Growth and Infrastructure Bill

Lord Jenkin of Roding Excerpts

Wednesday 30th January 2013 Lords Chamber

[Lord Adonis]

My Lords, that does not meet the point at all. The evidence which the national parks have given to noble Lords shows that 97% of several hundred applications—I think 292 have been made under the pre-notification procedure—have been agreed by the national parks authorities. I am sorry to keep putting this to the noble Baroness but it is a fairly fundamental issue. There has been a large number of applications, and we obviously want a great deal more so that we have a great deal more rollout of superfast broadband in the national parks and areas of outstanding natural beauty. However, almost all those that have been brought forward have been agreed. Does the noble Baroness have any evidence at all that there are cases which the Committee should take into consideration where the planning authorities themselves have been slowing down a rollout of broadband that would otherwise have taken place?

[Lord Jenkin of Roding]

Before my noble friend responds to that, I wonder whether the noble Lord, Lord Adonis, has taken account of the paragraph in the impact assessment which says:

“We have received reports where multiple sites have had to be surveyed and prior approval applications submitted, only for agreement still not to be reached, and delays in some cases of up to two years. Examples have been provided by BT based on their experience of rolling out broadband over the last two years with delays ranging from 12-27 months”.

It seems to me that that is really quite a serious bar on broadband in these areas

[Lord Adonis]

My Lords, I am not sure whether the noble Lord was present for my opening speech, but I pointed out that national parks authorities are not aware that any of those cases raised by BT apply to national parks or areas of outstanding natural beauty. The Government say airily that they have received reports but will not actually publish anything. The noble Lord, like me, has been a Secretary of State in the past. It is one thing to declare airily that you have received reports but it is another thing actually to give chapter and verse. No chapter and verse whatever has been given in this debate that there is a real issue that would justify a very major change in the law of the kind that the Government are proposing.

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Moved by

[Lord Jenkin of Roding]

60: After Clause 8, insert the following new Clause—
“Extension of economic development powers to councils
In the Localism Act 2011, after section 16 insert—
“16A Duty to report on proposals for the extension of devolved economic development powers to all local councils
(1) Within one year of second round of bespoke “city deals” being completed, the Secretary of State must lay before Parliament a report setting out the government proposals, policies and timescales for the extension of devolved economic development powers to all local councils.
(2) The report must, in particular, fully set out—
(a) the case for making the “core package” of devolved powers achieved in the second round of bespoke “city deals” available to all councils to help boost growth; and(b) the time-scales over which those proposals and policies are expected to take effect.(3) Where the Secretary of State has determined it not appropriate to extend devolutionary powers to all local councils, the report must, in particular, fully set out—
(a) why this has been determined as not appropriate;(b) include a resolution that sets out how the government intends to review this determination; and(c) the review of this determination must be laid before Parliament not later than one year following the laying of the original report.””

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[Lord Jenkin of Roding]

With the agreement of my noble friend Lord Tope, in whose name the amendment has been tabled, I wish to move Amendment 60. The amendment is also in my name and that of the noble Lord, Lord McKenzie.

The amendment returns us, as I am sure the Minister recognises, to localism. She will remember that when we were debating the Localism Bill, as it then was, two years ago, we made considerable progress in persuading the Government to go for a greater degree of localism than had originally been in that Bill. At the same time, I did not seek to conceal my disappointment that it had not gone further. There is huge scope for increasing the decentralisation of power and decision-making from central government to local areas and local people.

Since then, there have been a number of developments. I start with the remarkable report prepared by my noble friend Lord Heseltine, No Stone Unturned in Pursuit of Growth. I told my noble friend that I did not agree with everything in that report, but I applauded the emphasis which he laid—indeed, in an entire chapter—on the need for achieving greater localism.

That chapter is Chapter 2, Building on our Strengths. I cannot begin to quote the whole of that chapter, and the Committee, I think, would become singularly impatient if I did, but I want to quote just two sentences. Paragraph 2.14 states:

“For the UK to face up to the challenge of increasing international competition, we must reverse the long trend to centralism. Every place is unique. Local leaders are best placed to understand the opportunities and obstacles to growth in their own communities”.

