Cities and Local Government Devolution Bill [Lords]

Clive Betts Excerpts

Tuesday 17th November 2015 Commons Chamber

[Andrew Jones]

My hon. Friend is a vigorous campaigner for rail in the north of England, especially in his constituency, and I am happy to confirm that the Pacers will disappear under the new franchises, which we expect to announce before Christmas.

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

The Minister talks about the importance of trans-Pennine links, which currently are pretty awful. David Higgins described the links between Sheffield and Manchester as a matter of national concern. This is an important new clause—there are 12 pages of it, so it must be important. Just how will it help us to co-ordinate the delivery of HS3 with that of HS2—I have not found anyone in Government making that link—and how will it deliver a tunnel under the Pennines to replace the ridiculously slow Snake and Woodhead passes, which at present pass for road links between Sheffield and Manchester?

[Andrew Jones]

I caution the hon. Gentleman: the length of new clauses and amendments is not necessarily related to their importance. A sub-national transport body would provide a link between central and local government to ensure a united voice representing an area’s transport requirements and, as a result, to make more likely solutions that are tailored to local need. I agree with his basic point, however, that connections across the Pennines, especially between Sheffield and Manchester, are not good enough.

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[Mr Betts]

Will the Minister explain again? What role will the body play in looking at a road tunnel under the Pennines? Would it carry out the review of whether one is necessary? Would it commission the work? Or would it simply be advisory? How would it relate to HS2, given that that will need other transport links? What will its role be in that connection?

[Andrew Jones]

I am coming to that later, so perhaps I will address the hon. Gentleman’s points then.

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[Andrew Jones]

The Secretary of State will still be in charge of the national network. He will still be the final decision-maker in relation to the overall national transport strategy, and the way in which money is allocated to different schemes and areas. At first, STBs will advise him on strategic transport priorities for their areas to help promote economic development, but over time they will be able to advise him on how they can develop their roles and take on more responsibilities for improving transport planning, or provide for other enhancements to economic development in their areas. The Secretary of State will not be made redundant by these developments.

[Mr Betts]

I am still not sure what role an STB will play. Will it be just an advisory body? Will it be just a planning body? Will it just help the Secretary of State to make decisions? How, in particular, will it relate to HS2 and HS3? Will it try to link those two bodies? Will it have any oversight of those developments?

[Andrew Jones]

STBs’ responsibilities will start with the development of plans for their areas, as the hon. Gentleman will know from the Transport for the North plan, which was published last year. As the STBs develop, I shall expect them to work with other bodies. A memorandum of understanding has already been signed by Transport for the North and Highways England so that they can inform each other’s plans. That is how we expect the arrangement to work. Decisions will be taken away from here and made on a more local basis, and the bodies will then collaborate in order to produce the right plans for their areas.

Subject to the Secretary of State’s agreement, affirmative secondary legislation will designate an area as an STB area. Consistent with enabling legislation, there will be no “one size fits all” approach. The governance for STBs will not be standardised across all of them, and the detail relating to each one will be set out in secondary legislation. Combined authorities and local transport authorities will make up the membership of each body. To ensure that STBs are accountable to the people whom they represent, each one will be overseen by a political-level board consisting of either metro mayors—where they have been established as part of the Government’s devolution programme—or the political leaders of the relevant constituent authorities. The Bill also specifies that the STBs will have a chair, and will enable, but not mandate, the Secretary of State to make regulations for their constitutional arrangements.

To ensure that each STB is established in a way that is right for the area for which it is working, the exact detail—such as the make-up of the board, quorums, the presence of any non-executives, and the appointment of a chair—will be left to individual pieces of secondary legislation, reflecting local plans and local need. The board will then be able to co-opt other members, such as representatives of local enterprise partnerships, to give local businesses a voice, or representatives of neighbouring authorities, to cover cross-border interests.

Initially each STB will advise the Secretary of State for Transport on strategic transport schemes and investment priorities for its own area. STBs will develop a long-term transport strategy which will set out with one voice the area’s view on transport’s role in its economic development. Within the lifetime of this strategy, the STB will then need to create shorter-term transport plans that will prioritise transport interventions to be delivered in given time periods, likely to be mapped on to road and rail investment cycles. This process is already under way within Transport for the North.

