Devolution and Growth across Britain

Clive Betts Excerpts

Wednesday 3rd June 2015 Commons Chamber

[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.

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[Sajid Javid]

My hon. Friend is absolutely right to highlight that decision; as he has alluded to, it took into account the unique situation of Northern Ireland, with its larger neighbour and the tax situation there. It demonstrates what this Government will do to bring about further devolution.

I turn briefly to England. No matter where people live, our intention is that they have a Government that is on their side and that represents their interests. As we have heard, devolution is strengthening the voices of Wales and Northern Ireland, as well as that of Scotland, within our Union. That should be just as true for England.

[Mr Betts]

Will the Secretary of State give way?

[Sajid Javid]

I will give way in a moment.

As a one nation Government, we will revise the Commons rules to make the law-making process fair, bringing about constitutional reform that serves people living in all parts of the United Kingdom. The introduction of English votes for English laws will do just that for England. Our proposals will balance the principle of English consent for English measures with the process of MPs from all parts of the UK continuing to deliberate and vote together.

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[Sajid Javid]

My hon. Friend is absolutely right. By 2010 under the previous Labour Government, 33% of the jobs created were in London or the south-east. In the past five years, 60% of the jobs created were outside London and the south-east. The Secretary of State for Communities and Local Government deserves great credit for the progress already made on this agenda and I look forward to hearing his contribution a little later.

[Mr Betts]

Will the Secretary of State give way?

[Sajid Javid]

I want to continue my speech.

Looking at the incredible success that much of the UK is already enjoying, it would be easy to forget just how far we have come. When this House reconvened in 2010 our economy was on the brink, reeling from the deepest recession in almost 100 years and burdened with the largest peacetime deficit in our history. [Interruption.] Labour Members do not want to know. They want the country to forget. We were struggling to pay for the world’s largest bank bail-out. The turnaround achieved in the past five years has, by any measure, been remarkable.

Last year, Britain was the fastest-growing major advanced economy in the world. Just today, the OECD confirmed that in 2015, according to its projections, we will once again be the fastest growing major economy in the advanced world. We have more people in work than at any point in history thanks to 2.2 million private sector jobs created by British business since 2010. In fact, the UK has created more jobs in five years than the rest of the European Union put together, giving us the highest employment rate in our history and the lowest claimant count for 40 years. We have cut the deficit as a percentage of GDP by half. We cut corporation tax to 20% and cut employer national insurance contributions. The British public have endorsed the Conservative’s long-term plan, which has allowed this business-led recovery. They gave us a mandate to continue to implement it and that is exactly what we will do.

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[Mr Clive Betts (Sheffield South East) (Lab)]

I, too, congratulate the Deputy Speakers, and congratulate you, Mr Speaker, on your re-election. I also congratulate the new Secretary of State for Communities and Local Government, who I see is present. In the last Parliament, as planning Minister, he showed great willingness to listen to recommendations from the Select Committee, which I chaired, and to accept our proposals and amendments. I that we can establish a similar relationship if I am re-elected as Chair of the Committee in this Parliament. The right hon. Gentleman has not only a principled commitment to devolution but a track record on it—which I think is recognised by Members on both sides of the House—as well as being willing to look for solutions that meet local needs, in the true spirit of devolution.

Let me begin by raising two issues relating to what the Government have proposed so far. The first was raised in an earlier debate by one of my hon. Friends, who challenged the Government to explain why, if we were really serious about devolving functions to communities and their elected representatives at local level, we had to tell those representatives how the arrangements should best be governed. Why must we insist on an elected mayor to enable powers to be devolved to combined authorities? Many communities may decide that elected mayors are the best way forward. Why are the Government saying, “If you do not have our version of governance at local level, you cannot have devolved powers in the first place”? That is not typical of the right hon. Gentleman’s track record. When he was responsible for city deals, he was prepared to tailor arrangements at local level, in discussions with councils, in order to meet specific needs. Can we not have a rethink about that?

As for the second issue—and I challenge my hon. Friend the Member for Streatham (Mr Umunna) on this—why are the Government committed to devolving spending powers? Why are they prepared to trust local communities with the right to spend money and make decisions in that regard, but not prepared to trust them with the right to raise taxes in the first place? Why is something that is good for Scotland, Wales and Northern Ireland not good for England as well? What is wrong with extending the principle? The Government have been reluctant to do that, and my party’s Front Benchers have been somewhat reluctant to do it as well.

There is cross-party support for such a move. I see that my hon. Friend the Member for Rochdale (Simon Danczuk) and the hon. Member for Rugby (Mark Pawsey) are present. They were both members of the Select Committee in the last Parliament. We produced a report on fiscal devolution to local government in England that received widespread support. The Local Government Association adopted it, and, along with the London Finance Commission, the Mayor of London—who I see in a reincarnated form as the hon. Member for Uxbridge and South Ruislip (Boris Johnson)— produced very similar proposals.

The Front Benchers do not seem to understand that if we are to have real devolution in this country, it cannot simply be a matter of central Government handing out largesse and then reducing it, thus passing the responsibility for cuts to local authorities. That is not real devolution at all. Let us go a bit further, and be a bit braver. Does the Secretary of State not have an instinct—a real passion—to be the Secretary of State who delivers real devolution to England as well as to Scotland, Wales and Northern Ireland?

Let me raise a third issue during my six minutes. I am passionate about housing. We must start to build a quarter of a million homes to meet demand, and I think that we shall have to spend some more Government money. We must remove the borrowing cap that restricts councils’ ability to spend. Housing associations are struggling as a result of the cuts in the amount of money that they have per unit of development. Many of them are not taking up social housing grant, as they did before; I think there was a shortfall in the last financial year.

I understand the Government’s commitment to build more on brownfield sites, but the problems with paragraphs 47 and 49 of the national planning policy framework and the issues of which the Secretary of State is aware from his previous role as planning Minister—the challenge regarding definitions of viability—are affecting local authorities’ ability to include brownfield sites in their local plan. The speech contains a proposal on the right to buy that the National Housing Federation says will cost £11 billion. We cannot trust the Government on that, because the intended one-for-one replacement of houses sold simply has not happened. According to the very best estimates, about one house has been built for every 10 sold.

The Government are going to take private assets into public control. They will direct private companies and charities on how to use their assets. If they do that, are they nationalising those assets and taking their debts on to the Government’s books? Have they looked at the report from the Office for National Statistics on whether they will include the entire debt of housing associations in Government debt? Have they listened to the National Housing Federation, which called for a review of this policy? Its members say that the concerns about the future of their finances, the right to buy, welfare reform, the rise in rent arrears and the introduction of universal credit are taking them to a place where they do not feel comfortable about developing in the future. This policy has not been thought through. It is a real challenge to the future viability and independence of housing associations, and it will affect whether they develop in the future. That matter of concern needs addressing.