Cities and Local Government Devolution Bill [Lords]

Graham Stuart Excerpts

Monday 7th December 2015 Commons Chamber

[Norman Lamb]

I continue to argue strongly that we should have a democratically elected second Chamber, and we sought to achieve that during the coalition Government. Sadly, Conservative Members managed to block that long-overdue reform. [Interruption.] I think the hon. Member for Nottingham North (Mr Allen) is agreeing with me from a sedentary position. But we are where we are, and because Conservative Members ensured during the last Parliament that we still have to put up with an unelected second Chamber, it will just have to do the job as best it can. It is a revising Chamber and I hope that it will again make the argument that 16 and 17-year-olds should have the right to vote. I hope that I have responded adequately to the hon. Member for Gainsborough (Sir Edward Leigh).

David Willetts made the case strongly that there had been a break in the generational contract. I believe that it is incumbent on all of us to address that serious issue and to ensure that all political parties start to show a real interest in the interests of young people. If 16 and 17-year-olds had a vote at local and national levels, there is no doubt that the parties would focus more attention on their interests.

[Graham Stuart (Beverley and Holderness) (Con)]

The right hon. Gentleman said that the interests of young people are not properly reflected, partly because they do not vote, but he then said that giving the vote to even younger people who were even less likely to vote would somehow change the way in which the Government operated. I just do not understand the logic of that. Will he also tell us what is so special about 16? Why not choose 15? Is this about paying tax? We have to draw the line somewhere. What is the principle on which he is basing his argument?

[Norman Lamb]

On the hon. Gentleman’s last point, I of course accept that this is an arbitrary line. The current age at which people can start to vote is also arbitrary. We have chosen to make it 18. My argument is that we can reduce it because people aged 16 and 17 have rights and play a significant part in society. For example, they can join the armed forces, they can work and pay taxes on their income and they can marry. Those are all significant rights and responsibilities, and if they have such rights and responsibilities they ought surely to have a say in the election of our national Government and in the election of local authorities as well.

[Graham Stuart]

If the right hon. Gentleman were charged with a serious offence, would he really want 16 and 17-year-olds serving on the jury and deciding on his guilt or innocence? I certainly would not. We are talking about a certain level of maturity, and the line we have drawn is an appropriate one. If we would not want a 16-year-old sitting on a jury deciding whether or not we went to jail for 10 years, I suggest that we would not want to let them play a part in the election of the Government of the country.

[Norman Lamb]

With all due respect, I think that that is a distraction from the issue we are debating today. I repeat my argument that if 16 and 17-year-olds are able to join the armed forces, pay taxes on their income and marry, which are big responsibilities and rights, they ought to have a say in the election of their Government, either at national level or locally.

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[Mr Chope]

I instinctively think that the hon. Gentleman is right. I say that not only because I have on my wall at home a picture of his constituency that was presented to me by his council when I was a junior local government Minister—a picture that I chose—but because I think that his experience means that he understands the complexity of these issues and their potential impact on ordinary people.

The Government can sometimes give the impression that they get rather intolerant of those us who want to raise issues such as this.

[Graham Stuart]

I have tried to follow this closely but I may not have understood amendment 56, which I am trying to square with the assurances from the Minister. If his assurances are right, why would the Government support amendment 56, which will allow the imposition of this if only one affected local authority says so?

[Mr Chope]

My hon. Friend makes a good point, and perhaps the Minister will reply to it. If we are talking about genuine consensus—in other words, agreement between local authorities—then we do not need amendment 56, which is designed to enable the Government to intervene when some local authorities do not do as the Government think they should be doing. That is essentially what this is about. We might as well face up to the reality that this is a very centralising part of the Bill because it brings power back to the Government to enable them to change the structures of local government boundaries in areas such as Dorset.

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[Mr Chope]

Absolutely. I am very supportive of that amendment, but I have not yet had a chance to talk about it because I am so concerned about amendment 56 and amendment (a). I am not going to restate the case about the referendum, but I think it is a necessary safeguard.

If we look at the history books we see the unintended consequences that can flow from local government reorganisation. It was only because Wandsworth council started a campaign to abolish the Inner London Education Authority that education was given back to the inner-London boroughs, which were then able to gain economic growth as a result of having good-quality education within their boundaries. The same thing happened with the Greater London Council. The Greater London Council was interfering in the lives of the boroughs in inner London and outer London, so those in charge of the boroughs at the time persuaded the Conservative Government to abolish it. As a result, parks such as Battersea park are run by the local authority—Wandsworth council—rather than by a remote authority for Greater London.

