[1st Allocated Day]
Considered in Committee
[Natascha Engel in the Chair]
Devolution: annual report
I beg to move amendment 29, in page 1, line 14, leave out “under section 2”
This amendment would be consequential on leaving out clause 2.
With this it will be convenient to discuss the following:
Clauses 1 and 2 stand part.
New clause 1—Competences of local government—
‘(1) The Secretary of State must, after consultation with representatives from local government, publish a list of competences of local government.
(2) After the list has been published, the Secretary of State may not publish any amended list of competences of local government without first obtaining approval of the revised list consent from—
(a) the House of Commons, with two-thirds of its membership voting in favour of the amended list, and
(b) the Local Government Association.”
This new clause would define the independence of local government, and entrench it beyond easy repeal.
New clause 13—Double Devolution statements—
‘(1) A Minister of the Crown who has introduced a Bill in either House of Parliament having the effect of devolving functions or powers of the United Kingdom Parliament or the Secretary of State to a combined authority must, before the second reading of the Bill, make a double devolution statement on the arrangements for further devolving those functions or powers to the most appropriate local level except where those powers can more effectively be exercised by central government or by a combined authority.
(2) The statement must be in writing and be published in such a manner as the Minister making it considers appropriate.”
The intention of this new clause is to make clear what double devolution to smaller councils and neighbourhoods will occur in the wake of big city deals being agreed by combined authorities when giving powers to cities and/or combined authorities.
New clause 18—Independent Review, Support and Governance—
‘(1) It shall be the duty of the Secretary of State to lay before each House of Parliament each year a report about devolution within England and Wales pursuant to the provisions of this Act (an “annual report”).
(2) An annual report shall be laid before each House of Parliament as soon as practicable after 31 March each year.
(3) The Secretary of State may by order make provision for an Independent Commission or Advisory Board to undertake a review, challenge and advisory role in relation to:’
(a) reviewing orders and procedure arising from the Secretary of State’s decisions; and
(b) requests for orders received from combined or single local authorities.”
This new clause would ensure the Secretary of State has the necessary power to create an Independent Commission or Advisory Board to scrutinise the work of the Secretary of State relating to devolution, Annual Devolution Report and handle requests from local government about the decisions made by the Secretary of State.
New clause 22—Devolution in London—
‘(1) Within six months of the passing of this Act, the Secretary of State must publish a report on a greater devolution of powers in London, including on whether to make provision for the Secretary of State to—
(a) transfer a public authority function to a joint committee of London councils, and
(b) establish a joint board between London boroughs and the Mayor of London to support further devolution in London, and
(c) devolve responsibility on fiscal powers, including but not limited to, setting and revaluating local tax rates, banding and discounts.”
This new clause makes it a requirement for the Secretary of State to report on further devolution options for London, including fiscal devolution (e.g. council tax revaluation, etc) which has been called for by the Greater London Assembly and the Mayor of London.
New clause 23—Fair funding settlement: report—
Within six months of the passing of this Act, the Secretary of State must publish a report on the impact on the functions of combined authorities of the fairness of the distribution of funding from central government to local authorities, particularly with regard to levels of deprivation.”
This new clause would require a report linking the impact of devolution with the level of funding.
New clause 25—Public authority functions—
Within one month of the passing of this Act, the Secretary of State must publish a list of public authority functions which may be the subject of a transfer of functions under the provision of this Act.”
This new clause would require the Government to be more specific about the functions which it intends to developed to mayors, combined authorities and other local authorities.
Government amendment 4.
Amendment 51, in clause 3, page 2, line 19, at end insert—
‘(2A) An order under subsection (1) may not be made unless the proposition that the combined authority have a mayor is approved by a referendum of the electorate in that combined authority.”
The intention of this amendment is that elected mayors will be introduced only if that proposal has been endorsed, in a referendum, by 50% of the population.
Amendment 43, in page 2, line 31, leave out subsection (8) and insert—
‘(8) An order under this section providing for there to be a mayor for the area of a combined authority may be revoked or amended by making a further order under this section; this does not prevent the making of an order under section 107 abolishing the authority (together with the office of mayor) or providing for a constituent part of the combined authority to leave the combined authority and to resume its existence as a separate local authority.
(8A) An order under this section providing for a constituent part of the combined authority to leave the combined authority and to resume its existence as a separate local authority must make fair provision for a reasonable and proportionate division of resources between the former combined authority and the seceding local authority.”
The intention of this amendment is that a constituent part of a combined authority can leave a combined authority without the combined authority being dissolved, with provision for “fair terms” for the leaving part (i.e. their resource is calculated on a per capita basis, or similar.)
Amendment 46, in page 2, line 38, at end insert—
‘(10) This section does not apply to the County of Somerset, as defined by the Lieutenancies Act 1997.”
Amendment 39, in page 3, line 2, at end insert—
‘(1A) For an area of a Combined Authority where for any part of that area there exists both a County Council and District Council, no order may be made under section 107A unless either the Secretary of State or the existing combined authority has carried out a consultation with local government electors on replacing the existing County Council and District Councils with one or more unitary authorities.”
Amendment 44, in page 3, line 14, at end insert—
‘(4A) A constituent council may withdraw consent after the creation of a combined authority and a mayor for that authority.
(4B) Where one or more constituent councils have withdrawn their consent under subsection (4A), the Secretary of State must make an order either:
(a) abolishing the combined authority and the office of mayor, or
(b) reconstituting the combined authority without the non-consenting council or councils concerned”.
The intention of this amendment is that a constituent council may withdraw its consent to the creation of a combined authority, in which case the Secretary of State must either abolish the authority and mayor or re-constitute the authority without any non-consenting council.
Amendment 53, in page 3, line 27, at end insert—
‘(2A) The Secretary of State may make an order under section 107A in relation to a combined authority‘s area if a proposal for other appropriate governance and accountability structures for the authority’s area has been made to the Secretary of State by the constituent authorities.
(2B) The Secretary of State may set out accountability and governance tests in respect of other appropriate governance structures.
(2C) Orders may allow for a mayor or other appropriate governance structure to enter into collaborative working arrangements with more than one combined authority, or local partnership board covering for example rural areas.”
This amendment would allow for a mayor to work with more than one Combined Authority, or partnership board covering, for example, rural areas.
Clause 3 stand part.
Government amendments 18 to 22.
That schedule 1 be the First schedule to the Bill.
Amendment 57, in clause 4, page 3, line 33, at end insert—
‘(1A) Where the mayor for the area of a combined authority appoints a deputy, regard to gender balance must be given”
This amendment is intended to make sure that gender balance is taken into account in mayor/deputy teams
Clause 4 stand part.
New clause 21—Consultation with local community—
The Secretary of State must make an order to determine the consultation processes which will be used with the local community.”
This amendment is intended to ensure that mayors are provided only where the local resident population has been properly consulted.
Amendment 56, in clause 6, page 6, line 24, at end insert
“which is not restricted to a specific governance structure”
This amendment will allow a council to choose any form of governance and would be defined as a local authority according to the 1992 Local Government Finance Act.
Amendment 42, in clause 8, page 10, line 12, at end insert—
‘(2) The Secretary of State must lay before each House of Parliament at least once in each calendar year a report on the exercise by the Secretary of State of powers which have been devolved to the mayor of a combined authority.”
The intention of this amendment is that the Government should publish every year publish a report that shows that it has not exercised a power that has been devolved to a combined authority mayor.
Amendment 59, in clause 11, page 11, line 27, at end insert—
‘(1) Within 12 months of the passing of this Act, the Secretary of State must publish a report on the performance of the Localism Act 2011 and a review of the general power of competence provision.”
This amendment requires a review of the Localism Act and local authority innovation.
Government amendments 27 and 28.
As well as amendment 29, I will speak to Government amendments 4, 18 to 22, 27 and 28, and to the stand parts for clause 1, clause 2, clause 3, schedule 1, and clause 4. I will also comment, if time and the mood of the Committee permits, on new clauses 1, 13, 18, 22, 23 and 25, amendments 51, 43, 46, 39, 44, 53 and 57, and new clauses 21, 56, 42 and 59, which have been placed in the same group.
The range of interest that has been shown in this Bill speaks for itself. On Second Reading 76 colleagues made contributions, and there was a great deal of consensus. This Bill is of a consensual nature, and while there are issues that we will be discussing in Committee, it is important to put that on record. My intention and that of the Government today is to reflect on the debate that is now to take place and take that into account going forward. We hope this debate can continue in this consensual tone and that it will characterise the passage of this Bill.
Clauses 1 and 2 were inserted into the Bill in the other place. We have considered carefully the arguments in support of the clauses. We share the views of those who supported the clauses about the importance of the Government’s accountability to Parliament for the devolutionary measures and deals they pursue.
Clause 1 places a statutory duty on the Secretary of State to provide annual reports to Parliament setting out information about devolution deals. We recognise that the effect of this clause will be to bring together in an annual report to Parliament details about the whole range of devolutionary activity. While some, if not most, of this information will have been made available to Parliament in the ordinary course of business, we accept that there can be value in such a comprehensive annual report, enhancing transparency and accountability. The Government therefore accept that clause 1 should stand part of the Bill.
Amendments that hon. Members have now tabled seek in various ways to extend the reporting requirements. We are not persuaded that these are needed to ensure the transparency and accountability that we all wish to see, but I will listen carefully to the debate and we will consider further expanding the reporting requirements on devolution in due course subject to the arguments hon. Members put forward.
The hon. Member for Nottingham North (Mr Allen)—whom I may refer to occasionally throughout today’s discussion—has tabled new clause 18, which would require the Secretary of State annually to lay before Parliament a devolution report and enable the Secretary of State to establish an independent body to provide advice on devolution of powers. I think the reporting requirement he has in mind is already covered by clause 1, and while we accept the importance of reports, I do not believe a case can be made to establish some new independent body to provide advice. I fear that any such step would simply lead to additional costly bureaucracy.
The hon. Gentleman has also tabled new clause 13, which would require the publication of a report about how powers devolved to combined authorities are being further devolved. I know he takes great interest in that issue, in line with the devolution agenda more broadly, and wants that taken forward. The Government attach importance to such further devolution. In the Localism Act 2011 we have recognised the importance of neighbourhoods and of neighbourhood planning, and of communities being able to take ownership and management of community assets or take on the provision of local services. This is an important element of devolution and I can see the case for any comprehensive report about devolution covering these matters.
Amendment 42 was tabled by my hon. Friends the Members for Altrincham and Sale West (Mr Brady), for Hazel Grove (William Wragg) and for Bury North (Mr Nuttall). It would require the Government to publish an annual report about powers that have been devolved to a combined authority mayor. This again is an important matter and there is a case for information about this to be included in any comprehensive annual report on devolution. The Government recognise that and want to find the right solution for the concerns hon. Members have.
The shadow Secretary of State and the hon. Members for Heywood and Middleton (Liz McInnes), for Croydon North (Mr Reed), for Dewsbury (Paula Sherriff), for Easington (Grahame M. Morris) and for Stretford and Urmston (Kate Green) have tabled new clause 22 which would make it a requirement for the Secretary of State to report on further devolution options for London, including fiscal devolution which has been called for by the Greater London Authority and the Mayor of London. As we made clear in the other place, we are open to discussing with London plans for the devolution of wider powers. Indeed, the Mayor and London Councils have already sent in formal devolution proposals and the Government are engaged in discussions regarding these. We are committed to taking forward these discussions and I doubt whether there is a need for some further reporting requirement therefore to be included in this Bill.
Will the Minister confirm that these devolution powers from central Government apply to Manchester and to the interim authority and mayor after 2017, and that it is not the reverse—from local authorities up to a combined authority or mayor system—and that with spatial planning it will take the full agreement of the 10 leaders who make up the cabinet and a two-thirds majority for all other decisions? Will he confirm that to the Committee today?
The hon. Gentleman makes an important point. We are talking about powers that are being transferred from Whitehall and Westminster and from Ministers and public bodies to combined authorities —to the areas that are making these devolution deals. It is not about powers being taken up from local councils and authorities, unless they choose to so pool them. That option is on the table, but there is nothing in this Bill that would compel it. In Greater Manchester, as part of that deal and the accountability we want to build into the process, the combined authority has a two-thirds mechanism for holding the mayor to account. That is an important part of that deal and one that gives the reassurances people in Greater Manchester—the local authority leaders who reached that deal with us—and hon. Members will want to see as we take this process forward.
In theory devolution is fantastic, of course, and we all agree with it, but in this debate on Sunday trading will the Minister at least listen to religious people who feel the country is becoming increasingly secular and consumerist? Their concerns have to be handled very sensitively by the Government. That does not necessarily mean they cannot proceed, but those concerns have to be handled sensitively. Will he assure the Committee he will do that?
I can absolutely give my hon. Friend that assurance. The Government have consulted on, and made clear our intention to introduce as part of this Bill, Sunday trading devolution. We will have full opportunity to discuss that. This Bill is currently being discussed in Committee on the Floor of the House. There will be time for discussion and we will work with colleagues and listen to their concerns, and we will try to find a consensus, so if change is to be delivered it has the support of the House and of the broadest possible base of opinion in this country.
We accept the case for transparent and comprehensive reporting—indeed, we are advocates for it—but we are clear that the devolution statement that clause 2 requires to accompany any future Bill would be unnecessarily bureaucratic. For many Bills, such a devolution statement would be irrelevant, as the Bill would have no implications for functions that can be devolved. There is a real risk that, in practice, the production of such a statement would become a tick-box exercise, at best adding no real value and at worst becoming a distraction from driving forward real devolution, for which I think there is a broad consensus in favour among Members.
The Minister is making a rational and cogent argument. I would like to take him back to the question of double devolution, which has been raised with me by many, including the key cities—those that I would perhaps describe as the second-tier cities, rather than the core cities. They are concerned that power should not simply go from Whitehall to town hall, and that there should be an evolutionary process in which power continues to be devolved to neighbourhoods, parishes and other smaller bodies. If the Minister will not accept my amendment, will he give those cities some reassurance that there will be strong Government oversight to ensure that the devolution does not stop at the town hall?
Yes, I can give the hon. Gentleman that reassurance. Every devolution proposal will involve a deal between the Government and those local areas that want devolution. As part of those deals, we will look at what further steps can be taken. We recognise the principle, which he advocates, that decisions should be taken at the lowest level of government at which they can effectively be taken. If an area with which we were having discussions wanted that to be part of the deal, and if we could work with it to deliver it, it would be our intention to do that.
Returning to clause 2, it would be easy for some future Government to parade their devolutionary credentials because every one of their Bills had a devolution statement, while in reality they might have done little to continue to meet what I confidently predict will be a continually growing appetite for devolution across the country. I suspect that the hon. Gentleman agrees with me about the existence of that appetite. Accordingly, the Government are opposed to clause 2 standing part of the Bill, and amendment 29 is consequential to the removal of the clause from the Bill, deleting the reference to that clause in clause 1.
The hon. Gentleman has tabled a number of amendments that would have constitutional implications. We will consider most of them later today, but new clause 1 is in this group. It would require the Secretary of State to publish a list of local government competences, having first agreed them with representatives from local government. Once published, the list could be amended only with the approval of two thirds of the membership of the House of Commons and the approval of the Local Government Association.
I understand the reason for new clause 1 but I cannot support it. When codification of the relationship between central and local government has been attempted in the past, it has failed, as was recognised by the Political and Constitutional Reform Committee of this House. In their response to a report from the Committee in 2013, the Government commented that codification fails because it is about processes, rather than about policy intended to improve outcomes. Instead of liberating local leaders, a codified relationship could simply serve to focus energy on theoretical debate, rather than on shared endeavour, problem solving and action.
I will speak about this at greater length later, but may I make one specific point now? Historically, local government has felt uneasy about its relationship of subordination to central Government, and a means of reassuring local government of all political parties would be to entrench the settlement that the Minister is proposing and to find a way in which to reassure local government about its long-term sustainability and its independence from central Government. Will he undertake to have a think about this matter, so that he will be able to ensure even more co-operation from local government?
I will of course give the hon. Gentleman that undertaking, and I shall listen carefully to what he says later. I know that he has a great deal of expertise in this area, and I recognise some of his concerns. It is important that we find the right mechanism to address them as best we can in the Bill.
Amendment 59 and new clauses 23 and 25 have been tabled by the shadow Secretary of State, the hon. Member for Hemsworth (Jon Trickett), and his colleagues. Amendment 59 would require a report reviewing the Localism Act 2011. New clause 23 would require the Government to publish a report about the impact on combined authorities of the way in which resources had been distributed through the local government settlement. New clause 25 would require the Government to publish a list of the public authority functions which may be transferred.
We do not consider amendment 59 to be necessary. The Government are committed to a process of post-legislative scrutiny to review the effectiveness of legislation and to inform the development of future legislation. The lead Department submits a report to the Select Committee, usually within three to five years of the legislation receiving Royal Assent, with its preliminary assessment of how the Act has worked in practice in relation to its objectives and benchmarks, as identified during the passage of the Bill. This would inform the Select Committee’s view on whether to conduct a fuller post-legislative inquiry into the Act. The additional steps proposed in amendment 59 are therefore unnecessary.
When the Localism Act was passed, the Secretary of State for Communities and Local Government, the right hon. Member for Tunbridge Wells (Greg Clark)—in a previous guise—produced an annual report on how each Department was doing in regard to devolution. Unfortunately, that practice was stopped, but the right hon. Gentleman came to the Select Committee and argued strongly that it should be continued. Does the Minister think his boss has changed his mind?
The hon. Gentleman shares my admiration for my Secretary of State and for the work that he has done in this area of policy over an extended period. It is of course open to my right hon. Friend to do that again, and I suspect that the hon. Gentleman will wish to prevail upon him and to repeat his argument on the value of considering that course of action. However, I do not think it necessary to include amendment 59 in the Bill.
We also consider new clause 23 to be unnecessary. It would not add anything to the information we already provide. By separating Government funding from the other sources of income available to local authorities, as the new clause proposes, and by isolating deprivation from other drivers of spend—for example, the impact of population sparsity in rural areas—the report required by the new clause would fail to present a properly rounded picture of the settlement. As hon. Members know, we already publish an annual assessment of the impact of the settlement on authorities’ wider spending power and an equalities statement on the settlement’s effect. Moreover, the settlement is subject to wide-ranging consultation and comes before Parliament for approval. I am not persuaded that anything further of this nature is needed in the Bill.
On new clause 25, I remind hon. Members that this Government’s devolution policy is a bottom-up one. We want to ensure that devolution opportunities are available to all parts of England, including rural and coastal areas, counties, towns and cities. On Second Reading, we discussed at some length the devolution deal that has been done with Cornwall, a non-city area that wants to be part of this process and that has got behind a plan that it believes can drive real change for the better. The enthusiasm from hon. Members from Cornwall who spoke in that debate was obvious and is commendable.
My hon. Friend makes the important point that rural areas should be protected. Will he give the House an undertaking that rural areas that are close to urban areas will be protected from being swallowed up by those neighbouring cities?
My hon. Friend raises a point that I know is close to his heart. He has tabled amendments to the Bill, which we shall discuss later. No area will be compelled to agree a devolution deal. The purpose of the Bill is to enable us to put such a deal on the table for any area that wants one, but it does not give us the power to compel any area to accept it. His comment is in line with the Government’s intentions in the legislation. We want to ensure that devolution and the benefits it can bring are there for everybody, but we will not compel areas to be part of it.
