Cities and Local Government Devolution Bill [HL]

Lord Shipley Excerpts

Monday 8th June 2015 Lords Chamber

[Lord Shipley (LD)]

My Lords, I welcome the Second Reading of the Bill and I am grateful to the Minister for her kind comments earlier. I welcome the Bill not because everything in it is right but because it represents a further and very important stage in achieving greater decentralisation and fiscal devolution within England, through which growth can be increased outside London faster and local government can make more effective use of public money by joining up service delivery. There will be a number of contributions today from these Benches and I welcome that, because there is a wealth of practical experience here to draw on. Some colleagues who are not able to speak today will be speaking in Committee.

The Minister was right to say that the record of the last Government in encouraging decentralisation was impressive. It was, however, only a start. Crucially, there is now a much clearer understanding that you cannot run the whole of England from London, so I support the principle behind the Bill. It will decentralise power out of Whitehall and enable fiscal devolution. Because it is an enabling Bill, it means that one size need not fit all and that it can be voluntary for combined authorities or councils to propose schemes that are generated locally and have some local ownership.

In recent months, we have seen a host of reports as diverse as No Stone Unturned: In Pursuit of Growth by the noble Lord, Lord Heseltine, from the City Growth Commission, from the Independent Commission on Local Government Finance, the Independent Commission on Economic Growth and the Future of Public Services in Non-Metropolitan England and the London Finance Commission. There have also been a host of reports from think tanks, in particular the ResPublica reports—not least Devo Max-Devo Manc—and work done by IPPR and the Local Government Association, of which I am a vice-president. There has also been a huge amount of work done by the English core cities network. All that work points in the same direction.

It is 40 years ago that I was first elected to Newcastle City Council, and I well remember the turf wars between that council and Tyne and Wear County Council. They competed too much and it did not help that their memberships were separate rather than shared. The met counties, as we know, were abolished some 30 years ago, but problems of integrating with the wider region remained, not least in strategic planning and transport. Then, in 2004, we had the referendum in the north-east on creating a regional assembly. On a turnout of half the electorate, only 22% voted yes. It failed despite the best efforts of a number of Members of your Lordships’ House, not least the noble Lord, Lord Prescott, because it had no real powers and was seen as a talking shop and another layer of government, when power would still in reality reside in Whitehall. I think that things have changed. The north-east of England did not see the need then, but, given the further devolution planned for Scotland, that is no longer the case. This Bill gives the scope that we need. It is the next essential stage without which Cornwall, for example, or the existing combined authorities would not be able to go any further in securing devolution.

What of my own party’s position? Our general election manifesto said that we would:

“Build on the success of City Deals and Growth Deals to devolve more power and resources to groups of Local Authorities and Local Enterprise Partnerships … Establish a Government process to deliver greater devolution of financial responsibility to English Local Authorities, and any new devolved bodies in England, building on the work of the Independent Commission on Local Government Finance”.

We also said:

“Any changes must balance the objectives of more local autonomy and fair equalisation between communities. In some areas of England there is an even greater appetite for powers, but not every part of the country wants to move at the same speed and there cannot be a one-size-fits-all approach”.

We therefore said that we would,

“introduce Devolution on Demand, enabling even greater devolution of powers from Westminster to Councils or groups of Councils working together—for example to a Cornish Assembly”.

We now need local government to propose workable structures as central government accepts that one size does not fit all—both of which, of course, the Bill recognises and enables.

I may have given the impression so far in my contribution that we are debating a perfect Bill at Second Reading and that nothing needs to change, or be further defined or examined. In my view, that is far from the case. There are issues that we need to examine closely when we reach Committee in a fortnight’s time. The first relates to democratic legitimacy: that is, a new structure of local governance, and public support for that structure. I recognise that in the case of Greater Manchester it was made clear in the Conservative Party manifesto that a Conservative Government would,

“legislate to deliver the historic deal for Greater Manchester”.

However, it is also the case that most electors in Greater Manchester did not vote for the Conservative Party in the general election. I have come to the conclusion that it must always be right to test proposed constitutional changes such as these in a local referendum. We must return to this issue in a fortnight’s time when we start Committee.

Secondly, when elections for the mayor take place—assuming the Bill becomes an Act—there will be a direct connection with the ballot box at least for the person entrusted with the huge powers an elected mayor will have. However, the range of powers is potentially so vast that I doubt one person can do it all, which means in practice that much will be delegated. We need to think very carefully about running policing, social care and health, strategic planning, housing, skills, transport, economic development and regeneration all through one person.

Thirdly, in London there is an assembly with powers of scrutiny over the mayor. Something similar is needed as part of the Bill. I noted the comments of the Chancellor of the Exchequer on May 14 in Manchester, when he said that the metro mayor would be,

“a powerful point of accountability”,

because they would be:

“A person vested with the authority of direct election”.

However, he also said that,

“the Manchester model of devolution is not like London. We haven’t created a new Assembly here. We’ve built on the excellent cooperation you’ve established with your combined authority, as you asked me to do”.

I am not convinced that this is enough. We run the risk of creating a one-party state in which one party controls the metro mayor, the metro mayor’s appointment of the deputy, the combined authority—at least in terms of having a majority of seats—and the scrutiny of the mayor and of the combined authority. This concentration of power in the hands of a very limited number of people, when this Bill is all about devolving power, seems to me to need some urgent revision.

I also have some questions around the voting system and what the preferred voting system should be, and again around the powers to precept and what in practice that will mean when applied. I hope that we can look at those further in Committee. I am an advocate of proportional representation in local government, and it has occurred to me that this might be the moment for your Lordships’ House to give some further thought, given that it applies in Scotland, to the desirability of making local government elections by proportional representation. If we did, some of the problems that I have identified could be solved.

To conclude, the principle of enhanced devolution as proposed in the Bill is most welcome. It is the detailed set of proposals that we need to spend time examining now in Committee.