so little about devolving power from that Parliament to the regions and localities of Scotland? Double devolution is what is required in Scotland; that is why in the last Parliament my hon. Friend the Member for Edinburgh South (Ian Murray) brought a private Member’s Bill to devolve immediately the job creation powers mentioned in the Smith agreement and ensure double devolution to local authorities, which are best placed to grow local job markets.
None of the approaches from the Scottish National party or the Tories reflects our position.
David T. C. Davies (Monmouth) (Con)
The hon. Gentleman made an interesting point about the need for the SNP to devolve power to local authorities in Scotland. He forgot to mention the possibility of the Labour-run Welsh Assembly devolving powers to local authorities in Wales. Does he think that is also important?
Mr Umunna
In this House, we generally argue for subsidiarity within Europe. We should not stop at Europe; we should have subsidiarity in our own country, too—in all the different parts of the UK.
During our time in office, we pioneered much of the devolution that we now see across the United Kingdom. It was not perfect, but given the creation of the Greater London Authority, the Mayor of London, the Scottish Parliament, and the Welsh and Northern Irish Assemblies, we did much to devolve power down. We also established regional development agencies in England, which did important work. We are proud of that record.
Pete Wishart (Perth and North Perthshire) (SNP)
I am sure that this was just a slip of his mind, but the issue of English votes for English laws was not on the list that the hon. Gentleman presented. The Labour party was the stoutest defender of Scottish voting rights in this House. Will he back us in insisting that, rather than simply changing the Standing Orders, the Government bring forward a Bill for something as significant as the voting rights of hon. Members?
Mr Umunna
As has been discussed during the series of debates held since Her Majesty delivered the Queen’s Speech, we do not want two tiers of MPs to be created in the House of Commons.
We devolved power then and we support the principle of devolving more power now, in the Bills that I mentioned, for two principal reasons—one economic and one democratic. I turn first to the economic case. Decisions on how to grow our economy are often best made at a sub-regional and local level. Local actors, whether policy makers, business people or trade unions and others, best understand the unique combination of history, geography, demography and institutions that give their area a niche—a competitive edge, a comparative advantage—in the global marketplace.
The fact is crucial because in this era of globalisation, nations and regions need to concentrate their efforts on producing the services and goods that they are best at and then to trade them to generate the good, secure, well paid jobs of which we want more all over the UK. That matters because we have a higher incidence of low paid work than other developed nations. Despite the fact that our people work among the longest hours in Europe, output per worker in the UK lags behind that of our competitors.
To address the issue and raise productivity levels, areas need to harness their specific local skills and strengths and use them to become clusters of expertise and innovation. The simple fact is that one-size-fits-all policies devised in remote departmental silos are simply incapable of nurturing specific local strengths. It is the different players in our local areas and regions that are best placed to do that. We have to give them the tools to be the masters of their own destinies.
Geraint Davies (Swansea West) (Lab/Co-op)
I want to ask about devolution within Wales. Swansea Bay city region, the conglomerate of Neath, Port Talbot, Swansea and Carmarthenshire, is the biggest urban footprint in Wales. It projects the international brand name of Swansea, thanks to the city’s football success, on the back of two universities plus Tata Steel and a confederation of local government, industry and academia. Does my hon. Friend agree that that is the way forward in a global marketplace—perhaps along with regional banking, which we have not yet got from the Government?
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
Does my hon. Friend agree that it would be a mistake to confuse London as a whole with the City of London, which is of course hugely powerful and wealthy? People in London would not understand if other city regions such as the northern powerhouse got devolved powers, particularly over health, that were then denied to Londoners.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
The Government insist that areas such as the north-east can have further devolution only if they have a mayor. Does it strike my hon. Friend as a strange anomaly that so-called devolution should insist on one way of doing things and deny local people a say on whether they want a mayor in the first place?
Mr Umunna
I completely agree. I will come specifically to that point in a moment.
We have talked about some of the examples of where the approach works. Chicago’s Mayor Rahm Emanuel has turned the city into a hotbed of innovation that attracts the best graduates. A good European example is Eindhoven in the Netherlands. It has rebooted its innovation and, as a city comprising only 4% of the population, now generates 37% of Dutch patents.