The Minister has talked about a bottom-up approach. From what I understand, Manchester is to be offered powers over policing. We had a bottom-up approach in Wales as a result of the Silk commission, which was sponsored by the UK Government, in which all parties agreed that policing powers should be devolved to Wales, just as they are in Northern Ireland and Scotland. However, the draft Wales Bill was published yesterday and the devolution of policing is missing from it. Can the Minister explain the ambiguity of the Government’s position?
I recognise the hon. Gentleman’s diligence in raising his concern, particularly given that that is his area of expertise. Rather than my commenting on it in the debate on this Bill, however, I would gently suggest that it is a matter that should be discussed in a Welsh context in the debates on the Wales Bill.
The Minister has given the welcome assurance to my hon. Friend the Member for North East Somerset (Mr Rees-Mogg) that no rural area neighbouring an urban or metropolitan area would be held to becoming a member of it. Will he also give the Committee an assurance that any rural area wishing to join a combined or mayoral authority will be able to do so?
That would be entirely a matter for the proposal put forward by the local area in question. We would certainly be open to whatever geography an area wished to present as the most logical for its economy and the most able to allow it to drive forward the changes and improvements we envisage being enabled by the Bill. So yes, that would be possible, but only by agreement and in line with the Government’s approach to devolution.
The hon. Gentleman tempts me to divert my attention from the amendments. The steps this Government are taking on business rates are generally welcomed by local government—that is my experience of the discussions I have had. They are another step towards giving local government the certainty, control and freedom it wants, and delivering on our agenda. They are broadly in line with the devolutionary approach that we are taking and is envisaged by the Bill.
The Minister mentioned that local areas can choose what area will bid for these devolved powers, based on their own local needs. What size of population or of economy would an area need to get this devolution? There has been some suggestion that the Nottinghamshire and Derbyshire bid is not large enough.
It is up to local areas to make proposals, and we will look at the offers and deals. Thirty-eight proposals were submitted before the 4 September deadline by areas interested in being part of this process. We will seek to ensure that any proposal makes economic sense, and that the deal takes account of all interested parties and their views, but we are not going to prescribe in this Bill, nor set out centrally, the geography that devolution should follow, because to do so would go counter to the bottom-up process that we envisage driving forward long-lasting and successful devolution in this country. I recognise my hon. Friend’s important question, but flexibility is the intention and it is what the Bill contains. We want agreement and to work with areas to deliver on their objectives.
We are open to discussing devolution proposals from all places. We have been clear that our approach is for areas to come forward with proposals that address their specific issues and opportunities. The Bill is therefore enabling legislation that will provide the legislative framework to give effect to the different aspects of devolution deals. The Government have not specified a list of functions that may be devolved, and there is good reason for that approach. It means that we can consider any area, idea or proposal. Perhaps more significantly, if we started to specify lists of functions or kinds of areas, those whose ambitions fell outside these ideas might be reluctant to come forward. The reality is that, as decades past have shown, if the man in Whitehall is asked to specify what might be devolved, the list is going to be pretty cautious.
It would not be right to restrict our ambition by taking such an approach, so I hope Opposition Front Benchers will accept and understand the position the Government are taking. In short, specifying functions or kinds of areas is simply not consistent with a genuinely bottom-up approach. We will therefore not be supporting amendment 59, or new clauses 23 and 25, and I hope hon. Members will not press them to a vote. I also hope that, with my explanations and assurances, the Committee will be able to support clause 1 and reject clause 2, accepting the consequential amendment to clause 1.
Given what has been said by my hon. Friends the Members for North East Somerset (Mr Rees-Mogg) and for Altrincham and Sale West (Mr Brady) about rural areas being swallowed up by urban areas and the Minister’s response thereto, does it all mean that the Minister would be minded to accept at least the thrust of amendment 43, which stands in the name of my hon. Friend the Member for Altrincham and Sale West and would give a predominantly rural area that has already been swallowed up the right to remove itself from the arrangement?
I have had discussions with my hon. Friend the Member for Altrincham and Sale West, I recognise the comments that he makes and I will of course listen carefully to the further discussion today. I will set out the Government’s position on the issue in due course, but I wish to make it clear that the intention is to be consensual. We intend to listen to concerns that hon. Members might raise and try to find a way whereby we can agree across this House on what we want to deliver. I recognise the important point being made and I am sure we will discuss it further.
Amendment 4 is about mayors being a condition of devolution. We are seeking to remove the requirement that a mayor cannot be a precondition of transferring local authority or public authority functions to a combined authority, because it is wrong in principle, and it is at odds with our manifesto policy and manifesto commitment. In addition, if the requirement remained, it would mean that the deals we have made already with Greater Manchester and with Sheffield could be in jeopardy. The requirement is wrong in principle.
I welcome this movement, but can the Minister explain why the Secretary of State has always insisted in his discussions with the combined authority and the north-east council leaders that a prerequisite for any devolution is having a mayor?
The Minister has just said that the Sheffield deal could be put at risk, but at this stage it is not a done deal—it is a proposal. If Sheffield were to say, “We actually rather like the proposal, but without the mayor,” what would be wrong with that, as the Bill stands?
The hon. Gentleman might recognise that that would then not be the agreement that has been proposed. Where there is devolution on the ambition and scale of Greater Manchester, we could not ensure that the strong, clear accountability necessary to support such devolution and provide the leadership to drive forward that area’s economy would be in place without a metro mayor. That strong, clear accountability needs to be a single point of accountability that only an elected metro mayor can provide. Where major powers and budgets have been devolved, people need to know who is responsible for decisions that can have a radical impact on their day-to-day lives. Mayoral governance for cities is a proven model that works around the world—it is indeed the model of governance for world-class cities. None of that is to say that we are imposing mayors; mayors are not being imposed anywhere. If any area has a mayor, it will be because that area, through its democratically elected representatives, has chosen to have one. The Bill specifically provides for that.
The Minister is making the case that a mayor is required in order to have strong enough leadership and get things through, but in the proposed Sheffield deal only the transport functions go to the mayor—all the economic functions go to the combined authority. Is he therefore saying that there is not going to be strong leadership on these economic functions, because a mayor is not in charge of them?
Let me be absolutely clear about this: this Bill does not allow this Government or any future Government to impose mayors on anybody. But where we make a deal it is a two-way process, and it is the Government’s clearly stated intention for those metropolitan areas that the accountability a mayor brings is desirable and we want to see it as part of those deals.
It is important to be clear about what the devolution we are talking about does. It takes powers that exist in Whitehall—powers that rest with public bodies—and transfers them to local decision makers. It does not affect the arrangements that are already in place for local government, which recognise differences and the communities within them. We will allow them, of course, to pool areas of policy if they wish to do so, but nothing in this legislation would allow us to compel them to do so.
In his Budget speech in July, the Chancellor was clear:
“The historic devolution that we have agreed with Greater Manchester in return for a directly elected Mayor is available to other cities that want to go down a similar path.”—[Official Report, 8 July 2015; Vol. 598, c. 329.]
All of that is reflected in our manifesto commitments to
“legislate to deliver the historic deal for Greater Manchester”
“devolve far-reaching powers over economic development, transport and social care to large cities which choose to have elected mayors.”
I would like the Minister to clarify something. As he knows, the north-east combined authority area is not a metro area, because it covers a large rural area. He said that the agreement is between the combined authority and the relevant Minister, but the insistence so far from the Secretary of State has been that the only way the north-east combined authority will get devolution is if it has an elected mayor. Is the Minister now saying that there is an option for devolution without an elected mayor for the north-east?
The hon. Gentleman will recognise from the quote by the Chancellor that I just read out that where areas want significant devolution on the scale that Greater Manchester has and where they have metropolitan areas at their heart, the Government will ask for that requirement to be part of that deal process. However, nothing in this Bill will allow the Government to compel any area to have a mayor or to have devolution. This is an enabling piece of legislation. The hon. Gentleman is absolutely right that in the deal that we are discussing with the leadership in the north-east area—all of it from his party—there is that expectation and requirement, and it is a deal on which great progress is being made.
This point was covered very well on Second Reading. My hon. Friend may remember the speech of my hon. Friend the Member for Gloucester (Richard Graham) about who is in charge. Many members of the public cannot answer the question about who is in charge of their area. If we are devolving significant powers, surely it is right and proper that we have one person who is accountable to the people in that area.
My hon. Friend makes a very good point. If we want to drive forward the opportunities that devolution presents, the best model to use in many areas is that of metro mayor. We will have an answer to the question: who do I ring when I want to speak to the north-east, to Tees Valley and to Manchester? We will have a person who can bring together those opportunities and drive the potential that this devolution agenda delivers.
I thank my hon. Friend and the Secretary of State for the reassurance that was given to my hon. Friend the Member for North East Somerset (Mr Rees-Mogg) that we in the west of England will not have a mayor forced on us. Does he not agree that having that clause taken out needs to be looked at on Report?
Perhaps I need to be clearer about the impact of this clause. This clause would put at risk some of those deals already done. It would leave them open to legal challenge and put in jeopardy the devolution packages that those areas expect, the deals they have made with Government and the commitments that we made in our manifesto. I am in danger of repeating myself excessively, but I will again point out that no area can have a mayor or devolution forced upon it. This is enabling legislation that allows us to deliver our devolution obligations.
Is the Minister saying that he has entered into draft deals for which he has no legal powers and for which the Bill as presented on Second Reading gives him no powers? Is he also saying that without driving this amendment through this afternoon, he would not have had the legal powers to enter into the deals that he has done so far?
What I am saying is that, if this amendment is not made, deals with areas including Greater Manchester and the Sheffield city region would potentially be at risk; they would be open to legal challenge. The whole point of this Bill is to enable us to deliver on the deals that we are making with areas. That is the whole reason why we need this legislation. If we were able to deliver those deals without it, we would not be here debating it in this Committee today. I do not think that the loss of those deals is an outcome that many would wish to see. I therefore commend to the Committee the amendments that we need to make to ensure that we can deliver on our manifesto commitments and on those deals that we have made.
I now wish to consider amendment 51, which was tabled by my hon. Friends the Members for Hazel Grove and for Shipley (Philip Davies). It provides that a combined authority mayor can be established only after a referendum. Our manifesto commitment states that we will
“devolve far-reaching powers over economic development, transport and social care to large cities which choose to have elected mayors.”
We are committed to cities making the choice for a mayor, but, as I have made clear, a mayor will not be imposed anywhere. This principle of choice is a principle which I am confident that my hon. Friends accept.
If the hon. Lady will let me make a little progress, I will give way to her soon. I know that she has been keen to get in.
In the traditions of our democracy—the traditions of a representative democracy that go back to the days of Edmund Burke if not before—it would be curious if that choice could not be made by those elected at the ballot box by the people of the city to represent them. That is the approach that is provided for in the Bill. The Bill specifically provides that each council in the area must consent to any order establishing a combined authority mayor. There is a good precedent for such an approach. A council can decide to establish a directly elected mayor for its area now. It was Liverpool City Council, which, in 2012, decided that Liverpool should have a directly elected mayor. If one council can decide to have an elected mayor, why cannot a group of councils decide to have a mayor over their combined area?
To require a referendum to be the only way for a combined authority to have a mayor would seem not fully to recognise the role that those democratically elected can legitimately have. The choice at root, as Greater Manchester has shown—
I am very grateful to my hon. Friend for giving way. He is proceeding with great courtesy, erudition and charm in this debate. Just on that point of the referendum in Greater Manchester, there were constituent parts of Greater Manchester that had referendums in 2012 on whether to have directly mayors and they rejected them. In part, that is my motivation for the amendment.
My hon. Friend raises an important point. He gives me the opportunity to clarify again the difference between the local authority mayors, of whom we have talked before, who took powers up and away from people, and the metro mayors who take powers down towards people and away from central Government and public bodies. It is an important distinction and one that is at the heart of the difference that explains the approach the Government are taking to my hon. Friend’s concerns.
As Greater Manchester has shown, the choice at root is whether or not to have wide-ranging devolution. If the choice is for devolution, it goes without saying that there must be accountability arrangements commensurately strong for the scale of powers being devolved. Holding a referendum on the narrow question of whether there should be a mayor risks not fully recognising the choice that is to be made. In short, our democratic traditions do not demand the approach provided for in amendment 51. Indeed, the approach we have in the Bill of the choice for a combined authority mayor being made by councils is exactly the same approach that is open to councils for choosing a local authority mayor—accepting the difference that I have already explained in my comments to my hon. Friend the Member for Hazel Grove about these powers coming down from central Government. Accordingly, I hope that this amendment will be withdrawn.
I wish to come back later to make some other points, but let me raise now this issue of two-way opportunity and choice for local people, which I very much welcome. Bristol does not have the opportunity to reverse the decision it made in 2012, which is a fundamental principle of democracy and accountability. I am interested to hear whether the Minister will support clause 21, which has come from the Lords.
I hear what the hon. Lady says and that issue will be given a great deal of consideration. I will comment on the matter later in the course of the Committee, but the message has been heard loud and clear by Government. As I said in my opening remarks, we are keen to find consensus where we can on this agenda. I hope that at this stage, subject to the debate that might take place, that will sufficiently reassure the hon. Lady so that she can await those discussions in due course.
I cannot give way to my hon. Friend, because I must make some progress. I apologise to him, but there will be opportunity throughout today to discuss this matter.
I doubt that it would be right to accept this amendment, but we shall of course listen carefully to the debate, both on this amendment and on the amendments of my hon. Friends the Members for Hazel Grove and for Shipley. We recognise the strength of feeling and we want to find a way to ensure the broadest possible support for this legislation. I have put on record the Government’s views and the concerns that we have to the proposed approach, but we will of course listen to what is said later on today.
Amendment 46, which is in the name of my hon. Friend the Member for North East Somerset (Mr Rees-Mogg), seeks to prevent the ceremonial county of Somerset— the administrative county of Somerset and also the two unitary authorities of Bath and North East Somerset and North Somerset—from adopting arrangements that include a mayor for the area of the combined authority. There are two difficulties with the amendment. I suspect that my hon. Friend will speak to the amendment later, and I will listen intently to the comments that he makes. The first is that it would single out Somerset, Bath and North East Somerset and North Somerset as some kind of special case.
Although those places are indeed special, the amendment is completely at odds with the generic, enabling provisions of the Bill. To recognise the unique character of an area is not to seek to exclude it from the enabling provisions. Rather, it is through those enabling provisions that we can recognise the particular character of Somerset along with the particular character of any other area. That is at the heart of the Government’s flexible approach—the bottom-up approach—of delivering devolution that is bespoke to the areas that want it.
Secondly, the amendment would rule out the Somerset authorities from having the option of adopting one of the models for strong and transparent governance that is available. Clause 3 enables an area to adopt the model of a combined authority mayor, but it will be for the councils themselves to decide whether they wish to move to this form of governance. We will not impose devolution on anyone, but it should be possible for everyone. I look to my hon. Friend the Member for North East Somerset to withdraw his amendment, but I will listen with interest to the comments that he makes.
I also want to comment on amendments 53 and 56, which are tabled in the name of the hon. Member for Nottingham North. Amendment 53 seeks to extend the Secretary of State’s powers under the new section 107A, so that in addition to providing by order for there to be a mayor for a combined authority area, provision could be made in certain circumstances, following a proposal from the constituent authorities, for some other governance and accountability structures for the combined authority area. Amendment 56 seeks to provide that, where such other governance structure has been provided, the combined authority would be a major precepting authority, as it would be if there were a mayor for the combined authority area.
In general, I have some sympathy with what might be seen as the underlying idea of those amendments, which is to introduce some greater flexibility, but in this case I am not persuaded that this is the right approach. The amendments risk being seen as an attempt to hold out the possibility of some governance arrangement that does not have that sharp single point of accountability. Although we have been clear that the Government wish to impose that accountability on no one, it will be a requirement for those deals that are similar in their scope and ambition to that with Greater Manchester.
The Minister is being very generous in giving way. May I take him back to the point made by the hon. Member for Bury North (Mr Nuttall) about making arrangements that can be flexible and allow evolution, particularly of the larger areas that will be devolved? I know that Core Cities are particularly interested in this concept. It could be the equivalent of a pre-nup agreement with a smaller authority before it comes into full membership, almost like with the EU where there is a trial period, to see whether people get on before taking it forward as consenting authorities.
I hear the hon. Gentleman’s thoughts and recognise the intention behind the amendment. I will listen carefully to his comments later and will look to find consensus where we can to ensure that the safeguards that all Members want to see are included while ensuring that we deliver on this agenda and on the manifesto pledge made by my party at the election, only six months ago.
I am conscious that a number of hon. Members wish to speak, so I shall try to move through some of the other amendments reasonably quickly. Amendment 57 is tabled by the shadow Secretary of State and his colleagues and requests that a gender balance must be considered when the mayor appoints a deputy. I gently remind those on the shadow Front Bench that this approach was considered for the leadership of their party and rejected. The mayor, who will have a democratic mandate to govern, needs to be able to determine who will best assist him or her in delivering on the promises they have made to voters. That person should be the best person, regardless of gender, and I asked that the amendment is withdrawn.
Amendments 43 and 44 are tabled in the name of my hon. Friends the Members for Altrincham and Sale West, for Hazel Grove and for Bury North. Amendment 43 seeks to enable an individual local authority to leave a mayoral combined authority without the need to dissolve and reform the combined authority and provides that where that occurs, the resource is split according to a fair and proportionate division. Amendment 44 would require the Secretary of State to abolish and reform the combined authority when a constituent council wishes to leave. One of the benefits of establishing a combined authority is the long-term stability it offers for the area it covers and the duties it has. These are statutory bodies and that long-term stability is important, but I understand Members’ concerns about how changing circumstances could lead to changes in how the local area would want to work, the geography over which a combined authority should be formed and the functions it should have. I will listen carefully to the comments they make later in the debate.
On the question of dissolving a combined authority, will not the difficulty always be that pooling and sharing arrangements will have been put in place and borrowing arrangements will have been made that a constituent authority might not easily be able to exit? That would make the long-term stability of the combined authority very uncertain were the amendment to be passed.
The hon. Gentleman makes a salient and important point. The Government will not support the amendment for that very reason, but I will listen carefully to the speeches that are made because it is important that we address concerns to the fullest extent to which we are able without attracting from the intention of the Bill and the intention of the Government to deliver on our agenda.
Clause 3 provides flexibility to enable a single local authority to leave, in line with the comments that the hon. Gentleman has just made, if it does not wish to continue to be part of a combined authority. A council can also leave a combined authority once a mayor has been elected for the area of a combined authority without the need for the combined authority to be dissolved and reformed, using exactly the same process as is used to establish such an authority of undertaking a governance review demonstrating that the change would improve the exercise of functions. In addition, a council that wishes to leave a combined authority can do so if it obtains consent from the other constituent councils of the combined authority, and if there is one, the mayor. Again, I will listen carefully to the comments of hon. Members with a view to finding a position that can get broad agreement across the House as the Bill makes progress.
Amendment 39 is tabled by my hon. Friend the Member for Amber Valley (Nigel Mills). It applies to circumstances in which a combined authority is proposed and seeks to require that no order can be made for a combined authority unless local government electors have been consulted on replacing the existing county councils and district councils with unitary authorities. That moves away from the flexibility we want to be to deliver and puts conditions on deals that we might want to make but that we do not necessarily want to impose. Again, I will listen very carefully to my hon. Friend’s comments later on in today’s discussions.
