Cities and Local Government Devolution Bill [HL] — Second Reading (Continued)

Part of the debate – in the House of Lords at 8:03 pm on 8th June 2015.

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Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Parliamentary Under-Secretary of State for Communities and Local Government 8:03 pm, 8th June 2015

My Lords, I thank all noble Lords who have taken part in today’s debate. It has been an excellent one and I thank noble Lords from all sides of the House for the good will that they have shown towards the Bill. It is indeed a privilege to have heard from not only two former Deputy Prime Ministers but, as the noble Lord, Lord Beecham, pointed out, nine former council leaders. I have listened to what has been said and have got a good feel from some of the contributions that have been made. I see support from all sides on the need for further devolution, and the desire to see all parts of the United Kingdom benefit from greater devolution of power and achieve their economic potential in this way. The Bill will deliver the devolution of powers and resources so that our cities, our towns and our counties can become their own economic powerhouses.

The noble Lord, Lord Tope, made a point about London. London boroughs are absolutely not precluded from coming forward with their ideas for devolution, albeit they have a mayor in place. Just as an aside, he made the point about people thinking Boris Johnson is the Prime Minister—but people think Churchill is a dog.

I will not answer every single question but I will go through the pertinent points made this afternoon. The noble Lord, Lord McKenzie, made the first, crucial point by confirming that devolution under the Bill does not just cover cities. He was absolutely right: it enables proposals to come forward from counties, groups of authorities and certainly from rural areas. Although we have been quite tied up with the concept of the northern powerhouse, there are great counties, such as Cornwall, which will be very keen to put forward some of their proposals, and the Government are very keen to have a conversation with them. He also asked about the delivery strategy; in other words, how the counties will catch the Chancellor’s eye. Will smaller proposals be left behind? Not at all. The Government are keen to hear from all areas that have proposals. That will follow a discussion with the Secretary of State and the Government. He also asked where the buck ultimately stops. In this country, the buck always stops with the electorate—they will be the ones who ultimately decide—but there is also an agreement between the combined authorities and government in terms of what government will expect.

Many noble Lords asked whether a city can have all the powers without a mayor. The Chancellor said:

“We will transfer major powers … to those cities who choose to have a directly elected … mayor”.

That does not preclude any area from coming forward with proposals, and a conversation taking place between those areas and government.

The noble Lord, Lord Shipley, talked about this being an enabling Bill, as did many noble Lords. It is, and it does recognise that one size does not fit all. It recognises that Manchester is different from Birmingham, which is different from Leeds, which is different from Cornwall, which is different from Norwich. It also recognises that medium-tier cities will have their proposals, which will be different from those from other places, and it is very keen on those. I am personally looking forward to the proposal from Norwich, which the noble Baroness, Lady Hollis, mentioned several times. Norwich has its part to play.

The noble Lord, Lord Shipley, talked about democratic legitimacy through referendums, as have several noble Lords. I said in my Answer at Question Time today that there are local authorities that have mayors without having had to go through a referendum. I can name two of them: Liverpool and Leicester. As I said today, the Local Government and Public Involvement in Health Act 2007 provided that if local authorities wanted to go straight to a mayoral model, they could do so. This is a multiplication of that provision. It is writ large and absolutely clear in the Government’s manifesto that they wish for this to take place. In that context, I am sure noble Lords would be willing to support that.

The noble Lord, Lord Shipley, also talked about an assembly. Greater Manchester has been very clear that it does not want additional tiers of government, and I am sure other local areas would feel the same. An assembly has not been considered because we want to minimise the risk of creating more bureaucracies.

The noble Earl, Lord Listowel, made a very interesting point about social housing and addressing housing issues, very neatly followed by my noble friend Lord Heseltine talking about all the funding streams that existed, meaning that it was difficult to get one co-ordinated housing plan. The Bill would help with that disparate approach to things such as housing need. Of course, going back to Greater Manchester, there is a housing investment fund of £300 million.

As my noble friend Lord Heseltine said, the Bill is dependent on detail. It is a framework, a mechanism for powers to be brought through in secondary legislation. A lot of questions were asked this afternoon about what those powers are. The Government do not want to dictate to local authorities or groups of local authorities what those powers might be. We want to hear from them. I know that that is a bit of an about-face after all the years of centralisation, but Government really want to hear those proposals. This is a partnership between Government and local authorities.

The noble Lord, Lord Prescott, talked about the Northern Way. I remember that well; it was the subject of many a document. In terms of what it delivered, I do not think it delivered anything but it certainly sowed the seeds of what we now talk about as the east-west links between Liverpool and Hull. Those links are crucial and in no way less important than HS2—HS2 and HS3 are all part of the jigsaw. I declare an interest, as one noble Lord said earlier, as a former chief executive of Atlantic Gateway. The super-port in Liverpool has significant benefits in terms of the economy and transport logistics, and really could be a game-changer in all this and for Hull.

The noble Lord also asked what the proposals from Hull look like. I know they are working on proposals there, but I do not think anything has yet come forward to government. I am sure the noble Lord would like to be part of the conversations with Hull. Leeds also has a devolution deal with government that is quite far advanced, looking at West Yorkshire. He also asked how long this takes. It takes as long as it takes for those local authorities to agree and come forward to government with their proposals and for an agreement to go forward. It is a bit like a piece of string, really. Of course, Greater Manchester has been first off the blocks here.

The noble Lord, Lord Teverson, asked about a specific road map. Whatever proposals come forward will be considered and no one proposal will take precedence over another because of size or scale of ambition. The Government are keen to hear from everybody and every group of local authorities.

