Devolution and the Union

Debate between George Howarth and Ann McKechin

Thursday 20th November 2014 Commons Chamber

[Mr George Howarth (Knowsley) (Lab)]

First, I thank the Backbench Business Committee for the opportunity to have this debate and the hon. Member for Esher and Walton (Mr Raab) for introducing the subject. I want to discuss city regions and, specifically, the Liverpool city region, but first I wish to make two brief general points. The first, which is largely accepted across the political spectrum, is that there has been over-centralisation in the UK, as a result of which our city regions—and, some would argue, our counties—have underperformed on productivity, investment, value added and many other things. The second is that, without doubt, there is public disenchantment with the Westminster-Whitehall model and an appetite, certainly in my constituency and in my city region, to ask what we can do for ourselves and whether we can do it better than central Government and the Westminster-Whitehall model.

I now wish to discuss how the Liverpool city region could move towards a better model in terms of fiscal powers and additional powers that currently are either with central Government or with other bodies that are not directly democratically elected. On fiscal devolution, I wish to make two points. First, as a result of fiscal devolution there is a need to enable city regions to retain local investment and local taxation; local finance bonds offer potential, and it is necessary to remove the restrictions currently on local government and, in particular, on combined authorities in the work they can do to support growth. I will not labour the second point, but there needs to be greater flexibility on borrowing. When there is a big strategic reason, such bodies should not have to go cap in hand to central Government, but instead operate a more prudential system to determine what is right.

[Ann McKechin (Glasgow North) (Lab)]

My right hon. Friend is making a persuasive argument. Does he agree that, constitutionally, the role of local or regional government needs to be safeguarded, so that central Government, both here and in Scotland, do not dictate the level of council tax or revenue raised by local authorities, thereby hemming in their ability to react to local demands?

[Mr Howarth]

I am grateful to my hon. Friend. Given what I have said, it follows logically that I do agree with that.

I was going to say a word in response to the hon. Member for St Albans (Mrs Main) but she seems to have disappeared. [Hon. Members: “She has moved.”] Oh, I am sorry. She put forward an argument about the Barnett formula, but there is a different, less polarising way of expressing her points that actually supports her underlying argument. I do not personally—and neither, I am sure, do most colleagues, certainly on this side of the House—have any difficulty with the Barnett formula. What I want is a Barnett formula for England, or something equivalent, and others will make a strong case for something similar for Northern Ireland and Wales. The issue is how we get a fairer distribution of resources.