Over time, the Secretary of State may grant individual STBs additional responsibilities, through further secondary legislation, around the decision-making and delivery of transport schemes and significant cross-regional schemes, such as smart ticketing. The Secretary of State, and other public authorities including local and combined authorities, will not be able to overlook an STB’s transport strategy when developing their own transport strategies and plans. In return, this legislation requires STBs to consult with local government bodies, the Secretary of State for Transport and other interested parties within or without the STB, thereby ensuring it meets the expectations of all parties.

STBs will take a strategic-level view across an area to improve transport infrastructure and services, and address how that can support the economy. This involves assessing which transport schemes deliver most benefit from their investment, and how best to improve regional connectivity.

In creating STBs, the Government are demonstrating their commitment to work together with local areas to tackle those transport issues that cut across administrative boundaries, such as longer-distance road and rail, and find joint solutions that benefit people travelling across the region, such as smart ticketing. It is important to stress that this legislation gives all areas the opportunity to benefit from the establishment of STBs so their economies can grow. This is a key part of the work to help rebalance the economy outside London. Accordingly, I believe it is necessary for TfN, Midlands Connect and all future STBs to be enshrined as statutory bodies with appropriate statutory powers, and I commend this new clause to the House.

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[John Stevenson]

I will say a few words about new clause 30. The Bill includes plenty of references to elected mayors and their powers. Indeed, much of our debate has centred on elected mayors. I have long supported the idea of elected mayors and very much welcome their introduction into legislation. However, the Bill deals with larger areas such as combined authorities, large cities and the larger counties. It does not address the possibility of elected mayors in smaller councils and communities.

I acknowledge that the Government want this change to come from the bottom up, with local authorities coming together to put forward ideas and proposals, hence all the deals that we have heard about up and down the country in recent days—I am sure that there are many more to come. I understand that process, although I do not wholly agree with it at all times. I sometimes think that there needs to be greater direction from the centre. Nevertheless, the Government are moving in the right direction.

New clause 30, which my hon. Friend the Member for Cleethorpes (Martin Vickers) and I tabled, is a small change that would allow smaller council areas and communities, which are unaffected by this legislation in many respects, to consider having an elected mayor in a simpler way and give their populaces the opportunity to vote on the prospect of an elected mayor. For example, there is an elected Mayor of London, but of the 32 boroughs underneath that, only about two have elected mayors.

I would like other boroughs to have an easier opportunity at least to consider the prospect of an elected mayor, and to extend that provision to other parts of the country. It is my view, and that of my hon. Friend the Member for Cleethorpes (Martin Vickers), that the hurdles that prevent such an opportunity from being made as easy as possible for local communities are currently too high. Requiring 5% of the local electorate to sign a petition to bring about a referendum is a high figure. One or two places up and down the country have achieved 5%—indeed, Copeland District Council in Cumbria managed to achieve that figure, and people subsequently voted in a referendum for an elected mayor.

New clause 30 is a small change that would enable local people—with the support of a reasonable but realistic number of members of the public—to bring about a referendum, and I suggest that the Government change the requirement in the Bill to 1%. That does not necessarily mean that there will be an elected mayor; it means that that community will get the opportunity to vote in a referendum on whether they would like one. I accept that some places will reject that opportunity, but if more such opportunities exist we will start to see more elected mayors in different parts of the country and it will become an established form of local government. I firmly believe that that is far more transparent and accountable, and it will provide real leadership in different parts of the country.

I look forward to the Minister’s response, and would be delighted if he accepts the new clause so that it can be incorporated into the Bill and mean that referendums can be held across the country over the next few years on a regular basis. I appreciate that he will probably want to consider the matter, and I will not be pressing the new clause to a vote. I ask him to consider the issue seriously, however, and to see whether he can reduce the 5% to a percentage that is more realistic and will enable local communities across the country to petition for a referendum and decide whether they wish to have an elected mayor.