Will the Minister also listen to the problem in the districts in north Nottinghamshire and north Derbyshire? They are part of the Sheffield city region for economic purposes under the proposed deal but not for transport purposes, because in order to come under the mayor’s jurisdiction they need the permission of the county. Equally, the districts have to give their permission to join a county combined authority. This is a really complicated situation that needs resolution with Government help.
We will consider both the specific situation that the hon. Gentleman raises and more generally its application to our policy direction. I will listen carefully to the comments made in the rest of today’s debate.
Amendment 18 to 22, 27 and 28 are technical and simply provide that where the Secretary of State has powers in relation to electoral matters, those powers may also be exercised by the Chancellor of the Duchy of Lancaster. The provisions are similar to those in other legislation regarding local electoral matters, such as the election of mayors under the Local Government Act 2000, and ensure that the rules made on the election conduct of elections are consistent over wider electoral landscape. I hope that the explanation I have been to give in the time available adequately and sufficiently explains the Government’s position. I reiterate our commitment to listen to the comments of hon. Members and to build as broad a consensus as we can.
I want to make a very few points, because I know that other Members want to speak, particularly my hon. Friend the Member for Nottingham North (Mr Allen), who has tabled a number of amendments and has a long track record of constructive engagement in matters of constitutional reform and devolution of which I am very supportive. He did excellent work on that in the last Parliament.
My first point is about the question of elected mayors and takes me back to the point I made on Second Reading. If the Government are committed to considering bespoke arrangements on devolution for particular parts of our country and considering requests from combined authorities—groups of authorities voluntarily coming together and proposing what they want to see devolved—why do we need one element of imposition in all this? Why do we need one element that says that they can have the powers they come up with providing that agreement is reached but that they must exercise them in a particular way and that there is no ability to discuss that or come to a different view? I find it completely inconsistent with the rest of the Government’s approach.
I do not know why the Government are so insistent on having a mayor as a solution. If it was left to the combined authorities, they would come up with different arrangements. The arrangement in Sheffield has been negotiated not because the combined authorities wanted it but because they were told that they had to have it or else they could not have devolution. That is the situation.
I absolutely agree with the thrust of the hon. Gentleman’s remarks. Does he share my view that the element of imposition in the proposals means that there is a danger that the devolution proposals put in place will enjoy lower levels of support than they otherwise might if communities had been properly consulted and allowed to choose their own models of governance?
The right hon. Gentleman is absolutely right. Of course, the whole principle of the devolution that the Government propose, which I support, is that areas should come forward with their own ideas about what they want to see devolved. Why should they not also come forward with their own ideas about how that devolution should be exercised and about the governance arrangements for it?
I agree with my hon. Friend, but it is obvious why the Government want mayors. In certain areas—in his area and in others—they are hoping to break up the powers of locally elected Labour local authorities in the hope that if they have an elected mayor, they will either get an independent or someone who claims to be independent but is actually a member of the Conservative party.
I would not want to second guess the motives of the Secretary of State, so I will use my own arguments to resist what the Government are trying to do.
Apart from the inconsistency of approach, the proposals are confusing. That takes me back to the point I made in my intervention on the Minister. In the Sheffield city region the economic powers, which are important and cover skills, economic development and the infrastructure associated with it, are to be devolved to the combined authority, which will cover nine districts—four metropolitan and five non-metropolitan districts. But as I understand it from the deal, the mayor will have responsibility for just transport. So the mayor is to run transport, and the combined authority is to run economic development. The public want some consistency of approach on these matters. I do not believe that the combined authority, the district, would naturally have come forward with a proposal that broke up the responsibilities in this way.
My hon. Friend is making a powerful case. The difference between his deal and the Greater Manchester deal is that the Greater Manchester deal is within a single metropolitan county, so functions such as police and eventually fire and rescue can also be devolved to the Mayor’s office.
There is a big difference in the Manchester case. I am not arguing that Manchester should have a mayor imposed on it. If Manchester wants that, that is a matter for it, but it is different. In Sheffield we have hybrid devolution, with transport going to the mayor, but the mayor is not going to cover the nine districts. The mayor will cover only four districts—the old south Yorkshire districts—so how are people to understand the devolution deal, which has one set of governance arrangements for economic powers and skills, and another set of governance arrangements for transport, where one set of governance arrangements covers four authorities, whereas the other set covers nine?
The whole purpose of combined authorities is to bring local authorities together on a voluntary basis to cover a travel to work area—the natural economic entity—yet transport, the mayor and the associated powers will not cover the whole travel to work area of Sheffield. This is a real dog’s dinner. It is not going to work, and it is certainly not going to be understood by the public.
That leads me on to my second point. There is a problem with mayoral imposition, which in Sheffield’s case will not cover all five areas. Other districts can choose to join the arrangements for mayors if they wish. My understanding—I may be wrong—is that the districts of north Derbyshire and north Nottinghamshire, which are part of the Sheffield city region, are going to join the combined authority, which they are part of, for the economic powers. However, for transport powers to be devolved to those areas through a mayor, those districts will not merely have to agree, but they will have to get the county, which is the transport authority, or two counties, to agree as well. Does the county have a veto over what happens to devolution in the Sheffield city region?
This is not workable. At the same time as the Sheffield city region has a mayoral possibility, Derbyshire and Nottinghamshire are looking at having a joint combined authority, which would have a mayor as well. As I understand it, the mayor can exist for the districts of north Derbyshire and north Nottinghamshire only if those districts agree to the county mayor for Derbyshire and Nottinghamshire being created. So they have a veto over that. At some stage, surely, Ministers have to take some responsibility for coming forward with proposals to sort out this mess, or it will stop devolution working effectively in these areas.
As the hon. Member for Macclesfield on the other side of the Pennines, I understand the hon. Gentleman’s concerns and enjoy working with him on the all-party parliamentary group on national parks. Does he agree that one of the fundamental points of having a mayor is to achieve clear accountability? The lesson from London is that probably the greatest accountability the Mayor has is for transport. At a local level, surely much of the work needs to be done to bring the partnerships together. It cannot all be imposed by the Minister. It has to be about dialogue, which may sometimes be uncomfortable, at a local level as well.
I understand that argument, and it would be a lot easier to accept it from the Government if there was clear accountability and a clear understanding of what was happening, and if I had not just had to explain the situation in Sheffield city region, which has neither clarity nor accountability. Transport arrangements are to be devolved to a mayor who does not cover the whole travel to work area. That is not clarity or consistency, and it will not work.
Big issues are involved. I see the hon. Member for Carlisle (John Stevenson) in his place. We had discussions in the Select Committee, of which he was a valuable member in the previous Parliament, and I know he has clear views about moving towards unitaries if we are to have a combined authority that works. Otherwise we will have districts, counties and combined authorities, as well as parishes in some areas. I am not sure that that amounts to easy-to-understand government. The hon. Member for Amber Valley (Nigel Mills) has raised some interesting issues. I am not sure about his solution, but there is a problem, for which Ministers have to accept some responsibility.
I realise that others wish to speak. On the amendment tabled by my hon. Friend the Member for Nottingham North, I hope the Government will listen to the idea of some sort of independent body to look at these issues. That was discussed by our Select Committee last time. If there is genuine disagreement between central Government and local government, an independent body could bring the two sides together and produce a report for Parliament to consider. In the end it is not just about Government agreeing these deals; it is about Parliament taking a view where there is disagreement. Even if Ministers are not minded to accept the amendment today, it is an interesting idea to which they might give some thought.
Finally, we cannot legislate for double devolution because in the end, devolution has to allow areas to do things their own way, but there is a role for Ministers, parliamentarians and the LGA to get the message across that devolution does not stop at the town hall door. Where powers are devolved to local authorities, it is for them to move those powers into communities and to engage with communities in a positive way to make devolution happen even further down the line.
It is a pleasure to speak in the debate, and I shall speak to amendment 39 in my name. The purpose of the amendment is not to divide the Committee, but to ask how these devolution deals will work in areas that have a partly unitary and partly two tier authority structure. It is not clear that that is an effective or desirable situation for various reasons.
The reason for proposing a consultation with local people is that I am not sure there will be much enthusiasm among local people to pay for three different tiers of local government. It is confusing. They have no idea now which council does what. In Heanor in my constituency, for example, people elect 21 town councillors, they elect councillors to a borough council that has 45 councillors, and county councillors to a county council that has 64 members. How many more people do they need to represent them on these issues?
It is worth having an open consultation. There has been too little information and consultation with the public on the Government’s proposals, and I fear that my constituents will wake up one morning and find that they are part of an elected mayor area, together with the constituents of the hon. Member for North East Derbyshire (Natascha Engel), who is chairing this debate, and of the hon. Member for Nottingham North (Mr Allen), without any of those constituents realising that that was going to happen.
I am not sure many people feel there is a natural community that covers the whole of those two counties or that they wish to be part of such a local government unit. I suspect that paying for three tiers, plus town and parish councils, will not be popular, so before the proposals are implemented people ought to have a say about whether they would rather have only one of the two existing tiers. That would be a more easily understood and more cost effective local government structure.
The reason for proposing a consultation, rather than an absolute condition that devolution could not take place and elected mayors could not be introduced without moving to unitary authorities, is that I feared that the pearl-handled revolver that the previous Secretary of State still has in his desk drawer might be drawn out and fired at me in this debate if I suggested compulsory local government reorganisation. But if we are saying to local areas, “You can choose whether you want to be part of devolution and whether you want an elected mayor,” we should allow them to choose what unitaries they want. That is the next step. Three tiers of local government are not sustainable. That would focus the mind on what local government would look like and how we could best deliver these important services to our local people.
As a matter of fairness, I am not sure how a city of 300,000 people can have one leader at the table, and a county which has, say, 700,000 or 800,000 people can have nine people at the table, all with a veto and a combined authority on certain issues. If I were a member of a city council, I do not think I would see that as fair. We have a multi-level local government system which looks a bit odd. It does not help, for example, with the new homes bonus. I am not sure how business rate setting can be devolved to a two-tier area with questions over who gets to set what and who gets to keep what. There is a need to look at how local government works, and this would be the perfect time to do it. We can say to local people before they get their devolution and their elected mayor, “You tell us what you want. Do you want unitaries or do you want to keep the existing structure, with the advantages of a very local council, but with the extra cost that that brings?”
In Greater Manchester work on the devolution proposals is very advanced. Amendment 51, tabled by the hon. Member for Hazel Grove (William Wragg), would put that work on hold until a referendum was held to determine whether the public supported having an elected mayor. It would also require 50% of the population to vote yes before a mayor could be introduced, which is a high bar. The turnout in the 1998 referendum on establishing the Greater London Assembly and the Mayor of London was 34.6%. Although the turnout in the 1997 referendum on Scottish devolution was higher, the percentage of the total electorate who voted yes was less than 50%, and the same goes for the 1997 referendum on Welsh devolution.
I think that the hon. Lady has mistaken the explanatory statement, which refers to the 50% threshold, for the amendment itself. Perhaps she should pay a little closer attention to the wording of the amendment, rather than the explanation provided by the office.
The hon. Gentleman will appreciate that when I read an explanatory statement that says:
“The intention of this amendment is that elected mayors will be introduced only if that proposal has been endorsed, in a referendum, by 50% of the population”,
I am likely to believe the Clerks.
My hon. Friend will know that the Greater Manchester devolution settlement came from the bottom up, from the 10 councils of Greater Manchester, and the 10 leaders always intended to appoint an 11th member of the combined authority to act as full-time chair. The mayor merely becomes that 11th member.
I thank my hon. Friend for that intervention—his knowledge in this area is comprehensive.
As I was saying, 50% is a very high bar that is unlikely to be reached, so amendment 51 is, in effect, a wrecking amendment intended to stop the devolution of decision making from Whitehall to Greater Manchester. It is a kick in the teeth for the people of Greater Manchester.
The population of Greater Manchester is 2.7 million, and we have a shared sense of identity, even if, at the very minimum, it is, “We’re different from London.” Surely it is right that services to meet the needs of local people should be designed locally. Local people care about that much more than they do about esoteric arguments about organisational arrangements. Greater Manchester comprises 10 local authorities, 11 police divisions and 12 clinical commissioning groups. We have an opportunity to bring those resources together. Too often there are barriers to working together and sharing information and the delivery of services because of boundaries between councils and, for example, health agencies. The combined authority would bring together the strength, competence and experience of the existing local authorities and other agencies in Greater Manchester under the leadership of an elected mayor, which is supported by the 10 local authorities, so that the public can see the public face of that new devolved authority.
Of course, the point is that the Greater Manchester combined authority already exists in statute; it is a body corporate. The Bill will allow the 11th member, who chairs the combined authority, to be directly accountable to the 2.7 million people who live in Greater Manchester. Surely that is a good thing.
My hon. Friend is absolutely right; it is a good thing. When people talk to me—and, I am sure, when they talk to him—and ask who they can go to, to them having a mayor makes perfect sense.
Of course, there are outstanding issues with regard to health, but there is nothing in the Bill that will take away from the people of Manchester the right to national health services enjoyed by people elsewhere. The problem in Greater Manchester is the fragmentation of health, so it is good that these proposals will help reduce the number of commissioning organisations and allow providers to work together in a more collaborative way for the benefit of local people. However, we need a funding settlement that gives greater flexibility in developing high-quality health and social care services in the community across Greater Manchester as an alternative to hospital admissions, and at the moment it is difficult for each clinical commissioning group to free up resources in order to do that. Without that investment, the demand for expensive hospital care will continue. The authority cannot simply be a bank that hands out money under the current funding arrangements.
There has been a lot of talk about accountability, but in my experience accountability is at its best when well-informed elected representatives, such as my hon. Friend the Member for Denton and Reddish (Andrew Gwynne), demand answers and are willing to make their case loudly and publicly. No complexity in the arrangements for governance can take the place of that, and that is the accountability that the public expect us to ask for.
Last year I did some work looking into child sexual exploitation across Greater Manchester, at the request of the police and crime commissioner, Tony Lloyd, and following that I published my report “Real Voices” last October. Talking to children at risk of child sexual exploitation, it is absolutely clear that they do not observe local government boundaries, health boundaries or police boundaries, and neither do their predators. The digital age has redefined boundaries. A lot of progress on that has already been made across Greater Manchester. In particular, I want to congratulate Project Phoenix, a cross-boundary, multi-agency response to child sexual exploitation across the whole of Greater Manchester, which is working to ensure that child victims receive the same standard of response regardless of where they live. It has also initiated a very successful “It’s not okay” campaign to build public awareness of child sexual exploitation and help young people recognise when they are being groomed. It is clear that work on this crucial agenda will be enhanced by more devolution powers for Greater Manchester. We must overcome the silos and boundaries that prevent people working together to protect children from abuse.
Amendment 51, if passed, would be a kick in the teeth for the people of Greater Manchester and their children, who have felt for years that their voices have been ignored by Whitehall and Westminster. Devolution and the creation of a mayor offer the opportunity to the people of Greater Manchester to develop services that reflect their priorities and needs. We should take that opportunity and be positive about the opportunities we are being offered.
I am pleased to have an opportunity to participate in this brief debate in Committee. We have already had some useful exchanges, and my hon. Friend the Minister has, as usual, been courteous and helpful—I am sure that he will be even more helpful before the end of our proceedings.
The hon. Member for Stockport (Ann Coffey) spoke with obvious passion, and we all very much appreciate the work she did on child sexual exploitation, but I want to pick up on the point she made right at the end of her speech, despite my hon. Friend the Member for Hazel Grove (William Wragg) making it clear that amendment 51 would require a simple majority in the referendum, whatever the explanatory statement might say. I think that she can relax about the prospect of any kick in the teeth for local people.
I should not speak for my hon. Friend the Member for Hazel Grove in this instance, although I will put on the record my gratitude to the Clerks for their assistance in drafting the amendments and explanatory statements that stand in my name. I will speak briefly to amendments 42, 43 and 44, allude to amendment 51—I am sure that my hon. Friend the Member for Hazel Grove will speak to it in due course—and comment on Government amendment 4.
I want to try to clarify the point about the 50% threshold. In a referendum in which the electorate vote either yes or no, what we are trying to make clear is that it would have to have the support of over 50% of the people voting in the referendum. It is no more complicated than that.
I am grateful to my hon. Friend, who expresses the matter clearly and succinctly.
We have already shed light on a number of important things. I particularly welcome the Minister’s reassurance, which is important to those of us who are evangelists for devolution for the Greater Manchester area, that in due course, when it has proved as successful as we all hope it will be, some of the neighbouring authorities such as Cheshire East Council—I am delighted to see my hon. Friend the Member for Macclesfield (David Rutley) here—might apply to be part of the journey to this great new world on which we are embarking. I am sure that he would not be alone in wishing to come and join us.
I have great respect for my hon. Friend, who is indeed a great friend. Like him, I would absolutely love to see devolution succeed in Greater Manchester, in partnership with authorities in the counties around it, including East Cheshire unitary authority.
I am glad to have enabled my hon. Friend to speak for himself.
Amendment 42 seeks a very simple and not terribly onerous change. It would simply require the Government to report annually on how they have exercised their functions in order to demonstrate that they have not themselves exercised any of the devolved functions that rightly belong with the combined authority or the mayoral authority. There might be better ways of doing this, and I hope that my hon. Friend the Minister will put forward his own proposals in due course. However, the underlying point is that although the Government have been very pleased to place obligations on local authorities through the process of forming agreements or deals, as the Secretary of State likes to term them, very little in the Bill as it stands provides any mechanism to hold the Government to account and ensure that they fulfil their side of the bargain. I think that would be welcomed by everybody who is an evangelist for devolution—as I am sure we all are.
The Minister alluded to amendments 43 and 44, which seek to provide an easier route for exit. I happily accept that, as the hon. Member for Denton and Reddish (Andrew Gwynne) said, it would be very difficult for any authority to leave a combined authority, especially a mayoral authority, at some point in the future. An enormous number of functions, agreements, financial obligations and so on will bind local authorities together, increasingly so as the years pass, and therefore no local authority would do this lightly. However, the ability to leave, should the devolution arrangements not work in practice for any one or more of the local authorities in an area, is, in some ways, the ultimate guarantee that no abuse should take place. It is particularly important that we should have such a safeguard if we reach the end of our deliberations without a referendum lock in place. If the public are not to be given the choice as to whether they want to have the elected mayor and this new structure of governance put in place over them, surely there must be a safeguard so that if, at a future date, the new arrangements were not working for the people of Trafford, Bury, Stockport or Bolton, they could seek to leave, without penalty, to find a new way of providing services and representation to the local community.
Amendment 51 calls for a referendum test to be passed. This also relates to Government amendment 4. I think the only reason the Government are so determined to overturn the amendment passed in another place which seeks to prevent conditionality—local authorities being told they are allowed to have devolution only if they accept the model of an elected mayor as a condition—is that negotiations in Greater Manchester have moved as far as they have under those conditions. It seems wrong that the Government are expecting local authorities to accept a particular model of governance as the price for this kind of devolution settlement, particularly if the Government do not have the self-confidence to consult the people and to believe in their own argument such that they could persuade the public that it is something they ought to welcome. This is the ultimate test of the Government’s arguments. The Minister is a very persuasive man, as we have seen in the Chamber today. I am certain that with his enthusiasm, charm and powers of persuasion, he could go out and sell this proposition to the people of Greater Manchester, and perhaps to those in Sheffield and other parts of the country. I wish that he would have the confidence in his own abilities that we all have.