The right reverend Prelate the Bishop of Derby talked about the unevenness needing to be addressed. This is actually at the heart of what the Bill does in allowing areas outside London to unlock their potential. I do not in any way, in any of the discussions we are having, want to do down London. London is an incredibly important powerhouse, but the north and other areas outside London, such as Cornwall, are capable of so much more. That is what we are trying to promote. He talked about the benefit from the international economy in London. Of course, we have benefited from that but places such as Greater Manchester want now to be net contributors to the Exchequer. We want to punch above our weight.

My noble friend Lady Wheatcroft talked about clusters of businesses. Clusters of businesses and the links between them are absolutely crucial. This effect of agglomeration is crucial to local and regional economies, as is creating this idea of a single labour market, with some connections so good that people are closer together in terms of getting to work and seeking employment. She also asked—as did the noble Lord, Lord Beecham—about the idea of a municipal bond. The Government are open to suggestions as to how financing might be raised. We look forward to any suggestions being brought forward. She also asked if the mayor will be fun and ride bikes. The answer is that I do not know. I hope that the mayor will be fun, whoever that is in whichever authority.

The noble Baroness, Lady Hollis, talked about the unhealthy dominance of London. It is dominant and in many ways that has been healthy for our economy. However, outside London we are capable of so much more. That is a point I made before. As she said, the Core Cities will be sorted but what about the others? I think I answered that point in terms of the mid-tier and other smaller groups of authorities.

The noble Lord, Lord Goddard, who is not in his place, talked about the journey of Greater Manchester. I was with him on that journey. One thing I would say about that journey is that that combined authority grew in maturity over the 30 years that it worked on a voluntary basis. Also, one thing that you could point out about Greater Manchester is that the leadership was very strong. I do not believe that these things will get through or work effectively without strong local leadership, whatever that leadership might look like. He also asked about borrowing—there are clearly provisions for prudential borrowing in there for the combined authority—and fiscal devolution. Some noble Lords will have seen some of the proposals in terms of retention of business rates and the “earn back” model that Greater Manchester seeks.

The noble Lord, Lord Wigley, welcomed the Bill but asked about Wales. It is an entirely devolved Administration; the reference to Wales in the Bill was to Wales as a jurisdiction, rather than its relevance to this Bill—so I hope that that answers the question.

My noble friend Lord Moynihan talked about sport and recreation and perhaps raising funds through a precept. Should a group of local authorities wish to come forward with proposals—a mayor may wish to take a focus on sport and recreation—it is something that the mayor could put to the combined authority in terms of the precept that they raise.

The noble Lord, Lord Woolmer of Leeds, again, talked about fiscal devolution, and I hope that I have in some part answered that question. He asked why we needed a mayor. We need maximum accountability for maximum powers devolved. He talked about HS3, and I think that I have covered that, but he also asked, “What is the northern powerhouse?”, which got me thinking. For me, the northern powerhouse is the ability of some of those great northern industrial places to reignite their greatness again. That is what I understand it to mean. Of course, we have the northern powerhouse but we also have county authorities that wish to institute growth in their areas. The northern powerhouse might mean a certain thing in terms of cities, but we do not forget our counties in all this.

The noble Baroness, Lady Pinnock, talked about resources and said that it was our money. Of course, all money raised is our money, because we are the taxpayers. In terms of the devolution of powers and funding, it gives us the chance to be masters of our taxpayers’ destinies in a more effective way and to get economic growth.

There has been a lot of talk about single-party states. No combined authority would be formed without the explicit agreement of each of its constituent parts. My noble friend Lord Sherbourne also asked about the scrutiny and accountability, and asked how you ensure effective scrutiny when a scrutiny system cannot overturn but can challenge the decision of the mayor in question. Our view is that overview and scrutiny committees for combined authorities should be chaired by a person who is not actually a member of the majority party represented on the combined authority. I hope that that gives the noble Baroness and my noble friend some sort of comfort in holding a mayor to account.

The noble Baroness also talked about some of those non-constituent parts of a combined authority. It is a very important issue, which we want to consider carefully. There are provisions in a draft legislative reform order before Parliament which would, if enacted, give greater flexibility as to what can constitute an area of a combined authority. As we take the Bill forward, we will look carefully at how best to provide that flexibility so that the governance structures, including that of a metro mayor, can provide the accountability and transparency of the decision taken.

I shall gallop through the last two pages of questions, because I am coming up to 20 minutes. My noble friend Lord Horam made some lovely points about industrial Lancashire and the cotton industry, and I think that my noble friend Lord Ashton of Hyde’s forebears’ names might have been there somewhere. He talked about leaders having to beg for funding in the old days and feeling almost embarrassed; the time has gone to feel embarrassed. Government is now reaching out to local authorities and local areas to ask what they want.

The noble Baroness, Lady Donaghy, talked about powers being ceded by consent. The answer is yes to that. She also asked what powers may be included. I think that I answered that previously in saying it was about what powers local areas would want included.

The noble Baroness, Lady Eaton, made the point about counties, and I hope that I answered that in saying that we really do want to hear from counties that might be attached to cities, and so on, and so on.

The noble Lord, Lord Snape, asked whether the orders would go through on a negative resolution. No, they would not—they would go through on an affirmative resolution. He talked about transport needing primary legislation. That is absolutely correct and we hope to bring it through later this year.

However, I cannot finish without mentioning the noble Lord, Lord Lyell, and his love of Liverpool and the port. He is absolutely right about what a difference that port will make.

I hope that I can allay some of the cynicism expressed by the noble Baroness, Lady Henig, about Whitehall trusting local government. We shall see as time goes on. I thank all noble Lords who have taken part in this excellent Second Reading debate and look forward to continuing the arguments or debate in Committee.

Bill read a second time and committed to a Committee of the Whole House.