Robert Neill
Main Page: Robert Neill (Conservative - Bromley and Chislehurst)Devolution in England
Robert Neill Excerpts
Mr Speaker
Order. We are not having an identity parade, but I think the hon. Gentleman has the right hon. Member for Wokingham (Mr Redwood) in mind.
Mr Betts
There are two aspects to that intervention. The first is that we did not look at income tax, although we said at the end of the report that, in terms of fiscal devolution, there is a case for considering income tax and VAT further. That is an issue for the future, but we recognise that it has to be addressed. The second issue probably strays into the area of English votes on English laws, which the Committee did not go into, but there is a case for devolution within England to more local areas irrespective of how Parliament addresses the other issue.
Robert Neill
The hon. Gentleman is making an important and powerful point. He is right to say that although accountability is critical, we should not get too hung up on issues of party political control. When, as the Minister, I signed off the Greater Manchester combined authority, it struck me that both Conservative-controlled Trafford and Liberal Democrat-led Stockport were able to live within the system that was set up. It is important to get the structure of devolution in place before we worry about other matters.
Mr Betts
The hon. Gentleman is absolutely right. Indeed, the Committee visited Manchester as part of the inquiry, and it found exactly the arrangements that he has described.
We also went to look at the arrangements in Lyon in France. Interestingly, it has attempted, with the development of the grande métropole, to pull authorities together into almost a combined authority arrangement. It currently has an indirectly elected mayor and it will eventually move to a directly elected mayor, so it will have two different governance arrangements in the same area within a short period. There are therefore clearly alternatives.
The report was agreed unanimously—it is a cross-party report—and it was very much written with the next Parliament in mind. The Government made a response, as they should to a Select Committee report. I would say to the Minister that responses are supposed to be made within eight weeks, not eight months. The response was rather a long time in coming, as though the Government could not quite get their collective view together about what should be done.
It was very good to hear the comment that the
“Government welcomes this report’s contribution to the ongoing public debate on the scope for devolution and decentralisation within England.”
That is welcome, at least as a contribution to the debate, but there were not many welcomes in the Government response to the Select Committee’s specific recommendations. I have obviously also read the briefing from those on the Opposition Front Bench. I would say to both Government and Opposition Front Benchers that they do not seem fully to have bought in to the level of change that the Select Committee has recommended and which I think we need. I am sure we will have an ongoing debate with them both over a period of time.
The report was written before the Scottish referendum, but it anticipated that more taxation and spending powers would be given to Scotland and Wales. Very simply, I think that what is right for Scotland and Wales is right for England, and we followed that very simple rule. The report was also written after the London Finance Commission report, which was supported by the Mayor and the London boroughs, as well as the eight Core Cities. All those bodies and the Local Government Association have welcomed our report. Indeed, the Mayor said that Ministers “could not ignore” the “excellent” findings, as it would
“provide England’s cities with the means, incentives and crucially the stability of funding to deliver much needed jobs, growth and infrastructure”.
The Mayor of London is clearly with us, and he is pushing Ministers a little bit further than they are currently inclined to go.
We have had subsequent reports from the Institute for Public Policy Research, ResPublica, the City Growth Commission, and we now have the Independent Commission on Local Government Finance from the Local Government Association and the Chartered Institute of Public Finance and Accountancy. All have come to a similar direction of travel on devolution, perhaps with slight differences concerning how it should be done. We came to the conclusion that in England we should not be creating new bodies or regions, for example, and that we should base devolution on local authorities and combinations of local authorities—the Government have at least welcomed that fundamental recommendation.
Why not local authorities? Greater Manchester has a larger gross value added than Wales, and London has a larger GVA than Scotland, Wales and Northern Ireland put together. Those are large economic entities, and there is no problem about devolving powers to them. We came to the conclusion that devolution was beneficial for growth, a way of delivering better public services that are better related to local need, and a possible way of re-energising the democratic process. People feel that we in Westminster are somewhat out of touch with what happens in their daily lives, and there is more chance of reconnecting politicians and the democratic process with people if decisions are taken at a more local level.
Mr Betts
It is possible for a Secretary of State to have reserve powers to intervene in extremis, as indeed the Secretary of State has powers to do now. [Interruption.] I hear a little whisper from my hon. Friend the Member for Nottingham North (Mr Allen) about what happens when the central Government behave in a completely irresponsible way—who can deal with them? At the local level, the local electorate can take a view.
