Draft Tees Valley Combined Authority (Election of Mayor) Order 2016

Grahame Morris Excerpts

Tuesday 12th July 2016 General Committees

[Grahame M. Morris (Easington) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Gapes. It is an honour to represent the Opposition and the Labour party in this role. I served for 16 years as an elected councillor on Easington District Council. I served in the Whips Office. In a previous capacity, I provided support on communities and local government and on housing. I pay tribute to the valuable work carried out by my colleagues in the previous shadow team, my hon. Friends the Members for Hemsworth (Jon Trickett) and for South Shields (Mrs Lewell-Buck), who led on devolution for the Opposition.

As the Minister indicated, today’s draft order is very narrow in scope, converting the Tees Valley Combined Authority into a mayoral combined authority and setting the date for the election. That is the next step in the process towards the devolution deal. However, I challenge the assertion made by the Prime Minister quite recently that it is “devolution by consent”, and I have some questions to put to the Minister about the imposition of mayors.

Local leaders have not welcomed the imposition of a Mayor for the Tees Valley Combined Authority, but they have accepted it, reluctantly. In evidence to the Select Committee on Communities and Local Government, Councillor Sue Jeffrey, the leader of Redcar and Cleveland Borough Council, said:

“It is a price we are having to have, so we will make it work...We have to take what is on offer and do what we can with it.”

I commend the pragmatic approach adopted by all five councils and their leaders in the Tees Valley area in defence of their communities. The Opposition want it to be clear that we support the principle of devolution, but would do things rather differently, particularly in relation to governance arrangements.

Having been through previous local government reorganisations—I was a member under the old committee system, chaired a number of committees and saw the transition to the executive-scrutiny split—I am concerned that, if the Government adopt a one-size-fits-all, top-down approach, with the imposition of mayors as a prerequisite for the devolution of substantial powers, that will be a detrimental step. We need to look at the evidence from previous reorganisations and impositions of this type.

[Jenny Chapman (Darlington) (Lab)]

My hon. Friend used the phrase “one size fits all”, but I understood that some combined authorities or devolved areas were not having an elected Mayor imposed.

[Grahame M. Morris]

I am grateful to my hon. Friend for her intervention. I was going to come on to that point in a moment. A number of members of the governing party have expressed concern about imposition as a precondition, and I hope that the Minister will address that. If the Government are making an honest and true attempt to promote economic growth and rebalance the economy, that should not be a precondition. I am sure that the Minister is aware of concern in his party. From my perspective, and in the light of the remarks by my hon. Friend, that is a key point.

The Government’s approach has been rejected by local government leaders negotiating the deals and by a number of leading organisations, including the Local Government Association, the National Audit Office and the Select Committee on Communities and Local Government, to name just a few. I had the opportunity to visit the LGA conference in Bournemouth last week. A number of local authority leaders—not just Labour ones—expressed concerns about the imposition of elected mayors. I hope that hon. Members are aware of the National Audit Office report, “English devolution deals”, which sets out the various packages on offer to different areas. It is clear that there is wide variation, and it seems that the Minister has accepted that the imposition of an elected mayor is not necessarily a requirement before powers can be devolved.

There have been concerns about the creation of a fourth or even fifth tier of local government creating the potential for a complex, over-bureaucratic and costly system of representation that is also potentially unaccountable. The Communities and Local Government Committee has warned the Government that such a system, leading to low turnouts at mayoral elections—as has happened—will have implications for the democratic legitimacy of elected mayors.

In case there should be any confusion, I stress that my party, and I personally, are not opposed to the concept of mayors. In many cases they can provide visible leadership and accountability. However, devolution should mean, if it means anything, that people and communities are free to choose the most appropriate model of governance for their community. The imposition of mayors risks undermining that process and public confidence in it.

I would like to pose a few questions to the Minister. In view of today’s order, I am not anticipating, although I am an eternal optimist, that he will announce any radical changes at this eleventh hour. However, are there any circumstances where he would acknowledge that an elected Mayor might not be the best model of governance? I refer him to examples in the National Audit Office report, where Cornwall and, I believe, Leicestershire have been allowed to proceed without the imposition or precondition of an elected Mayor.