I am sorry, obviously, to interrupt the much deserved flattery. Does my hon. Friend accept that, especially in areas outside Manchester, none of the council leaders proposing these deals has been elected on such a mandate? I do not recall that in the 2013 county council elections there was any suggestion of “Vote Labour and we’ll try and create an elected metro mayor for Nottinghamshire and Derbyshire combined.” I agree with local decision making and I support these changes, but there is no local electoral mandate for them.
I absolutely agree with my hon. Friend. In my Greater Manchester constituency, the level of knowledge of what is being proposed on changes in governance is still remarkably low. Certainly, it was not a significant feature of the general election campaign or the last local election campaign. We need to try to create a better level of knowledge and engagement.
It is correct that no political party has so far campaigned on a metro mayor, but can the hon. Gentleman tell me of any political party, in Greater Manchester or elsewhere, that has ever campaigned on more power for central Government? In fact, the opposite has always been true. Having written Labour party manifestos several times, I know that political parties have always asked for more decentralised power.
The hon. Gentleman and I agree in a distressingly large number of circumstances, and I absolutely agree with what he says now. Most of us are very firmly in favour of the devolution of powers from central Government to a level closer to the people, but we are discussing the mechanism for governance and whether people should have the right to consent to changes in that mechanism.
My hon. Friend the Minister says that this is a necessary package. Clearly, the position that the Government are seeking to establish is one where we can have these levels of devolution only with the particular type of accountability that comes through a directly elected mayor. In that case, does he not believe that that can be put to the people of Greater Manchester as a package? If the benefits of the devolution package are sufficiently good to make it an attractive proposition—if enough of the powers that the hon. Member for Blackley and Broughton (Graham Stringer) and I would like to come closer to the people are being devolved—perhaps even those who are sceptical about the elected mayor model might accept it as a whole. I hope that the Minister, in looking at how the Government might more effectively take on board the views of local people, will consider that possibility as well as the one we have put before the Committee in amendment 51.
Before I begin, I should inform the Committee of the breaking news that our good friend Michael Meacher, the right hon. Member for Oldham West and Royton, has passed away. He was a good friend to many people in this House, and I am sure there will be an appropriate moment for us all to pay tribute to a fine parliamentarian and good friend.
This is my first opportunity to put on record my gratitude and the thanks of the House to my hon. Friend the Member for Stockport (Ann Coffey), who seized the opportunity to produce a magnificent report on areas in and around her constituency. I hope she will take great pleasure in the fact that the Government are now actively considering creating a What Works institution to address the sexual abuse of children. It will ensure not only that people are not victimised, but that perpetrators do not repeat their offences. I hope she feels that her work has been rewarded. I know that was not what she was looking for, but she put a great amount of energy and thought into a very difficult subject.
Turning to the Bill, I want us to think about where we might be in 2020. As I said on Second Reading, I suspect there will be at least one more devolution Bill—possibly two—so the Bill under discussion is getting the ball rolling, and as we progress I think that many of the edges to which Members on both sides of the Committee have rightly referred will be knocked off.
If the Government were minded to approve the 38 bids they have received, that would give devolution to about 80% of English local authorities. There is, therefore, not a lot more to do in terms of taking coverage further, but there is a lot more to be done in a number of specific areas. I hope that the Minister, who kindly said he would listen carefully to my remarks on my proposed amendments, will be able to use them and others to ensure that we get a practical devolution settlement that sticks and delivers for people. That cannot happen under this Bill, which is about beginning the evolution of the process. I commend the Government for that.
I am pleased to see present one colleague from the Scottish National party, the hon. Member for Glasgow Central (Alison Thewliss). Whatever our differences with the SNP, it is not the only party that got votes in Scotland at the general election, although one could be forgiven for sometimes thinking that that was the case. In fact, if we were operating under a proportional system, many more Labour, Conservative and Liberal Members of Parliament would be representing Scotland.
Putting that aside, we can learn a great many things from the package given by the Westminster Parliament to Scotland after intense negotiations. It could be used as a template for further English, Welsh and Northern Irish devolution. We should try, with a lot of humility, to understand how the package—which resulted from negotiations prior to the referendum—works, how it came about and how it could be applied to the rest of the UK. The answer to any argument in favour of separatism is that everybody in the United Kingdom should enjoy the maximum amount of devolution and run as much of their own affairs as possible, whether that be nationally—as in Scotland, Wales, England and Northern Ireland—locally, or at the level below that of the local council.
I am grateful to the hon. Gentleman for tempting me to intervene on him. Does he share my disappointment with the draft Wales Bill, which was published with much fanfare yesterday, but which pales into insignificance when compared with the powers made available to Scotland? The ad hoc nature of devolution across the UK is inherently unstable. Of course, my hon. Friend the Member for Glasgow Central (Alison Thewliss) and I want to go further than the Scottish settlement, but surely that is the benchmark we should be working towards.
Unless there is a written settlement, there has to be an evolutionary settlement and someone has to pile in first, make the breakthrough and be a pioneer. In terms of the nations of the United Kingdom, that has been Scotland. All those who contributed to that devolved settlement—including, obviously, Donald Dewar, but also the Scottish Constitutional Convention and many others in civic society—deserve acclaim for their achievements. It is up to the rest of us, whether we are in Wales, England or Northern Ireland, to go through the gap and say, “Devolution is a great thing.” It is not an expedient to buy off Scotland, but a matter of principle that should be applied equally, and at an appropriate pace, to Wales, England and Northern Ireland.
My argument is exactly the same with regard to Manchester, which has established the principle. It spent 14 years establishing this bridgehead and it deserves every accolade possible. The rest of us in England should take strength from what it has done. I am sure it is far from perfect—it would be impossible for it to be perfect at first gasp—but we will be working on this issue for another 10 or 20 years. We should follow through and make sure that those other English authorities that have made devolution bids get similar, appropriate deals. As I have said, they account for about 80% of the population.
My hon. Friend talks about the principles of devolution, but one of the key factors as to whether it will work will be the proper and fair allocation of resources. This Government have a track record of devolving responsibility to local authorities while at the same time top-slicing their budgets. Is not my hon. Friend concerned that this Government, who are committed to a small state, will devolve not only responsibility without resources, but blame for cuts?
My hon. Friend makes a very sound point, of which we should all be wary. We need to break that system so that we are able to go with the begging bowl and say, “We can prove we need a little bit more than anyone else,” and take as much control as possible of our own areas and resources. The amendments I have tabled seek to achieve that. The localities need their own tax base and powers. Those powers also need to be entrenched so that they cannot be sucked back by any Government—by that black hole of magnetic force we call Whitehall—unless they are able to demonstrate that their stance can be defended constitutionally, as explained in a couple of my amendments.
We need not be afraid. As well as the tremendous example of what has happened in Scotland, we have the example of what happens in every other western democracy. People in western Europe and north America take as given the independence of their locality, state, region or länder from the centre. They cannot be told what to do. The idea that the President of the United States could tell the states of New York and Georgia how they should spend their money is laughable, as is the idea that all the money in individual areas in Germany, Italy and Scandinavia should go to the centre and then be redistributed. They would think we were crazy if we proposed that system for them, yet that is the system we operate for ourselves. We are the oddities—we are the odd ones out.
We need to mature as a democracy. Sometimes I think our democracy is a bit frail and feeble, but actually it is underpowered: we do not have enough of what other nations in the western world have and we are unable to take steps forward. That is why I welcome the Bill in general, but I want to propose a number of other steps for the Minister to take either now or, perhaps more realistically, in the next devolution Bill.
Does the hon. Gentleman agree that the difference between the United Kingdom and many other countries is the lack of citizen engagement with the democratic process in this country, and that if devolution is to be properly embedded and truly work, people must be engaged at grass-roots level?
I do, but I gently suggest that the hon. Lady does not push me too far on that point, because she will push me into talking about what the SNP has done to local government in Scotland. One of my new clauses, which may go some way to meeting her point, would entrench the rights of authorities below local councils—neighbourhood, community and parish councils—so that they too can have clear rights.
The hon. Member for Amber Valley (Nigel Mills) has left the Chamber, but people do get confused if there are lots of different tiers and nobody quite knows who does what. If the parish council looks after grass verges, everybody gets to know that and those who are interested can ask questions at that level. If the electrification of the midlands main line or the refurbishment of the M1 motorway is the responsibility of the combined authority for Nottinghamshire, Derbyshire, Nottingham and Derby, people will get to understand that mechanism. We could spend a lot of time talking about combined authorities. Let us let evolution take place and let us make sure, as part of that evolution, that, if we manage to secure this immense gain and step forward of going from Whitehall to town hall, we also go to the level below the town hall.
Entrenchment sounds like a very technical, dry constitutional question, but it is what just about every other country has. Just in case we ever got an unpleasant or tyrannical central Government of any political party, a local area would have justiciable rights to say, “I’m sorry. You cannot do that. You cannot impose that on us. We are an independent unit, with just as many rights as central Government.” Those rights might include the right to raise its own money, issue bonds or whatever it may ultimately be during the next five or 10 years as we catch up with the rest of Europe. Such entrenchment cannot be obtained, however, even by a Minister as benign as this one or his colleague the Secretary of State, because it is sometimes required to be in writing and to be defended.
The object of my new clause 1 is to defend the progress that the Minister and the Secretary of State are trying to make so that there cannot be changes unless there is consent. There are many ways of doing that. One way is to have a super-majority in the House. If someone came along and tried to terminate the life of a Parliament, just at the whim of the Executive, it could not now be done because there has to be a super-majority. Perhaps local government is as important as the question of how long the life of a Parliament is. Another way would be to have a check and balance, as it were, perhaps with local government itself—with the LGA, or any other institutional arrangement—being able to say, “No. We’re not yet prepared to relinquish that power, so we stand where we are.” It could also be defended behind the Parliament Act 1911, which says that the second Chamber shall not stick its nose into any affairs other than—this is the only one at the moment—five-year Parliaments. We could add that it shall also defend the rights of local government and its independence from the centre. Putting such constitutional or democratic blocks in the way of an erosion of some of the very good work that the Government are doing in the Bill is very important in my opinion. I hope that that will be addressed, if not only this occasion, then in a future Bill.
I would jump at the possibility of moving to a written constitution, because that would make it knowledge we could share with every schoolboy and schoolgirl, rather than having parliamentary archaeologists, such as the hon. Gentleman, tell us the right interpretation of a particular view. We could, however, have a halfway house; sadly, it does not necessarily require a written constitution. There are the means of a super-majority, a self-denying ordinance, a lock by an external body—in the case of local government, I have suggested it could be the LGA—or the 1911 Act. It is absolutely possible: every other western democracy has done it, and there is nothing in the parliamentary water that robs us of the wit to do something comparable.
I tabled new clause 13 on double devolution. The Minister has been very generous about considering how we can safeguard devolution pressed down below town halls to the localities. The new clause suggests that the Government should make a regular statement to talk through and enable Parliament to debate what happens when powers are given to town halls and to ask whether the powers get down to the people who really need them. There may be many powers that appropriately stop with the town hall or the combined authority. Equally, however, many others would be administered much better at a lower level. It is not about doing that for everything or forcing people into it, but about doing only what is appropriate. That is the way to follow this through and to continue the debate. This is not about trying to prevent the Government from doing what they are doing, but to facilitate the next stage.
My hon. Friend the Member for Sheffield South East (Mr Betts) talked about the need for public consultation and involving the public. It is absolutely imperative to take the public with us on this journey. It should not be seen just as a technical exercise. We should involve them by saying, “Look, we’ve had our devolution for a year or so. Let’s have a little look at what we’ve managed to do so far. What do people outside Government or Parliament think we could do better?” It would be very healthy to have such dialogue, promoted by the Government through a statement to the House or to the general public, and it would help us to move to the next stage of the evolution of devolution, particularly in England.
The Minister referred courteously to my new clause 18, so I will not go over the ground again in relation to parliamentary oversight. Let me, however, mention the other part of the new clause, which is about having an independent body to look at how devolution is going. This is comparable to my point about double devolution. However, they constitute it, the Government could create an arm’s length authority to say, “There are a lot of problems around x, or whatever it may be.” My hon. Friend mentioned cross-border difficulties, where one bit of territory is contested by more than one combined authority or metro mayor. Other colleagues spoke about powers being in one place, but not being relevant to another part of an authority. Many others have spoken about mayoralty.
An independent body—without the vested interests we sometimes have to have in Parliament, sadly—should look at this and say, “Well done, the Government. You’ve got us to first base, but if you want to get to second base, we think you should have a look at these things.” Again, that is not about binding Parliament or telling Ministers what to do, but about allowing ventilation of what is, for us, the very novel concept of devolution and the question of how it can work better.
I have already put a number of other points on the record. Like the Minister, I have spoken to Core Cities, Key Cities, the New Local Government Network and the National Association of Local Councils. They have all raised with me concepts, as well as detailed amendments, about where this ought to go, but I will not go through them. I will not detain the Committee much longer, suffice it to say that as well as getting this Bill through the House, we must look at where we want to be in 2020 and take steps to open a dialogue so that we can get to where we all want to go. We want to ensure that people control much more of their own affairs not only at United Kingdom level, but at national level, at combined authority devolved level and at the grassroots—on the ground in the localities. I hope that the Minister will take my remarks in the spirit in which they are intended and continue such a dialogue over the coming years.
Order. I want to call the Front Benchers at about 2.55 pm. There are still six or more Members who wish to speak, so unless Members keep their contributions below five minutes, we will not get through them all. I would therefore appreciate the co-operation of the Committee.
Given that the hon. Member for Nottingham North (Mr Allen) has informed the Committee of the sad news of the death of Michael Meacher, I think it is appropriate for me to put it on the record that the Government’s thoughts are, of course, with those who were close to him and who will be feeling pain at this time. As someone who was in this House for longer than I have been on this earth, he made a very significant contribution to this place and one that we should recognise.
May I add to what the Minister has just said? In my dealings with Mr Meacher in this House, he never put his strongly held political views above his fundamental good manners and civilisation. He was always the most decent man to talk to, even though I doubt there was a single subject of any political importance on which we agreed. He is a loss to this Chamber.
I will come on to my amendment 46, which would exempt Somerset, God’s own county, from the provisions on having a mayor. The Minister suggested that Somerset was not exceptional. I think that that was a momentary lapse because he is not only a most honourable gentleman, but somebody of fundamental good nature and wisdom. We will forgive him such a momentary mental lapse on this occasion and put it down to the wet weather or something like that.
The Government are giving fine and good undertakings. I will quote briefly from the Secretary of State on Second Reading:
“It is a fundamental tenet of this Bill, in contrast to other reforms debated over many years, that it does not give me or any of my ministerial colleagues the power to impose any arrangement on any local authority.”—[Official Report, 14 October 2015; Vol. 600, c. 326-327.]
My hon. Friend the Minister has reiterated those undertakings. They are excellent and encouraging, and they provide a solid basis for proceeding. Unfortunately, there is a “but” coming.
Everything I hear from local councillors in North Somerset and Bath and North East Somerset tells me that they are having their arms twisted. We are seeing a velvet glove today—a finely manufactured velvet glove of the highest quality velvet. Behind it, however, is a firm iron fist that expresses the Government’s will that things should go in a certain way. I encourage the Government, through my amendment, to make the background noises—the conversations in smoke-filled rooms—match the fine words that we are hearing in this House.
And so I come to why I want to exempt Somerset. Well, there is history—there is always history! I will start, as always, with Alfred the Great. If we go all the way back to 879, Bristol was in Mercia and Somerset in Wessex. One of those two kingdoms was completely under the Danes—that was obviously the Gloucestershire bit. The borderline between the two has been there for over 1,000 years. There is a strongly embedded history in Somerset and, indeed, in Bristol which means that they see themselves as independent, distinct units.
It is important that the Government go with the grain of communities that have built up over generations, centuries and, in this case, even a millennium, rather than create new administrative regions that mean very little to people. Most people have no interest in the title of their council. They have an interest in where their home is. Their home may relate to a great city, to a great county or to a village, a county and the country. The use of power needs to go with that. Therefore, devolution from the United Kingdom to an administrative body with which people do not have sympathy and about which they do not have a feeling makes things no better. People have a loyalty to the nation and a loyalty to their locality, but if interspersed between them is some random political agglomeration that came about through a sudden burst of enthusiasm by a Government, people have no association with that, no enthusiasm for it and no loyalty for the institution.
Of course, this has been tried before. This is my second and perhaps more important appeal to history in the context of Somerset, particularly in relation to North Somerset and Bath and North East Somerset. We were part of a much disliked, most unsuccessful, high-cost organisation called Avon. It is known to the cognoscenti as CUBA—the county that used to be Avon. The name CUBA was appropriate because it was almost as left-wing as Mr Castro in its approach to government and it was exceptionally expensive. It had one of the highest increases in rates in the 1980s. It was felt by people in the rural areas that it was run for the benefit of Bristol, with the cost being borne by people in rural areas.
We continue to see that in Avon and Somerset police, the cost of which is borne by the rural areas, even though—I am sorry to say this with the hon. Member for Bristol South (Karin Smyth) sitting opposite me—most of the crime is in Bristol. Inevitably, being an inner city, Bristol has more drug dealing, more armed crime and more social disorder than Nempnett Thrubwell and other villages in my constituency, which are bastions of law-abiding civility.
I was not going to intervene, but the hon. Gentleman is maligning the great city of Bristol, which draws in people from North East Somerset with its great employment and cultural opportunities. Indeed, that causes some great problems in my constituency in respect of travel arrangements and so on, but we are grateful to have his constituents coming to work in the city. Perhaps we can have a more balanced discussion.
I am very grateful for the hon. Lady’s intervention, because it brilliantly encapsulates what I want to say, which is that Bristol is a fantastic city, a noble city, a city of fine history, but it is not Somerset. What I want to do is to protect Somerset from encroachment by Bristol. I want Her Majesty’s Government to ensure that the people of Somerset are not subjected to any pressure, any force or any arm twisting to be ruled from Bristol or to subsidise Bristol. I would rather, and I know the people of Somerset would rather, see our money spent through decisions made in Whitehall than decisions made in Bristol. We see the unity of the nation and we see the history of our county; what we do not see is a random administrative area.
I hope that the Minister can give me one commitment, which is that if we do not sign up to these things and if we retain our independence and freedom of manoeuvre, the Government institutions that spend money, such as Highways England, will continue to spend money—that it will not mean any loss of money, but will merely be about who decides how it is spent. For once, I am trusting the man in Whitehall against the man in red trousers in Bristol.
The Minister made three startling claims in his opening remarks. He said that mayors will not be imposed, that devolution settlements will not be imposed and that the Government will seek consensus on such settlements. That is just not what the Government are doing.
The hon. Member for North East Somerset (Mr Rees-Mogg) talked of an iron fist in a velvet glove. What we have here is complete doublespeak. The portrayal of the situation by the Minister and others is that these decisions will somehow be taken in local areas. At the same time, the North East combined authority is being told that it will get devolution, but that a non-negotiable condition of that is to have a mayor. When councillors meet the Secretary of State and ask him why they need a mayor, he says that it is because the Chancellor of the Exchequer requires it as a prerequisite of devolution. The Conservative party and its friends in the north-east state that when the North East combined authority’s leaders ask sensible questions about why other areas have devolution without a mayor, or legitimate questions about how the mayor will work in practice, they are somehow being difficult, and that is why amendment 51 is so important. Throughout this entire exercise we are forgetting one important group of people—those who elect us and who are served by local councils and local areas.