If we are not going to put proposals like this to the electorate, we must have the necessary safeguards. None of this stuff was in our manifesto. There was no suggestion that a Conservative Government were going to restructure local authorities so as to try to squeeze out small councils that are closest to the people. If we are not going to test this in a general election and amendment 56 is going to be on the statute book until the end of March 2019, it is all the more important that we should be able to have the safeguard of a referendum—the very safeguard that the Poole People party and the Liberal Democrats have sought, in vain, from the leaders of Poole, Bournemouth, East Dorset and Christchurch Borough Councils.

We are on the threshold of a big spat at local government level between different councils at different tiers and different councillors with different personalities and political parties. This threatens completely to preoccupy local government for the next three or four years. We will look back and say that this all started with the Government wanting to interfere in areas where they should not be interfering at all. They should be trusting local councillors and local people to decide what is best for them. They should not be taking away from Dorset County Council or East Dorset District Council, for example, the power to veto any proposals to change the boundaries in which they operate.

I very much hope that the House will not accept amendment 56 as proposed to be amended by the Government but will push them back to their previous position, which was that this is genuinely for local councils and local people to decide, and the Government are not going to interfere.

[Graham Stuart]

I will try to keep my comments brief, because contrasts are always a pleasant thing. It is a pleasure to follow my hon. Friend the Member for Christchurch (Mr Chope), who spoke powerfully about this issue.

[Jon Trickett]

And lengthily.

[Graham Stuart]

And at length, it has to be said.

I want to tell the House about something that happened in the East Riding of Yorkshire. For many years, people who think about these things have looked at the boundary of the city of Hull and thought it is too constrained and has too little of the hinterland within it. A lot of people thought that it would make sense for it to be expanded, but East Riding of Yorkshire Council is a very successful council and the residents are relatively happy with it. The city of Hull announced that it would set up a commission to look at the boundaries—in effect, at the possibility of Hull expanding outwards. It did so with little or no involvement from East Riding of Yorkshire Council. The response of the council was to call a referendum for the surrounding communities of Hull to see what they thought. This was a one-off referendum: nothing else was going on at the same time. One might think that the arcane issue of boundaries could occasionally capture the public imagination, but generally people would just accept a sensible top-down solution given to them by leaders and Governments and so on.

We need to be careful. I do not have the figures to hand, but, off the top of my head, there was a 75% turnout and a Ceau?escu-esque election result—96% said that they did not want the expansion to go ahead. I mention that in the context of amendment 56 and the argument that, because not all councils are quite in line, perhaps all they need is a little push to get a sensible result. We should be remarkably sensitive to how strongly the population can feel about such things.

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[Sir Greg Knight]

Does the experience of the East Riding and Hull referendum lead my hon. Friend to be in sympathy with amendment 56 or against it?

[Graham Stuart]

It leaves me in a position of having profound doubts about amendment 56. I really appreciated the Minister’s interventions setting out what the Government want to do. The police reorganisation under the previous Labour Government was top down and people did not like it. It is not that we are neutral—my hon. Friend the Member for Christchurch was wrong to say that the Government have always said they would be neutral. The Government have a position and a vision, but I think it is much smarter to offer reassurances and tell people that, whatever we think, we are not going to push it on them, because we have seen that that does not work. People have to consent to it. There will be difficult council leaders who we will think are being a pain because of their own individual interests, but we should bind our hands and restrain ourselves from just pushing them aside. We need to listen and say to everybody, “Unless you can bang heads together yourselves and get a consensus, we’re not going to come piling in, because we’ve seen where that ends up.”

It might be a Labour Government’s instinct to think that they know better than the people, but it should be a Conservative Government’s instinct to recognise that they do not know better and that even if, in their opinion, the people are wrong—and history might show that they were wrong—it is the people who get to decide, and if they feel strongly about something that should be respected.

[Mr Chope]

Will my hon. Friend give way?

[Graham Stuart]

My hon. Friend has had a fair crack and I am going to sit down.

[Mr Steve Reed (Croydon North) (Lab)]

This group includes a number of new clauses and amendments, so I want to focus primarily on those in my name and those of my hon. Friends, although I will also touch on some of the others as I go along. I do not want to detain the House for too long and there is quite a lot of ground to cover, so I shall try to romp through it at a reasonable pace.

New clause 10 proposes votes at 16. The Government seem to be a little confused on this issue: the Secretary of State has said that there is a debate to be had; the Minister for the northern powerhouse says there is not; and the Prime Minister is against it altogether. Yet we know that the Government are considering it for the European Union referendum and that they supported it for the Scottish referendum.

There are more than 1.5 million 16 and 17-year-olds in the UK. They can get a job or an apprenticeship, get married, pay taxes and join the armed forces, but apparently they are not responsible enough to be able to vote for their local councillor to take decisions about the local services in the area where they may well have bought a home and live with their family. The Bill is the ideal place to bring about change. Incremental change is how the British constitution develops, and allowing votes for 16 and 17-year-olds in local elections seems to me to be a good place to start.

