Budget Resolutions

Debate between Steve Reed and Peter Dowd

Thursday 9th March 2017 Commons Chamber

[Mr Reed]

Perhaps Conservative Members, including the hon. Gentleman himself, should have thought about that before they stood for election on a manifesto that said absolutely categorically that there would be

“no increases in...National Insurance contributions”.

It does nothing for trust in politics when politicians say one thing to persuade people to vote for them but then, once they are elected, do the polar opposite. They are helping to further break trust in this House and trust in politics. This is not down to the IFS; it is down to Tory Central Office, the Prime Minister, the Chancellor of the Exchequer and—dare I say it?—the hon. Gentleman himself, if he is going to vote for the proposal. Given all the uncertainty about Brexit—it is shocking that the Chancellor had so little to say about Brexit in his statement—small businesses and the self-employed need reassurances, not broken promises.

I now turn to those in employment, because this Budget has very little to offer them either. Low pay and stagnant wages have become endemic. Most people have seen no growth in household incomes in the 10 years since the global financial crash; indeed, many have seen a real-terms cut. The British economy might be getting richer, but British working people are getting poorer. Ours is the only advanced economy in which wages fell while the economy grew between 2007 and 2015. In Croydon, average earnings have fallen by 7.6% in real terms, and today more than one third of my constituents earn less than a real living wage. So where has the money gone? Who has taken the proceeds of that growth? It is not the vast majority of people in Croydon or across Britain who work around the clock to pay the bills and put food on the table, but the shrinkingly small number of the super-rich whose interests this Government really represent. Wages are stuck and household debt is soaring, but the Chancellor had absolutely nothing to say about any of it.

[Peter Dowd]

Is my hon. Friend aware of today’s Resolution Foundation report that says that the UK is set for the worst decade for pay growth in 200 years?

[Mr Reed]

That is absolutely shocking, but it reflects what we are seeing in our constituencies and what our constituents are telling us.

Once upon a time in this country, there was a covenant between people and Government. People gave their consent to the system in return for a fair reward for the work they put in. There was an understanding that if people worked hard, they would do well. They could expect a decent home, security for their family, and healthcare when they fell ill or grew old, and that if they could not work, they would be looked after with dignity and respect. But today that covenant is broken. The unfairness and inequality that this Government stoke has bred resentment that has catapulted us out of the European Union and over a cliff edge into uncertainty.

Cities and Local Government Devolution [Lords] Bill

Debate between Steve Reed and Peter Dowd

Wednesday 21st October 2015 Commons Chamber

[Peter Dowd]

My hon. Friend is spot on in in identifying some of the mechanisms that can be used to help local economies. For example, low carbon investment accounts for 1,400 businesses in our area and is a major growth sector. Among the organisations that invest in our area is Copenhagen city council. Why cannot we as a city council or a local authority invest in our area in that way? Devolution will eventually enable us to do that. The low carbon industry is one of our priorities and brings a huge amount of money into the local economy. We want to grow that area, and we could do that best ourselves.

There are other reasons why my city region will benefit from devolution. We want more manufacturing. The Government have said that they want to move into manufacturing because that helps with exports. In our area advanced manufacturing is worth £3.2 billion and accounts for 50,000 jobs and 3,000 businesses. Again, we need to grow that as part of our strategy, which may well fit in with the Government’s agenda. It may not, but that is a matter for us. We are working closely with businesses through the LEP and outside the LEP to continue to develop that sector.

The creative and digital sector is important. Merseyside had a long history of creativity. I am not saying that other places do not have that, but for decades we have had the benefit of the creativity that we have brought on, and we want to continue to bring it on. Why not? That will be best done from within Merseyside. The sector is worth £878 million, and accounts for 3,500 businesses and almost 19,000 jobs. We are best placed to grow that. The life sciences and health sector is huge and worth £1.7 billion, with the potential to grow even more.

I gave those examples of our priorities—the visitor economy, advanced manufacturing and so on—because many of those have been pushed from within our area. We want the structure, the capability, and the devolution of powers and resources to enable us to push them further.

This may be a radical proposal and it may be slightly party political. The Conservatives have made major cuts in our local government budget in Merseyside and other areas, and that will continue. If that happens, so be it, although I do not agree with it. But I would rather have devolved budgets and resources even at a lesser amount if we can determine how to use them, because our priorities may not be the priorities of the Government. One of the good things that the Government did was to lift much of the ring-fencing which had become endemic over the past 10 or 15 years.