Robert Neill
It might be worth bearing in mind the fact—for the benefit of my hon. Friend the Member for Beckenham (Bob Stewart)—that even with significantly greater devolution, the local authority would still have to behave within the principles of public law, acting in Wednesbury reasonableness terms, and be subject to judicial review if it behaved wholly irrationally.
Mr Betts
I am sure lawyers will not be out of business any time soon on this matter The hon. Gentleman is absolutely right. In our recommendations on extra borrowing powers as part of a devolution package—including the housing revenue account and using tax increment financing more actively as local authorities have complete control over business rates—we make it clear that all the borrowing has to be done within the prudential borrowing rules. That is absolutely clear.
There is one other major issue: the control total for total managed expenditure that central Government use. The Government have already had to accept that if the Scottish Parliament decides to raise more money and spend it, that has to come outside the total. If Scotland can vary it, there cannot be a total managed expenditure that is absolutely fixed, because it cannot be cut elsewhere to compensate for Scotland’s increase. The principle has been accepted, and the Treasury has to relax more about allowing local authorities to raise money for investment purposes at local level outside the controlled total.
Finally, let us return to what the Prime Minister said about devolution in Wales:
“That means those who spend taxpayers’ money must be more responsible for raising it.”
That is a fundamental point. It is why fiscal devolution, as well as spending devolution, is essential. As the Select Committee said:
“The point has been reached for the Government (and policy makers in other political parties) to make it clear whether they are committed in principle to large-scale and more comprehensive fiscal devolution in England.”
We as a Select Committee are, and we believe that all those on the Front Benches should be, too.
Robert Neill (Bromley and Chislehurst) (Con)
It is a pleasure to follow the hon. Member for Blackley and Broughton (Graham Stringer). I agree with his analysis of the right approach to Greater Manchester, but I will come back to that in a moment.
First, let me address the broad thrust of the report, with which I very much agree. It is an excellent report, the Chair of the Select Committee made an excellent speech on it, and I struggled to disagree with anything in it. I hope that all parties will take the report on board.
We have a real opportunity to create a cross-party consensus on this matter. All too often in this House, devolution is spoken of in terms of legislative devolution —of votes for laws and structures. That is critically important, but without significant fiscal devolution, it is effectively meaningless. If we can get around that point, we would have a sensible basis on which to build. We need to recognise that this Government have done a lot already. I congratulate the Secretary of State and his team—I might be seen as being a little biased here—on having reversed what was nearly a 50-year trend of centralism.
The hon. Gentleman made the point that, when he was elected, there was much more control, and that is true. I was first elected to a London borough in 1974—I would like to think that I lied about my age, but I did not. By that stage, power was already being removed, and that had been a process throughout the post-war period. Therefore credit must go to this Government for having reversed that trend so significantly. I am talking here about the power of general competence, removing capping and replacing it with the consultation of residents via a referendum, which is an important step forward, and breaking down ring-fencing. Those are important and significant changes. I particularly welcome the further steps that were taken around devolution to Greater Manchester. I am a little disappointed that one or two Members were carping about the approach.
I am a firm believer in the idea that, from the point of view of local government, the first thing to do is to get the power devolved. For heaven’s sake, do not worry about the detail until the power is devolved. It is the tendency to allow the best to be the enemy of the good that has bedevilled local government in its relations with central Government over the years. It has been all too easy for the civil servant or the Minister, with every respect, to be told, “The local authorities cannot agree among themselves, so it is better that we keep the power centrally.” The same is said to Members of this House. However, if the principle of devolution and the transfer of power and finances is agreed, local authority leaders have the ability, with good will and common sense, to sort out the exact arrangements for themselves. In that respect, the leaders of all parties in Greater Manchester have been markedly more pragmatic than those in this House sometimes show themselves to be through the arguments that they deploy.
Lisa Nandy
Does the hon. Gentleman agree with me, as somebody who is a Member of Parliament in Greater Manchester, that the public might also be involved in the conversation between local authority leaders and the Government that he has talked about?