Last week on Second Reading the hon. Member for Bromley and Chislehurst (Robert Neill) claimed that the Secretary of State was being a Chamberlain-style reformer. No, he is not, and I agree with my hon. Friend the Member for Sheffield South East (Mr Betts) when he says that we will end up with a complete dog’s breakfast.
There has been no great commission. When the Conservative party restyled local government in the 1970s we had the Redcliffe-Maud report, and in the ’60s—I think it went over into the Heath Government—the Crowther commission considered devolution. At least we are considering the issue and have some consistency to our approach, but that is because this Bill has nothing to do with real devolution and is about the Chancellor’s political control. He is seeking to ensure that the cuts required by his ideal of a small-state Britain can be devolved to local authorities or mayors, so that when people ask, “Why do you have to make these cuts?”, he will stand back and say, “It is nothing to do with me. It is down to your local mayor, and you decide.”
The North East LEP does not really hang together cohesively in its geography. It extends from south of Barnard Castle that borders North Yorkshire, right up to the Scottish border at Berwick-upon-Tweed—a considerable distance. This is not some sort of city region; it is an urban heart with a considerable rural hinterland. It does not hang together well from a business perspective.
My hon. Friend makes a good point. In 2010 the Government were completely against regions, but now they have recreated a region in the northern LEP area. What he says is right—the area is very diverse and has some difficult issues regarding population, services, and other things that are delivered.
This is slightly different from when we had mayors for local authority areas. The Minister said that we need elected mayors because this is about devolving power from Whitehall to the regions, and that is why the approach needs to be different. I am sorry but—I make no bones about this—in 2004 I remember the Labour Government’s proposals for regional government in the north-east. Was it right for local people to have a say in whether the north-east had an extra tier of regional government? Yes, I think it was, and people overwhelmingly rejected it. I am not sure whether the Minister was around then, but many Conservatives in the north-east who now support him argued vigorously for the idea that it was right for people to have a say in the future governance of their region. Indeed, I think that some of the people who funded his election campaign also funded the no campaign in the north-east.
If it was good enough then, and the Conservative party and its backers in the north-east argued vigorously for why we should allow people to have a say, why now will they not allow people to have a say over a new tier of regional government? That is inconsistent, and it is interesting that the same voices that once argued vociferously against regional government in the north-east have remained completely quiet now that a Conservative Government are preparing to impose a system on the north-east without giving local people a say.
I congratulate the hon. Member for Hazel Grove (William Wragg) on his amendment, and I hear what people are saying about Manchester. I will not get into Manchester politics, but council leaders should be careful. If we have learned one thing in the past few years, it is that people cannot be taken for granted. If we are to listen to and represent people, it is important at least to give them a say in what we do. This is a major issue, given the change to how the country will be governed, and excluding people in the north-east and not giving them a voice in their future is completely wrong. The Government need to explain why they are afraid to allow people in the north-east to have a say in the future governance of their region.
It is a pleasure to serve under your chairmanship, Mr Crausby.
I pay a warm tribute to the Minister and the Secretary of State for their approach to this Bill and the constructive dialogue that they have had with—dare I say it?—the caucus of Greater Manchester MPs, including two who are sitting next to me. The Minister warmed my heart by quoting Edmund Burke earlier. I do not know how Burke’s “Reflections on the Revolution in France” compare with my Second Reading speech, “William Wragg’s reflections on Devolution in Greater Manchester”, although in some respects my speech was probably equally as intemperate as the fiery language that Burke deployed against the French revolution. If I at all offended the Minister with my remarks on Second Reading, I wish to atone for that entirely.
The point about amendment 51 is no different to the point that I made last week about having confidence in the arguments and trusting the people to win them over. My hon. Friend the Member for Altrincham and Sale West (Mr Brady) expanded on the qualities of the Minister and the Front-Bench team in persuading and engaging with the public, and if they were to test this issue with a referendum in Greater Manchester, they might be pleasantly surprised with the result.
My neighbour, the hon. Member for Stockport (Ann Coffey), has recently left the Chamber, but I pay tribute to her work on child sexual exploitation. I was pleased to serve on one of the sub-committees of Stockport Council which took evidence from her. I say gently, however, that I would distance myself from any temptation to link the topic on which she has done a great deal of work with whether an elected mayor would impact on that, as I think it is a slightly spurious argument.
As a former teacher I should perhaps apologise to the hon. Member for Nottingham North (Mr Allen), who took issue with how the explanatory statement was drafted, and I hold my hands up as that was due to a lax approach on my part. There was never intended to be threshold on which 50% of the population would have to agree. Amendment 51 is supported by a growing list of colleagues, and it simply asks that fundamental changes to local government and the governance of my constituency are put to the test at a referendum, so that they can be endorsed and back the Government’s welcome programme of devolution.
I am pleased—along with my neighbour the hon. Member for North East Somerset (Mr Rees-Mogg)—to give the Committee a bit of respite from the subject of Manchester and to talk a bit about Bristol instead. Bristol has been a trailblazer for devolution and, in 2012, it was the only city to choose to have an elected mayor when the question was put in a referendum. I am a keen supporter of devolution and of transferring power closest to the people it affects, and I was proud to make my maiden speech on that subject. I am perhaps not as much of an evangelist as the hon. Member for Altrincham and Sale West (Mr Brady), but I am keen for devolution to happen.
Let me pick up on a unique issue which means that the people of Bristol do not share the same democratic rights as the rest of the country. The Bill started in the House of Lords, where Baroness Janke moved an amendment, now clause 21, which, if passed, would give Bristolians the right, after 10 years, to reverse, if they so wished, the decision we made in 2010 to have an elected mayor to govern our city. If the model is not fit in 10 years, we would like the opportunity to change it. By that time, citizens will have had ample opportunity to assess the value or otherwise of the current model, how it works in Bristol and, crucially, with the changing situation, how it would work across—I will not use the word CUBA, or indeed Avon—the wider Bristol area and with our neighbours in a combined authority.
This is not about personalities or whether we like or dislike the current mayor or would prefer a different person in office; it is about the system that works best for us in the city region. It is not about party politics either, because all the major political parties on the city council agree and supported a joint motion to that effect. I am very grateful to Baroness Janke, a Liberal Democrat peer, who did a lot of work in shaping and gaining support for the clause when it was in the House of Lords. It is about democracy. It is about whether we should have a voice and a new model. We should now be given that say. In an era when we are supposed to be seeing an increase in devolution and empowerment, it feels wrong that we as Bristolians should have to go through a long and tortuous legislation-making process to know whether we have the right to determine the way our city is governed. This clause would allow us to do that much more easily.
I hope the Government are able to support that provision, and give me and the people of Bristol a greater say in how this works for us in the future.
Turning to another aspect of devolution, I would like to talk about the importance of health devolution. I obviously welcome the Government’s devolution revolution, which the Bill will help to deliver. In London, the Mayor has been campaigning for greater fiscal devolution and I know he applauds the recent announcement on business rate reform, as this will benefit our capital.
The devolution revolution that the Bill champions will ensure that Greater Manchester becomes the first English region to have full control of its health spending. However, as the Minister will be aware, London government has also been exploring how a similar model could work in the capital. As we all know, health is no respecter of ward or council boundaries. People live in one area and work in another, and may receive treatment for complex conditions in more than one area. That is why it is so important, in cities such as London and others that have been instanced today, that it should be viewed as a whole.
For a patient receiving many different treatments, it is far more effective for their care to be under one authority. As the previous deputy Mayor of London watching over this brief, I chaired many cross-London forums where councils and health authorities have come together to share resources and work together for better outcomes instead of being able to afford a smaller service in their locality. I would therefore argue that London, like Manchester, should explore ways to reform health and care provision, including a rebalancing towards prevention, early intervention, and proactive personal care and support. The aim should be to reduce hospitalisation, invest more in primary care, and integrate planning and decision-making for both the health and care services. Inevitably, there needs to be a review of NHS properties, including underused facilities, so that new integrated care centres can be opened and we have a more efficient use of the health estate.
There is agreement among London partners that the scale and complexity of health and care issues in London means that a model of reform should include actions at local, sub-regional and pan-London level. As part of their submission to the comprehensive spending review, London government made the case for greater devolution over health and social care. In the interests of brevity as we are short of time, I shall reduce the list substantially and just mention public health powers, including regulatory and fiscal interventions; multi-year allocations of NHS and local authority funding on a borough footprint; and London’s share of national NHS transformation funding.
As the Minister will know, representatives from the Greater London Authority, London Councils, NHS England, the London office of clinical commissioning groups and Public Health England are developing a memorandum of understanding to progress this work and to look at the powers that could and should be devolved to London. The recent London Health Commission report also advocated a London health commissioner, who could focus on the particular concerns of our growing city with its transient population. In London, we see diseases that many of us thought had died out, such as tuberculosis and rickets. They are often seen in people who were born or have grown up elsewhere, bringing pressures to the health system in London.
I am asking the Minister to welcome the approach being taken by London and support the aspiration for the greatest possible speed of reform to improve the health of Londoners.
I start by putting on record my condolences to the family and the many friends of Michael Meacher on the very sad news we have heard this afternoon. I am sure that we will have the opportunity to pay our respects to him properly and recognise the huge contribution he made to politics, Oldham and the life of this country and this House.
Turning to the Bill, this is a very exciting and long-overdue agenda. The UK, and England in particular, is deeply over-centralised. This holds back our regions, cities and communities. We welcome the Bill. It is a positive step forward. It is broadly, as the Minister said, of a consensual nature and I welcome his readiness, as he expressed it earlier, to listen to this debate before coming back with his final proposals. That does not mean, however, that there are no areas where the Bill could not go further or be improved. We have heard, across the Chamber this afternoon, plenty of examples of such areas.
Listening to the Minister, it struck me that he was on his weakest ground on the issue of mayors. A number of MPs from all sides spoke very eloquently about imposed mayors. It is right that areas that want mayors should have mayors. The Greater Manchester combined authority made it absolutely clear that it supports its mayoral model and we absolutely back it on that. When that applies to other areas, that is absolutely fine: if that is the model they want, that is the model they should have. However, the Secretary of State should not be able to force mayors on areas that do not want them. He has not been at all clear on how a metropolitan area that wants to proceed with devolution but without a mayor, is able to do so. He has made the one conditional on the other.
Clause 3, as it stands, is an important clause. It ensures that mayors cannot be made a condition of devolution and we believe the Government are wrong to seek to remove this important safeguard. We will wish to test the opinion of the Committee on that.
I entirely concur with the arguments my hon. Friend is putting forward. Unfortunately, in the north-east of England, where there are seven local authorities involved in the North Eastern local enterprise partnership area, many councillors from different authorities have said to me and to colleagues, “We’ve been told it’s the only game in town” and that only with an elected mayor will the financial incentives for the LEP area be forthcoming. That is totally unfair and undemocratic.
Absolutely. I thank my hon. Friend for that intervention. Those constraints are being imposed by the Government on that region. It should be up to the region to choose the most appropriate model of governance as we proceed, rightly, with devolving powers down to that area.
Our new clause 21 seeks to ensure that the community is involved in any decision about the model of governance. Open engagement needs to go much further than that. Devolution deals that are shaped with the local community are more likely to have the support of the local community. Just as important, they are more likely to be better deals. The Government should not close the door on meaningful engagement that is open and transparent. The deals the Minister is making may not feel obscure to him, because he is the one inside the closed door. The people on the other side of the closed door—those on the outside—need to know what is going on and to be able to influence and shape it. If the Government really believe in devolution, why will they not devolve decisions over the appropriate form of governance so that local areas can decide for themselves? I wonder what they are afraid would happen.
Consultation is further constrained because the Government are not clear enough about which functions local areas could have greater powers over, which is why we have tabled new clause 25. Local areas need greater clarity about what the Government are prepared to devolve. They say they are open to any request from combined authorities, which is the right attitude, but the Chancellor is not necessarily accepting every part of every bid, so what is guiding him to say no where no is the answer he comes back with? Clarity will help other areas to shape their own bids more effectively, it will help devolution to expand and it will help us to see whether the Government are being too cautious and thereby apply pressure on them in a way helpful to the Secretary of State and his ambitions. In response, I hope that he or the Minister will make clear which functions they believe lie outside the possibility of devolution. Perhaps there are not any, but let us hear that from them.
On amendment 57 and the need for a better gender balance in mayoral teams, I was disappointed by the Minister’s comments. The Fawcett Society has stated:
“Women’s representation at a local level is stagnating with virtually no change in the level of female councillors in the last ten years.”
According to 2014 statistics, women make up just 33% of local councillors, just 13% of council leaders in England, Scotland and Wales, just three out of 16 elected mayors and just six out of 41 police and crime commissioners. This is clearly not good enough. We must not allow the roles of mayor and deputy mayor to become predominantly male preserves, as other leading roles in local government have been. Our amendment is not prescriptive, but it would require mayors to consider gender balance when appointing a deputy. It is a sensible and modest measure, and I hope the Government will support it. With the Speaker’s permission, we will return to this on Report, at which point we might wish to push it to a vote, depending on the Government’s position.
London has had a mayoral assembly for well over a decade, but that cannot mean that devolution to London has reached the end of its journey; there is still much further to go, and we are grateful to the work of London Councils, the GLA and the Mayor of London, all of whom have endorsed the proposal for further devolution to London. Our new clause 22 backs that proposal, and I welcome the Government’s willingness to listen, as expressed by the Minister earlier in the debate.
Devolution will not work if areas are set up to fail because they are inadequately resourced to deliver the devolved services. Since 2010, local government has faced cuts of 40%, and more is on the way in the coming spending review. Just this week, the LGA, a cross-party organisation, has warned that local authorities are struggling. Lord Porter, its Conservative chairman, says:
“We know we’ve got probably 12 or 14 councils that are very close to the edge now.”
Councils close to the edge will not be able to cope with devolution. The funding settlement so far is deeply unfair. The 10 most deprived communities in the country have suffered cuts 18 times higher than the least deprived. In many cases, the areas hit the hardest are those in the front line for devolution. In part, that is because local decision making is more effective and more efficient, but there will be a breaking point if resources become wholly inadequate, and the Government should not force local areas past that point. I am sorry that the Minister sees no merit in ensuring that resources are aligned with powers and need. Our new clause, quite reasonably, would place a duty on the Secretary of State to publish a report on the impact of funding on devolution. It is intended to ensure that devolution can flourish, so I hope that he and his colleagues will think again.
The Bill could radically reshape local government, but to really make an impact, we also need to change the culture and shape of national Government, Whitehall and this place. Redefining local government should also mean redefining national government, but very little has been done on that so far. At its best, devolution will mean real power for local areas, but at its worst, it will simply make local government a commissioning arm of national Government, adding little more than local colour. That would make it a huge wasted opportunity. Whatever they say from the Dispatch Box, the Government still talk localist but act centralist. Free schools have no local oversight, desperately needed social housing is being sold off in areas that do not want it sold off, the forthcoming Housing and Planning Bill contains dozens of new centralising powers, and the Work programme was designed and delivered from the centre in a way that excluded localities. All this, and so much more, hardly argues that the Government are consistently pro-devolution in the way that the Secretary of State would have us believe.
It is welcome that the Government are agreeing to publish an annual devolution report, which is an important transparency measure, but if the whole Government are signed up to devolution, in the way we are told, why are they opposing our proposal that every Minister should tell us the impact of every new Bill on devolution? That tells me that the Secretary of State has failed to convince his colleagues in Cabinet that devolution really does matter. As it stands, clause 2 ensures that every time a Bill is presented in either House, a Minister must make a statement to show how it is compatible with devolution. This clause has been welcomed by the cross-party LGA as a means of strengthening devolution, so I regret the Minister’s earlier comments. For instance, the new Housing and Planning Bill would benefit from such a statement because it would make it clear to the whole country just how centralising it is. I can see that, although it would benefit the passage of legislation and devolution, politically the Government would not want it, but that is no reason to block the measure.
Similarly, amendment 59 seeks to focus on the general power of competence and review its fitness for purpose for devolution. LGA research shows that the general power is
“limited by significant constraints set by central government”
and that local government needs far more independence from interfering central Government. We had a small example of that in a Delegated Legislation Committee on which I sat earlier this week. The Government insisted on retaining a role for the Secretary of State in taking local decisions about tattoo parlours in England—although oddly not in Wales. This really is not “letting go”. Post-legislative review has not resolved these matters. The amendment encourages the Secretary of State to review the general power of competence and remove barriers to empowering communities.
In conclusion, we welcome these long-overdue attempts by the Government to devolve power. We welcome the fact that it is largely Labour councils that are leading on this agenda, and we congratulate them on and support them in their work. The Bill is welcome. It is a step forward, but it could be better and it could go further still in empowering communities beyond the town hall, in the way my hon. Friend the Member for Sheffield South East (Mr Betts) described; in offering fair resources alongside devolved powers; in reforming central Government to fit a permanently devolved settlement, particularly across England; and in engaging local communities far more openly to help shape their own devolution deals so that they can become the settled will supported by the local community.
I would like to test the opinion of the Committee on new clause 23, which seeks a fair funding settlement alongside devolution, and to oppose Government amendment 4, which gives the Secretary of State centralised powers to impose mayors where localities have made it absolutely clear they do not want them.
We have had an interesting and wide-ranging discussion that none the less has retained the cross-party support for the Bill’s broad objectives that I detected on Second Reading. There are concerns about some of the amendments, and the shadow Minister has indicated his intention to test the will of the Committee on some of them, but on others I have listened carefully to, and will consider, the informed contributions of hon. Members on both sides. However, I do not think that detracts from the fundamental truth that many Members of different political views would like the devolution agenda advanced and the Bill to succeed. I am pleased that that is the case and hope that we can move forward in that vein. I want to touch on some of the specific comments made in today’s debate.
The hon. Member for Nottingham North (Mr Allen), who kindly described me as a benign Minister—I have been described as benign and as a velvet glove this afternoon, although at least one Member indicated from a sedentary position disagreement with at least one of those statements—is on the record as a supporter of devolution. I have discussed the issue with him in this place and outside it. I recognise that through his amendments he wants to make his position clear that devolution should go further—he anticipates that in due course it will go further—and wants to entrench elements of devolution as part of our constitutional settlement. I understand his desire to deliver that, but some of his amendments may go a little too far from the nature and scope of this Bill in respect of what he wants to deliver constitutionally. I listened carefully to what he had to say and I recognise his expertise in this area and welcome his contributions.
My hon. Friend the Member for Amber Valley (Nigel Mills) talked about his desire to see local government reorganisation tied in with some of the devolution deals that are being delivered. We do not resile from that prospect—it is not something that we are necessarily against—but we are cautious when it comes to any proposal that would move towards imposition of that sort of reorganisation. This is going to be a consensual process—the Bill is designed to allow for that—and that is what it must be if devolution is to be a lasting settlement. I recognise the point of my hon. Friend’s amendment 39 and the consultation that he envisages within it, but I do not think that it is a step that we want to include at this time.
The hon. Member for Bristol South (Karin Smyth) made a cogent argument about the mayor and the provisions for people to have a say about that mayor, bringing the provisions into line with requirements and legislation that exist for mayors in other areas. I recognise what she said and hope that we can find some agreement on this area that she will support. I have certainly taken note of her comments and her useful contribution today.