That is highly relevant to the Bill.

In paragraph 2.22, after reciting a considerable number of measures that the Government have taken—they cover two pages of the report—my noble friend goes on to say:

“We need to go further and faster to achieve an essential rebalancing of central and local power and resources, extending not just to cities, but to local areas right across England”.

I thoroughly endorse that. As my noble friend will recognise, that is what the amendment is all about.

Another development is that in December 2011, the Government announced their intention,

“to develop tailored deals with our core cities, devolving powers and supporting projects which will boost growth and jobs for the long term”.

That was widely applauded. It has been followed up vigorously by the relatively small number of cities to which it extends. The question is: why should it stop with the cities? The new city deals recognise that local leaders, rather than Whitehall departments, are best placed to understand the economic opportunities and challenges that they face and that they have a key role to play in shaping incentives and conditions for private sector success.

There is also a case for mainstreaming the devolved powers achieved in the early city deals as part of a general mainstreaming programme making those powers available to all councils to help them to boost growth. The wave 2 cities will receive a core package of devolved powers as part of their deal. I submit that the case for extending that more widely is becoming very strong.

I am told by the Local Government Association, which of course has followed that up with much enthusiasm, and has conducted seminars and conferences to seek the views of its members on it, including a seminar with the Centre for Cities on 19 December last year, that it is now receiving many expressions of interest from other cities, towns—and, indeed, not only single local authorities but groups of local authorities—which would like encouragement to develop similar negotiated deals with central Government to give them the additional powers and resources necessary for them to develop the economy in their area.

Another aspect is that when we were passing the Localism Act, the local enterprise partnerships were still very rudimentary. They had only recently been announced; they did not at that stage cover the whole country; some of them were taking longer than others to get off the ground; and they did not have significant financial resources behind them. Those are partnerships led by employers. I have always been firmly of the view that the most effective encouragement to employment, growth, and all the rest of it comes from employers rather than from central government. The Government can facilitate, encourage and provide a framework but, in the end, it is local authorities, individuals and businesses which can make it happen on the ground.

We have not only the strong recommendations of the report of my noble friend Lord Heseltine; we now have the growing experience of the city deals, which are proving very satisfactory and popular and are producing results, and the now well established local enterprise partnerships set up over the greater part of the country, which are beginning to work well. The Government have recognised that by allocating more finance to them. I very much welcome that.

The missing link is that local authorities, apart from the big cities, do not have the same power to negotiate deals with central government that would allow them to have the same opportunities and encouragement to develop their economies and provide jobs and growth in their areas. They know their areas best. We should be prepared to do that; I hope that my noble friends on the Front Bench agree.

We are not seeking by the amendment an immediate commitment for that to happen. Clearly, there needs to be study and further consideration of how, where and when that would best be done. Our amendment would add a new clause to the Localism Act entitled:

“Duty to report on proposals for the extension of devolved economic development powers to all local councils”.

The first subsection states:

“Within one year of second round of bespoke ‘city deals’ being completed”—

that is very wise, because it gives a chance to assess the experience of city deals without charging ahead too rapidly—

“the Secretary of State must lay before Parliament a report setting out the government proposals, policies and timescales for the extension of devolved economic development powers to all local councils”.

Then the amendment suggests what should be in the report. Subsection (3) states:

“Where the Secretary of State has determined it not appropriate to extend devolutionary powers to all local councils … The report must, in particular, fully set out—

(a) why this has been determined as not appropriate;

(b) include a resolution that sets out how the government intends to review this determination”.

Then the review of the determination must be laid before Parliament within a year.

That is asking the Government to take this forward positively as a further means of spreading the localism—which is the Government’s policy and has been declared to be and has rightly been at the centre of their attitude to local government—but gives them time to ensure that it would really work if extended across the country.

The amendment is reasonable. It builds on what is there already. It reflects the important chapter in my noble friend’s report, No Stone Unturned, and it fits well with the general thrust of the Government’s policy of increasing localism. I hope that my noble friends will feel able to smile on the amendment. I do not say for one moment that the wording is right, but I hope for some encouragement. Then we can return either with a government amendment or something that takes account of what Ministers have said. I beg to move.