Robert Neill
Local authority leaders are elected via their local authorities. We can talk about the time frame for having a directly elected mayor, but I am afraid that we are again allowing process to get in the way of the principle of fiscal devolution, which is the most important thing. When one looks at local authority systems in other countries where there is significantly more financial devolution, of which France is a very good example, the public participation at elections is significantly higher because people realise that their vote makes a difference. That is the main objective that we should be aiming for.
As a Greater London Member of Parliament, I also welcome the devolution package that was announced by the Chancellor and the Mayor of London. It does not go quite as far as the Greater Manchester package, but it is extremely valuable. It is worth noting that it was a Conservative Mayor and the Labour-led London Councils that agreed, in a pragmatic fashion, on a set of 10 principles for how London local authorities would use the extra devolved powers and the even greater devolved fiscal power that was recommended in the London Finance Commission report, which I hope will be adopted by the next Government—I hope of my complexion—in the next Parliament. Again, the hugely important point to make is that when local government is pragmatic, it delivers better.
The Prime Minister gave me hope in his speech in June. The Financial Times reported him as saying that
“devolving power and money from Whitehall to the cities…is the future. The debate now is about how far and fast it can go.”
I hope that in the next Parliament, we will see a significant increase in the amount of public spending that is devolved. We have made a valuable step, because some 70% of council income is now raised locally. That is a big improvement on where we were. However, council income is not the same as total spend.
That is why the pooling arrangements between health and adult social care in Greater Manchester are an important step forward. Anyone who has served on a top-tier authority, whether it is a county, a unitary, a London borough or a metropolitan district, will know that adult social care is one of the principal cost pressures. The ability to align it more closely with the health service makes obvious sense financially and in terms of better and more effective service delivery. As has been observed, local authorities are often better placed to nuance the delivery arrangements to reflect the needs of the population.
The Chairman of the Communities and Local Government Committee made a perfectly fair point about where we should go from here. I think that we should start to look at the further devolution of property taxes. That is the most obvious thing to do. We have made a start with the local retention of the increase in the business rate. He was kind enough to make observations about the methodology that was put in place. He was perfectly right that we always envisaged the methodology as being capable of improvement and refinement. It would be easy to increase the locally retained share. I welcome the fact that the Secretary of State talked at the Local Government Association conference last year about raising it to the high 80s or 90s. The Prime Minister has spoken in similar terms. Personally, I hope that we will move to make all the additional business rate retained in the next Parliament. We should aim, within not too short a period, to re-localise the whole of the business rate.
Mark Pawsey
My hon. Friend is making a strong case for increased devolution, which is exactly what we heard on the Select Committee. He has been a Minister in the Department, so what does he think are the obstacles within the institutions of government that prevent that devolution from taking place? Why has it not happened before now?
Robert Neill
There are two things. One is a practical matter that we must address seriously, which is the need for equalisation arrangements. As the Chairman of the Select Committee fairly said, we have a model already in place that could be adjusted to deal with that. I therefore do not think that we should allow the need for a measure of equalisation to fall in the way of further devolution. The question of risk of local authority failure is sometimes raised, but I think that it is overstated, first because of the public law constraints that are already there and, secondly, because in truth if we believe in devolution we must accept that sometimes, very occasionally, a local authority will fail. That is what democracy is about. Allowing failure as a result of a democratically elected body’s decision, provided there are sensible reserve powers that can be put in place, as the Chairman of the Select Committee properly and sensibly set out, is a sensible way forward. We could easily deal with that.
The final problem is the institutional inertia of a system in which so much has come to this place over the years that initiative at a local level is often stifled. The most talented in politics and business see London and Westminster as the centre of operations rather than driving forward their careers at a local level. In France, it would be perfectly natural for the mayor to be a significant political player. The combined authorities in France referred to by the Chairman of the Select Committee work exceptionally well and have done for some 30 years. They have delivered on social care and on major infrastructure improvements. That is a sensible and pragmatic way forward that can be tweaked to reflect areas and on that basis there is no reason why we cannot also consider similar but not exactly identical arrangements for the shire counties. My hon. Friend the Member for Folkestone and Hythe (Damian Collins) is absolutely right that they are capable of significant devolution too.
This is a most important debate. I am glad that we have had some thoughtful and constructive speeches and it is a good report. This is a piece of work that we must continue in the new Parliament, as we cannot continue with the current set-up. The Government are entitled to congratulations for what has been done so far, and I hope that it is work on which we can build.