Draft Tees Valley Combined Authority (Election of Mayor) Order 2016

Lord Wharton of Yarm Excerpts

Tuesday 12th July 2016 General Committees

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

I beg to move,

That the Committee has considered the draft Tees Valley Combined Authority (Election of Mayor) Order 2016.

It is a pleasure to serve under your chairmanship for the first time, Mr Gapes. I welcome the new shadow Minister, the hon. Member for Easington, to his place. I often attempted to entice him to contribute to these debates when he was a Whip, but I look forward now to hearing the contribution he has to make. At the outset, I should declare my interest in every sense in the draft statutory instrument, which is an important piece of legislation for the area that I represent and for the Tees Valley as a whole.

The draft order was laid before this House on 13 June 2016. If approved, it will create the position of Mayor for the Tees Valley Combined Authority, with the first election to be held in May 2017. It will also set the first mayoral term for a duration of three years, with the next election in May 2020 and subsequent four-year terms. The Government committed in their manifesto to

“devolve far-reaching powers over economic development, transport and social care to large cities which choose to have elected mayors.”

To give effect to that commitment, Parliament passed the Cities and Local Government Devolution Act earlier this year.

The order is a milestone in the implementation of the devolution deal agreed between Government and local leaders on 23 October 2015. It follows the establishment of the Tees Valley Combined Authority on 1 April 2016. As Lord Heseltine’s independent report stated, the Tees Valley Mayor will provide one voice and one direction for the area, and that enhanced leadership will help to accelerate growth. The order establishes a Mayor and sets the dates of elections and subsequent term lengths. It is laid before Parliament following the statutory process specified in the Local Democracy, Economic Development and Construction Act 2009, as amended by the Cities and Local Government Devolution Act 2016. As required, all of the constituent councils have consented to the order being made, and we now seek Parliament’s approval before making the order.

The order is about delivering devolution and empowering local authorities to set their own policy agendas. It provides enhanced local leadership in the form of a directly elected Mayor with a strong democratic mandate. The Mayor will work closely with local leaders, who will sit on the combined authority board. Together they will drive forward the economic opportunities presented by devolution, with the Mayor acting as chairman of the combined authority and providing a single voice for the area that can be prominent nationally and help to drive the devolution agenda.

If the draft order is approved, it will open the way for full implementation of the devolution deal for the Tees Valley. It is therefore a significant milestone in the devolution journey, leading to greater prosperity, a more balanced economy and economic success. We are committed to that journey because there is a real opportunity for areas to assume powers and budgets, which will help places to achieve their potential and to take control of their growth and, importantly, have a positive impact on the lives of local citizens. The order will provide the Tees Valley with a strong voice and an effective leader who can deliver for the local area and help to rebalance the economy, including building and delivering on the northern powerhouse.

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[Grahame M. Morris]

I am grateful to my hon. Friend for her intervention. That is precisely the point I was trying to make in a rather laboured way, for which I apologise. That is key to whether the deal can go forward. The control of EU funding is an essential part of the devolution deal. We seek reassurances from the Minister to the Tees Valley Combined Authority that expected levels of funding, including those expected from the EU, will be maintained, not just in the short term—without second-guessing the Minister’s answer— of the next two years, but in the longer term. We seek assurances that there will be local control of these funds.

In the light of the Brexit vote, there are understandable concerns about the impact on inward investment. Can the Minister offer some comments about how the Government are going to address potential instability and uncertainty on inward investment? That is key to the Tees Valley—as the Minister well knows having a constituency there—given the importance of the chemical industry cluster and the associated manufacturing industry.

I commend the work of the five councils in the Tees Valley Combined Authority and their efforts in seeking to secure the best deal possible for their area and their communities, despite the constraints placed upon them by Government. The £15 million devolution deal—that is £15 million a year over 30 years—can never fully compensate for the devastating cuts to local government. The Tees Valley area has already seen cuts in excess of £240 million per year since 2010: a huge sum of money to lose from local authority budgets. I appreciate the concerns about the Government’s commitment to investment, not only in the light of the referendum, but in view of the gross disparities between infrastructure spending in the capital compared with the regions. I ask the Minister to say a few words about how we are going to address these huge regional disparities.

The commitment to devolving education and transport can ring hollow when considering recent announcements regarding academies and the Bus Services Bill. I know we are not dealing with that here, Mr Gapes, but it is relevant to the package of the powers the elected mayor and the combined authorities will exercise.

I recognise that we are at the start of the devolution process and when the deal is complete, it will only be the first stage. While I am in post, I will support—

[James Wharton]

Very good, Grahame.

[Grahame M. Morris]

Thank you. While I am in post, I commit to supporting local areas in securing the deals that they want, that best suit local circumstances and that will best help them to meet the challenges they face in supporting and sustaining their local communities.

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[James Wharton]

I will seek to address the questions raised by the shadow Secretary of State. I welcome the tone of his comments, although clearly there are areas of disagreement in terms of policy and the approach that the Government are taking. I have noted down the most salient points that I am to formally address. I will do my best to address them, but I am confident that he will intervene if there is anything that I have missed. The circumstances in which a Mayor might not be the best model—whether a Mayor is appropriate or not—seem to be the focus of much of his comments.

The Government have been quite clear. We have imposed a devolution deal on nobody. The Cities and Local Government Devolution Act 2016 gives the Government no power to impose a devolution deal on anyone. A deal is a two-way process where there are things that the Government want to see and tests and robustness that they want to be assured of, but where local areas are able to ask for the powers that they believe they can best use. That process of discussion takes place in each area, based on geographies determined by that area. This is an issue that I will revisit when speaking on the points made by the hon. Member for Darlington, but it is a bottom-up and bespoke process.

