Budget Resolutions and Economic Situation

Robert Neill Excerpts

Monday 13th July 2015 Commons Chamber

[Emma Reynolds]

I say to those on the Government Benches that they are simply out of touch with the lives of working people up and down this country. Of course we want an economy in which people are highly paid and highly skilled, but the course towards such an economy has to be charted before the support is cut off.

Let us deal with the crucial issue of devolution. We urgently need to rebalance our economy to drive growth and prosperity in all parts of the country. We are one of the most centralised countries in Europe. London dominates our economy, and its growth surpasses that in all of our major cities, which is not the case in either Germany or France where other cities beyond Berlin and Paris are true engines of economic growth. I agree with what the Chancellor said last week—that we will not achieve a better settlement by pulling London down. We should be proud of the dynamism and success of our capital city—and long may it continue. We must, however, reverse the long tradition of British politicians of all parties and of civil servants who have hoarded power in Whitehall and failed to trust local government.

There is a huge political and economic imperative to devolve power as close as possible to local communities. As ever, the Chancellor’s Budget speech on devolution was heavy on rhetoric, but rather light on substance. This Government boast about bringing about a “northern powerhouse”, but their rhetoric rings hollow, given that no part of the country has faced bigger cuts to local authority budgets over the last five years than those in the north of England. Indeed, the shelving of the electrification of the Manchester to Leeds trans-Pennine railway means that the Government’s plans are closer to a power cut than a powerhouse. We need a settlement for every part of the north, but as one of my hon. Friends pointed out to the Secretary of State earlier, there was barely a mention of the north-east in the hour-long Budget statement or in the 123 pages of the Red Book.

Ahead of the Budget, we know that there were briefings about which deals would be announced, and we know that the Secretary of State did what some might call a frenetic round of local government speed-dating during the Local Government Association conference two weeks ago. We welcome, for instance, the extra powers that the Government are planning to devolve to Greater Manchester. We also welcome the progress that three combined authorities—Sheffield city region, Liverpool city region and Leeds, West Yorkshire and partner authorities—are making towards a devolution deal, and the progress that Cornwall is making. As a Wolverhampton MP, I particularly congratulate the leaders of the local authorities that are working so hard to create the West Midlands combined authority. We are proud of the fact that Labour leaders in local government are making the weather on devolution.

While we welcome that progress, we also believe that the Government should not impose a one-size-fits-all approach to devolution, and should stop putting obstacles in the way. In his first major speech after the election, the Chancellor said that he would not impose the mayoral model on anyone, but in the very same breath he said that he would not settle for anything less. Why are the Government running scared of letting local people decide, and when will they clarify exactly what different areas and combined authorities can expect to achieve from devolution if they do not opt for a mayor?

[Robert Neill (Bromley and Chislehurst) (Con)]

I know that the hon. Lady has a good memory. Does she recall regional spatial strategies? What were they but an imposed one-size-fits-all policy from above? Has she forgotten that so quickly?

[Emma Reynolds]

It seems from the details of the Government’s productivity plan, which were published on Friday, that the hon. Gentleman’s party is introducing a nationalised spatial strategy.

Our amendment to the Cities and Local Government Devolution Bill, which is being debated in the other place today, would ensure that areas that did not want a mayor would not get a second-class deal. A Labour amendment that was passed in the other place earlier this afternoon proposes the introduction of a “devolution by default” test for every new Bill that the Government introduce to Parliament. If the Government did not push down as much power as possible to local level, they would have to give and justify their reasons. I hope that they will agree to retain that new provision, because it will be a test of their commitment to devolution.

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[Robert Neill (Bromley and Chislehurst) (Con)]

I normally regard my right hon. Friend the Secretary of State as one of the most generous-hearted men in politics. When I listened to the opening of his speech, I thought he was being a bit harsh on the Opposition, but having heard their reaction, I think he was, if anything, over-generous. When one of the more thoughtful Members of the shadow Cabinet is reduced to tripping out every stereotypical canard in the socialist book and attempts to take refuge in the same view that was adopted by the last Bourbon King of France, Charles X, who was wholly and genuinely convinced that the French revolution was a terrible aberration, and that people would wake up one day and realise that they had got it wrong and that the divine right of kings was the only answer, I realised the difficulty that any Blairite on the Labour Front Bench faces. If it is any help for the historians here, Charles X lasted three and a half years before he was got rid of. I shall be interested to see how long the next leader of the Labour party lasts.