If, with devolution, comes the resource—appropriately equitable, possibly over a transition period—all the better. Colleagues in my neck of the woods and I welcome devolution. We want to be able to push the agenda on for our area and we think we are best placed to do that. Importantly, we would be accountable for that at a local level, and that is the key.

[Mr Steve Reed]

This group of amendments deals with the functions of combined authorities and their funding. I shall try to cover the whole range and also speak to our amendment.

The Minister said that he and the Government are listening to these debates and making changes as a result. It is disappointing, therefore, that they have not brought any significant changes to the Committee in relation to this group, after the debates and decisions that were taken in the Lords, and the debate on Second Reading, on introducing stronger financial powers. Areas are being given new powers, which is absolutely welcome, but the truth is that they will lack the resources they need to use them fully.

Local government has proven itself to be more efficient than national Government, as hon. Members have testified, but Whitehall still will not let go. That is why I tabled amendment 58, which would introduce multi-year financial settlements. That would offer city regions financial stability and allow them to have long-term planning, which currently is not on offer under the financial settlement or the funding of local enterprise partnerships. Without long-term funding arrangements, they cannot plan sensibly for the long term.

The Government must commit to providing devolved regions with the resources they need so that they are not being set up to fail. The regional development agencies, which LEPs replaced, were able to make single three-year funding arrangements. LEPs are in many respects better, but they have access to a smaller budget, and there are far too many small ring-fenced grants, which constrains their ability to take the big, long-term, strategic decisions in the way they need to. We must ensure that combined authorities do not suffer the same problems.

Amendment 58 would therefore make provision for multi-year funding agreements, which would give combined authorities the resources and time they need to build financial stability and allow them to best protect themselves against unfair funding settlements of the kind we have seen central Government deliver since 2010, which I fear we are going to see again when the Chancellor makes his pre-Budget statement to the House in a few weeks’ time. This is an important issue, and I believe that the success or otherwise of devolution depends on it, so we will seek to push that amendment to a vote.

A number of other amendments are aimed at increasing financial stability. We are particularly interested in the Government’s view of those. I urge the Minister, in the Secretary of State’s absence, to respond to them so that we do not have to bring them back on Report. In particular, amendment 60, tabled by my hon. Friend the Member for Sheffield South East (Mr Betts), seeks further powers to allow mayors to borrow. New clause 14, tabled by my hon. Friend the Member for Nottingham North (Mr Allen), would allow local areas more discretion over the setting of council tax bands.

New clauses 10 and 11, tabled by my hon. Friend the Member for Harrow West (Mr Thomas), seek further devolution to London. I think he is quite right to point out that the devolution journey in London has not ended, because the capital is seeking further powers. His points about devolving housing to London are certainly worth further exploration. However, it is worrying that the Housing and Planning Bill contains more than 30 centralising measures, taking powers away from the localities and putting them in the hands of Ministers here in Whitehall, which runs completely contrary to everything we have heard from Ministers this afternoon about their devolution intentions.

My hon. Friend the Member for Harrow West also referred to fiscal devolution. We certainly need to see that, but it must sit alongside a fair equalisation mechanism, with incentives for areas so that they can benefit by expanding their economic potential, including the ability to invest in housing, infrastructure and those things that will increase the opportunity for jobs and prosperity.

The Government have tabled a number of minor amendments relating to the functions of police and crime commissioners, particularly amendments 23, 24 and 25 to schedule 2. There have been a number of media reports about devolving fire service functions to PCCs, but the Bill gives those functions to mayors. Can the Minister assure the House that fire services will not be politicised in the hands of mayors, a move that the Local Government Association says there is “no pressing need for” at this stage?

We support the principle of subsidiarity—an ugly word for a beautiful concept, as my hon. Friend the Member for Nottingham North reminded us in relation to his new clause 2—which states that decisions should be taken as close to citizens as possible. That is a very important principle that central Government repeatedly fail to understand.

On my hon. Friend’s points about a constitutional convention, he has been constrained to keep within the scope of this Bill by talking about a local convention. However, we believe that we do need a model for engaging civic society in the whole country—citizens, not just politicians—in seeking a new constitutional settlement that will shift powers not just from Whitehall to town hall but to communities, neighbourhoods, service users and all citizens to get power out of this place and into the hands of people who can really make a difference once they have access to it.