[Grahame M. Morris]

I have heard the Minister’s comments in response to the first question. I am not suggesting that he has been disingenuous but is not the truth of the matter that, in these discussions, which he has referred to as a bottom-up process, not a top-down process, there has in essence been a precondition that unless the combined authority accepts an elected Mayor it will not go any further? I am aware of discussions and reports of discussions with other combined authorities. We should be clear that it is the Government’s intention—by whatever method—to ensure that there are elected Mayors leading these combined authorities. If that is not the case, perhaps he might make it clear that combined authorities are at liberty to come up with another model and will still be able to have devolved powers, as set out in the order.

[James Wharton]

The Government will of course consider any proposal that comes forward from a combined authority, but we have been clear throughout this process that, where areas want a significant package of powers, there is an expectation that that comes with the clear and sharp democratic accountability of an elected Mayor. I will not try to use words to avoid the reality of this—I have been very clear about it. We cannot force any area to accept a deal, and we cannot force any area to accept a Mayor. The Government’s position is that, where areas want significant deals, we expect a Mayor to be part of that package. It may be an issue on which there is disagreement across the Floor of the House, but it is one on which we have been clear throughout this discussion and debate.

The shadow Secretary of State also raised the issue of Brexit, but specifically with reference to European funding. He referred to control over European funding being part of this devolution deal. It has been agreed that intermediate body status will be delivered. That issue was also raised by the hon. Member for Redcar. I give what assurances I can, in that at least for the time being we remain a member of the European Union, so nothing will change until exit is agreed. We of course must see how the process evolves and unfolds.

The truth is that we are a significant net contributor to the European Union and so, on exit, will have the opportunity, taking control of money that Europe currently decides how to spend, to spend it in accordance with the interests of this country and, indeed, under the direction of its people and Government. My intention will be to advocate very strongly indeed the continuation and, indeed, improvement of funding to the regions from within Government, but nothing is going to change in the near future. I encourage local areas to continue to pursue economic growth and to make a positive case for the projects for which they want support. Indeed, I support the Tees Valley in doing that, and in continuing to deliver the letter and the spirit of the deal agreed between its local authority leaders and central Government.

There has been a welcome rise in inward investment across the north of England in the past two years. It is up significantly, and we want to continue to encourage the process. I have no doubt that stability is something that drives decision making, and that those who choose to invest look for it. That is why I welcome the decisions that have been taken in my party to offer the country stability in recent days. I hope that for Her Majesty’s Opposition that process will also be brought swiftly to whatever its conclusion will be.

The Shadow Secretary of State also said—rightly; this is an issue on which we agree—that the process is at its start. Agreeing the devolution deal is not the sum total of what will be done. The Government’s ambition, which I hope is shared by local areas, is for devolution to continue; they want additional powers to be devolved and the areas in question to identify additional opportunities, which, in discussion with the Government, can be delivered into local hands to drive economic growth.

[Anna Turley]

I appreciate the Minister’s point about the process being an ongoing one, but is not there something odd about the fact that the Committee is here to agree a statutory instrument about a Mayor when we do not really know what powers there will be? There will be a further statutory instrument in the autumn. I know there is a consultation document, but it seems we are putting the cart before the horse in agreeing to a Mayor before we even discuss their powers.

[James Wharton]

I do not agree. There is a deal document that is very clear about the powers that the Mayor will have. I am saying that there will be an opportunity for the local area and leaders to ask for further rounds of powers, if they want to. The measure is about establishing the framework through which they can be delivered, and about a process that is taking place—and has taken place—in all the areas that have agreed to such deals. This week, as I have done in previous weeks, I will be dealing with other statutory instruments of this type. If we do not put the mechanism in place, there will be nothing to which to devolve further powers. We know what is in the deal now. We know that there is ambition to go further, and I welcome those discussions. We know the agreed mechanism by which that can be done. That is entirely the right approach.

The hon. Member for Darlington asked about the Tees Valley and she is right; I would tend to use the term “Teesside”. But of course that does not include Darlington, as I know she is aware, and we are talking about a devolution area which was proposed by local authority leaders, not Government, and which does include Darlington. Therefore, the label that applies is Tees Valley, whether people like it or not. However, I want to make it clear to her that I maintain the view that the local airport should be named Teesside airport rather than Durham Tees Valley. It is a campaign with which I had rather limited success; however, I should welcome her support for that if she were minded to offer it.

The hon. Lady also asked about the Mayor’s salary and the mechanism for it. The Mayor’s remuneration would be a matter to be devolved locally. The local combined authority would take advice, of course, from the independent body on those matters, as happens for councillors’ allowances, but that would be for local determination. It will, I have no doubt—although I do not want to prejudge what it might be—be significantly less than the £15 million a year that will be brought to the area as a result of the deal, and if it were not I would join her in protesting about the proposed level of remuneration. I think it is unlikely to be of such a scale, or anywhere near it.

The hon. Lady also raised concerns about a single voice for different areas, and I do not think there is great disagreement between us on that, at least as far as recognising that many different communities and identities are contained in the area described as the Tees Valley. What we are doing is not about overriding or diluting those identities; it is about recognising that there are some things that are better done at a broader level, looking at the local economy and economic factors as a whole. The Tees Valley is a sensible economic area and was determined by local authority leaders. When the Government examined it, it stacked up and made sense, and met the criteria that we would expect, to be suitable for devolution. That in no way undermines or replaces pre-existing local identities, whether towns, villages, boroughs or other levels in the communities that make up the area.

What we are considering is an important step for the Tees Valley. It is a significant opportunity to transfer powers to local people to determine their economic future. I welcome it. We have had a helpful and broad-ranging discussion about the order’s implications and I hope that the Committee will support it.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Tees Valley Combined Authority (Election of Mayor) Order 2016.