I also felt genuinely sorry for the current leader of the Labour party. After trying to inject a modicum of realism in relation to benefits and welfare reform, she was entirely disavowed by her own party. It is rather sad when the official Opposition of this country take as their role model the ostrich. They expose their thinking parts to us and bury the realities in the sand, and the country deserves better.

[Kwasi Kwarteng (Spelthorne) (Con)]

Has my hon. Friend heard anything today about the Opposition’s current view on the welfare cap? Has he learned anything interesting about what their actual position is?

[Robert Neill]

Not at all. As there are probably something in the order of 230-plus different views, we could not cover them all in time. It is also rather remarkable that the Opposition have adopted an entirely different stance to elected mayors from that which I remember when I was the leader of the Conservative group on the London Assembly and facing the first ever elected mayor in this country—the first Mayor of London. I am glad to say that things have improved since then. As some may remember, the office of Mayor of London came into being as a result of legislation introduced by the Labour party. It comes back to the same trope. Why does the Labour party now regard any elected mayor as anathema? Because it was an idea of Tony Blair’s, and must therefore be cast into utter darkness.

I find it truly bizarre that a normally thoughtful party that wants to talk about devolution objects to the opportunity to take up city deal models with an elected mayor. The idea has not been forced upon Labour; it is Labour’s choice whether to have it or not. It was Labour that imposed more central control over local government, not just in planning, not just in terms of whether there could be a committee structure or not, not just in terms of whether a very strict and rigid standards regime was imposed, not just in terms of the comprehensive area assessment, not just in terms of planning policy, and not just in terms of financial policy and the cap. After all that, Labour had the gall to complain about an offer—take it or leave it—put forward by my right hon. Friend.

[Emma Reynolds]

I always enjoy debating with the hon. Gentleman. To clarify, we are not anti-mayor. We believe that local areas and local communities should have a say over whether they have a mayor or not. We are in favour of true localism, not imposing structures on people.

[Robert Neill]

That is useful and I regard it as a step forward. I hope the hon. Lady is able to remain in place after the leadership election. Let me explain why. With all respect to her, being on the campaign team of a Blairite in the Labour leadership election probably makes the prospects of the ostrich pretty good in terms of species survival, so I wish her well for the future.

The Labour party has ducked the real issue, which is that my right hon. Friend the Secretary of State and the Chancellor of the Exchequer have offered genuine devolution of power to local authorities. The issue is not so much about the badge on the top of the tin, although there is a good reason for a single focal point in city areas. It is hugely important to remember that we have offered that to Cornwall too, and we are starting to see the good work of city deals rolled out to the shire counties. That should be applauded. The ability to join up adult social care, one of the principal cost pressures on top tier authorities, with the health service should be applauded by everybody in the House, not greeted with the rather curmudgeonly response that has come from Opposition Members.

[Jonathan Ashworth]

The hon. Gentleman has moved on, but may I extend an invitation to him to come to Leicester where we have an elected mayor? The opponents of that are members of the Leicester Conservative association.

[Robert Neill]

I believe there is a Blairite in Leicester. It might be too difficult for me to go up there.

It is sad that the key issues are being missed. We ought to be prepared to work across the House on opportunities to improve the offer available to local government. Whether Opposition Members like it or not, a good deal of work was done under the coalition Government and more is being done now to hand power down to local communities. That is a good thing in itself. It must be right to give significant economic drivers—London and the other major cities—the power to raise revenue and invest it more for themselves. Could we go further? I think we should, but we should recognise this as a very important first start.

[Bill Wiggin (North Herefordshire) (Con)]

Will my hon. Friend give way?

[Robert Neill]

I must be careful with the number of interventions I take, as other Members want to get in, but I shall give way to my hon. Friend.

[Bill Wiggin]

I am grateful to my hon. Friend. He referred to some excellent legislation introduced by the previous Government. There is no finer bit than the Localism Act 2011, but in Herefordshire we are seeing brakes put on the powers of local people by the local authority. Does he find that happening elsewhere?

