Elected Mayors

Debate between Helen Jones and Lord Wharton of Yarm

Tuesday 14th June 2016 Westminster Hall

[James Wharton]

I consider my bubble burst, but it was worth a try to take what compliments might be on offer when the opportunity was there. They have eluded my grasp on this occasion. Devolution is an important matter. It is transformational and of constitutional significance for how we run our country. It is important for driving future economic growth and recognises that it is those living in the communities affected by the decisions made by Government at whatever level who are best placed to understand how those decisions should be made and the things that can be done to grow the economies we represent in our different constituencies and different parts of the United Kingdom.

[Helen Jones]

I am grateful that the Minister says it should be people in communities who decide these things. Can he explain why Birmingham had a referendum, voted against having an elected mayor and is getting one anyway?

[James Wharton]

I will explain the difference between the sort of mayors we have had before and the approach the Government are taking to devolution at this time, as well as why that is the right approach. Looking at the history of mayors, we have all known and experienced civic mayors. That important role recognises the contribution that local councillors have often made in representing their local authority. We saw a transition to local authority mayors pioneered under the previous Labour Government. That saw powers taken from local authorities and focused in that executive person. Indeed, the example that the hon. Member for Warrington North (Helen Jones) gave was of powers coming from a local authority into that executive person, who would then use them in theory for the good of that area, with their democratic accountability and mandate.

The sort of mayors we are talking about with devolution hold powers coming down from central Government that are currently held by Ministers and exercised by civil servants. We want to give those powers to people who are closer to the communities affected by their exercise. We want to transfer those powers down. Where there is a significant transfer of Executive control and decision-making with those powers, we also want to ensure sharp accountability delivered by an elected person with the mandate to ensure that the work that needs to be done can be delivered, but who will be accountable to the electors of the area over which they are the mayor.

That area is not chosen by central Government. The process of devolution for any area is a deal, and that is a two-way process, but we ask areas to come forward and tell us the geography on which they think a devolution deal should be delivered. Rather than Government dictating centrally what the geography might be, we allow local communities, represented by their elected local authority leaders, to look at the geography of the economy in which they operate and tell us what they think is the right geography.

[James Wharton]

It is very clear. The Government do not have the power in statute to force any area to accept a devolution deal. It happens by agreement, working with local authority leadership. If an area is not happy with what is proposed, whether that is the geography, the powers or the mechanism of governance, the Government have no power to compel them to make that deal or to go down that route of devolution at that time. What is so welcome is that so many areas have done that and have recognised the opportunities to choose their own geographies.

Members have spoken about the overlapping and different-layered identities of our constituents. I represent Stockton South in Teesside, which is also within the larger Tees valley. My constituency is half in the old north riding of Yorkshire and half in County Durham for ceremonial purposes. People identify in different ways in my constituency. I of course understand that in any area or geography of any scale or size there will be differences of identity. The point of devolution is to identify the economic opportunities, and we have approached that from the bottom up. We have let those communities come forward, put their proposal on the table and persuade Government why it is the right thing. We do not accept everything that is brought forward. We work with them to test and understand why they want to make that deal, but that is the right approach, because it will give a geography that will last and stand the test of time.

We take the same approach with the powers that we are conferring with devolution. We allow areas to come to us with their bid, and we make a deal with them about the powers they want. There is not some centrally held list. There is not a restricted and narrowly defined number of things that an area can have. They can ask for whatever they want; it is a deal with Government. We have to agree, and we work with them on those areas in which we can find agreement, and hopefully we reach a deal in the interests of that geography and those communities, identifying the powers that will help drive forward the economy in that area.

[Helen Jones]

The Minister is being generous in giving way once more. Warrington would be subject to four different tiers of local government under the current proposed deal: an elected mayor, a combined authority, a council and parish councils. From what he is saying, can I deduce that if Warrington came to him with a proposal for more powers to the local authority, he would consider it?

Business Rates (North-East)

Debate between Helen Jones and Lord Wharton of Yarm

Tuesday 25th October 2011 Westminster Hall

[James Wharton]

The excellent Conservative mayor of North Tyneside, Linda Arkley, who is doing a superb job and is no doubt looking forward to her re-election by popular acclaim next year, has raised some concerns as part of the consultation process on behalf of the people whom she represents. I do not accept that it is a criticism of the consultation; it is feeding into the consultation in the hope of influencing the result in a way that will benefit the people whom she represents. The good mayor that she is, she is doing the right thing. I am delighted that the hon. Member for North Tyneside (Mrs Glindon) has given me the opportunity to raise that point.

Another important point, apart from the consultation, is that there should be no effect on what businesses pay. When the policy is introduced, we will not see business rates rising. Levels will be set, as I discussed briefly in an exchange with the hon. Member for Hartlepool, to ensure that the funding that councils receive at the point at which the policy is introduced is kept level. No council should initially be disadvantaged by the introduction of the policy. [Hon. Members: “Initially.”] I fully accept that. It will then be a responsibility for local authorities to engage—within a framework that we must all see as fair and to which we must contribute to ensure that it is fair, so that the rules do not disadvantage any area—with that new system, grow their local economy as best as they can and reap the benefit.

What are the Government going to do? They will set a baseline, tariffs and top-ups. Tariffs and top-ups will mean that wealthy areas—we have heard of some of the wealthy areas that take a lot of money in from business rates—will see some of that money taken away from them and redistributed, often to councils such as those that many of us here today represent in the north-east. The top-ups will be the benefits that some of our authorities receive.

There will be a levy for disproportionate benefit, so if a council sees a huge rise in its business rates that is disproportionate to the benefit that that council should receive, that will be redistributed again in some way.

[Helen Jones (Warrington North) (Lab)]

The hon. Gentleman should accept that we should be specific. The Government’s proposal is to take back not the disproportionate benefit, but a share of the disproportionate benefit, which is an entirely different thing.

[James Wharton]

That is a fair point. As part of incentivising growth, it is important that local authorities are able to keep some benefit. Residents who have a large industrial complex built in their back yard may feel entitled to a share of the income that that brings to the Exchequer. There will be a levy that will allow for a redistribution of disproportionate benefit and for a safety net. For example, one of the questions raised by hon. Members was, what if a large industry disappears or if a large manufacturer or retail site closes down in the north-east? What about that potentially catastrophic effect? There is already in the consultation a potential mechanism for addressing that through the levy, which will create a pot of money that councils that find themselves disadvantaged will be able to tap into. We look forward to hearing from the Government how they will administer that and what their proposals for that are.

There will also be five-year revaluations to ensure that the system is seen to be and remains fair. Hon. Members have raised concerns about the frequency of revaluation, and the Government should look at those. The Government should also consider the balance between providing an incentive and ensuring adequate funding, and more frequent revaluation could form part of that formula. We have discussed the difference between the business rates brought in by retail and manufacturing. Again, that is a fair observation and should form part of the consultation, and I hope the Government will pay attention to that. We have also discussed dependency on small numbers of large businesses; I have just touched on that in my comments. I would like to see more detail of how a levy for disproportionate benefit will help those areas when a large industry or business closes down and potentially impacts local government finances.

Overall, however, the Government are pushing power back down to people, empowering local authorities and communities to take control of and responsibility for the areas in which they live, and incentivising councils to create and foster growth. That should be welcome in the north-east, where we need to see greater private sector growth. I hope that we can have a constructive engagement with the consultation to deliver the best for our region, not simply to score political points, which may appear on Tyne Tees later this evening—one never knows.