Cities and Local Government Devolution Bill [Lords]

Gareth Thomas Excerpts

Wednesday 14th October 2015 Commons Chamber

[Greg Clark]

I will indeed, and I would like to reciprocate the hon. Gentleman’s compliment. Both in his role as Select Committee Chair in the last Parliament and through his personal work in Nottingham, driving the regeneration of what he terms the outer estates in his city, the hon. Gentleman brings and personifies a degree of local knowledge of the problems and of the people, many of whom he has introduced me to on my visits to his city, which it would be impossible to replicate in Whitehall. That provides a good example of why we need to devolve in exactly the way that the hon. Gentleman said.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Let me take the right hon. Gentleman back to the subject raised by the right hon. Member for Wokingham (John Redwood)—the issue of where the money comes from to finance devolution. The Secretary of State will be aware of the work of the current Mayor championing full fiscal devolution for London—not just of business rates, but of a series of other local property taxes. Why has the Chancellor resisted devolving control of those additional property taxes?

[Greg Clark]

I think the hon. Gentleman is being a bit churlish. Part of the Mayor’s campaign was to have 100% retention of business rates. That has been secured, and the mayor was appropriately generous in his praise for the Chancellor for doing so. We are rightly responding to a long-standing campaign to make this devolution work, which is a very important step forward.

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[Greg Clark]

I am going to make some progress. I have spoken for half an hour and a lot of Members want to speak.

The Bill is intended to honour our pledge to bring prosperity and opportunity to every part of the country. We must address the problem of recent years of how to prevent the strength of London—valuable and desirable though it is—from overshadowing the opportunity for other parts of the country to achieve their potential. It is very important that no one and no place shall be left behind. Talking of one nation, as Disraeli said,

“the greatest good you can do for another is not just to share your riches, but to reveal to him his own.”

Our local communities are aware of their riches and they want the opportunity to show them, to make use of them and to burnish them in a way that they have been prevented from doing in the past.

Let me say a few words about the progress that was made in the last Parliament.

[Mr Gareth Thomas]

rose—

[Greg Clark]

I want to make some progress and I will perhaps give way a little later.

During the last Parliament, the Government introduced the concept of city deals, pioneering the approach of having a conversation with cities, in the first instance, to see whether there was any common ground—something that might be in the local interest and the national interest, and where agreement could be reached. That was followed by 39 growth deals. My hon. Friend the Member for North West Hampshire (Kit Malthouse) foresaw my being carried shoulder high at LGA conferences, but my experience at those, having negotiated the city deals, was that the leaders of our districts and counties did not so much carry me shoulder high as pursue me down corridors demanding that they should be able to be part of this devolution, and they were right to do so. That is why we extended our devolution arrangements to the 39 growth deals. It is important that we now take this to the next level and be able to devolve powers that Ministers and public bodies have to local authorities, be they individual authorities, combined authorities or mayoral authorities.

The important point to recognise is that the Bill gives no ability to strip any powers from any existing authority. All their powers continue and all the Bill’s proposals are directed at allowing this House, if it gives its approval, to take powers from Ministers and from national bodies and vest them in local government and local leaders. All the devolution is one way; no change is made to the powers and responsibilities of the constituent councils.

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[Jon Trickett]

Every one of the leaders I have spoken to—they have been negotiating with the Treasury, by the way, rather than with the Department for Communities and Local Government—has told me that, despite their objections, they have been told that they cannot have devolution unless they agree to a new form of governance, namely a metro mayor. That may or may not be what is on the face of the Bill, and we will see what the Government do in Committee and what amendments are tabled, but the truth is that this is a fait accompli. A single model has been imposed from on high. I invite Conservative Members to reflect on whether the only possible model for city and town governance involves a directly elected mayor with no accountability to a wider assembly. That is a presidential, not a parliamentary, model of governance, and it is anathema to the British constitution.

[Mr Gareth Thomas]

Charming as the Secretary of State might be, he nevertheless gave wind to the prejudice that lurks in one or two minds outside London that the capital has all the power and all the wealth. I know that my hon. Friend is bigger than that. Will he therefore acknowledge that, in the face of an acute housing crisis, Londoners recognise that more devolution needs to be given to the Mayor and the London Assembly so that we can properly tackle that crisis? For example, might my hon. Friend support an amendment to the Bill that would give London the same opportunities to control housing legislation that Scotland and Wales currently have?

[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.

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[Alison Thewliss (Glasgow Central) (SNP)]

I do not intend to spend a great deal of time speaking on the Bill, as clearly it affects only England and Wales, not Scotland. However, I would like to offer a few observations and questions that I hope will be of value.