My hon. Friends the Members for Altrincham and Sale West (Mr Brady) and for Hazel Grove (William Wragg) commented on a range of issues and a range of amendments, including on their desire for referendums. I talked about the issue in my opening remarks and set out why I think the process we are talking about here is different, with different types of mayors from those we have seen before and differences in the nature of what we are doing, with the transfer of powers down rather than up. I have listened to my hon. Friends’ comments and hope that, while we may disagree on some of the specifics, we will find broad agreement, and I look forward to having further discussions with them about how best to achieve that.
I want to return to the point, mentioned across the Chamber, about the work that can be done collaboratively on health issues. We saw the work done on dealing with violence against women, and I want to reiterate the importance of devolving health to these larger areas.
My hon. Friend brings a wealth of experience to this place, and I welcome her comments and interventions. She has stated her position very clearly on the record. As we move through the course of today’s debate, we will have further opportunities to discuss the potential for health devolution. I recognise my hon. Friend’s case particularly in respect of London. The Government have the capacity to discuss and continue to discuss with the Mayor of London and London local authorities the sorts of changes they would like to see to the existing settlement. It is important to recognise my hon. Friend’s comments, to welcome the co-operative spirit in her approach and her desire for London to benefit from the sort of changes that are going to be delivered to other areas through this Bill.
I am listening to the Minister’s comments about referendums and what we discussed on Second Reading about metro mayors. In the balance of the debate, there still seems to be some confusion among the Opposition Front-Bench team about whether this is an imposition. It is not; it is an enabling process. Will the Minister confirm that that is the case?
My hon. Friend pre-empts what I was coming on to say. He is, of course, absolutely right, and is perhaps more generous than I would be inclined to be when he says that there is only “some” confusion on the shadow Front-Bench. He makes an important and relevant point—one that I intend to develop in my later remarks this afternoon.
I appreciate the Minister’s confirmation that nothing will be imposed on any area where it is not wanted. However, in areas where it is wanted and councils want to come together to get powers devolved from Westminster to their areas, does my hon. Friend agree that it is important to have a single person who can be held accountable by the public for those new powers and new responsibilities?
My hon. Friend is of course right about the importance of sharp accountability with respect to the ability of a metro mayor to drive the change that devolution presents an opportunity to deliver. This direct approach from the elected metro mayor should help to ensure that we get the maximum benefit from a process of devolution. That has been shown the world over, when many big cities with mayors deliver real improvement and success for the areas they represent. It is a proven model, one that we want to see delivered through this devolution agenda. It is also one, importantly, that will not be imposed on any area.
Will the Minister just be honest? He says that he is not going to impose a system, but he well knows the alternative. Unless the north-east accepts an elected mayor, no devolution will take place. That is a take-it-or-leave-it provision; it is an imposition by any other name. The Minister should admit that he wants to impose an elected mayor on the north-east irrespective of what local people or local politicians want.
I listened carefully to hon. Gentleman’s contribution, and I know that he is exercised by this issue. I do not recognise the narrative that he put forward as entirely fulsome in its representation of the processes that are under way. [Interruption.] I will explain my comments thus. The Bill does not allow the Government to impose devolution or a model of devolution on any area. It allows areas to reach agreement with the Government about devolution when they see the benefits to their areas from it.
In the north-east—an area represented by the hon. Member for North Durham (Mr Jones) and one close to my heart and interests—we have had productive discussions with local authority leaders. Those leaders are not exclusively Conservative or even Liberal Democrat, as we are talking to Labour local authority leaders, too, and they are working with us to find the right package to deliver devolution. The Bill gives no power to impose devolution on the north-east and we would not attempt to impose a model of that devolution without the two going in tandem. The opportunity is there in the legislation for areas to ask for devolution; we can enter into discussions and deals can be made in a bespoke and bottom-up way to ensure that every area gets the right deal.
We have been clear throughout this process—it was clear in the manifesto on which this party stood at the last election—that if areas with large metropolitan city centres want a devolution package similar to the one that Greater Manchester has agreed with the Government, we would expect a metro mayor to be part of the package.
Will the Minister confirm that for the area of the North Eastern local enterprise partnership, which includes Durham, Northumberland and Tyne and Wear, a £30 million investment package is on the table, but that that £30 million is available only in the eventuality of an elected mayor being accepted by the seven authorities?
I am happy to confirm that we are in discussions with local authority leaders in that area, but that leads me on the hon. Gentleman’s earlier comments about the geography. He has raised the point—and is perfectly entitled to do so—that this is a diverse area with rural and urban communities. I should make it clear, first, that we are talking about powers that are currently controlled in Whitehall and currently controlled nationally by public bodies and by Ministers here, and we are taking them closer to the people affected by them. Secondly, I must make it clear that we will not tell any area what its geography must be. We have left it for areas to come forward with proposals that they believe best suit the economic opportunities that exist in those areas.
My hon. Friend raises a valid point. An elected mayor provides the focus and accountability; it means there is someone to drive the agenda forward and be accountable for it. However, we would not impose this on any area. It will be delivered only by agreement. That is true of the north-east as it is for the country as a whole, and it is true of the text in this Bill, which does not give us the power to impose. It gives us the power to make deals with the areas that want them. Devolution should be on the table for any area that wants it, but it should be imposed on no one, and that is what the Bill ensures will happen.
Of course. Areas that choose not to be part of devolution—and it is their choice; devolution will not be imposed on anyone—will suffer no disadvantage as a result of that choice. I shall be happy to meet my hon. Friend and his colleagues to discuss any concerns that they may have about what may come to be proposed for the area that my hon. Friend represents, and also about the implications should an area choose not to be part of the process. This is not about imposition; it is about consensus, working together and co-operation.
I am, because what the Minister has just said is not true. What has been said to the seven local authority leaders in the north-east is they must either accept the mayor and the devolution settlement or not receive the extra money that has been trumpeted by the Tory party in the north-east and by the Minister’s friends. The only way to get extra resources for the north-east is to accept an elected mayor and the system to which the Minister is agreeing.
I am not sure how much more clearly I can express myself. We will not impose devolution on any area, but any area is free to come forward and negotiate with the Government to make a deal for the delivery of devolution if it wishes. Areas that do not choose to be part of devolution will not have anything taken away from them as a consequence, and when devolution is delivered, it will be about powers coming down. Local authorities will only see powers transferred up to a metro mayor when they opt for that to happen. I think I have made myself very clear on that important point.
There is one more important point that I want to make to Opposition Front Benchers, about amendment 4. It is imperative that when the conditionality amendment that was made in the other place is put forward, we are able to deliver on our manifesto commitments, and so that we can do that, the changes that the Government have proposed today need to be made.
Two and a half hours having elapsed since the commencement of proceedings, the debate was interrupted (Programme Order, 14 October).
The Chair put forthwith the Question already proposed from the Chair (Standing Order No. 83D, That the amendment be made.
Question agreed to.
Amendment 29 agreed to.
The Chair then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83D).
Clause 1, as amended, ordered to stand part of the Bill.
Clause 2 negatived.
New Clause 23
Fair funding settlement: report
“Within six months of the passing of this Act, the Secretary of State must publish a report on the impact on the functions of combined authorities of the fairness of the distribution of funding from central government to local authorities, particularly with regard to levels of deprivation.” —(Mr Steve Reed.)
This new Clause would require a report linking the impact of devolution with the level of funding.
Question put, That the clause be added to the Bill.
Power to provide for an elected mayor
Amendment proposed: 4, in page 2, line 18, leave out subsection (2).—(James Wharton.)
This amendment removes the prohibition against an order providing for there to be a mayor for the area of a combined authority as a condition for agreeing to transfer the functions of local authorities or other public bodies to that combined authority.
Question put, That the amendment be made.
Amendment 4 agreed to.
Clause 3, as amended, ordered to stand part of the Bill.
Mayors for Combined Authority Areas: Further Provision about Elections
Amendments made: 18, in page 21, line 29, after ‘State’ insert
‘or the Chancellor of the Duchy of Lancaster’.
This provides for the order making power in paragraph 3 of new Schedule 5B to the Local Democracy, Economic Development and Construction Act 2009 to be exercised concurrently with the Chancellor of the Duchy of Lancaster.
Amendment 19, in page 25, line 28, after ‘State’ insert
‘or the Chancellor of the Duchy of Lancaster’.
This amendment provides for the order making power in paragraph 12 of new Schedule 5B to the Local Democracy, Economic Development and Construction Act 2009 to be exercised concurrently with the Chancellor of the Duchy of Lancaster.
Amendment 20, in page 26, line 12, after ‘State’ insert
‘or the Chancellor of the Duchy of Lancaster’.
This amendment provides that before making an order under paragraph of 12 of new Schedule 5B to the Local Democracy, Economic Development and Construction Act 2009 the Chancellor of the Duchy of Lancaster must consult the Electoral Commission.
Amendment 21, in page 26, line 13, after ‘State’ insert
‘or the Chancellor of the Duchy of Lancaster’.
This amendment provides that the Chancellor of the Duchy of Lancaster can only make an order limiting the expenses that can be incurred during an election for the return of a mayor, on the recommendation of the Electoral Commission.
Amendment 22, in page 26, line 17, after ‘State’ insert
‘or the Chancellor of the Duchy of Lancaster’.—(James Wharton.)
This amendment is consequential on amendment 20.
Schedule 1, as amended, agreed to.
Clause 4 ordered to stand part of the Bill.
I beg to move amendment 45, in page 4, line 18, at end add
‘provided that in each exercise of that function the mayor has the consent of each constituent part of a combined authority.’
The intention of this amendment is that any constituent part of a combined authority may veto any decision made by a mayor of a combined authority.
With this it will be convenient to discuss the following:
Amendment 40, in page 4, line 18, at end insert—
‘(1A) An order under subsection (1) may only be made with the consent of the relevant combined authority; and that consent must be obtained prior to the creation of the office of mayor in the combined authority concerned’.
The intention of this amendment is that a function of a mayoral authority may only be transferred to the mayor with the consent of the relevant combined authority, which must be obtained prior to the creation of the relevant office of mayor.
Government amendments 5 to 7.
Amendment 60, in page 5, leave out lines 9 and 10.
As it stands the Bill removes the right of the Secretary of State to give borrowing powers to an elected mayor but allows for borrowing powers to be given to a combined authority. The amendment will allow borrowing powers to be given to an elected mayor.
Government amendment 8.
Clause 5 stand part.
Government amendments 23 to 25.
That schedule 2 be the Second schedule to the Bill.
Clauses 6 and 7 stand part.
Amendment 41, in clause 8, page 8, line 20, leave out from beginning to end of line 12 on page 10 and insert—
‘(1) The Secretary of State may by order make provision for a function of the Secretary of State that is exercisable in relation to a combined authority’s area to be a function of a mayor of a combined authority;
(2) An order under subsection (1) may not include provision about the exercise of functions currently exercised by local authorities.’
The intention of this amendment is that the only powers that can be given to a mayor of a combined authority are powers currently exercised by central government.
Amendment 54, page 8, line 27, at end insert—
‘(c) make provision for conferring on a combined authority, upon the request of that authority in relation to its area the full retention of business rates, business rate supplements, council tax, stamp duty land tax, annual tax on enveloped dwellings, capital gains property disposal tax, and multi- year finance settlements.’
This amendment will allow local authorities to retain all of their local taxation, including Business Rates and Council Tax.
Amendment 55, page 8, line 27, at end insert—
‘(c) make provision for conferring on a combined authority in relation to its area discretionary control of council tax discounts, business rate discounts and supplements, and other local fees, charges and subsidies in relation to other retained taxes.’
This amendment will allow local authorities to control all of their local taxation discounts, including those applicable to Business Rates and Council Tax.
Clause 8 stand part.
Clause 17 stand part.
Amendment 48, in clause 18, page 17, line 48, after “consents,” insert
‘and in the County of Somerset, as defined by the Lieutenancies Act 1997, approved by a referendum in the local authority area’.
Government amendment 15.
Clause 18 stand part.
Clause 9 stand part.
Amendment 1, in schedule 3, page 32, line 12, after “persons” insert
‘including representatives of parish, neighbourhood, community and other councils in the area of the combined authority’.
This amendment would allow local representation from parish, neighbourhood, community and other council is to attend combined authority scrutiny meetings.
That schedule 3 be the Third schedule to the Bill.
Government amendment 9.
Amendment 58, in clause 10, page 11, line 26, at end insert—
‘(5) The Secretary of State may by order make provision for conferring powers on a combined authority to set multi-year finance settlements.’
This amendment is intended to offer financial stability to city regions, allowing them long-term planning which is something not currently offered by the finance settlement or the funding of local enterprise partnerships (LEPs).
Clauses 10 to 14 stand part.
Amendment 49, in clause 15, page 14, line 43, at end insert—
‘(d) In the County of Somerset, as defined by the Lieutenancies Act 1997, approved by a referendum in the local authority area.’
Clause 15 stand part.
Government amendment 10.
Amendment 2, in clause 16, page 16, line 6, at end insert—
‘(d) the creation of a Constitutional Convention to discuss further local authority governance, functions and related democratic issues.’
This amendment creates the means by which every UK citizen can participate in a national public discussion on local devolution in the context of the wider renewal of UK democracy.
Government amendment 11.
Amendment 47, in page 16, line 11, after “apply” insert
‘and in the County of Somerset, as defined by the Lieutenancies Act 1997, approved by a referendum in the local authority area’.
Amendment 50, in page 16, line 11, at end insert—
‘( ) In the case of two tier authorities, consent under section 16(3) may also be given where a majority of local authorities in the local authority area have indicated their support.’
Government amendments 12, 14 and 13.
Clause 16 stand part.
New clause 2—Subsidiarity—
‘That Subsidiarity as defined by the Maastricht Treaty 1992 Article 5(3) shall apply to the functions of national and local government.’
This new clause would build in local government’s independence by using the principle of subsidiarity found in European law.
New clause 4—Local Government Constitutional Convention—
‘(1) A convention is to be held to consider and make recommendations on the constitution of local government in the United Kingdom.
(2) The Secretary of State must make regulations to—
(a) appoint a day on which the convention must commence its operations,
(b) make fair and transparent rules about how the convention is to operate and how evidence is to be adduced,
(c) make further provision about the terms of reference prescribed under section (Local Government Constitutional Convention: terms of reference), and
(d) specify how those who are to be part of the convention are to be chosen in accordance with section (Local Government Constitutional Convention: composition).
(3) The date appointed under subsection (2)(a) must not be later than 31 December 2016.’
This new clause creates the means by which every UK citizen can engage in a national public discussion of devolution local government, governance and electoral systems and make recommendations and receive a response from government and parliament to that national debate.
New clause 5—Local Government Constitutional Convention: terms of reference—
‘The convention must consider the following terms of reference—
‘(a) the devolution of legislative and fiscal competence to local authorities within the United Kingdom,
(b) the reform of the electoral system for local government,
(c) constitutional matters relating to local government to be considered in further conventions, and
(d) procedures to govern the consideration and implementation of any future constitutional reforms in relation to local government.’
This new clause creates the means by which every UK citizen can engage in a national public discussion of devolution local government, governance and electoral systems and make recommendations and receive a response from government and parliament to that national debate.
New clause 6—Local Government Constitutional Convention: recommendations—
‘(1) The Local Government Constitutional Convention must publish recommendations within the period of one year beginning with the day appointed under section (Local Government Constitutional Convention).
(2) The Secretary of State must lay responses to each of the recommendations before each House of Parliament within six months beginning with the day on which the recommendations are published.’
This new clause creates the means by which every UK citizen can engage in a national public discussion of devolution local government, governance and electoral systems and make recommendations and receive a response from government and parliament to that national debate.
New clause 7—Local Government Constitutional Convention: composition—
‘(1) The Local Government Constitutional Convention must be composed of representatives of the following—
(a) registered political parties within the United Kingdom,
(b) local authorities, and
(c) the nations and regions of the United Kingdom.
(2) At least 50% of the members of the convention must not be employed in a role which can reasonably be considered to be political.”
New clause 10—Housing devolution to London—
“In any enactment relating to housing, any power or duty of the Secretary of State applicable to any person or dwelling shall be exercisable in the Greater London area only by the Mayor of London, with the consent of the Greater London Assembly.’
This new clause provides for devolution to London of the Secretary of State’s housing powers.
New clause 11—Local property taxes devolution to London—
‘(1) There shall be London Consolidated Fund into which shall be paid each month a sum equivalent to the previous month’s tax receipts in relation to properties in the greater London area accruing from—
(a) the stamp duty land tax,
(b) capital transfer tax,
(c) the annual tax on enveloped dwellings, and
(d) capital gains property disposal tax.
(2) The Treasury must consult the Mayor of London and the Greater London Assembly on what band and rates should be applied in respect of the Greater London area for the next financial year in respect of each of the taxes mentioned in subsection (1).’
This new clause provides for devolution to London of the receipts from taxes on property and for formal consultation with the Treasury on the rates of those taxes to be set for the greater London area.
New clause 12—Local Government Financial Integrity—
‘(1) Local authorities shall be financially independent of central government, save as otherwise provided for by this section.
(2) Central government may not place any restriction on decisions by local authorities about the exercise of their financial powers.
(3) The distribution of central government funds between local authorities shall continue on the basis of existing equalisation arrangements. Distribution will continue to be based on the principle of ensuring fairness and balance between local authorities. The basis on which this distribution is carried out must continue to be made public.
(4) Each local authority shall receive from central government a guaranteed share of the annual yield of income tax, as follows. Central government must in each financial year assign to the Secretary of State responsible for the distribution of central government funds between local authorities an amount of money equivalent to the yield from ten pence in the pound of income tax. The Secretary of State must make arrangements to inform each taxpayer in England of the amount of their income tax which makes up the central government funding distributed to English local authorities as a whole.
(5) The amount of the income tax yield referred to in subsection (4) shall be renegotiated between central and local government whenever service provision responsibilities are transferred between central government and local authorities.
(6) Local authorities may raise additional sources of income in their areas in any way they wish, and with the consent of their electorates as expressed through arrangements to be determined and put in place by the local authority concerned.
(7) Local authorities shall be able to raise any loans, bonds or other financial instruments which their credit rating allows and as independent entities will be exclusively responsible for their repayment. All local authorities shall operate a balanced budget so that in any one financial year all outgoings, including interest repayments on borrowings, shall not exceed income.
(8) Central government may not cap, or in any other way limit, local authorities’ taxation powers.
(9) The financial transparency standards that apply to central government shall apply to local authorities.
(10) Central government and local authorities may contract with each other in order to pursue their own policy objectives.’
The intention of this new clause is that receipts from income tax should be assigned to the Department for Communities and Local Government who will then pass it on to councils.
New clause 14—Power to create new council tax bands—
‘(1) Section 5 of the Local Government Finance Act 1992 is amended as follows.
(2) In subsection (4) omit “The Secretary of State may by order, as regards financial years beginning on or after such date as is specified in the order” and insert “A local authority may for any future financial year”.
(3) Omit subsection (5).’
The intention of this new clause is to devolve to councils the power to create new council tax bands.
New clause 15—Abolition of referendums relating to council tax increases—
‘(1) In Part 1of the Local Government Finance Act 1992 (council tax: England and Wales) after Chapter 4 omit the Chapter set out in Schedule 5 to the Localism Act 2011.
(2) Schedule 6 to the Localism Act 2011(council tax referendums: further amendments) ceases to have effect.’
The intention of this new clause is to end the council tax referendum system.