[Mr Betts]

I wish to raise two issues that the Government and the Committee will have to deal with at some point. When I spoke on Second Reading, I indicated that I was generally supportive of the Bill. I have reservations about some aspects and details of it, but the direction of travel is essentially right, as is the idea that devolution will happen and is on the agenda, and there is a good deal of cross-party support for it. That is an important step change from how things were when I first came to the House in 1992, or in many subsequent years. We are seeing progress. Members of the House are standing up and talking positively about devolution, and no one is saying “Local councils can’t do that—they can’t be trusted”, which was very much the attitude a few years ago.

I am comfortable and supportive of that idea, but we need a dialogue and debate about two important issues. The first has been raised continually by my hon. Friend the Member for Nottingham North (Mr Allen), who chaired the Political and Constitutional Reform Committee in the previous Parliament. He was a strong advocate for trying to codify or set in a more formal arrangement the powers of local government and its relationship with the centre. That is important because there is a danger that some powers and aspects of policy will be devolved to local councils, but that other powers—without talking about centralisation or taking anything back to the centre—will be removed from local councils, and more controls introduced in their place.

There are currently two Bills before the House, and I expect the Minister is considering them both fairly widely. The Cities and Local Government Devolution Bill is about devolution. That is welcome, and we can discuss how devolution should take place. We also have the Housing and Planning Bill, and the Royal Town Planning Institute said that it was astonished at the amount of planning centralisation in that Bill. With starter homes, measures in the Bill are attempting to decide on the nature of section 106 agreements, which are essentially agreements about a particular site between a local authority and a developer. That is a particularly wide issue.

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[The Temporary Chairman (Mrs Anne Main)]

Order. I think the hon. Gentleman was trying to make a fair point about devolution and taking back powers, but the shadow Minister is straying down a path that will not be fruitful.

[Mr Betts]

I will try to get back on to the straight and narrow, Mrs Main.

My point is that we need a time of reflection, with a discussion between Government, local government and this House about the framework for the constitutional relationships between the centre and local authorities of whatever kind, including combined authorities, so that we can look at the balance of powers and perhaps put down some markers or mechanisms for ensuring that the devolution we all support today is not taken back tomorrow. We need something of that kind. A constitutional convention has been mentioned—the Government may not like those words, but we need some mechanism to enable that to happen.

My second point is about fiscal devolution. My hon. Friend the Member for Croydon North (Mr Reed) quoted the report from the Select Committee in the last Parliament, and the hon. Member for Carlisle (John Stevenson) was a member of the Committee. We produced the report on an all-party basis. We followed the London Finance Commission, which was promoted by the Mayor of London and supported by the London boroughs. By and large, we agreed the report, albeit with some embellishments, with the London Finance Commission, and we had support from the core cities, but it was almost dismissed by the Government as an irrelevancy—something that they did not want to pursue.

I am pleased that the Government are looking at the total localisation of business rates. How they do that will be critical, including dealing with the issue of rewarding councils that get more development in their areas and at the same time protecting those areas where development is not as easy to achieve. Achieving some element of redistribution in the mechanism will be key. Nevertheless, the Government have accepted the need for some more fiscal devolution in principle. They now need to consider how it can be right that any increase in the one tax over which local government has total control—the council tax—is restricted by the need for a referendum. No other tax raised by central Government requires a referendum on any increase. I did not agree with the previous Government’s policy on council tax capping—I refused to vote for that on several occasions, as it is a very centralist policy.

The tax also has not been revalued for 25 years. That is nonsense. The council tax is the one tax over which local government has some degree of control, but it does not control the bands. There must be some flexibility there to recognise the extraordinary difference between amount of tax paid and the value of houses in the top and bottom bands. The difference in the values of the houses is much wider than the amount of council tax paid. Local councils need more flexibility and the ability to control that. As the London Finance Commission said, and the Select Committee agreed, let us also look at stamp duty and other property taxes. Let us consider giving local councils freedom to set business rates. I know that the Government want to bring in some freedoms, but they could go wider. Could local government have a right to be allocated a certain percentage of income tax?

Those are all ideas. All I am saying to the Government is that once this wave of devolution is going through, with cross-party support and local councils entering into it and putting in bids, can we at least have some indication that they will step back at some point and have a serious look at wider fiscal devolution? Ultimately, simply giving to local councils the power to spend money that has been handed out from the centre is not real devolution at all. It is power to spend the money the Chancellor gives out. What councils need for real devolution is the greater power to raise that money in the first place.