Draft Liverpool City Region Combined Authority (Functions and Amendment) Order 2017

Jim McMahon Excerpts

Wednesday 8th March 2017 General Committees

[Jim McMahon (Oldham West and Royton) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Turner. I am pleased to be considering the order today, not least because postal votes will be landing on doormats in about four weeks. We are cutting it slightly fine in dealing with the statutory instruments, but the order is nevertheless welcome. It is the result of a great deal of hard work by council leaders and the Mayor of Liverpool to bring together a deal.

We need to put the devolution package into perspective. Hearing the warm words from the Minister we might believe that there is a giveaway to Merseyside local authorities from the Government, but nothing could be further from the truth. The scale of public sector cuts affecting Merseyside’s local authorities, police and fire services, primary and secondary schools and Sure Start centres far overshadows the very small investment that the Government are making.

Furthermore, if the £900 million is meant to rebalance the economy and allow Merseyside and the wider north-west to compete with London and the south-east, we need to put it into perspective. It works out as £21 per resident per year. The transport imbalance between London and Merseyside is £1,600 a year, so what is happening is not the type of investment that would deliver the Government’s northern powerhouse narrative. The foundations on which devolution rests are hacked away every year by central Government cuts. Many authorities in the region will be wondering whether they will still exist by the time of the second Merseyside mayoral election—and no wonder, given the scale of the cuts there.

I make no apology for repeating that Labour Front-Bench Members remain concerned at the absence of a devolution framework in England. To take the north-west region, mayoral elections are now coming in Greater Manchester, and we are today agreeing the framework to allow elections to take place in Merseyside, but a meaningful devolution deal has still not been agreed for Cumbria or for Lancashire, and we have not yet seen full details of what the Cheshire and Warrington devolution deal will mean. Just within one region of a diverse country the levels of devolution are fragmented and contradictory.

The Government will celebrate the devolution of post-16 education, which will come with significant funding reductions. At the same time as they seem happy to devolve that funding, they do not trust the same local authorities to deliver primary and secondary education in schools; the Government are snatching power and resources away from local authorities and effectively disbanding the local education authorities.

A framework for devolution would get over many of the issues I have raised, where there are inherent contradictions in Government policy. I do not necessarily blame the Minister; it would not be fair to do that. It is clear that other Secretaries of State and Ministers just do not want to give up power. As much as there are champions of devolution who are trying to send power downwards, there are also some non-believers, shall we say, in the Cabinet, in the Government. They do not believe in devolution; they believe in a centralised state, where power, wealth and opportunity are held by the few, not the many, and where decisions that affect many millions of people are made by a few individuals, not by the people who will be affected by those decisions.

Let me say this, in the spirit of trying to move this matter forward. Clearly, the Minister is struggling to get broader support across the Cabinet and other Departments. I can understand the tensions in the Government machinery in trying to do that. If he is struggling to make progress with his own colleagues and there is anything that I can do to assist him to make better progress and which would advantage the people that I and other Labour MPs are here to represent, I feel obliged to offer the Minister that support. If he is not able, for whatever reason, to accept my support, let me gently encourage him to do slightly better in bringing other people on board.

--- Later in debate ---

[Andrew Percy]

Well, I suppose I should begin by welcoming what seemed to be some positive comments. I am getting used to the shadow Minister in particular being positive, then panning the entire policy for the rest of his contribution, but we are making progress all the same.

One of the things I should have done in my speech, as the shadow Minister did, is pay tribute to the work of those people in the local authorities who have brought this deal into being and have worked incredibly hard on it. I have met them a number of times since I took on this role and have been very impressed by the way in which they have engaged in the process and buried some of the traditional challenges that local authorities sometimes have with one another in neighbouring areas to come together on this deal. Obviously, the Mayor of Liverpool is in the same boat. It is very impressive and they deserve credit for it.

I cannot let the shadow Minister’s comments on northern powerhouse funding and the general commitment to it go answered. It is simply not the case that substantial resource has not been put behind it. Only two weeks ago, I was in Manchester launching the £400 million investment fund that is going to provide anything from £25,000 to £2 million of support—funding and borrowing—to small and medium-sized enterprises across the north of England. It was only at the beginning of this year that we announced how £556 million of growth funding from the Government to the north was going to be allocated.

[Jim McMahon]

I am sure Greater Manchester council leaders fully appreciate the £400 million—not least for the fact that the Government were cutting more than £400 million from their budgets this year alone.

[Andrew Percy]

I do not mind taking lectures from people on any area of policy if their own position is consistent, but the Opposition’s position going into the general election was to promise not a penny more for local government. They were elected on the same mandate as we were when it came to local government funding, which was not a penny more. That was their policy.

[Jim McMahon]

Will the Minister give way on that point?

[Andrew Percy]

No, we have done this before. That was the policy of the Opposition, so lectures on local government finance when those were the words of the former shadow Chancellor are a little bit difficult to take.

To get back to my point on funding, the £556 million from the local growth fund for the north is the lion’s share of the bigger £1.8 billion pot, and we announced £71.95 million of that for the Liverpool City Region in January. If we consider those funding figures, as well as what my area in the north is getting per head compared with what Londoners got, it is simply not the case that resources are being provided to other parts of England that are not being provided to the north. We did much better out of that funding than many parts of the south of England. We are also committed to £13 billion of investment in Transport for the North and the growth funding I mentioned is part of a broader £3.4 billion package.

I recall that at the 2010 election—not going too far back in history, although I think the Labour party was still electable at that point—the policy of the Opposition, who were the Government of the time, was to cut infrastructure spending if they won. That was their policy. So, again, lectures on infrastructure spending are a little bit difficult to take.

The shadow Minister talked about future devolution agreements and criticised me and the Government, and whoever else, for failing to bring those deals forward. Progress in Cheshire was paused by Warrington. That was not a decision by Government—it was a decision by Warrington. I have met Warrington Council since then. I sat down only yesterday with the Labour leader of Cheshire West and Chester Council. In the case of Warrington, they have now taken that pause off and wish to proceed with a deal and a proposal. It is for the local area to come up what they think that deal should be and what they want to see in it. The Government remain open to that.

The hon. Member for Oldham West and Royton mentioned Lancashire and criticised me or the Government again. We have not been presented with a devolution deal for Lancashire. We have been presented with a proposal for a combined authority non-mayoral, for which several local district councils have now withdrawn their consent.

[Jim McMahon]

Conservative councils.

[Andrew Percy]

Well, it is called local democracy. It was a Labour council in Warrington that decided to pause the deal in Cheshire, and it was Labour councils in the north-east.

--- Later in debate ---

[Andrew Percy]

I am sorry. She can keep saying a line but, when everybody has panned this being from our side or from the council itself in the case of Surrey, she should bring forward evidence of a sweetheart deal. I tell the Committee that all Surrey has asked for is exactly what Liverpool is already getting, which is a pilot for business rate retention. The difference is that the Liverpool City Region will get it a year earlier. Unless we have done a sweetheart deal with Liverpool, we have not done a sweetheart deal with anybody else. The Opposition should stop peddling that particular line.

[Jim McMahon]

Will the Minister give way?