The Electoral Reform Society argues that lowering the voting age will improve registration rates. Nearly 90% of eligible 16 and 17-year-olds registered for the Scottish independence referendum, and a high proportion of them took part in it. Research in other countries suggests that the turnout rate for 16 and 17-year-olds is higher than that for 18 to 34-year-olds. Establishing the habit of getting involved and voting in elections at an early age makes a lot of sense if we want people to continue voting throughout the rest of their adult lives. The Scottish referendum set the precedent. It is unreasonable to extend the vote in one part of the Union and not in another. Local elections suffer from low turnout, so that is a good place to start, but if the Minister thinks that this is not the time to introduce the change, perhaps he can answer the question: if not now, when?

On new clause 11, the Government have been very unclear about plans to devolve fire and rescue to mayors or police and crime commissioners, but we know that the Home Office is pushing for it and it is included in the Greater Manchester devolution deal. Our new clause calls on the Secretary of State to publish a review of how the Bill affects fire and rescue services. As we have seen over the weekend, and as we heard in the flooding statement earlier, the fire and rescue service is doing an incredible job, despite extremely severe cuts that have limited its capacity and reduced the number of jobs by almost a third. The cross-party Local Government Association believes there is “no pressing need” for police and fire services to merge. Any changes of the kind being considered will heighten public concerns about safety. The new clause would simply add a level of scrutiny and oversight to the provisions, so I hope that the Secretary of State and, indeed, the Minister will welcome and support the proposal.

Since 2010, local government has faced cuts of 40%, and last month’s spending review imposed a further 56% reduction in central support to councils. We know there will be changes to business rates once they are localised, and we were promised details in the autumn statement about how an equalisation mechanism would work, but no such details were given. Councils have simply been left to plan their future budgets in the dark, despite cuts on a scale that they have never been asked to deal with before. The LGA has warned that local authorities are struggling, and that is even before the spending review hits them. Lord Porter, the Conservative chair of the LGA, says:

“We know we’ve got probably 12 or 14 councils that are very close to the edge now.”

They need to know what is going to happen to them in future if they are going to be able to avoid falling off the edge of that particular financial cliff.

The funding settlement is deeply unfair. The 10 most deprived communities have suffered cuts that are 18 times higher than those made to the least deprived communities. Councils with the highest rates of children in care have suffered cuts that are three times higher than those made to councils with the lowest number of children in care. Although Labour councils are disproportionately hit by the cuts, they are also the ones that are protecting front-line services. Tory councils have shut half their youth services since 2010.

The unfair funding settlements are made worse by England’s local government finance arrangements, which are among the most centralised anywhere in the industrialised world. Councils lack the freedom to innovate so that they can spend on local priorities. Even London, which currently is more devolved than anywhere else in the country, is reliant on central Government funding for three quarters of its revenue. That is far higher than 30% in New York and just 25% in Berlin. London is the world’s greatest city, and yet this Government insist on keeping it on far too tight a financial leash. The Communities and Local Government Committee concluded that local authorities in England

“have limited control over local taxation and, as a consequence, rely…disproportionately on central Government funding.”

Our new clause 13 does not prescribe a particular settlement, but calls on the Secretary of State to publish plans for a package of fiscal and financial devolution that addresses three areas. First, on business rate retention, councils need an equalisation mechanism to ensure that those communities with the least capacity for economic growth are not left to sink. Labour supports the localisation of business rates, but it has to be done in a way that incentivises areas to grow, without penalising areas that have less capacity to do so at the time or in the future.

Ministers promised at the Dispatch Box that details of the equalisation mechanism would be made available during the autumn statement, but that did not happen. It still has not happened and we have not been given a date by when it will happen. We simply cannot allow rich communities to get even richer while everywhere else struggles to provide basic services. The new clause calls on the Secretary of State to introduce an equalisation mechanism to ensure that the least well-off are not hammered by the change.

[Graham Stuart]

The hon. Gentleman, as an expert in this area, will be aware that people in rural areas are on average poorer than people in urban areas. He will also be aware that his Government—the Government of his predecessors—left a system in which there was 50% more support per resident in urban areas, which are wealthier than rural areas, than in rural areas, and that it is more expensive to deliver services in rural areas. It is no surprise that we are not seeing the same reductions in services in rural areas as in cities, because such services do not exist in the first place. His party left it that way. Are Labour Members now committed to a fairer system?

[Mr Reed]

The hon. Gentleman seems to support my case for a fair equalisation mechanism, which I am pleased to hear.

Secondly, on greater local control over tax rates and discounts, England has one of the most centralised funding arrangements anywhere in the world. Whitehall takes the key decisions on council tax, which means that it is barely local at all. The previous Secretary of State capped rises, while the Chancellor is now encouraging councils to push up council tax to make up for his cuts. Labour wants the Government to publish plans to introduce greater local freedom over tax rates, banding, valuation and discounts.