My hon. Friend the Member for Swansea West (Geraint Davies) mentioned the example from Wales. Many of our colleagues in local government are doing pioneering, innovative stuff across the UK. In Oldham, Labour has introduced enterprise hubs in every secondary school; in Plymouth, it is working with housing associations to build 1,000 homes; in Leeds, it is setting up an apprenticeship brokering service for small and medium-sized businesses; and in Lambeth, where I am, it is using council buildings to provide a home for small businesses. We need to promote such ways of working if we are to address the ongoing structural imbalances in our economy. We may have achieved 2.8% growth last year, but our economy is still seriously imbalanced. We need look only at the Office for National Statistics regional gross value added figures to see the uneven distribution of growth. The Queen’s Speech talked about the Government’s desire to build a northern powerhouse, which was mentioned by my hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott). In truth, we should seek to make every single region a powerhouse, not just have the northern powerhouse.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
My hon. Friend is making a very powerful speech. Bearing in mind that the UK trade deficit widened from the last quarter of 2014 to the first quarter of this year, does he not agree that local authorities and local enterprise partnerships play a very important role in helping to support businesses to take advantage of export opportunities, so that Britain’s businesses can meet their maximum potential in the world?
Mr Umunna
My hon. Friend raises a very important point. The current account deficit is at its highest ever level at the moment, and she is absolutely right about the approach that we need to adopt.
Beyond the economic argument, which I have talked about, there is a bigger argument to be made for devolution. We know that levels of trust in politics are low, but we also know from research that policies formulated and delivered locally command far greater trust than those made in Westminster.
Mrs Caroline Spelman (Meriden) (Con)
Does the hon. Gentleman accept that west midlands manufacturers felt completely neglected for 13 years under the previous Labour Government and have enjoyed a renaissance only since the coalition Government? Is it not true that the severity of the financial crisis was much greater for the United Kingdom because our economy was so unbalanced in 2008?
Mr Umunna
I would say two things to the right hon. Lady. First, when I was in her area, I heard so many complaints, particularly during the last Parliament, about the abolition of Advantage West Midlands, the regional development agency. Secondly, those involved in the renaissance in the automotive sector in particular—the likes of Jaguar Land Rover and so on—tell us how helpful and important it was that the previous Labour Government established the Automotive Council.
As I was saying, I want to move beyond the economic case to make the democratic case. We know that levels of trust are higher in decisions made locally, but we also know that the contempt people have for politics is fuelled not only by a sense that we are all in it for ourselves, but by a sense of powerlessness—a sense of citizens’ powerlessness in shaping what the system does for them and a lack of confidence in politicians’ power to change things in the face of powerful global forces. What better antidote to that sense of powerlessness is there than to give people more power in their localities and communities?
This is very much my personal view of what we in this House are all guilty of, but people are desperate for an end to the partisan point scoring we sometimes see in this place. There is an increasing desire for politicians to transcend the partisan bickering that characterises a lot of debate here. On that point, I should refer to the last hour in the Chamber. We all mourn the loss of Charles Kennedy, the former Liberal Democrat leader and former Member for Ross, Skye and Lochaber. He was a great and brilliant parliamentarian. He was so popular, and there has been such a huge outpouring of affection since his sad passing, in part because he could transcend the Punch and Judy of this place. If we are honest, it is fair to say that our colleagues in regional and local government are often far better than us in putting aside party political differences and working together. An example often cited is the way in which Lord Heseltine, a Conservative, collaborated with our Labour colleagues in Liverpool over the years. That led to his being awarded the freedom of the city by the Labour administration there in 2012. Let us look at the work of the cross-party London Councils body, which has rolled out its successful apprenticeship scheme across the Labour and Conservative-run boroughs of the capital. That is another reason for devolution, and it would actually help our democracy.
Mr Clive Betts (Sheffield South East) (Lab)
My hon. Friend is making a very powerful democratic case for re-energising democracy through devolution to local authorities and local communities, and certainly through trusting local people to make decisions over their own spending at local level, but should we not also trust local people to have the ability to raise more of their own taxes at local level? That is a place where those on neither Front Bench have so far wanted to go, but is not fiscal devolution just as important in the total approach to devolution as the devolution of spending powers?
Mr Umunna
I believe—this is my view—that fiscal devolution is important, and I will say a little more about that shortly.
