Devolution: English Cities

Lord Wallace of Saltaire Excerpts

Wednesday 17th July 2019 Grand Committee

[Lord Wallace of Saltaire (LD)]

My Lords, we have all enjoyed this fascinating and detailed report. It has formed the basis of a very worthwhile debate. I will start, if I may, by looking at one or two of the tensions within it—most of all, the tension between the mayor as a model for efficiency, leadership, effectiveness and regeneration and what the noble Lord, Lord Heseltine, refers to in his conclusions as the need for this to be based on,

“our families, our schools, our communities, our social services”,

so that government at all levels must work,

“in partnership with communities and businesses”,

and individuals.

That is part of the difficulty we have in Britain at the moment. I was very struck by a long article in the Financial Times yesterday looking at those who voted for Brexit three years ago and who still feel left behind now—why they voted as they did and why they still feel immensely discontented not just with Brussels but with London. The article said that they are as much against London as they are against Brussels. There is a sense of hopelessness, a fear that there are no decent-quality jobs, poor education, deeply inadequate skills training, obstacles getting to work and shrinking public services. As a result, as they see less government—I certainly see this in Bradford—and as local government and local services shrink, ordinary, poor people have less and less contact with it. It is there in London, not providing you with local services which you see—or even with police whom you see, as community services deteriorate.

If we are going to restore confidence in democracy and government, we must care about that as well as fundamental and essential regional regeneration, which is the core of this report and with which I strongly agree. I have spent much of my career teaching and researching European international politics. I am deeply conscious that those who designed the European Economic Community, Jean Monnet above all, believed that it would receive legitimacy by providing results and did not need a whole complex of democratic accountability and scrutiny. We all know where that got us. It provided results, but it did not achieve legitimacy. My worry about the strong mayor model, particularly without the scrutiny, is that we risk reaching that point of continuing alienation among much of the population, even though the effectiveness is there.

As a number of speakers have said, we face a deeply divided country, with deep regional inequalities and deep mistrust. The country has become increasingly centralised over the last 40 or 50 years. The noble Lord, Lord Lansley, talked about the problem of Whitehall attitudes. They are also Westminster attitudes. When my daughter was in the Department of Health, I remember being very struck when she said that most of her colleagues did not think it at all attractive to go up to York and visit the outstation of the department that was there. She was very happy to do so, because she could come to Saltaire at the same time.

I also remember an astonishing conversation on educational matters I had some weeks ago with a Minister. When I started in politics, the West Riding education authority was one of the best in the country. It did things that people in the rest of the country did not and experimented with new attitudes. Now I represent a music education charity of which I am a trustee. I went with the heads of our education programme. I found myself having an argument with the Minister about the detail of initial musical education in primary schools around the country. That is the extent of centralisation. It is also why the Department for Education is much bigger than it needed to be in the 1960s.

It is also, incidentally, why I am sceptical about the need for the restoration of regional offices of central government. If we have effective city government and regional government, we do not need central officials checking on them to ensure that they do the right thing and do not put the filter light in on the A6, or whatever it may be. I am not sure whether the UK Government need a large embassy in Edinburgh and Cardiff to keep watch on what they do. If we have effective city and regional government, they ought to be able to manage on their own. Whitehall officials can come up to visit them from time to time and learn how well they are doing.

The Heseltine model, which I on the whole approve of, is a regional revival through concentration on the cities as the hubs for regeneration. It is a far more substantial devolution than the Government have yet been willing to accept of infrastructure, skills education and training, land use, planning, industrial strategy et cetera, and partnership between political and private sector leadership.

I shall focus on some of the obstacles we face in reaching that excellent model. Let us recognise how much we have to change if we are to achieve that vision. First, there is finance, as several noble Lords have said. There is the depth of cuts in local finance and the shortage of resources. Local government in Bradford started with public sanitation in the early 1810s to 1820s. Last year, Bradford closed 42 of its 49 public toilets, so it is going out at the point where it started. It also involved the provision of clean water. That is of course privatised and mainly owned by Australian and Canadian pension funds. Yorkshire Water is now in trouble because it is releasing raw sewage into the wharf upstream from where people bathe.

We have lost our sense of control and some of our local private as well as public leadership. As I look around the Aire Valley, where I live, I am conscious that we have lost a lot of our small companies and that when new small companies develop—we had had two in Saltaire 15 years ago—they get taken over by multinationals. Salts Mill is now owned by an American multinational. That means that we do not have the local industrial or financial leadership that we need to help with the regeneration. The regional CBI and the regional Institute of Directors represent the regional branches of a large number of multinational firms. That is a problem.

It is also a real problem with banks and the financial sector. My father spent his career working for Barclays Bank dealing with funding for small companies and reporting to his local head office in a federal bank, as it was organised. Banks are now very much national and multinational and do not retain that link. We must rebuild a whole host of things that we have lost at the local or regional level. We are about to lose EU structural funds. Perhaps I could persuade the Minister to say a little about the shared prosperity fund, what he sees it doing and whether it will be entirely direct from Whitehall or whether the regions will have some say in how it is distributed. That is of real concern to the less prosperous regions of England. Perhaps we ought to begin to discuss whether financial equalisation across England is something that ought to be much more public and much more politically debated. When I look at Germany, I am struck by how Finanzausgleich is one of the things that is most bitterly argued between the different Länder—quite rightly, because the rich areas do not like transferring funds to the poorer, although it is one of the things that has to be done within a national community. Let us have that argument out in the open rather more. We have it on the Barnett formula; we do not have it for the English regions. As the noble Lord, Lord Horam, said, this is absolutely no time for tax cuts. What we need now is long-term investment.

I am not entirely sure that city regions are the answer and I am very struck that the noble Lord, Lord Lansley, the right reverend Prelate the Bishop of Newcastle and others have suggested that larger regions may in some ways be what we need. In Yorkshire we are stuck in our devolution with the Government because, as the Minister will know, the majority of local authorities prefer a one Yorkshire model. The Minister for the northern powerhouse is trying to make us accept a three-city region model and a sort of rural powerhouse—whatever that means; he could not explain it—for north Yorkshire. A one Yorkshire model is preferred because our city regions overlap, the city boundaries are very difficult to draw and that is what suits the people in the region. I hope to hear a little more from the Minister about whether there may possibly be a little movement at some point on that, although perhaps it will not be until we have a new Government.

The damage to confidence in democracy that has been done over the past two generations, inflicted by repeated reorganisation of local government and increasing Whitehall interference, is a real problem that we face in this country. We need a new settlement, one that can be agreed between the parties and between successive Governments. Devolution to city-led regions is key, but is not enough on its own to restore confidence in democracy and close the gap between people in the provinces and our governing elite. We desperately need action to narrow the gap between the prosperous metropolis and the regions and cities outside the south-east.