New clause 16—Effective devolution committees—
‘(1) The functions of local authorities include the formation of committees to collect and analyse data on effective performance by local authorities of powers and functions devolved to them.
(2) The Secretary of State must not give any directions to such committees.’
The intention of this new clause is to enable Local Government to set up its own “what works” organisation on devolution to examine what’s effective, either independently or in partnership with, but separate from, the Department for Communities and Local Government.
New clause 17—Scale of devolution—
‘(1) The extent of the devolution of powers and functions to local authorities must not be dependent on the size of the population of the local authority.’
The intention of this new clause is to provide flexibility for devolution on varying scales and foot prints instead of linking the amount of devolution to the size of the recipient.
Government amendments 26, 30 and 31.
I shall be brief. Amendments 40, 41 and 45 relate to a variety of questions regarding the precise powers that are to be transferred under a devolution settlement, including whether powers can be devolved down from Government and whether there is any danger or any possibility that might preclude the danger of powers being pulled up from local government and vested at a level further from the people, which I believe to be the case under the Bill as it stands.
Essentially, amendment 45, by providing a veto for any one authority in a combined authority or mayoral authority area over any decision, would establish what, in the context of the Prime Minister’s negotiations on the EU relationship, we would refer to as sovereignty. It is the opposite of the arrangement in the Bill, which we would, I suppose, call qualified majority voting. The current provisions would clearly allow a majority position in the mayoral authority to prevail over a serious objection from one, two or perhaps three authorities. If I read the Bill correctly, in fact, I think that most of the vetoes in the Greater Manchester agreement would require two-thirds opposition to a measure to prevent it from proceeding.
Amendment 45 makes it very clear that although we are pleased to participate in the new arrangement, or to enhance the existing arrangement of a combined authority, which works very well, we believe that the fundamental power in this relationship ought to reside with the local authority or with each of the local authorities in the area. If the amendment were to be agreed, it would provide that protection. As with the amendments we discussed in the earlier group, which I did not press to a vote, I do not intend to press these amendments to a Division in Committee, in the hope that Ministers will reflect on them and consider whether there are more effective ways in which these guarantees and safeguards could be provided.
Similarly, amendment 40 seeks to establish what one might call a “foundation status”. It would give a special status to the original devolution agreement, which has been acceded to by the leaders of the local authorities in Greater Manchester, which is obviously the instance I know best. The intention is that it would limit the transfer of powers from local authorities, in particular, to any transfer that might take place before the establishment of the mayoral authority and would therefore prevent any further transfers. The amendment might not be perfect, and there might be flaws in how it is drafted, but I hope that my hon. Friend the Minister will accept that there is a real and important point that at the moment of the inception of the mayoral authority there is a degree of consent from the local authorities, but that consent might be less certain at a later stage.
Finally, amendment 41 seeks to provide an explicit guarantee. Ministers are very clear in their statements and Members on both sides of the House have been quite enthusiastic about the principle that we are seeking to move decision making and spending closer to people, taking functions away from central Government and moving them to a more local or regional tier. The hon. Member for Nottingham North (Mr Allen) spoke previously to his amendments seeking to establish a principle that could allow powers always to cascade down to the lowest level—something with which many of us feel a natural sympathy.
However, the Bill as it stands provides the possibility for powers to move in the opposite direction—for a local authority in any one year under any political control to decide that it wishes to cede decision making to the mayoral authority level. It is conceivable that the present Conservative Government will last for no more than another three or four Parliaments, and at some point in the future there could be a Government of another party in place. It is conceivable that a Minister less benign and less wise than my hon. Friend on the Front Bench may seek to lock into a mayoral tier of government powers sucked up from the local level.
Amendment 41 would provide a guarantee that what Ministers say they intend to achieve through the Bill and what most of us would like to see—the transfer of powers down from central Government—will indeed be the effect of the Bill, and not the reverse, the danger that the process will lead to decisions being taken further away from people, rather than closer to them.
Again, I shall speak about a number of issues that relate to the bigger principles and can perhaps be considered as a warm-up for the next devolution Bill, which must surely come within a couple of years, as I said in my earlier contribution, to knock the edges off this pioneering Bill, which brings serious devolution to England for the first time in my political lifetime. I tabled a number of amendments and I shall speak first to amendment 2, which is about a constitutional convention.
The work that I have been doing on a constitutional convention, which is the policy of my party and others, becomes ever more pertinent. We do not want to do parts of the jigsaw, but never see the bigger picture. Unless we step back and have a constitutional convention, we will not see how voting systems interlock with the role of a second Chamber, with the nations within the Union, and with the role of independent and devolved local government as the agents of devolution in England. This is an important Bill providing one part of that jigsaw, but at some point in the next five years we need a mechanism to allow us—hopefully, all parties—to get together, take a pace back and ask, “Where does this leave us? Where does it leave the Union? Where does it leave our democracy?”
I have spoken about the evolutionary approach to English devolution of the Minister and the Secretary of State, and I have commended both. Where does that necessarily piecemeal approach leave us in terms of the future of our country? That cannot be the property of any one party, nor should it be. The parties here have a role as a midwife, ensuring that this concept has a fair wind and is set up properly, is properly funded and provided for and has proper means of public participation, but that is all.
The political parties should take a step back from any convention, whether on local Government or on our wider democracy, and allow the citizens of the United Kingdom their say, perhaps under the auspices of one of the great and the good—an archbishop, a High Court judge or whoever they want to suggest—as worked so well in Scotland. That led to the smooth—it was also protracted, but necessarily so—development of devolution there, culminating in the Scotland Bill that was before us only a few weeks ago.
I do not expect the Minister to jump up and say, “Fine, we’ll do that”, but I do expect him to acknowledge that there is a point here, which is that we cannot keep doing this stuff piecemeal and that at some point we will need to pull it together. The whole of my private Member’s Bill on a constitutional convention is basically in the amendment paper, including the nuts and bolts that the Political and Constitutional Reform Committee, which I had the privilege of chairing in the previous Parliament, worked very hard on. I have pulled together some of those ideas and put them in an amendment so that they can be read by anyone, at either official or political level, who feels that the concept of a constitutional convention has something to recommend it to the House.
The next issue is one that I know is close to the hearts of Conservative Members: all things European. One of the really good things European was set out in the Maastricht treaty. I forget which Conservative party leader it was—either Mrs Thatcher or Mr Major—who granted us ever-closer union with our European friends. It set out one concept that I think we can all agree on, at least philosophically: subsidiarity—that most ugly word for the most beautiful concept. It essentially means doing things at the lowest appropriate level.
I return to the idea that we must entrench what progress we make. It is not good enough to hope that Whitehall will not want to suck power back, because it will. Having the principle of subsidiarity from the Maastricht treaty and European law embodied in our own law in order to prevent that is something that I think pro-Europeans and anti-Europeans could agree on. It could then be a central tenet of the way we distribute power in the United Kingdom.
A simple amendment incorporating that into British law would give people in devolved local government some security, and something that they could take to court, if necessary. People at the lower level of the double devolution that I talked about earlier—people in a neighbourhood council, for example, who scraped together a few quid to do good things in their parish—would have a defence, because taking that away from them would be illegal. I hope that the Minister will also look at that proposal, because I think that in the near future, if not now, it should command the respect of the House and find its way into legislation, either supported by a super-majority or hidden behind the Parliament Act 1911.
I will move on now to new clauses 4 to 7 and a constitutional convention. I will pick just one thing that is at the centre of the paradox that the Minister is struggling with—and who would not struggle?—which is that although we are seeking to devolve power, we are, whatever words we choose to dress it up, imposing the concept of a mayor as the gateway to devolution. I will not get involved in that argument, because in 2020 it will be history and we will look back on it as something that is not all that relevant. However, it is relevant right now, and it is difficult right now.
The argument I put to the Minister is that we ought to be looking at this as something that we can change, work through and evolve, if we consider that at some point we want local government not to be told what system of governance it must have or what electoral system it must operate, but to have the discretion, as an independent institution, to decide on its own governance. If the concept of mayoralty has not taken root after five years, possibly in 80% of England, then it is not a good concept. Some people might say “Fine” to the concept of a mayor, as they would in London now. If we tried to take the concept of a mayor away from people in London, they would resent it greatly. We should let people decide at the end of that period whether they want a council leader, a committee structure, or something else. That would survive the test of time because they would have decided that it was what they wanted.
Exactly the same argument applies to electoral systems. Some people, including me, would say that authorities should be free to decide their own electoral system for local government. If they want all-out councils, election by thirds, the single transferable vote or first past the post, then, in conjunction with the people in their area—that is very important—they should have a debate about that and come to a decision on it. That would be a strong system, but not immutable. People are entitled to say, “We tried the mayor and it didn’t work—we had a succession of people who weren’t very good. We never had that before when we had a more collegiate view.” We should let people make a choice, and let them renew it every so often if that is what they want. I throw that out as an idea; I do not expect the Minister to accept it. If he does, I will be most grateful, but I suspect that it needs to brew a little, perhaps alongside a constitutional convention.
I have tabled many amendments and I am conscious of trying not to use up too much time. The Chair will raise an eyebrow appropriately if I go on too long, but I do not intend to take as much time as I did earlier. Some of my amendments were initiated by the National Association of Local Councils, others by the New Local Government Network, and the one on devolution for all sizes of authorities by Key Cities, but I will deal with the home-grown ones.
The central amendment is about learning the lesson from Scotland. I am sorry that no one from the Scottish National party is in the Chamber at the moment, because their advice would be very helpful. Someone who went to Scotland, even before the referendum, would have gone to a country that has a chunk of income tax assigned to its Government—to the Scottish Parliament. Rather painlessly, four years ago, we passed the Scotland Act 2012, which gave the equivalent of a 10p income tax rate to the Scottish Parliament. The national rate was reduced by 10p and we substituted a Scottish rate of 10p, so nobody paid any more and no elements of equalisation changed, but there was a clear line of account from the Scottish people as taxpayers to their Government in Holyrood.
I am making the radical, earth-shattering, civilisation-ending suggestion that what the Scots did could work for England and that the English people are just as capable of benefiting from such a system as the Scottish people are already. We could assign a chunk of income tax, not directly to every individual local authority, because that would become a nightmare, but, in essence, to the equivalent of the Scottish Government, which would be the Department for Communities and Local Government. That chunk would go to the DCLG as a block of, say, 10p in the pound, through the distribution mechanism, as now, with proper equalisation, as now, and no changes in the rates. That would give everybody a really clear line of account. If it was on people’s wage slips that that chunk of their national income tax went to local government, everyone would suddenly start to take much greater interest in their local government because they would see for the first time that they were spending that chunk of their income tax money on it.
I agree with my hon. Friend’s argument on income tax. Might the full suite of property taxes, not just business rates, also be worth considering in this context? I draw his attention to my amendment, clearly not as well drafted as his, suggesting that property taxes should be devolved in full to London. I hope to catch Mrs Main’s eye and say a few words on that later.
Our London colleagues have done some fantastic work on how to localise taxation that is currently held by the centre. That has to be done sensitively and carefully, but as I said earlier—I do not think my hon. Friend was present then—every other western democracy manages that difficulty without a problem. In Sweden, America, Canada, Italy, Germany and Holland, it is second nature to retain money locally from business rates, landfill taxes and land taxes such as stamp duty. They get by pretty well. In fact, because that system is institutionalised, their local government has immense power over and above what we have as vassals. In effect, we do what we are commanded to do according to the crumbs left in the begging bowl after the Chancellor has done his bit for the national economy.
It is absolutely open to us to do work similar to that done by my hon. Friend, Professor Tony Travers and consecutive London Mayors to liberate people. Nottingham gets a lot of tourists because of the Robin Hood tradition and the castle, so we could have a hotel tax or a bed tax of £1 a night. That happens in other western democratic countries and the people endorse it. There is a big caveat though: no council should do this unless the people have okayed it and bought into it. Councils should also be able to borrow on the open market on the basis of their credit rating, but they need to have the consent of the people. It is perfectly possible for us to do what my hon. Friend suggests.
I have been listening carefully to my hon. Friend and, while I do not disagree with him, the proposal to retain 100% of business rates will be a disaster for some poorer areas. It is fine for areas of central London, such as Westminster, to argue for the ability to retain 100% of their business rates. However, business rates in poorer areas of the north-east and elsewhere are never going to generate a great deal. In fact, one large closure can devastate the local income base. There has to be a redistribution mechanism.
My hon. Friend is absolutely right. A proper redistribution mechanism—whether it is based on the amount received from income tax, business rates or any other taxation—must be in place; otherwise the system could be distorted and deeply unfair. That is why my amendments, which my hon. Friend will have read, suggest that equalisation should be central to the process; otherwise we will end up with the disjointedness he mentions.
In addition to the point made by the hon. Member for North Durham (Mr Jones), does the hon. Member for Nottingham North (Mr Allen) think there is a relationship between fiscal decentralisation and the geographical wealth of the countries that he mentioned, including the United States, which is far more balanced than the gross imbalances in the UK?
No, I do not believe that is the case. That happens everywhere. Although I am very much an ardent devolver, I believe there is always a place for the federal level. President Clinton was not denied his wish to introduce Head Start to every state in the union. He did not impose it, but he offered it as a federal programme and virtually every state picked it up. Devolution would not diminish our role in this place to do good things, and it certainly should not diminish our role in insisting on the sort of equalisation that my hon. Friend the Member for North Durham (Mr Jones) has in mind.
Does my hon. Friend agree, though, that that is not what is being offered by this Government? They are offering retention of 100% of business rates without equalisation, which will have a dramatic effect on those areas with low business rate receipts. It will also be to the advantage of some areas that perhaps do not need extra resources.
I again agree with my hon. Friend. We are not there yet and it is not a done deal yet. We need to make the points that he very ably makes about equalisation. I will say to him, however, that if it is a choice between being instructed by Whitehall how to spend not very much money and having not very much money to spend locally, I would go for spending it locally every time, because we will maximise value and spend the money sensitively. Whatever money is available, it is better spent by those who know what they are doing, rather than by the man in Whitehall. I totally accept my hon. Friend’s points.
Is not a further argument for local taxes being controlled at local level that it allows local government a full range of policy responses to deal with local problems? I offer the example—I hope to catch your eye on this later, Mrs Main—of the housing crisis in London, where an ability to impose higher taxes on empty homes might be one part of the solution to the housing crisis.
The nuance that I would add to my hon. Friend’s excellent point is that local taxation need not necessarily always be collected locally. Income tax is a very good example. Provided that it is distributed fairly from the centre, it makes a lot of sense for collection to be a central function, with Her Majesty’s Revenue and Customs simply continuing to do what it does, openly and transparently. Other things—he mentioned a hotel tax, business rates and so on—are much more amenable to local decision making, but we are long way from that.
My hon. Friend is committed to and searching for radical localist solutions. He mentioned the efficiency of decisions taken locally. My experience is that local government is much more efficient than central Government. Would not the most radical constitutional change be to make central Government responsible to local government, not the other way round?
I would not ever wish to do to central Government what they have done to local government. I will therefore resist the temptation that my hon. Friend puts in my way. Sometimes, however, when we are being lectured about fiscal prudence, I ask myself: who has the triple A rating in this country? It is local government, rather than central Government. Who goes cap in hand to international lenders? Central Government. Who runs tight and balanced budgets? Local government. A central Government of any political colour who lectures local government should look in the mirror first.
I just want to mention one last new clause, new clause 16. It relates to having an institution, created by local government, as one of the What Works institutions that, thankfully, are now springing up across and outside government. They take the best possible practice out there and spread it around. A national-level inspectorate can tell local government what to do, but I am saying that there is a different model. We should draw up from the localities to national level something selected by the localities to spread best practice. We all want to do better and to hear who is doing the good stuff.
I will boast about the fact that the city of Nottingham has just come with the idea of an energy broker. Anybody can phone up and get the best deal—done. It will save people several hundred pounds a year. It is a not-for-profit service. As a Nottingham patriot, I could go on about our trams and many other innovations that we are introducing with two hands tied behind our back.
If we release people in the way I am describing, we can show them best practice and we can see what they are doing. I ask the Minister to consider that point very seriously. The Government have very generously created What Works institutions in policing and early intervention —I played a small part in creating the Early Intervention Foundation—and there are about 10 of them across the board. We need an organisation created by local government and that local government will respect—based in the LGA, the Department for Communities and Local Government or wherever—to give advice, offer evidence and fight local government’s corner. That is something for the Minister to take away and consider, and I hope it will reappear in the next of the two other devolution Bills I anticipate before 2020.
I am grateful for the opportunity to say a few words about amendment 50, which I tabled. I will be interested to hear what the Minister says, but it is not my intention to press it to a vote.
As the Minister is well aware, I fully support the Government’s overall aims and intentions. It is sensible that this is an enabling Bill and that it allows the maximum possible flexibility. I think that it will lead to innovation and fresh thinking not just at the national level, but at the local level. Indeed over the past few years, local authorities have demonstrated that they are innovative and that they can change.
I appreciate that the Government want to reform local government with the support of local government. The Bill gives local government the opportunity to step up to the plate and embrace these opportunities. It gives local authorities the chance to take responsibility, to take on more powers and to achieve an awful lot more for their communities. I understand that the Government do not want to impose things on local authorities, but to discuss and negotiate with them in order to come to a deal that is beneficial for central and local government.
A key part of this change is not only about powers, but about governance and structure. There has been an extensive discussion about elected mayors, of which I am an enthusiastic supporter. Indeed, I believe that elected mayors should be the default position for all councils throughout the country. I will continue to support and encourage that idea. However, I accept that the Government want local areas to come up with their own solutions and ideas for change on both governance and structure. I understand the thinking behind that.
I do, however, have some concerns. If I may take this opportunity to be rather parochial, I would like to talk a little about Cumbria. I suspect that other areas face similar circumstances, but I will just discuss my own county. Cumbria has been described as a county that is over-governed and under-led. We have more than 380 councillors and seven councils, yet we have only half a million people. That system was created in 1974 and is now clearly not fit for purpose. It is recognised by everybody locally, including all the political parties, industry, business, the health service and local people, that it has to change, and that it has to do so soon if it is to be part of the devolutionary changes that are happening and to take the opportunities that are available to local government.
However, there is a potential problem. That is why I tabled amendment 50. I believe that it is wrong in a two-tier area for one authority effectively to have a veto over any change, even if it is a sensible and well-supported proposal made by the rest of the county and all the other districts. That allows one authority to stop popular and vital reforms going ahead. Anyone who understands Cumbrian politics will know that that is a distinct possibility.
Amendment 50 is not about allowing central Government to impose their will over what happens in Cumbria—I want to emphasise that. It is about stopping one authority denying progressive change that is in the interests of people throughout Cumbria. Cumbria is an obvious example of this problem because six of its authorities could be prevented from bringing about badly needed and well-supported reform by one maverick authority.
I am very interested in the point that my hon. Friend is making, but concerned that his proposal would undermine one of the principles behind what the Government are doing, which is to ensure that there is consent for the proposals. Does he feel that if what he is describing were to happen, it would be right to have a referendum to ensure that people were not having decisions made for them wrongly by the hierarchy above them?
I do not feel that a referendum would be necessary, because the councillors on the various councils are the elected representatives of the people. My concern is that one authority might dig its heels in and prevent change that is in the beneficial interests of the rest of the council and all the other districts, particularly given that sacrifices will be made by those districts and the county council.