First, I ask the House to consider the journey that Scotland has been on. The people of Scotland have been seeking devolution in some form or other for many decades. The experiences of the no vote in the 1979 referendum, the yes vote in the 1997 referendum and the recent independence referendum have all shaped public views on what devolution means and how it should operate. We arrived at this situation through public and civil society demanding change in a way that I am not quite convinced is yet the case for England’s cities and regions. Devolution should not be done in haste, and great consideration should be given to its purpose and the means by which local people will be involved.

Scotland is a hub of expertise on the devolution process, and we feel that public engagement is critical. We recognised the hunger for local community power by passing the Community Empowerment (Scotland) Act 2015 in the Scottish Parliament and introducing the “Empowering Scotland’s Island Communities” consultation, in which the islands have demanded more powers from the Scottish Government. We support more efforts to deliver devolution for local authorities, but the process must be transparent and consider the views of local communities.

In the past two years there has been great consideration by organisations such as Common Weal and the Electoral Reform Society Scotland, as well as by other civic groups and individuals, such as Lesley Riddoch, whose book, “Blossom: What Scotland Needs to Flourish”, looks at what shape democracy should take and how local people can be more involved in the process. I recommend that Members have a look at Lesley’s book to see how the bottom-up approach can be taken. I have asked the Library if it could seek a copy for their information. I also direct Members to the Electoral Reform Society Scotland’s Democracy Max project, which looked at the idea of “mini publics” as a means of engaging the public in shaping their own democracy. I very much agree with the hon. Member for Nottingham North (Mr Allen) that double devolution must go through local communities as well, and cannot stop at the mayoral level.

My reading of this Bill is that it is, sadly, very top down. Powers are being given rather than demanded, and there is still the same level of control from the centre. I agree with the hon. Member for Hemsworth (Jon Trickett) about that. An example is the imposition of mayors against the will of local people, particularly those who rejected such a principle in local referendums. Transferring powers from a centralised Westminster system to an all-powerful mayor is not really, in practice, local participatory democracy. People do not have a say, and that reflects on the legitimacy that the mayor will then have. If people are to have faith in the process, a good deal more work needs to be done to establish what they want their local democracy to look like and what powers it should have.

[Mr Gareth Thomas]

Londoners are broadly comfortable with the originally established system of devolution in London, but one thing they look enviously at in Scotland is the power to control and shape housing policy. Would the SNP look sympathetically on an amendment from London Back Benchers seeking to give that power to London?

[Alison Thewliss]

The hon. Gentleman makes a good point on the ability to control housing policy. While the SNP is not necessarily going to vote on this because it is an England and Wales-only Bill, we strongly agree with the principle that housing should be in the control of London, and other local authorities as well, because if people are unable to control the housing stock or to make decisions about construction, funding and everything else, they are hamstrung in their ability to influence local housing supply.

I seek to establish the Government’s true purpose in devolution to cities and to local government. Members may remember that Scottish devolution was supposed to have killed the SNP stone dead, but if that were its purpose, it has demonstrably failed, despite the fact that our Members are not in the Chamber today. If devolution to cities and local government in England and Wales is based on the general principle of the importance of local decision making and democracy, that is a worthy ideal that I absolutely support, but if, as suggested by a lot of the rhetoric, it is simply about economics and growth rather than democracy, I am less convinced. Tying the deals to economic indicators puts a great deal of pressure on the new set-up, and I fear that it could then be a hostage to economic fortune. Should it not meet those economic targets and goals, it could be seen by the Government and by local people not to have achieved the objectives that were put on it.

I also seek an assurance that devolution is not being used as a cover for cuts. A lot of people involved in the NHS, in particular, are concerned about this. Like other Members, no doubt, I have had lots of representations from various organisations. This should not be a cover for regionalisation of the NHS by the back door. That is fine if Scotland has control over the NHS, which is a great thing, but it should be debated on its own as a case that can stand or fall on its own merits. To cut funding and blame the new authority would make the position of that authority absolutely untenable.

In this place, decision making feels very far away from ordinary people, whether they be in Wick, Glasgow, Manchester or Cornwall. I hope that this Bill will create and engage a groundswell of support for local democracy in England, and that powers and money are returned from Westminster to local people, as they should be. I urge the Government to consider how best to embed the principle of subsidiarity within the Bill, and to seek and listen to the views of local people on what they are seeking from their democracy.

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[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

It is a pleasure to follow the hon. Member for Hertford and Stortford (Mr Prisk) and my hon. Friend the Member for Blackley and Broughton (Graham Stringer). Like them, I strongly support the move towards more devolution, but we should not get misty-eyed about metro mayors or local government in general. We are now—rightly, perhaps—sceptical about centralised decision-making from Whitehall, and in that spirit I think that the provocative scepticism of those on the Opposition Front Bench is right.

