Devolution and Growth across Britain

Jonathan Edwards Excerpts

Wednesday 3rd June 2015 Commons Chamber

[Mr Umunna]

I certainly want more councils to follow Manchester’s example. I think that it is a good thing, so I agree with the hon. Gentleman.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Will the hon. Gentleman give way?

[Mr Umunna]

I will make a little progress if I may, but I may come back to the hon. Gentleman later.

What of the Government’s proposals in the Queen’s Speech that we are debating? We are told that the Cities and Local Government Devolution Bill will provide the legislative framework necessary to deliver the Greater Manchester deal and other future deals in large cities in England that choose to have elected mayors, as my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) mentioned, and in other places. Shortly before the general election, devolution deals were announced in relation to Sheffield and West Yorkshire. In addition to Manchester, we were told that the Government will pilot allowing councils in Cambridgeshire and Cheshire to retain 100% of the growth in business rate revenue so that they can reap the benefit of decisions to boost growth locally.

To pick up my hon. Friend’s point, however, why limit these arrangements to those areas? Why not give every region the opportunity to reap the benefits of the decisions they make to boost growth locally through such deals and through the devolution of business rates? Although I am a big fan, what about areas which, as she said, choose not to have elected mayors? Why should they be denied the benefit of greater local freedoms? Combined authorities, with or without a mayor, can provide a useful vehicle through which to do all this, but one important point for the Government to consider as they proceed with their legislation is this: what about areas which do not have or do not desire a combined authority, and how will they get more powers? My criticism of what has been proposed—I accept that we need to see the Bill—is that it does not seem to go far enough and is rather piecemeal. The Government need to find a way of ensuring that all areas can enjoy greater autonomy.

The Government say that their Scotland Bill aims to deliver in full the Smith commission agreement, to which the five main Scottish political parties signed up in November 2014. We are absolutely committed to ensuring that the vow—a promise made and a promise to be delivered —made on the eve of last year’s referendum is delivered in full to make the Scottish Parliament one of the most powerful devolved Parliaments in the world. As we set out in our manifesto, we will work to amend the Bill to give the Scottish Parliament the final say on social security and the power to top up UK benefits. This settlement must recognise the strength and security offered by being part of the UK, which means retaining the pooling and sharing of resources that flow from the Barnett formula. It is imperative that that is protected and, for the sake of the Scottish economy and public services, one hopes that the SNP’s economically illiterate plans for full fiscal autonomy are dropped. The worst-case scenario for Scotland would be the hon. Members of the SNP in this House pressing for full fiscal autonomy and the Tory Government delivering it.

[Jonathan Edwards]

The Labour amendment equates fair funding with the so-called Barnett floor, yet the hon. Gentleman has just said that he is committed to the Barnett formula for Scotland. If Wales had the same level of investment as Scotland, it would be worth an extra £1.4 billion a year. Would that not be fair funding? If that were in the Labour amendment, I would be more than happy to march through the Lobby with him. As it is, we cannot.

[Mr Umunna]

Perhaps I will help the hon. Gentleman shortly, because I am coming straight on to Wales.

We are told that the Wales Bill will deliver a clearer, more stable devolution settlement for Wales and devolve important new powers to the National Assembly for Wales and the Welsh Government. We understand that a funding floor is to be introduced to protect Welsh relative funding and provide certainty for the Welsh Government in planning for the future. We support measures to put Welsh devolution on a stronger statutory basis, as is the case with Scotland. We agree with taking forward proposals from the Silk commission and extending the power that the people of Wales have over their transport, elections and energy.

To come to the point made by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), let me be clear that Wales must not be unfairly disadvantaged by the Barnett formula. The Conservative-led coalition cut the Welsh budget by £1.5 billion. This Conservative Government must ensure that there is a fair funding settlement for Wales by introducing a funding floor. That funding floor should not be contingent on an income tax referendum.

The Queen’s Speech refers to legislation to implement the Stormont House agreement in Northern Ireland. This issue was raised in Prime Minister’s questions. The legislation will provide the architecture to deal with the past, institutional reform at Stormont and certain economic measures, including the devolution of corporation tax. In view of the concerning escalation of the dispute over welfare reform, we urge the Government to do all in their power to work with the Northern Ireland parties and, where appropriate, the Irish Government to avert this serious threat to political and economic stability in Northern Ireland.

--- Later in debate ---

[The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid)]

I echo the tributes that were paid to Charles Kennedy earlier today. I was not fortunate enough to know him well, but his reputation for courage, his principles and his humour were well known to all. My thoughts are with his family and friends.

I extend a warm welcome to all new Members of the House and to you, Mr Deputy Speaker, upon your return. I also welcome back the hon. Member for Streatham (Mr Umunna). I look forward to our many encounters over the coming months. The hon. Gentleman and I have an unusual connection. Soon after I was elected back in 2010, as was he, it came as a great surprise to be recognised so frequently by members of the public. I later discovered, after a particularly excited individual took a selfie with me, that they thought I was the hon. Member for Streatham. [Laughter.] I consider that to be a compliment, but I am not sure whether the same is true of him.

The title of our manifesto promised three things if we were returned to government: strong leadership, a clear economic plan and a brighter, more secure future for our country—our whole country. After Labour’s record-breaking recession, the British economy is experiencing record-breaking growth. Maintaining that growth will be at the heart of everything this Government do over the next five years. Because the Conservatives are the party of the many, not the few, we will deliver that growth in a way that benefits all of Britain’s people: creating opportunity for everyone, rebalancing our economy, devolving power to every corner of the United Kingdom—a one nation party; a one nation Government.

The Scottish and Welsh Governments already have more powers than they did five years ago. The Scotland Act 2012 contained significant new financial powers for the Scottish Parliament, all of which will be enforced by April 2016. The Wales Act 2014, introduced last December, moved various tax and borrowing powers from Westminster to Cardiff. Legislation introduced earlier this year paved the way for the devolution of corporation tax to Northern Ireland. Now we will go further.

[Jonathan Edwards]

The Secretary of State just mentioned the powers—including some minor taxes—devolved to Wales in the Wales Act 2014. Therefore, the principle of fiscal devolution seems to have been conceded. Why are he and his Government still insisting on a referendum about income tax devolution to Wales?

[Sajid Javid]

I thank the hon. Gentleman for his question and I assure him that I will come to just that point in a moment, but I hope he will please allow me to refer to Scotland first.

Of course, Scotland has had its referendum and its people chose to stay in the United Kingdom, which was the right decision. However, the referendum also sent a clear message that Scotland wanted a greater say over its affairs and greater control over its economic destiny. That is why we will deliver the Smith commission agreement in full.