Cities and Local Government Devolution Bill [Lords]

Clive Betts Excerpts

Wednesday 14th October 2015 Commons Chamber

[Greg Clark]

That goes to the point about double devolution made by the hon. Member for Nottingham North. My hon. Friend is right in what she says, and the Housing and Planning Bill contains provisions to strengthen the ability of neighbourhoods to insist on the development of a neighbourhood plan. I hope she will find that welcome.

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

rose—

[Mr Ivan Lewis]

rose—

[Greg Clark]

I am going to make some progress, but I will give way to the Chairman of the Select Committee and others before I finish.

The Bill has been warmly welcomed by local government, business leaders and local leaders of every hue. Lord Peter Smith, the leader of Wigan Council, said the deal with Manchester was “a momentous moment” for Greater Manchester because

“it gives greater control over our own destiny.”

But the Bill is, as we have been discussing, relevant to rural areas, none more so than the great county of Cornwall, where a group of Members of Parliament—it is a good example to Members on all sides—engaged with their local authorities in developing the proposals. The agreement with Cornwall was described by the leader of Cornwall Council as “brilliant news” and “the first stage”—which it is—“of a longer journey” towards further devolution for Cornwall.

In Sheffield—the constituency of the hon. Member for Sheffield South East (Mr Betts), so it is perhaps a good point to give way to him—James Newman, whom he knows well, the chairman of the local enterprise partnership, said that Sheffield’s agreement put it “at the front of the pack” and would strengthen the position of Sheffield as a “world-class centre for modern manufacturing and engineering”, which it undoubtedly is.

[Mr Betts]

I will not demur in any way from what the Secretary of State has just said. I congratulate him on his efforts over the years to bring about the change that we have seen in the approach to devolution. In a written statement the other day, the right hon. Gentleman referred to the full retention of business rates and the fact that that will mean more resources for local government, but it will require a process of further devolution of powers to take account of the extra expenditure that local authorities will control. Will he say how that will be done? How will local authorities and this House be consulted on the measures to be devolved as part of that arrangement?

[Greg Clark]

That is a very good question, and I am sure we shall have other opportunities to discuss it. Devolving 100% of business rates is more than the grant that goes to local authorities, so it is an opportunity to devolve more powers with the funding to local government. Again, the point of the transfer announcement at this stage is so that we can have a sensible conversation with our colleagues in local government as to what might be the appropriate activities and responsibilities to devolve. I dare say the hon. Gentleman personally and his Committee might have some suggestions to make on that.

--- Later in debate ---

[Jon Trickett]

We would look carefully at any amendment that was presented to us. The point I want to make is that the old days of a Westminster-based elite cooking up deals and imposing them on cities and other areas are over. It is time we consulted the people and engaged in a wider conversation, but that is precisely what the Government are avoiding.

[Mr Betts]

I have a lot of sympathy with the points that my hon. Friend is making about the imposition of elected mayors. Recognising that we will eventually need to move to a wider settlement, perhaps through a constitutional convention, does he accept that in the meantime it is not our party’s position to stand in the way of devolution deals to our colleagues in local government, particularly in major cities including Sheffield and Manchester?

[Jon Trickett]

My hon. Friend is absolutely right to say that local government leaders should not be directed by those on the Front Bench. If they feel that something can be done in a deal with the Government that will be beneficial to the community, they should do it. Equally, it is our duty to express opposition to the way in which this is being imposed on local government. I have spoken to council leaders in south Yorkshire, where my hon. Friend is a distinguished Member of Parliament, and they have told me that this deal is being imposed on them.

The second reason that the Bill is a pretence at devolution involves the wider context of local government finance. In a comprehensive Bill, there should surely be clauses regarding the way in which local government can be funded to make it more autonomous and less dependent on the centre, but the reverse is the case here. There should also be clauses regarding fair funding, as the cuts in recent years have been concentrated on the urban areas. We know that the Chancellor manipulated the formula for the benefit of certain areas in a way that was politically beneficial to the interests of the governing party.

The truth is that the Secretary of State is not devolving financial power, or any power. He is delegating Treasury cuts. What the Government give in pennies, they take back in pounds. Since 2010, local government in England and Wales has lost 40% of its funding. Now every children’s centre, every fire station, every care home, every nursery, every pensioner waiting for a bus, every youngster looking forward to attending a youth club on a Friday night and everybody of any age whose horizons are widened by public libraries—they and many others are anxiously waiting not for this Bill but for 25 November, when the Chancellor of the Exchequer will announce his spending review.

The Tory-led Local Government Association is expecting further cuts to local authorities of up to an additional 40%. That is on top of the cuts that have already taken place. Cuts on that scale make a mockery of the Secretary of State offering further devolution. This is the delegation of cuts, not the devolution of powers.

I have already referred to the wise words of the hon. Member for Altrincham and Sale West in that excellent journal, The Daily Telegraph. It has to be said that that paper has been on a roll this week. Yesterday, a report by its political editor stated:

“As many as four Cabinet ministers, including Philip Hammond, the Foreign Secretary, and Iain Duncan Smith, the Work and Pensions Secretary”,—

and two others, unnamed—

“have so far refused to submit to the Treasury plans to cut their departments by as much as 40 per cent.”

I put it to the House that the anti-austerity case that my hon. Friend the Member for Hayes and Harlington (John McDonnell) has been pursuing has now extended to members of the Conservative Cabinet. It seems to have wider cross-party support than was first feared. But wait a minute! That same article reports that the Business Secretary and the Justice Secretary are “enthusiastically” preparing for massive cuts to their Departments. The House is entitled to ask what side of this dividing line our Secretary of State stands on. There is no mention of him in the article. Is he fighting the corner for those fire stations, libraries, care homes, students and nurseries? Or is he, like the Business Secretary and the Justice Secretary, “enthusiastically” anticipating cuts on a historically unprecedented scale?