[Lord McKenzie of Luton]

My Lords, I have added my name to the amendment, which we enthusiastically support. We should thank the noble Lord, Lord Jenkin, for moving it so comprehensively in the absence of the noble Lord, Lord Tope. Too often, we hear the mantra of devolving power but see the reverse: power and decision-making moving to the centre, from schools policy to planning.

We should acknowledge the progress being made on devolving powers to some areas, building on the achievements of multi-area agreements. Following the deal on the first eight cities, the Government are encouraging bids from a further 20, as the noble Lord, Lord Jenkin, said.

Perhaps I may remind noble Lords of what was involved for some in the first tranche. Nottingham City Council would be given powers to create a venture capital fund to invest in high-tech business, start-ups and growth businesses. I think that for Newcastle, Sheffield and Nottingham the deal has been backed by tax increment finance schemes. A control over part of central government’s skills budgets will be given to Sheffield, while Bristol, Leeds, Newcastle and Nottingham will join Manchester in creating apprenticeship hubs. That is just a flavour of what has been achieved from those first few city deals.

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[Lord Beecham]

My Lords, on behalf of the city of Newcastle, I disavow any territorial ambitions in relation to Cumbria, even though we are connected by the Roman wall, part of which runs through and, indeed, is visible in the ward I represent.

I am the fifth consecutive former council leader to address the Committee this afternoon. It was in that capacity that I first made the acquaintance of the noble Lord, Lord Jenkin, some 30 years ago when he chaired the inner city partnership in Newcastle. At that time, a number of authorities had such a partnership chaired by a senior Minister, and the noble Lord, Lord Jenkin, was chairman of the Newcastle inner city partnership. I recall rather amusing him by referring to the city action teams that were created in those days as “feral cats”. He might remember the phrase. We worked well together, as did other inner city partnerships. It was a process initiated by Peter Shore in the Callaghan Government of the late 1970s.

[Lord Jenkin of Roding]

I ought to put on record—I do not think that the noble Lord will disagree—that there were some areas that found that extremely difficult. I need only mention Liverpool.

[Lord Beecham]

Liverpool was in many minds at that time. The noble Lord and I perhaps shared a view about Liverpool, but we were not alone in that.

The principle of looking across government departments and local authority functions embodied in a small way in those arrangements was returned to under the previous Government with the concept of Total Place. As I think I have said before in debates in your Lordships’ House, that has, I believe, been rebranded as community budgets, but it is consistently compatible with the thrust of the Government’s policy on city deals and the thrust of the amendments, which, of course, I support. The noble Lord, Lord Jenkin, was quite right to refer to the powers and resources that are required to invigorate local economies. That involves, by definition, a wide range of public organisations, including government departments. One thinks of BIS, the Department for Transport, the Department for Work and Pensions, the Department for Education, the DCLG, Defra and the Department of Energy and Climate Change. All potentially have a role to play with not only their policies but sometimes with their resources in individual areas. I hope that the Government can look at reinforcing the concept of the city deal by connecting it to the concept of community budgeting or Total Place, so that one looks at the sum of government-directed public expenditure in an area and sees how it can fit into and be applied to the issues of economic growth and regeneration.

Of course, the city deals that have been announced are welcome. Newcastle has benefited; I think that the figure is roughly £80 million. Liverpool got a little more at £110 million. That is not necessarily cash coming from the Government. It is the value of some of the freedoms that have been given, including, for example, tax-increment financing. Tax-increment financing is the permission effectively to borrow against the anticipated business rate income, which will generated by development. It has been deployed effectively for some years in the United States. There is reason to hope that it will help us here.

It is not, then, a question of the Government passing resources to the local authority, but of borrowing. Useful and impressive though those schemes and those amounts of money to invest will be, however derived, they have to be contrasted with the loss of financial resources to the very same authorities as a result of the local government finance settlement, exceeding on an annual basis in the cases of both Liverpool and Newcastle—and perhaps the others, I cannot say for certain—the value of the city deal and its financial implications. That is ultimately money taken out of the local economy, which is likely to have a deleterious effect on that local economy, employment and business. It is a curious inconsistency, which the Government have to address. They have to align their local government finance policies with the ambitions, which we share in local government, across the parties, of the city deal programme.