I have been clear that we support devolution across the UK in principle. It cannot, however, be devolution for the sake of it; it must be a devolution of powers for the purpose of creating a fairer and more prosperous society for everyone. As our amendment sets out, we want an ambitious UK-wide plan to devolve powers, not a series of piecemeal measures or one-off deals, and those powers must cover transport, housing and skills for all areas.
Jake Berry (Rossendale and Darwen) (Con)
The hon. Gentleman is making some very good points. In the spirit of cross-party working, I am sure that he, like me, would welcome the concordat between the Greater Manchester Combined Authority and central Government to devolve more powers to the north-west of England. Would he join me in encouraging other large councils, such as Lancashire County Council, to come forward to the Government with plans to ensure that more powers can be devolved to the constituents I represent in Lancashire?
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Will the hon. Gentleman give way?
Mr Umunna
I will make a little progress if I may, but I may come back to the hon. Gentleman later.
What of the Government’s proposals in the Queen’s Speech that we are debating? We are told that the Cities and Local Government Devolution Bill will provide the legislative framework necessary to deliver the Greater Manchester deal and other future deals in large cities in England that choose to have elected mayors, as my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) mentioned, and in other places. Shortly before the general election, devolution deals were announced in relation to Sheffield and West Yorkshire. In addition to Manchester, we were told that the Government will pilot allowing councils in Cambridgeshire and Cheshire to retain 100% of the growth in business rate revenue so that they can reap the benefit of decisions to boost growth locally.
To pick up my hon. Friend’s point, however, why limit these arrangements to those areas? Why not give every region the opportunity to reap the benefits of the decisions they make to boost growth locally through such deals and through the devolution of business rates? Although I am a big fan, what about areas which, as she said, choose not to have elected mayors? Why should they be denied the benefit of greater local freedoms? Combined authorities, with or without a mayor, can provide a useful vehicle through which to do all this, but one important point for the Government to consider as they proceed with their legislation is this: what about areas which do not have or do not desire a combined authority, and how will they get more powers? My criticism of what has been proposed—I accept that we need to see the Bill—is that it does not seem to go far enough and is rather piecemeal. The Government need to find a way of ensuring that all areas can enjoy greater autonomy.
The Government say that their Scotland Bill aims to deliver in full the Smith commission agreement, to which the five main Scottish political parties signed up in November 2014. We are absolutely committed to ensuring that the vow—a promise made and a promise to be delivered —made on the eve of last year’s referendum is delivered in full to make the Scottish Parliament one of the most powerful devolved Parliaments in the world. As we set out in our manifesto, we will work to amend the Bill to give the Scottish Parliament the final say on social security and the power to top up UK benefits. This settlement must recognise the strength and security offered by being part of the UK, which means retaining the pooling and sharing of resources that flow from the Barnett formula. It is imperative that that is protected and, for the sake of the Scottish economy and public services, one hopes that the SNP’s economically illiterate plans for full fiscal autonomy are dropped. The worst-case scenario for Scotland would be the hon. Members of the SNP in this House pressing for full fiscal autonomy and the Tory Government delivering it.
Jonathan Edwards
The Labour amendment equates fair funding with the so-called Barnett floor, yet the hon. Gentleman has just said that he is committed to the Barnett formula for Scotland. If Wales had the same level of investment as Scotland, it would be worth an extra £1.4 billion a year. Would that not be fair funding? If that were in the Labour amendment, I would be more than happy to march through the Lobby with him. As it is, we cannot.
Mr Umunna
Perhaps I will help the hon. Gentleman shortly, because I am coming straight on to Wales.
We are told that the Wales Bill will deliver a clearer, more stable devolution settlement for Wales and devolve important new powers to the National Assembly for Wales and the Welsh Government. We understand that a funding floor is to be introduced to protect Welsh relative funding and provide certainty for the Welsh Government in planning for the future. We support measures to put Welsh devolution on a stronger statutory basis, as is the case with Scotland. We agree with taking forward proposals from the Silk commission and extending the power that the people of Wales have over their transport, elections and energy.
To come to the point made by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), let me be clear that Wales must not be unfairly disadvantaged by the Barnett formula. The Conservative-led coalition cut the Welsh budget by £1.5 billion. This Conservative Government must ensure that there is a fair funding settlement for Wales by introducing a funding floor. That funding floor should not be contingent on an income tax referendum.