Does he acknowledge that an elected Mayor might not be the best model of governance? If so, although I appreciate there is an eight-week consultation period, will he commit to working with local leaders, at whatever stage they are at, towards a devolution deal, and consider the merits of alternative governance models, where it can be demonstrated that the mayoral system may not be the most suitable, given local geography and circumstances? Unfortunately, without that flexibility, authorities and communities are effectively held hostage, with those opposing elected mayors locked out from accessing substantial devolved powers.

I hope that the Minister is aware of concerns expressed by the Centre for Public Scrutiny. It has warned that

“requiring elected mayors and overview and scrutiny committees may lead to combined authorities approaching governance as a ‘matter of compliance, where no further thought is required’.”

That would be as a sort of tick-box exercise. I believe there should be an opportunity to bring powers and decision making closer to the people. However, the imposition of mayors is a contradiction of the meaning of devolution.

I must also take this opportunity to ask for some assurances from the Minister about the implications of the Brexit vote. A key benefit of the Tees Valley deal was control over EU structural funds. That is absolutely a key issue. Not without justification, the Tees Valley has been a long-term beneficiary of European funding and has secured a commitment of £169.8 million over the current EU funding period.

It is a matter of record that the Minister was a leading advocate for Brexit. During the campaign, the Leave side—

[The Chair]

Order. May I ask the hon. Gentleman to get back to the actual wording of the motion before us today, rather than open up a general debate about Brexit?

[Grahame M. Morris]

I am grateful for your advice, Mr Gapes, but—

[The Chair]

Please.

[Grahame M. Morris]

Yes. I am seeking assurance, Mr Gapes, that, should we go forward with an elected Mayor, the Minister will give a pledge and cast-iron guarantee that the EU structural funds in particular will be made good. That is key to the deal.

[Anna Turley (Redcar) (Lab/Co-op)]

rose—

[Grahame M. Morris]

Do you mind, Mr Gapes, if I give way to my hon, Friend?

[The Chair]

That is a matter for you.

[Anna Turley]

There is an important point here, which is related to the devolution deal. The combined authority was going to control the EU funding. We are seeking assurances, if we are to lose that money, of what that means in the longer term. We want clarification on the instability over inward investment that we are facing at the moment.

[Grahame M. Morris]

I am grateful to my hon. Friend for her intervention. That is precisely the point I was trying to make in a rather laboured way, for which I apologise. That is key to whether the deal can go forward. The control of EU funding is an essential part of the devolution deal. We seek reassurances from the Minister to the Tees Valley Combined Authority that expected levels of funding, including those expected from the EU, will be maintained, not just in the short term—without second-guessing the Minister’s answer— of the next two years, but in the longer term. We seek assurances that there will be local control of these funds.

In the light of the Brexit vote, there are understandable concerns about the impact on inward investment. Can the Minister offer some comments about how the Government are going to address potential instability and uncertainty on inward investment? That is key to the Tees Valley—as the Minister well knows having a constituency there—given the importance of the chemical industry cluster and the associated manufacturing industry.

I commend the work of the five councils in the Tees Valley Combined Authority and their efforts in seeking to secure the best deal possible for their area and their communities, despite the constraints placed upon them by Government. The £15 million devolution deal—that is £15 million a year over 30 years—can never fully compensate for the devastating cuts to local government. The Tees Valley area has already seen cuts in excess of £240 million per year since 2010: a huge sum of money to lose from local authority budgets. I appreciate the concerns about the Government’s commitment to investment, not only in the light of the referendum, but in view of the gross disparities between infrastructure spending in the capital compared with the regions. I ask the Minister to say a few words about how we are going to address these huge regional disparities.

The commitment to devolving education and transport can ring hollow when considering recent announcements regarding academies and the Bus Services Bill. I know we are not dealing with that here, Mr Gapes, but it is relevant to the package of the powers the elected mayor and the combined authorities will exercise.

I recognise that we are at the start of the devolution process and when the deal is complete, it will only be the first stage. While I am in post, I will support—

[James Wharton]

Very good, Grahame.

