Queen’s Speech

Lord Shipley Excerpts

Wednesday 25th May 2016 Lords Chamber

[Lord Shipley (LD)]

My Lords, it is always a pleasure to follow the noble Lord, Lord McFall, and to be reminded of the importance of banking supervision and regulation. I join in the congratulations of the right reverend Prelate the Bishop of Newcastle on her maiden speech. As a fellow Novocastrian, I share her pride in the north-east, its successes and potential. I hope the Minister noted her concern about the need for adequate funding and that the Government should make the commitments in the gracious Speech real in everyday life.

The gracious Speech has been described as lacking ambition. I am not sure that is true, because some of the legislation proposed is very important, particularly the Bus Services Bill and the local growth and jobs Bill. With caveats, both are to be welcomed, because they could make a huge impact. Where the gracious Speech lacks ambition is in its failure to address issues of inequality: income inequalities, housing inequalities, social exclusion, and child poverty. That is a matter of regret, because in all these areas the gap is widening between those who have and those who do not.

Of course, there is ambition in the modern transport Bill. We have heard a lot in the media about flights into space, but would the Minister agree that before the Government propel tourists into space they should complete the dualling of the A1 between Newcastle and Edinburgh, as well as attending to all the other road improvements urgently needed across the north of England? I draw his attention to east-west roads, notably the A66 and A69, which cry out for capacity increases, dualling and improved road safety.

This is the second year of this Parliament, which continues the trend towards greater decentralisation in England. We are now at a critical stage in that process, because it is one thing to pass the legislation but another actually to make it work on the ground. The National Audit Office said in April that the Government’s plans are risky. I agree with that analysis. The plans are piecemeal, but that is what you get with an approach that encourages local authorities to choose what responsibilities they want to take on and what investment-sharing, risk-sharing and business rate sharing they are prepared to pool with others. To be clear, this was the right thing to do to get devolution actually happening, but we now need a clearer, menu-based approach that everybody understands.

For example, the Government need to explain better why elected mayors are essential in some places and not others. As an example, the Bus Services Bill will devolve powers to directly elected mayors in England over local bus services. Such powers may yet go to places without a directly elected mayor, but there is no certainty of this since it will be for the Secretary of State to decide. Things need to be clearer, because the buses Bill has the potential to be a good one in that it will set standards and fares.

There is then the local growth and jobs Bill, which also needs clearer explanations. It will allow local authorities to retain business rates and to reduce the tax rate. Yet the Bill gives combined authority mayors the power to levy a supplement on business rate bills to fund new infrastructure projects, provided they have the support of their local enterprise partnership. I suggest that the Government should go further to enable similar powers to lie with non-mayoral authorities.

However, 100% business rate retention will not finance devolution. The mechanics of 100% retention need to be debated and agreed. Prior to 1990, when business rates were localised, and prior to the nationalisation of business rates, there was an element of equalisation in the grant. I know that the Government are well aware of the potential problem, but simply allowing well-off councils to become even better off while poorer councils cannot get better off will simply widen inequalities. As the Joseph Rowntree Trust showed a few weeks ago, many towns in the north do not have the capacity for high levels of growth. Ten of the 12 most struggling cities are in the north.

It is said that the Government want a smaller state. That would be wrong. We cannot have a smaller state if we are to rebalance the economy. If the northern powerhouse is to have a chance of succeeding, the state must play a leading role. Recently, an ONS and KPMG report gave us some very worrying figures about the brain drain to London. I think Ministers are well aware of that. I read in the newspapers of some possible schemes that might help to address this outflow from the north. It is important that Ministers continue to confirm that the northern powerhouse is not simply about the M62. That needs to be restated continuously, and it needs to be demonstrated through real activities and real investment right across the north of England.

The gracious Speech refers to the northern powerhouse, stating:

“To spread economic prosperity, my Government will continue to support the development of a Northern Powerhouse”.

The first paragraph of the briefing document supporting the gracious Speech states:

“The Northern Powerhouse is the government’s vision for the North of England. It is built on the solid economic theory that while the individual cities and towns of the North are strong, if they are enabled to pool their strengths, they could be stronger than the sum of their parts”.

I agree entirely with that sentiment. However, does the Minister share my regret that Gateshead decided recently to opt out of membership of the north-east combined authority? I do not think this helps either Gateshead or the north-east. I hope that the Government will do all they can to persuade Gateshead to look again at its decision. It would be to everyone’s advantage if it did.