[Robert Neill]

Sadly, it does happen. One of the disappointments I have had is, I am sorry to say, that local authorities have been slower than I would wish in putting in place up-to-date local plans. There is a good deal more movement on that than previously, and I hope that the political certainty we have since the general election will encourage local authorities to move forward on that. I hope we can do more to encourage the uptake of neighbourhood plans, which my right hon. Friend pioneered and which offer a chance to give granularity to local communities’ involvement.

We should look again at the sort of fiscal incentives we can offer local authorities to support growth. The new homes bonus is important, as is the ability of cities like Manchester to retain 100% of the uplift in business rates. Personally, I think we should aim by the end of this Parliament to make that the norm across the country, rather than the exception. Those are the things that we ought to be talking about, rather than re-running history.

We need to offer other incentives in the housing field. A great deal more needs to be done. There is an issue with skills in the construction sector. When I talk to people in the sector, they tell me that as well as the planning side, which we can tackle, we need the skilled trades—the carpenters and the bricklayers, the supply systems. The Government are tackling that through their apprenticeship schemes, and we need to push that forward with great rigour. We need to ensure that the planning system deals not only with housing issues, but with the need to supply aggregates and other materials that are critical to the building trade. I hope we all recognise that we should be ruthless in prioritising building on publicly owned land. Today we had—I congratulate my hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) on this—the first meeting of the London Land Commission, which is bringing forward something that has been mooted for a very long time.

I shall say one more thing about London. Devolution to other cities is welcome, but I hope that the Government do not think that means London has had enough devolution. I say that not only as a London MP but as joint chair, alongside the hon. Member for Croydon North (Mr Reed), of the all-party group on London. The truth is that London, as a major powerhouse, can and should have further fiscal devolution. I commend to hon. Members a thoughtful piece in today’s Financial Times by Professor Vernon Bogdanor, in which he writes that it is important that our major cities and powerhouses have devolved powers. I am very happy for them to have elected mayors, but the developer will ask not only “Have you got a mayor?” but “Can you give me a tax incentive? What breaks can you give to make it attractive?” I hope that we can build on that, too.

The Budget presents great opportunities for local government. Let me end by pressing one final reform upon my right hon. Friend the Secretary of State. We have done a great deal to boost the structural arrangements and we have started on the right track in relation to fiscal devolution. I hope that we can do more to encourage the supply of housing through the various initiatives I have suggested. The final thing we need to do is deliver infrastructure planning more effectively. One thing we could do is have a serious reform of compulsory purchase legislation, which is overdue, and which I have talked about before. It will be the work of a Parliament, but it is worth starting now. I think we could achieve cross-party consensus on that, because delivering the underpinning roads, rail and other infrastructure will speed the sustainable delivery of housing, which is critical.

My constituency was once represented by Harold Macmillan. I can tell hon. Members that he would have been very proud of my right hon. Friend the Secretary of State and of this Budget.

[Several hon. Members]

rose—

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[Alison Thewliss]

I have made it abundantly clear that it is not a living wage; it is a rebadging of the national minimum wage, and it is not good enough. [Interruption.] Would Government Members give me a break?

Long tenancies give a degree of certainty and reduce costs to housing providers, who know that a tenant is there for the long term and do not constantly have to manage the turnover of stock. That is costly for housing associations and local councils to manage, so knowing that a tenant will stay reduces their costs. The Government should think very carefully about this policy’s impact on well-established and strong communities.

This Government seem to be making a further attack on the social rented sector and its tenants, following the distress caused by the bedroom tax. The Joseph Rowntree Foundation has found that only 6% of affected tenants were actually able to move, and that 50% of those who did not move fell into arrears. I am glad that the Scottish Government were able to mitigate that, but it is another example of a policy built to deal with a London problem that did not exist in Scotland, and which simply punishes people for their circumstances. The Scottish Government should not exist simply to mitigate the policies of another Government. That is unfair and unsustainable.

The Government are also in real danger of undermining their own work on city deals. One of the intended outcomes of the Glasgow and Clyde Valley city deal is to help long-term unemployed people back to work, and if the actions of this Tory Government undermine that by slashing benefits and making life harder for people who are looking to work, that will undermine the potential success of the deal. We must co-ordinate and work together. We need job-creating powers in Scotland and more than the simple power to mitigate the wrongheaded approach of this Government.