--- Later in debate ---

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

I have over the years had disagreements with the Secretary of State about the pace of change of devolution: I probably wanted to go faster than he and the Government have gone. I have had disagreements with him about the amount of devolution: I probably wanted to go further than the Government have gone. I have had some disagreements with him on the detail. The important thing, however, is that we are actually talking about devolution. Devolution is a key element of Government policy and it is happening. It is important to have regard to such matters.

Although my disagreements may be about the pace and extent of devolution, the direction of travel is absolutely clear. I think that credit, on a cross-party basis, should be given to the Government and to the Secretary of State—both in his current job and his past roles—for driving forward this agenda, which deserves support.

Thinking about it, there probably never was a realistic chance of getting a big bang, with complete devolution across the board of everything that I would eventually like to be devolved. After years of centralisation, it was probably always going to be the case that incremental change would be the successful way forward—convincing the Treasury that economic growth would be improved and that value for money in public services would be increased. Indeed, we must watch to make sure that those things actually happen, and that proper impact assessments are made over the years to show that the change has brought such benefits.

Having different solutions in different areas was likely to be the way forward to achieve devolution on a realistic basis, and that is also completely consistent with the localist approach, which is that things should be done differently in different areas. However, I have one serious disagreement with the Secretary of State, which the Local Government Association has also raised. The disagreement is that one size does not fit all in terms of the powers that will be devolved and how those powers should be administered. We therefore come back to the imposition of elected mayors.

Why is such imposition necessary? If the rest of the approach is about agreement, with local areas coming forward with their views on what needs to be devolved in their area, why cannot we trust them to come forward with ideas about how powers should be administered in their area? The Government must provide an answer on that challenge, because that is the one inconsistency in their whole approach.

[Tom Brake]

Does the hon. Gentleman agree that the Government already seem to have conceded that point in relation to Cornwall, which does not have a mayor?

[Mr Betts]

Yes, I think so. Ministers will have to explain that. I think their answer would be that Cornwall has elected councillors for one county, which is slightly different from the situation in combined authorities. I do not accept that, because I think we can come up with arrangements in combined authorities. Indeed, to come back to the Sheffield model, I understand that some of the economic items to be delegated, such as those on skills, will be devolved to the combined authority, not to the mayor, but that transport items will be devolved to the mayor. That means there will be a two-party approach: on some items, the elected leaders of the various constituent councils, acting as a combined authority, will have the powers, but other powers will go to the mayor. I think that will be more confusing than ever to the public, who will not know where powers rest under the new approach.

The Government must give thought to one or two things, as should local government. The deals being done—I understand how they are now being done to move forward a very centrist agenda on a more devolved basis—still give a bit of an impression that ideas are being cooked up in back rooms by councillors, and that deals are then done in back rooms with Ministers. We must try to move to having a more open debate. Ideas for devolution should be brought forward by councils and there should be a more open debate on the Government agreeing to such deals. We must find ways of involving the public more in the whole approach if we are to take them with us. In the end, one of the key issues of devolution should be greater public engagement, with the public feeling that they have more control over the decisions that affect their daily lives. That has to be a key element of devolution, but there is a problem at present.

I agree that we will eventually have to get an overall framework for devolution, including a list of powers that councils can have as of right. Ultimately, there must be a move from devolution by patronage—Ministers agreeing that certain things can be done in a certain way—to councils having the right to have such matters devolved to them. We are a step away from that situation at present, but we must move in that direction. As I said to my Front-Bench colleague, my hon. Friend the Member for Hemsworth (Jon Trickett), let us look at wider devolution—ultimately, we may want a constitutional convention—but in the meantime we must not stop the progress that is being made. Let us make sure that the devolution deals can go ahead and take us in the right direction of travel. Perhaps that is something on which we can get consensus.

I want to raise a couple of problems. In Sheffield, there is still a problem about the non-metropolitan districts that are part of the city region. It is unique as a city region because it crosses more than one region—it does away with the old regional boundaries—but the non-metropolitan areas cannot join the transport deal because transport is a county function. The elected mayor will cover only the south Yorkshire districts, not other districts in Derbyshire and Nottinghamshire, but it cannot be right that a devolved authority’s travel-to-work area is not covered by the new mayor who has responsibility for transport. That is a challenge and a problem.

I do not share the concerns that colleagues have expressed about health, although one of my concerns is that we do not really have standardised treatment and service levels throughout the national health service anyway. However, we must avoid the dead hand of centralism in the Department of Health stopping innovation at local level in joining up health and social care in a way that will be allowed under devolution deals, whether in a combined authority such as Manchester or in an individual authority such as Sheffield.

I am pleased that the Secretary of State has become a convert to fiscal devolution. In the end, real devolution is not just about allowing local authorities greater freedom to spend the money they are given by central Government; it has to be about more freedoms for councils to raise money. The Chancellor’s statement on the full localisation of the business rate is a step forward. In the last Parliament, the Communities and Local Government Committee produced a report on “Devolution in England: the case for local government”. I hope that the Government will look at the proposals for further fiscal devolution. Business rates and how full localisation is done are obviously important issues. As I said to the Secretary of State earlier, there is an opportunity, with the extra money retained in local government through full localisation, to allow more devolution right across the board. That will be a very big conversation during this Parliament, and I am pleased that the Secretary of State is committed to a full consultation on that both in Parliament and with local government as a whole.