Budget Resolutions and Economic Situation

Ivan Lewis Excerpts

Monday 21st March 2016 Commons Chamber

[Mr Ivan Lewis (Bury South) (Lab)]

I want to focus my contribution on the devolution deal for Greater Manchester. I welcome the principle of local politicians and communities having far greater control over the policies and funding that affect their localities. It is right that we have a much greater opportunity to shape our own destiny and build a world-class, fair and prosperous Greater Manchester. However, as we take greater responsibility, the Government, and especially the Chancellor, must understand that we are not prepared to be set up to fail or to collude with policies that are plainly wrong. Greater Manchester’s political leaders are right to do business with the Government, notwithstanding, in most cases, serious political differences. However, I have come to the conclusion that, in some key areas, the combined effect of the devolution deals so far is flawed. We must negotiate a new, fairer deal that enables us to tackle the inequality that has left too many people and communities behind.

On skills, it is essential that we raise our game in Greater Manchester, so that we can tackle the scourge of worklessness, improve poor levels of productivity and ensure that people living in our communities benefit from the future jobs that businesses will create at the cutting edge of the technological and green revolutions. The current devolution deal only gives Greater Manchester control over 19-plus education. This is nonsense and is setting us up to fail. I want local authorities and the mayor to have the power to support school improvement through a properly funded schools challenge, on a par with London, to build a 14-to-19 phase of education with a high-quality vocational offer and to have greater flexibility to work with employers on apprenticeships. If the Government are serious about supporting Greater Manchester to tackle the scandal that is 25% of children living in poverty, they will provide additional funding so that we can expand early childhood development programmes, not cut them, as is happening now.

On health and social care, we have agreed to create an integrated care and support system. However, we have a £2 billion NHS funding gap in Greater Manchester. Cuts to council budgets are severely restricting access to social care, and community mental health services are in crisis. In many areas, preventive services, often provided by voluntary organisations, are being cut to the bone. On top of that, we have no guarantee that the Treasury will not cut our funding further in the future. A fair deal would mean NHS England more than doubling the transformation fund established to support those changes in Greater Manchester, from the current £450 million to £1 billion. Any deal must also make it clear that in Greater Manchester we vehemently oppose the privatisation of the NHS.

Let me turn to business rates. I strongly support the principle of money raised in Greater Manchester staying in Greater Manchester. Indeed, in the longer term, devolution must mean greater fiscal autonomy on a much broader level. However, at the same time, Government cuts to councils’ grant aid and the disparity in revenue generated in the different cities and towns of Greater Manchester increase the risk that the deal will increase inequality, not reduce it. A deal that is fair must put in place transitional arrangements to ensure that the cumulative impact of 100% rate retention, combined with cuts to Government grants, does not disadvantage any of our 10 Greater Manchester authorities.

In some parts of our conurbation, the decline of town centres has damaged both economic opportunity and civic pride. Despite being identified as a priority in negotiations between Greater Manchester and the Government, bids for town centre renewal funding have so far been rejected by the Treasury—another flaw. A fair deal would recognise the importance of towns and district centres across Greater Manchester. Finally, the devolution deal is silent on accountability and public participation. While some of these issues require resolution at Greater Manchester level, a fair devolution deal would include funding to enhance public involvement and the accountability of the mayor and the cabinet.

A new, fair devolution deal is essential if Greater Manchester is to reduce inequality and become a world-class conurbation for all its people. This Budget reaffirms the Government’s commitment to a northern powerhouse, but I must warn Ministers that it has all the hallmarks of the big society—a tarnished brand, fatally undermined by reality. Disproportionate cuts and policies such as the forced academisation of our schools make a mockery of the northern powerhouse; indeed, we would be a northern poorhouse if it was not for the innovation and commitment of our local councils and communities. It is for that reason that our leaders in Greater Manchester have been right to be pioneers for devolution, but the time has now come to demand a fair, not a flawed, devolution deal.