I am entirely comfortable with the thrust of the Bill, although I think there are some omissions, the biggest of which relates to London. London is different from the rest of England in terms of the scale of appetite and need for further devolution. I say that not to minimise the argument for further devolution in the north, Cornwall or elsewhere, but rather to underline the scale of the challenges currently facing London.

London’s population is bigger than that of Scotland or Wales, yet it does not have power to tackle the—at times breathtaking—levels of poverty and inequality. London is growing by more than 100,000 people a year, and it is expected to do so for at least the next decade, bringing with it range of additional challenges that are not replicated to the same degree elsewhere in England.

The housing crisis in London is bad now, but it is only likely to get worse without substantial extra devolution. Many in the House will be familiar with the development of London’s infrastructure, which has too often been characterised, particularly on the big projects, by lengthy delays. In part, that has been driven by the number of players involved in decision making, not least in central Government.

London should be given the tools in full to tackle our housing crisis in particular. Through the Mayor and the London Assembly, it should be given the right to legislate on London housing matters. Legislative power over housing was devolved to Scotland in 1998 and to Wales in 2011. I simply ask the House why London, where the crisis is so acute, should not have the same powers: judgment on control of rents, on whether right to buy should be extended, on levels of property tax, and on funding for new affordable housing. Targets for percentages of new-build schemes given over to sheltered housing or social rent ought to sit in one place, enabling one body or one figure to develop a clear, holistic strategy for housing in London. At the moment, the Mayor has his hand on some of the levers, but for too many others it is to Whitehall that he has to go, and not just to one Whitehall Department but to a number of Departments. I gently suggest that that needs to change. I hope to table a probing amendment to test the appetite of the House on devolving legislative power on housing to the London Assembly.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

In Wales, we suffer from referendum fatigue. Whenever significant powers are to be devolved to Wales, there is always a referendum. Does the hon. Gentleman believe that there should be a referendum before legislative powers are handed down to the London Assembly?

[Mr Thomas]

There is a justification for having a referendum in London to consider the extension of powers: we had one when we set up the Mayor and the Assembly. If there is to be further substantial devolution then there is certainly a case to be made for a referendum to cement mayoral and Assembly authority over those additional powers.

Another area for London ought to be full fiscal devolution. I welcome the announcement on business rates, but I am afraid that does not go far enough. All property taxes should be devolved. The all-party consensus of the mayoral London Finance Commission report published in 2013 was for a pound-for-pound reduction in revenue support grant as the quid pro quo that London offers back. It remains opaque at best on why the Treasury will not agree not just to business rates but to additional property taxes to London.

[Mr Graham Allen]

I am enjoying very much my hon. Friend’s review of where we are on local government finance in London. Does he not accept that we have broken the precedent with the Treasury by having income tax assignment for Scotland? The law was passed three or four years ago, before the devolution referendum. It now, very properly, has a system of income tax devolution. Is not the long-term answer to have a proper baseline budget, rather than little slices, so that London, Nottingham and every other part of the country can look after its own affairs?

[Mr Thomas]

My hon. Friend is, as ever, ahead of me. I share his view that in time—particularly if there are substantial additional public services responsibilities devolved to London, not least the extra powers, alluded to by my hon. Friend the Member for Blackley and Broughton (Graham Stringer), relating to healthcare—there would be a case for more control à la Scotland, certainly the ability in the current settlement to vary levels of income tax. Why should London or Nottingham not be able to impose new additional levies—for example, a tourist levy that many other big world cities, such as New York, can impose? It is striking that in London business has strongly supported the devolution to local control of all property taxes, not just business rates. They see it as essential to speed up infrastructure development. I urge the Minister and the Secretary of State to use their influence with the Chancellor to encourage him to go even further down the line of fiscal devolution.

There is also a question about the living wage. Why does that need to be controlled by the Treasury? Why should the decision not be set, after consultation with business, by local people? There could perhaps be a local minimum set by national Government, with the actual rate determined by at regional level by local decision makers. I again draw the attention of the House to London, where a living wage and a living income would be very different from that in other parts of the UK.

If there is to be a further devolution of powers to London—I hope there will be—we need to consider stronger scrutiny powers for the London Assembly. The Assembly ought to be able to scrutinise the heads of major public utilities—such as water, electricity, gas, National Rail and broadband providers—on their London work programmes and on how Londoners will be affected by their decisions, in the same way that the Assembly is able to scrutinise other crucial services, such as policing and transport. I commend the case for further devolution to London and hope to probe this issue with the Government in due course.