[Grahame M. Morris]

Thank you. While I am in post, I commit to supporting local areas in securing the deals that they want, that best suit local circumstances and that will best help them to meet the challenges they face in supporting and sustaining their local communities.

--- Later in debate ---

[James Wharton]

I will seek to address the questions raised by the shadow Secretary of State. I welcome the tone of his comments, although clearly there are areas of disagreement in terms of policy and the approach that the Government are taking. I have noted down the most salient points that I am to formally address. I will do my best to address them, but I am confident that he will intervene if there is anything that I have missed. The circumstances in which a Mayor might not be the best model—whether a Mayor is appropriate or not—seem to be the focus of much of his comments.

The Government have been quite clear. We have imposed a devolution deal on nobody. The Cities and Local Government Devolution Act 2016 gives the Government no power to impose a devolution deal on anyone. A deal is a two-way process where there are things that the Government want to see and tests and robustness that they want to be assured of, but where local areas are able to ask for the powers that they believe they can best use. That process of discussion takes place in each area, based on geographies determined by that area. This is an issue that I will revisit when speaking on the points made by the hon. Member for Darlington, but it is a bottom-up and bespoke process.

[Grahame M. Morris]

I have heard the Minister’s comments in response to the first question. I am not suggesting that he has been disingenuous but is not the truth of the matter that, in these discussions, which he has referred to as a bottom-up process, not a top-down process, there has in essence been a precondition that unless the combined authority accepts an elected Mayor it will not go any further? I am aware of discussions and reports of discussions with other combined authorities. We should be clear that it is the Government’s intention—by whatever method—to ensure that there are elected Mayors leading these combined authorities. If that is not the case, perhaps he might make it clear that combined authorities are at liberty to come up with another model and will still be able to have devolved powers, as set out in the order.

[James Wharton]

The Government will of course consider any proposal that comes forward from a combined authority, but we have been clear throughout this process that, where areas want a significant package of powers, there is an expectation that that comes with the clear and sharp democratic accountability of an elected Mayor. I will not try to use words to avoid the reality of this—I have been very clear about it. We cannot force any area to accept a deal, and we cannot force any area to accept a Mayor. The Government’s position is that, where areas want significant deals, we expect a Mayor to be part of that package. It may be an issue on which there is disagreement across the Floor of the House, but it is one on which we have been clear throughout this discussion and debate.

The shadow Secretary of State also raised the issue of Brexit, but specifically with reference to European funding. He referred to control over European funding being part of this devolution deal. It has been agreed that intermediate body status will be delivered. That issue was also raised by the hon. Member for Redcar. I give what assurances I can, in that at least for the time being we remain a member of the European Union, so nothing will change until exit is agreed. We of course must see how the process evolves and unfolds.

The truth is that we are a significant net contributor to the European Union and so, on exit, will have the opportunity, taking control of money that Europe currently decides how to spend, to spend it in accordance with the interests of this country and, indeed, under the direction of its people and Government. My intention will be to advocate very strongly indeed the continuation and, indeed, improvement of funding to the regions from within Government, but nothing is going to change in the near future. I encourage local areas to continue to pursue economic growth and to make a positive case for the projects for which they want support. Indeed, I support the Tees Valley in doing that, and in continuing to deliver the letter and the spirit of the deal agreed between its local authority leaders and central Government.

There has been a welcome rise in inward investment across the north of England in the past two years. It is up significantly, and we want to continue to encourage the process. I have no doubt that stability is something that drives decision making, and that those who choose to invest look for it. That is why I welcome the decisions that have been taken in my party to offer the country stability in recent days. I hope that for Her Majesty’s Opposition that process will also be brought swiftly to whatever its conclusion will be.

The Shadow Secretary of State also said—rightly; this is an issue on which we agree—that the process is at its start. Agreeing the devolution deal is not the sum total of what will be done. The Government’s ambition, which I hope is shared by local areas, is for devolution to continue; they want additional powers to be devolved and the areas in question to identify additional opportunities, which, in discussion with the Government, can be delivered into local hands to drive economic growth.