Inequalities of Region and Place

Lord Shipley Excerpts

Thursday 14th October 2021 Lords Chamber

[Lord Shipley (LD)]

My Lords, I declare my interest as a vice-president of the Local Government Association. It is a pleasure to follow the right reverend Prelate the Bishop of Durham and I look forward very much to the maiden speech of the noble Viscount, Lord Stansgate. I am grateful to the noble Lord, Lord Liddle, for enabling this debate; I share his sentiments. We still await the Government’s plans for levelling up and devolution, and I hope we get an update about that from the Minister when he replies.

This Motion is about levelling up. That levelling up cannot come at the expense of London. The Government have raised expectations. They have created a term—levelling up—which now has the status of a title in the Department for Levelling Up, Housing & Communities. It is hard to understand what authority this new department has over other Whitehall departments. Do its powers extend to managing the spending policies of the Department for Transport, the Department for Business, Energy and Industrial Strategy, the Department for Digital, Culture, Media and Sport, or any other government department, including the Treasury? I doubt it.

You cannot level up places without levelling up people, and you cannot level up people by increasing taxes on the low paid, such as the increase in national insurance for health and social care, and in council tax—around 5% per year is now forecast for several years. Add those regressive tax increases to the rising energy costs and rising cost of living generally, and it is hard to see how levelling up can work if the incomes of so many people will be lower.

Paragraph 235 of the coronavirus report published earlier this week, on the lessons learned, says of test and trace that,

“in short, implementation was too centralised when it ought to have been more decentralised”.

You could say that about many policy areas managed by Whitehall. We cannot run England out of London. England’s population is 56 million. We must decentralise and devolve, but the Government insist on running a hub-and-spoke model based on Whitehall holding financial power. Far too many funds are complex, requiring a bidding process which is expensive for local government to manage when resources are so tight. Financial control needs to be decentralised because levelling up is not just about some Whitehall jobs being relocated in England. The ambition should be that at least 50% of public spending is controlled at a regional or more local level.

There has been reference to the National Infrastructure Commission report produced a few weeks ago. It says that, to deliver greater regional equality, the Government should give more control over funding to local areas to help their levelling up. Rightly, it criticised the Government’s policy of ring-fencing pots of money and demanding bidding and competition. It said that we should move instead to five-year devolved budgets so that local areas can develop their own infrastructures strategies.

The National Infrastructure Commission is right, but missing from the debate on levelling up is, first, the need for local government to have greater powers over sources of taxation; it cannot all be about government block grant. Secondly, the private sector has to be prepared to invest more in those areas needing greater investment, because it cannot all be done with public money. Private sector companies have social responsibilities to places and should not think simply in terms of shareholder returns. It might help too if the Government looked at some of the rules around the investment of pension funds, which could be an additional source of investment funding if more pension fund money could be accessed.

Finally, one trend could prove helpful to levelling up, and it is the consequence of the current dislocation of our supply lines. We should actively promote reshoring more production so that we make more, produce more and consume more sustainably, thereby in turn creating more jobs in areas that need greater support.

Levelling up requires a place-by-place plan, helping education, skills and new industries, but that will happen only if local places are empowered to lead it.