City Deal Funding (Aberdeen)

Lord Wharton of Yarm Excerpts

Tuesday 30th June 2015 Commons Chamber

[The Parliamentary Under-Secretary of State for Communities and Local Government (James Wharton)]

I congratulate the hon. Members for Aberdeen North (Kirsty Blackman) and for Aberdeen South (Callum McCaig) on their speeches. I noted the tone of their contributions with great interest. The hon. Member for Aberdeen North said that she sometimes felt that her area had been forgotten by Westminster, and I understand what she means. As a Teesside Member of Parliament, I sometimes felt the same in years gone by, although, thankfully, not under the present Administration.

I am aware of Aberdeen’s valuable role. Durham Tees Valley airport, half of which is in my constituency, has been partly sustained by regular flights to Aberdeen because of the economic links between the hon. Lady’s constituency, that of her hon. Friend the Member for Aberdeen South, and my own. The hon. Lady has sent a message to someone who is receptive to it, if I may put it that way, and I commend her for the tone in which she has done so.

I have always found that, while there are matters on which we disagree across the House—no doubt more will surface as time progresses—there are also areas of commonality. It is in all our interests to enable every part of our economy to achieve its potential. My experience may be limited in comparison with the experience of others—I look at the right hon. Member for Gordon (Alex Salmond) as I make that comment—but so far I have found that a positive approach which, while recognising the challenges faced by our constituencies, trumpets the opportunities that they present, the great things that they do, and the fact that they are wonderful places that we are fortunate to represent in the House, produces the best reaction from those whom we want to persuade that our own particular constituencies deserve investment and support.

The Government’s economic ambition is to create a fairer and more balanced economy by supporting policies that enable it to grow. We recognise the challenges and opportunities that exist within local economies right across the United Kingdom, and we have been clear that a one-size-fits-all solution from Whitehall will not work: every part of our economy needs to fulfil its potential. That is why we are devolving powers to cities, towns and counties, and allowing local people to take control of the economic levers in their areas. That work started in the previous Parliament, in no small part with the city deals.

The Government recognised that, to improve the performance of our cities, new solutions were needed. Through bespoke city deals, we have seen the right of initiation pass from Whitehall to town hall. It is a fundamental shift in the way in which Whitehall works. City deals were originally negotiated back in 2012 with the eight core cities in England, and that has been followed by a further wave of city deals across the UK.

In August 2014, the Government, alongside the Scottish Government and the Glasgow and Clyde valley local authorities, extended that model up to Glasgow and the Clyde valley. That deal is one of the largest ever agreed, and local partners anticipate that it will create 29,000 jobs and lever in more than £3 billion of private sector investment. That is an example of what can be achieved when all levels of Government, business, universities and the voluntary and community sectors work together to promote economic growth.

City deals are an important part of the Government’s approach to improving economic growth locally, but we should also remember that they are only one part of the entire package. The Scotland Bill, which is being discussed at some length in this place, will make the Scottish Parliament one of the most powerful devolved Parliaments in the world. It will increase the financial accountability of the Scottish Parliament through devolution of the rates and bands of income tax, air passenger duty and the assignment of VAT revenues; increase responsibility for welfare policy and delivery in Scotland; increase the scope for scrutiny by the Scottish Government of a whole range of public bodies; and give significant new responsibility for areas such as roads, speed limits, onshore oil and gas extraction and consumer advocacy and advice. The Bill honours the commitment made to Scottish people before the independence referendum to transfer significant new powers to the Scottish Parliament.

[Alex Salmond]

The Minister has said that under the proposals the Scottish Parliament will be one of the most powerful devolved Parliaments in the world, but the Command Paper said that it would be almost as powerful, in financial terms, as a Swiss canton. Would it be possible to aspire to be more powerful than a Swiss canton in financial terms?

[James Wharton]

I have no doubt that the right hon. Gentleman has grand aspirations and that it is possible for him to hold them, but my contention is that what this Government are delivering is very significant indeed and meets the obligations and promises that were made in the referendum campaign.

I have provided the context, but what about the city deals themselves and where we are going? City deals are very important because our cities can be drivers for growth. UK cities account for 74% of our population and 78% of all jobs, and it is in the interests of everyone in the UK that cities are able to achieve their potential. Economic growth itself does not just happen—it happens in specific places.

Ensuring that our cities are globally successful is not going to be easy, but I believe that it can be done through active collaboration between Whitehall, the Scottish Government and local authorities that recognise its value.

[Stewart McDonald]

Last Friday I had a meeting with the Glasgow chamber of commerce. Investment that we would have thought would come to Glasgow is already being picked off by cities such as Manchester, following the promise to deliver more powers to them. That is a great concern to me as a Glasgow MP and to other colleagues. The chamber of commerce believes that we could meet that challenge if we got a solid commitment that High Speed 2 will come to Scotland and perhaps even start there. Will the Minister at least endeavour to look at that in more detail? I appreciate—

--- Later in debate ---

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Perhaps I can help, because I am frightened that we are going away from Aberdeen. Of course, I am very interested in Manchester myself, but this debate is not about High Speed 2 to Glasgow. I can see the connectivity, but we need to keep the Minister on subject of the debate, which is funding for Aberdeen.

[James Wharton]

Thank you, Mr Deputy Speaker. The hon. Gentleman’s comments have been heard loud and clear. They will be recorded as part of the debate and no doubt properly taken into account. I appreciate that he intends to be a consistent advocate on this matter, and I suspect that this is an issue that we will discuss again.

I very much agree with the hon. Members for Aberdeen North and for Aberdeen South on the important role that Aberdeen plays in supporting the UK economy. We are determined to make the most of that, which is why the Chancellor announced in the Budget in March that we would begin negotiations with both Aberdeen and Aberdeenshire on a potential city deal. Those conversations are ongoing and my officials are continuing to have a constructive dialogue on the potential deal with officials from the two local authorities and with the Scottish Government. As I have set out, a key feature of any potential city deal is that it should be bottom up. This is about places putting forward proposals that will drive their economy forward and about recognising that different places need different things.

[Kirsty Blackman]

Does the Minister agree that this is a really good opportunity for joint working, and does he have any more information on the timeline for any agreements and for when the negotiations will reach a conclusion?

[James Wharton]

The hon. Lady’s intervention brings me neatly to my next point, in which I want to spell out clearly that each agreement must be a genuine deal, with offers and asks on both sides, and that the onus remains on Aberdeen and its partners to develop a credible proposal. This is something that we want to see delivered, but there is a process that needs to be gone through in order to deliver it, to ensure that any deal is robust, that it offers value for money for taxpayers and local people and that it delivers what it is supposed to for the people and the economy of Aberdeen. I am happy to confirm that my colleague, the Under-Secretary of State for Scotland, will be happy to meet the hon. Lady and her colleague to discuss this matter further, and I look forward to my officials working with those on the ground who want to deliver this city deal, so that we can all benefit from its ultimate success.

Question put and agreed to.