Thirdly, on multi-year finance settlements, every successful organisation needs to be able to plan for the future, and local authorities cannot plan complex services without knowing what level of funding is available to pay for them. As powers are devolved from Westminster, local authorities need to know that they have the resources to exercise those powers properly. Local enterprise partnerships could operate more effectively if they had longer-term funding streams. Indeed, the regional development agencies, which LEPs replaced, could make single, three-year funding agreements, while LEPs have access to a smaller budget, with too many small funding pots and with constraints on their use. We want to make sure that combined authorities do not suffer from the same problem. Our new clause 13 calls on the Secretary of State to publish plans to allow for multi-year funding agreements, which would give combined authorities the resources and time to ensure financial stability, and allow them to make better long-term decisions about local services.

On new clause 14, we welcomed in Committee the proposal that new sub-national transport bodies must consult adjoining authorities before taking decisions. On transport, the Government have recognised that the devolution of powers to combined authorities concerns neighbouring authorities that do not wish to, or cannot, join a combined authority. That is an important principle, but it extends to areas beyond transport, and the Minister’s response to our amendment in Committee was disappointing. The Minister said it was not “necessary or appropriate”, so perhaps he will reconsider and support this new clause. For example, local authorities on the periphery of the Greater Manchester combined authority have concerns about health service decisions that will affect them, but which they are unable to influence. We want to give them the right simply to be consulted. If the Government are prepared to concede that such authorities should be consulted on transport, then why not on health or other key services?

Whatever the Government say, they are imposing mayors by making them a non-negotiable condition of devolution for metropolitan areas. We believe that the spirit of devolution demands that local areas should choose their own model of governance instead of having it imposed from the centre. If areas want a mayor, that is fine, but it should also be fine if they do not want a mayor. Government amendment 7 and related amendments are disappointing. They will allow the Secretary of State to impose a mayor on a combined authority even if one or more constituent councils do not want one. It is no surprise that the Local Government Chronicle wrote about amendment 7 under the headline, “Boost to government powers to impose elected mayors”. The Government are acting in opposition to their own claims to support local decision making in that respect.

If the powers are agreed to this evening, they must be used with extreme caution. Where a potential combined authority is divided on the details of a deal, which it may well be, local co-operation must be the preferred way forward. I would welcome a statement by the Minister or the Secretary of State to that effect. Our amendment 58 would reintroduce the change made in the Lords, stipulating that devolution deals cannot be made dependent on having a mayor. That view has support from Members on both sides of the House, as we have heard again this evening.

On amendment 59, we discussed the general power of competence earlier. The Localism Act 2011 introduced the general power of competence, which was intended to give local authorities more power and freedom to innovate. That is a good idea, but LGA research shows that the power is

“limited by significant constraints set by central government”,

and that local government needs far more independence from interference by central Government. The constraints the LGA identifies are financial, structural and regulatory. Our amendment encourages the Secretary of State simply to review the power of general competence to learn how to make it more effective and to encourage greater take-up than the disappointing level so far.

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[Graham Stuart]

I am struggling to square the amendment with what the Minister has just said. There is no talk about streamlining or tests. The amendment simply states that if one council is in favour, all the others can be pushed aside. That is what the amendment says. Our job is not just to listen to reassurances from Ministers, however brilliant, but to look at the words of the Bill, and the Bill appears to give great power to the Secretary of State. If he has that power already, I do not see why we need it in an amendment; if he does not have it already, I am a little reluctant to give it to him.

[James Wharton]

I hear what my hon. Friend says, but it remains the case that a council or group of councils can now, regardless of the Bill, ask the Secretary of State to implement a proposal for structural change through the traditional processes of the Local Government and Public Involvement in Health Act 2007, even where not all councils agree or where there are competing proposals for different councils. He has those powers, but only as part of a convoluted and lengthy process. This is not about forcing unwanted change on areas just because we have the power to do so; it is about enabling the flexibility to deliver the right devolution deals for areas and in a timely and flexible way. I know that hon. Members have raised concerns, but there are none the less statutory tests that have to be satisfied in doing that. This place would need to approve any change, but the fast-track process, with its significant safeguards, is a welcome one.

The new process would still require the Secretary of State to lay before Parliament a report on the fast-track process, including on matters he has taken into account when deciding to use it, and I reiterate that it could not be used without Parliament’s approval. Having carefully considered and weighed the arguments; having listened to the comments of my hon. Friend the Member for Carlisle and others; and having considered the need to ensure flexibility if we are to make devolution last, we have decided to support the amendment. We have tabled a manuscript amendment so that it is for a trial period and not something that would necessarily last in perpetuity; none the less we welcome the flexibility in the amendment.