Although I say that, the hon. Members for North West Leicestershire (Andrew Bridgen) and for Bedford (Richard Fuller) will be glad to find that I welcome the further development of city deals in the Budget. They will go some way to redressing the imbalance in the UK economy, and not before time. Looking at the rhetoric about the northern powerhouse, I would suggest that it is perhaps a final admission of the fundamental failure of the UK economy. London is indeed the giant suction machine that the former Business Secretary spoke of, and the map on page 67 illustrates that investment in the south and east of England is focused through the prism of how best to serve London rather than to build up those areas in their own right and advance the economy.

I have attended Adjournment and Westminster Hall debates on city deals for Aberdeen and Cardiff and I listened with great interest to the debate on elected mayors. I have also followed discussions on the Cities and Local Government Devolution Bill in the other place. I am keen to see the development of deals that meet local needs and have been disappointed in some of those debates to find that the wishes of local people seemed to rank behind the pet project of some local authorities and the requirements of business. If more powers come to cities, it should be to serve the ambitions and priorities of local people to raise their opportunities in life and to make things better according to local demands. They must also be the devolution of funding to match those powers, as devolution and the reform of local government cannot be a cover for passing on cuts.

I am of course delighted to see continued commitment to the city deal for Glasgow and Clyde Valley, which the UK Government established in partnership with the Scottish Government, each putting in £500 million, with £130 million coming from the eight local authorities involved. I hope, too, that the deal will involve listening to local people. It is early days and the work of the joint board is just getting under way. I commend the fledgling city deals for Aberdeen and Inverness, which are mentioned in the Red Book, and ask that attention be paid to potential deals in Scotland’s other cities.

In considering city deals, we must also consider how we support areas outwith large conurbations. Rural areas should not be left behind, and if they are it will only exacerbate the difficulties of rurality. The approach in Scotland has been about collaboration through the Scottish Cities Alliance rather than cutthroat competition, and I believe that that is more productive. Setting regions against one another and failing to seize the opportunities to make links will only waste money in the long run. I note with interest that an Oyster-type system is being considered for Manchester. That is of course welcome, but it should not operate in a way that builds barriers between different regions. There is much opportunity for interoperability rather than running in entirely different directions and I note with some concern the comments made by the hon. Member for Bromley and Chislehurst (Robert Neill) about incentives for businesses. If we are not careful, that could lead to a race to the bottom on standards in different areas.

I would also guard against the temptation to reach for shiny prestige projects at the expense of more sustainable projects that benefit local communities and urge that further attention is paid to the importance of community benefit policies within public contracts. They were used effectively in Glasgow during the Commonwealth games and on other projects and are a simple way to ensure that local people get jobs, training and investment in every large or small infrastructure project that comes along.

A Westminster Hall debate last week touched on the fact that elected mayors had been rejected in some areas in local referendums. It would seem to me to be unwise to overrule that democratic right, but the Under-Secretary of State for Communities and Local Government, the hon. Member for Nuneaton (Mr Jones), said:

“I reiterate that where there is a request for the ambitious devolution of a suite of powers to a combined authority, there must be a metro mayor, but no city will be forced to take on those powers or to have a metro mayor, just as no county will be forced to make any governance changes.”—[Official Report, 9 July 2015; Vol. 598, c. 187WH.]

That seems to make no sense and to disrespect local democracy. People can have the funding, but only if they have the mayor. If people do not want a local mayor and think that the power is better vested in their local authority and local democracy, the Government should respect that. Members might also like to note that there is no such obligation for the Glasgow and Clyde Valley plan to come with an elected mayor.

[Robert Neill]

The hon. Lady is making an interesting point, but if she trusts local authorities in that regard it is legitimate to trust them to vary certain levels of taxation within an area and to increase their prudential borrowing against a revenue stream. Would she support us on such measures?

[Alison Thewliss]

Having come from local government, of course I trust it to do those things, but it should not be forced with a gun put to its head.

I will close by asking the Secretary of State to reflect on the purposes of power being devolved, and on how best we support local communities. People will be unsurprised that we in the SNP reject the austerity agenda, and the people who voted for us support our policy. That austerity agenda has already led to so much damage to the fabric of our communities, and there is only so much that people can take.