Finally, I entirely agree with the noble Lord, Lord Shipley, and my noble friend Lord Smith on the need for local authorities to co-operate and not to be seen to be competing with one another, at least in the same sort of area. There will no doubt be competition —healthy, I hope—between different parts of the country, offering different attractions for investment from within this country or overseas; that is a healthy process. However, it would be a great mistake if, within regions—or, to use the current governmental phrase, sub-national areas—there were to be cut-throat competition between more-or-less neighbouring authorities.

It was striking in those dark days of the 1980s—which the noble Lord, Lord Jenkin, did his best to brighten in Newcastle—that the region of the north-east came together in two ways. First, it came together—I have to say, at my suggestion—to create a Northern Regional Councils Association, which included Cumbria in those days, as it rather looked to the east than to the south. It also came together to facilitate the hugely important Nissan development in Sunderland. There was no competition between authorities as to who should get that. We came together and worked with business in the region and the Government of the day on behalf of the region as a whole. It is effectively a functional economic area, to use the jargon. That spirit of co-operation certainly needs to be driven, and I hope that the Government will incentivise it as these proposals go forward. I hope that—with the slightly cautionary words of the noble Lord, Lord Greaves, about not conferring significant powers and functions on unviably small groups of authorities on their own terms, with which I agree—

Have I misunderstood the noble Lord?

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Different elements of the city deals package will continually be assessed and, as appropriate, we will look to extend them to local authorities as and when appropriate—indeed, to all local authorities when we believe that to be relevant. The Government will also consider reporting back on any measures that we are trialling in a city deal, when appropriate. I hear what has been said about the specific report but it is important that we respond fully to the Heseltine report and then subsequently report back on the trialling on which we are taking part in the first and second wave. On behalf of the Government, I welcome the widespread support for city deals. Based on those assurances, I hope that my noble friend will see it as appropriate to withdraw his amendment.

[Lord Jenkin of Roding]

I think that my noble friend did indeed smile. He has given us a very fair and encouraging report, and I entirely take the point with which he finished, that there will be a full response to the report of my noble friend Lord Heseltine. There was one point on which I disagreed with my noble friend Lord Heseltine, when he suggested that local authority structures should be reviewed and they should become single-tier authorities. I told him that I did not agree with that, and the Government have made it perfectly clear that they do not agree.

I warmly support what has been said about the need for co-operation. When we debated the Localism Bill—my noble friend Lady Hanham will remember this—there was a good deal of scepticism about the Government’s wish that local authorities should co-operate. The fact of the matter is that two years later one can point to any number of examples where local authorities are co-operating admirably. That is a far better way than to embark on a major restructuring, which would be unrealistic.

I shall not comment in detail on everybody who has spoken. I am extremely grateful for the amount of support that we have received. I mention two points. The noble Lord, Lord Beecham, mentioned the achievement of the Nissan investment. That was very much a collaborative exercise; I was the Secretary of State for Industry who in the end persuaded Nissan to come here. We were negotiating as well with Honda, which eventually went to Swindon. I composed what my Japanese friends were kind enough to say was a sort of haiku: “We get fonder and fonder of Honda, but the kissing with Nissan is missing”. In the end, the kissing was everywhere; we got them both.

That was a very good example of local authorities co-operating. My noble friend Lord Greaves mentioned the West Cumbria authorities: Allerdale, Copeland and West Cumbria. I had been led to believe—with considerable optimism, I hope—that the decision will be announced that the idea of a nuclear repository within that territory, on terms that will need to be finally agreed, is welcomed. We had a three-month delay on this. But the co-operation of the county council and those two district councils has, to my mind, been an admirable example of how local authorities can work together in the national interest.

I thank my noble friend Lord Ahmad for his very encouraging response and beg leave to withdraw the amendment.

Amendment 60 withdrawn.