The Queen’s Speech refers to legislation to implement the Stormont House agreement in Northern Ireland. This issue was raised in Prime Minister’s questions. The legislation will provide the architecture to deal with the past, institutional reform at Stormont and certain economic measures, including the devolution of corporation tax. In view of the concerning escalation of the dispute over welfare reform, we urge the Government to do all in their power to work with the Northern Ireland parties and, where appropriate, the Irish Government to avert this serious threat to political and economic stability in Northern Ireland.
Sammy Wilson (East Antrim) (DUP)
Does the hon. Gentleman accept that if the impasse is not resolved and the hole in the Northern Ireland budget of 6% for the remainder of this year is left unresolved, the only answer is for the Government to take over the welfare reform powers from the Northern Ireland Executive, because some parties have clearly shown themselves to be incapable of dealing with them?
Mr Umunna
Without wanting to fuel the dispute, I would say that the important thing is that it does not get that far. It is important that all the parties manage to find a resolution to the dispute. I know that the talks are ongoing today.
I have talked a lot about growth, but before I conclude, I want to turn to the specific growth measures in the Queen’s Speech. I sincerely hope that this Government have more success than the last one in the delivery of their policies on regional growth. In the last Parliament, having hastily and mistakenly abolished the regional development agencies that we established, the Government asked local enterprise partnerships to do basically the same things as the regional development agencies, but without the powers or the resources. Local enterprise partnerships have had mixed success. We want this Government to resource them properly and give them the support that they need to do the job that is being asked of them.
The last Government’s flagship regional growth fund was mired in chaos and delay from the start. Eventually, it managed to get moneys to successful bidders, although I suspect that a substantial amount is still gathering dust in Treasury coffers. We wait to see what further measures there will be in that respect in the Budget.
Graham Evans (Weaver Vale) (Con)
On the hon. Gentleman’s point about LEPs, in the 13 years of the Northwest Regional Development Agency, why did Labour not come up with the idea of the northern powerhouse to give power to those great northern cities?
Mr Umunna
I could ask the hon. Gentleman why, in the 18 years beforehand, his party did not come up with the ideas of the Mayor of London, the Welsh Assembly or the Northern Ireland Assembly.
We will, of course, hear a lot more about the Government’s plans for growth in the Budget, but in the Queen’s Speech we had the enterprise Bill. To the extent that it promotes growth and supports businesses, we will support it. I see the new Minister for Small Business, Industry and Enterprise in her place. I am pleased that the Government propose to extend the primary authority scheme, which we established, to reduce the regulatory burden on business. That is good.
I would like the Business Secretary and his new deputy to go much further in the Bill than they have indicated they will in order to clamp down on the national scandal that is the late payment of small and medium-sized businesses by their large customers. We will press the Government on that during the passage of the Bill through this House. A conciliation service is all well and good, but what small businesses want is a regime with teeth that will impose sanctions on late payers automatically, without their having to have a row with their customers. That must be the Government’s goal.
To reform our economy, we must invest in our infrastructure. The key thing is to ensure that people in every part of the UK have a decent, affordable place to live. The shadow Secretary of State for Communities and Local Government will say more about that later.
Caroline Lucas (Brighton, Pavilion) (Green)
Does the hon. Gentleman agree that economic devolution must include mending our broken banking system, which is sucking money into London? Does he agree that, although the Government are about to announce, I imagine, the selling off of RBS at a massive loss to the taxpayer, we should instead use our investment in RBS to create a local banking network to support small businesses and rebalance the economy?
Mr Umunna
The hon. Lady is absolutely right that when we look at economic devolution we should consider reform of the way banking works. I am a big fan of regional banking.
I am conscious of time and I know that many Members want to make their maiden speeches, so I will finish where I started and return to the rationale for devolution. Often, people dismiss debates such as this as not being high up the list of concerns for the public. It is true that the turnout in the referendum on whether to establish the Greater London Authority and the Mayor was just 34.6%, and that the referendum on the establishment of the Welsh Assembly was carried with just 50.3% of the vote. However, I leave this thought for hon. Members to consider: if any Government now proposed to abolish the institution of the Mayor of London, not only would my hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) go crazy, but there would be a public outcry. The same would be true if a Government proposed to do away with the Welsh Assembly or any of the new institutions we have set up. That reinforces my view that, when it comes down to it, people want more power, so we should ensure that they have it. For that reason, I commend our amendment to the House.