I ask the Minister to give serious consideration to what I consider to be a modest and sensible amendment. I look forward to him accepting it on Report.
I agree with what my hon. Friend the Member for Nottingham North (Mr Allen) said about the need for a wider constitutional settlement. That was apposite, and at some point we will have to address those issues. I agree with his points about subsidiarity and taking that below the level of an individual local authority, and about encouraging the process down.
Fiscal devolution is a challenge, and Members have reflected different perspectives from different parts of the country. It is a challenge, but not one that we should duck. I am Chair of the Communities and Local Government Committee, on which the hon. Member for Carlisle (John Stevenson) sat in the previous Parliament. He made important and valuable contributions to our report. We found a way to take on board proposals from the London Finance Commission about the wider devolution of property taxes, while recognising the need to protect areas that will perhaps struggle to raise business rates and other property taxes easily, or to get back money from areas that simply watch property prices rise and receive enormous windfalls. We must have balance in the system.
The Committee has begun an inquiry into the workings of devolution and the Bill, but since then the Chancellor has made his announcement about the full localisation of business rates. The Committee will want to come back and look at how that will be done. I think most Members would support the principle behind such a move, but how will we implement it to ensure protection for poorer areas? How will we devolve more powers to local government to take account of the extra money made available as part of that process?
My hon. Friend is right to say that the Select Committee must consider business rates retention in detail. One possible solution for devolved city regions might be the pooling and sharing of business rates. For example, parts of Greater Manchester are key drivers of economic growth, and that wealth should be spread across the whole conurbation for the benefit of all.
My hon. Friend is right, and the Committee made that recommendation in the previous Parliament. It is a way that we can devolve the redistribution process to more local areas. That does not work everywhere, but it would probably work well in areas such as Manchester that have a spread of different local authorities
My hon. Friend’s point about poorer areas and the full devolution of business rates is apposite. Is the Chancellor’s suggestion to axe completely the revenue support grant for local authorities—that was in the same speech as plans for the full devolution of business rates—likely to have a dramatic impact on increasing inequality of income between areas? Will my hon. Friend’s Committee be considering that?
We will certainly want to consider that issue. From reading what has been said, and the written statement that was presented to the House on the first day back after the recess, there does not seem to be a commitment simply to leave the amount of business rates collected in an area with that local authority. Instead there was a move to allow the full retention of the growth of business rates, and then a decision about what to do with the rest. I think that is the position, but Ministers will have to explain it further in due course. I am sure that the Committee will want to explore that.
The Minister and I have slightly different views about whether elected mayors should be a requirement for full devolution, but the Minister won the vote and that measure is back in the Bill. I am still concerned to have a level playing field, however, and I am surprised about one element in the Bill that Ministers have not sought to explain. Amendment 60 would delete from clause 5(1)(7) words that would devolve to a mayor who is exercising powers independently, any powers that are
“similar to any power exercisable by the mayoral combined authority…but the power conferred on the mayor may not include a power to borrow money.”
When a combined authority is set up, it can have the power to borrow money. In the Sheffield city region, the combined authority has to borrow money for the functions of economic development, skills and matters devolved to it. The mayor will effectively become the transport authority and exercise transport functions. In exercising those functions, however, the mayor will not be able to borrow money. Somebody else will have to do that if, for example, a new tram system is going to be developed. The mayor will have to go to somebody else and say, “Will you borrow money for me?”
Is that not a very odd situation? The Government have been arguing very strongly—the Minister has made the case—that we need clear accountability and strong leadership, and that we can only have that through elected mayors. That has been the Government’s line right the way through, but these strong mayors—these solely accountable people who are essential to making this form of governance work—will not be able to borrow the money to deliver the functions they are given. Why? It is not as if I am arguing, with the amendment, that Ministers have to give borrowing powers to the mayor, but the Bill actually prevents the Government from being allowed to give borrowing powers to a mayor. Is that not very strange for an enabling Bill? The Ministers have disabled themselves from doing something that seems fairly fundamental to the powers of a mayor. Can someone explain that? I cannot. It really is quite a strange situation for the Government to have got themselves into.
I tabled a very simple amendment to take those lines out. It will not force Ministers to do anything; it will simply allow them to come to deals with the combined authorities on how mayors should be able to exercise properly the functions they are given. The Minister might like to at least reflect on the fact that this is a sensible amendment.
I return to the comments made by the hon. Member for Carlisle (John Stevenson). His is a probing amendment, but it is probing in a very effective way. There is a problem: consent for one person is veto for somebody else. That is also a problem in proposed new subsection (3) in clause 15(3), which relates to authorities that have to give their consent for a combined authority to operate, including a district council or
“a county council the whole or any part of whose area is within the area”.
What if four Derbyshire districts decide they want to join and have their transport powers exercised by the combined authority of the Sheffield city region, which is a natural travel to work area—they are all working together on a joint basis at present—and Derbyshire County Council says no?
This is a point I raised earlier. Ministers have to give some thought to the challenges this will pose in areas where there are currently districts in counties. I give great credit to the Government, because both the LEPs and the devolution proposals they are working towards have no regard to the old regions, which were administrative conveniences, but Sheffield has little connection with Whitby, even though we are both in what was the Yorkshire region. We have a lot of connections with Chesterfield, North East Derbyshire, Bolsover, Derbyshire Dales and Bassetlaw. They are part of our travel to work area, along with Barnsley, Doncaster and Rotherham. We are part of the same economic entity. To have a Bill that enables a veto on the development of a proper economic policy for a proper economic area is a concern. I am raising this point again and the hon. Member for Carlisle has raised it in a different context. It is a problem. I hope the Ministers will help us to sort it out.
It is my view that there are no problems with the Bill. I championed it last week because I believed the Government were right to give more powers to councils, which can better address the issues in their areas. Cornwall does not have an elected mayor, but it does have a rather unique sense of identity and a desire to get its traditional low-wage economy functioning as a high-wage, high-skill one and to secure the lifestyle benefits that brings.
As many Members are aware, the Bill was preceded by the Cornwall deal, which, as a Cornwall MP and local councillor, I was proud to see signed off by the separate bodies and the Minister. Devolution for Cornwall recognises the needs of its people. The Government are saying to the people of Cornwall, “If you want more power, you can have it.” It is no secret that Cornwall has been a very deprived area. This is not just recognised nationally; it is also recognised on the continent. Cornwall has received European funding to improve this situation, but the last round created only 3,500 jobs out of the 10,000 planned. This is in a county of only 500,000 people. Those 10,000 jobs would have been of huge benefit to us, but the funding was not properly utilised. Cornwall has now been granted intermediate body status and so gets to take control of such money. That is the best way to make businesses grow. Let us give business the opportunities to invest.
As a rural area, Cornwall struggles with the reliability and frequency of transport links. In my constituency, there are no main line railways—there is not one passing anywhere near the constituency—so I know how important bus links are to communities. I am glad, therefore, that bus links were part of the deal. Not everyone has a car or driving licence, so it is buses that help them to commute to and from work. The Cornwall deal now gives us greater control over those bus links, and with the introduction of smart ticketing, like that in London, we can move Cornwall into the 21st century.
Cornwall and local health organisations plan to introduce a business plan for the integration of health and social care, meaning that Cornwall will have a greater say over how healthcare is provided to our elderly, sick and vulnerable constituents. With the empowerment of local government, however, comes great responsibility, and my constituents want to hold local government to account. This deal makes that possible. It gives the power to local people to hold their politicians and boards accountable. I feel proud to be MP for an area that has seen these devolved powers. It is a historic deal for Cornwall, and I hope that many of my right hon. and hon. Friends will feel the same way when the same powers are devolved to their areas.
I rise to make the case for new clauses 10 and 11, which stand in my name, but first, I should preface my comments by supporting the remarks of my hon. Friend the Member for Nottingham North (Mr Allen) about a constitutional settlement. That is an entirely sensible way forward. I do not know whether he has considered the distinctiveness of London as part of that settlement, but I think that any such convention should recognise its difference, the scale of the challenges facing it and the significant contribution it makes to the wealth of the UK as a whole.
I read new clause 22, debated in the previous group, with interest, and I commend my hon. Friend the Member for Croydon North (Mr Reed), whom I understand was its genesis. I hesitate to commend him more fully, in case it damages his career, but I am encouraged that the Labour Front-Bench team recognise the need to argue quickly for more devolution to London. I hope to persuade him and the Committee that my new clauses contain the substance of what needs to be devolved to London.
The substance of new clause 11, referred to by my hon. Friend the Member for Sheffield South East (Mr Betts), secured cross-party support in London as a result of the London Finance Commission, which Tony Travers chaired and which was established by the Mayor of London, the hon. Member for Uxbridge and South Ruislip (Boris Johnson). That commission recommended that the full sweep of property taxes—not just business rates, but council tax, stamp duty, capital gains, property development tax and the annual tax on enveloped dwellings—should be devolved to London.
High property prices in London mean that the capital contributes a disproportionate amount to the Treasury through property taxes. Last year alone, some £3 billion was paid in stamp duty in London—40% of the total, more than was paid in Scotland, Wales and Northern Ireland put together.
It is right that much of the wealth generated in London is redistributed around the UK. There should be continuing equalisation measures, as my hon. Friend the Member for North Durham (Mr Jones) rightly said, perhaps through the revenue support grant or other means. There should also be a corresponding reduction in grant income to London to ensure that devolution of property taxes is fiscally neutral to the Treasury.
My point, however, is that London needs to control more of the wealth that we create to solve the challenges that our city faces. We have the most severe housing crisis of any part of the UK, the highest cost of living, and the starkest levels of inequality. Our transport infrastructure is under huge pressure, and we have stubbornly high levels of child poverty and deprivation. I say that not in any way to dispute the fact that other parts of the UK face significant challenges as well, but merely to underline the argument that London needs to be able to control more of the levers to shape our responses to these challenges.
I thus support the instinct to retain 100% of business rates, but it is the full devolution of all property taxes that is needed to help us in London to tackle our challenges, with a pound-for-pound reduction in London’s revenue support grant as the quid pro quo going forward. There is widespread support among the business community for the devolution of property taxes because that community recognises that it is key to developing the necessary infrastructure to promote economic growth.
I use as my example the 40 years it has taken to start work on Crossrail. Given the pressures that London’s rapidly growing population is creating for further investment in infrastructure, it is vital for big infrastructure decisions to be brought to resolution more quickly and for the control of property and taxation to be exercised at London-wide levels, which would increase the Mayor’s ability—and, indeed, that of local councils—to put the financing together for the infrastructure schemes necessary for the future. Greater control over property taxes would ease the borrowing constraints on London’s local councils so that they could invest in vital infrastructure such as affordable housing.
As the London Finance Commission set out, London currently controls only 7% of the taxes that are paid here, compared with more than 50% in New York. Property taxes are set locally in Paris, Berlin, Madrid and Tokyo. Such control would not only enable London to plan infrastructure projects better, but allow greater scope to ensure that the property taxes that are levied suit London’s property and land markets. For example, the introduction of a hotel occupancy tax, as successfully levied in New York, could raise up to £50 million a year for London. Even if the Minister is not minded to support my new clause 11 at this juncture, he might give some indication of being tempted to develop a feeling of courage in taking on the Treasury and advocate further devolution of more property taxes to London.
New clause 10 devolves responsibility for housing law to the Mayor and Assembly. That matches arrangements for Scotland and Wales and would allow Londoners themselves to decide whether to extend the right to buy and whether or not to cut rents. It is the scale of the housing crisis that provides the overarching rationale for this new clause. We have seen a huge drop in owner-occupation in London. An average home in London costs nine times the average wage of a police officer, 21 times the average wage of a chef and 35 times the wage of a Foreign Office cleaner. Rents have rocketed, and are not expected to bottom out any time soon. Homelessness has also increased rapidly: there has been a 50% increase in my own borough over the past five years. Meanwhile, Ministers—and I say this with all due respect to the Minister who is present—sit on their hands doing very little about a crisis which, given that we are building fewer than half the homes a year that London needs, is likely to become more rather than less acute unless radical steps are taken.
I strongly believe that the Mayor of London has not had the will to tackle London’s housing crisis. It is also true to say that he has not had at his disposal all the levers that he might have had if he had really wanted to get to grips with it. One of the benefits of the amendment is that we would be able to put in one set of hands, or in the hands of one institution, all the crucial levers that would enable us to tackle that crisis. A mix of solutions is needed. The potential for those solutions currently lies in a multiplicity of hands, including those of the Treasury, the Department for Communities and Local Government, the Homes and Communities Agency, the Mayor and the Valuation Office Agency. We need to bring those responsibilities together, so that a mayoral London housing strategy can have real teeth and real resources with which to meet its objectives.
Decisions about the right to buy, about cuts in rents and about the introduction of rent controls in London, which I think are needed, planning rules, tax powers and the power to write the rules for the housing market more generally should be the responsibility of the Mayor, with the support of the Assembly. I think that property taxes should be as well, so that, for example, we can impose higher taxes on empty homes or on land that could be, but is not being, developed. Such decisions could be made more quickly by the Mayor. At present, councils must head for the Treasury to try to persuade the Chancellor.
I recognise that there are those who think that London has all the power and all the wealth, and that further devolution will only make that worse. As I said earlier, the wealth that London creates needs to be redistributed. Most Londoners continue to support that principle strongly, but I do not think that Whitehall always knows best. I think that there are more policy areas in London in which the expertise—I say this gently—of Scottish, Welsh and other English MPs is not needed, and which should be devolved to the Mayor and the Assembly. Property taxes and housing law, for instance, are crucial in that regard.
London is different from the rest of England. The scale of our economic and social challenges, our rapidly rising population and the fact that our competition is now far more about New York, Berlin and Tokyo than about other UK cities demand a much stronger devolution package for London. That does not by any means undermine the case for further devolution to other parts of England, as the Bill already suggests.
Amendment 2, tabled by my hon. Friend the Member for Nottingham North (Mr Allen), calls for the creation of a constitutional convention, which I think is very important.
As we heard earlier from my hon. Friend the Member for Sheffield South East (Mr Betts), the Government’s proposals are likely to end up as a dog’s breakfast. The Bill does not represent a movement for devolution or an attempt to improve local government or governance; it represents a clear political agenda. It is about the Chancellor’s vision of a small state Britain that will make it easier for him to push through draconian cuts. Once he has pushed responsibilities down to local government or regional tiers, he will be able to top-slice the budgets, while the difficult decisions will have to be faced locally, by mayors and councils. Those individuals will get the blame for the tough decisions that will be taken. The Chancellor and this Government will step back and say, “I’m sorry, it’s not our fault; it’s your local decision-making process.”
This is a unique way of approaching the devolution debate in this country. There have been other approaches. There was the Crowther debate in the late 1960s and early 1970s, which stood back and looked at not only Scotland, Northern Ireland and Wales, but how to devolve power locally. The Redcliffe-Maud reorganisation of local government took time to look at future structures for local government. That was controversial at the time—some of the historical counties were abolished, for example— but at least there was an evidence base.
That is not what is on offer now, which is why amendment 2 is so important. We need a properly thought-out national debate on devolution and what the structures will be. What we have now in this so-called enabling legislation is legislation with a big stick attached to it. Local areas such as the north-east have been told they can have devolution but only if there is an elected mayor, even though the Minister keeps denying that. He said an interesting thing in response to the previous set of amendments; he said no area would be disadvantaged if it did not go down the devolution route. That is not what he has been saying in the region or what his supporters in the Conservative party have been arguing in the region. The argument there is that if these truculent local authorities do not agree to devolution, they will lose out on all this money. The Minister has changed his tune this afternoon and said that is not conditional. It will be welcome if there is still an option to get those extra resources without necessarily going down the route he wants.
This is about local decision making, but what is key in any organisation is who holds the purse-strings. The Chancellor still holds the purse-strings under what is being proposed, and when the tough decisions come down the line his fingerprints will not be on them.
My hon. Friend the Member for Harrow West (Mr Thomas) mentioned business rates. I take his point: allowing local councils and others to have the powers to regenerate areas and try to create extra revenue is welcome, but he will appreciate—as my hon. Friend the Member for Nottingham North noted earlier—that there is not a level playing field across the UK. Without any mechanism for redistribution in local business rates, areas such as the north-east—those that have already been hit disproportionately by this Government taking the need element out of grant formula, which rewards richer areas more than poorer areas—are going to lose out.
Westminster city council will benefit if it gets to retain 100% of its business rates and gains from any new development it can have. Its situation will be easy compared with that of the poor people of Redcar; Redcar council is going to find it very difficult to attract new development that plugs the hole left by the closure of the steelworks.
We need to ensure we put in place structures that not only will work and have the support of people, but are practical. If we have a Teesside mayor and a mayor for the north-east, both will have responsibility for transport in their area. Where that will leave the A19, the M1 or any of the other transport links that cross the area, no one seems to know. Will the mayor of Teesside be responsible for the section of the A19 as far as the border of the area? Will the mayor for the north-east assume responsibility for the road network beyond that point? Therein lies one of the issues.
The Government said that they were against regions, but they have now divided quite a small geographical area. Supporters of the proposals have not explained how all this will work in practice. They have been out there in the north-east vigorously putting forward their case. Many of them have been posing as business people while forgetting to tell everyone that they are actually Conservatives.
There is a similar problem with resource allocation. The Government are proposing to impose a new tier of regional government, but how will it relate to the existing local authority tiers? The Minister keeps saying that this will be different because it involves moving power down from Whitehall to the region, but I can envisage people starting to ask whether they really need the large numbers of councils that they have at the moment. That will certainly happen in Manchester, for example. I know that turkeys do not usually vote for Christmas, but some local authorities need to think about where the Government’s agenda will lead. The Conservative party has traditionally been quite passionate about local government—it has always been supportive of it—but I believe that the Bill represents a move to reduce those tiers of local representation.
We need to step back and look not only at how the new system will work in practice but at the levels of local support. The Government are refusing to allow the people of the north-east a say in whether they want an extra tier of local government. The Minister is adamant that he is not prepared to give those people a say over whether they want an elected mayor whose responsibilities would stretch from the Scottish border down to Barnard Castle. As I said earlier, when we proposed a regional assembly in 2004, we quite rightly put it to the people. The Conservatives and their supporters argued vigorously against the proposal, and I am sure that if the then Labour Government had imposed an assembly on the region without taking the proposal to the people, we would rightly have been criticised. There would have been an outcry. Those same advocates who argued against us then are keeping very quiet now, however.
I have some sympathy with the amendment tabled by the hon. Member for Carlisle (John Stevenson). He has raised various issues, and I agree that there is a problem. One question that some of the smaller district councils will face is whether they will have capacity as a result of the cuts that will be imposed in the autumn statement, on top of those that have already been imposed. The last Labour Government introduced unitary councils in the north-east, in Durham, and it was one of the best things that happened making decisions more straightforward. I hate to think what some of those smaller councils would do if they were still in existence now, given the cuts that this Government have imposed. I doubt that they would have the capacity to deliver their services.
I put it to the Minister that these larger areas will need an effective mechanism for ensuring that local people are engaged in the decision-making process. I used to work in Cumbria and I know it well. I understand some of the attitudes he has referred to. Having a veto over decisions on what is needed there could be a disadvantage for Cumbria rather than an advantage.
We need the measures that my hon. Friend the Member for Nottingham North is proposing. We should have had them in place before we embarked on this process, but the Government know exactly what they are doing. This is not about devolution. It is about the clear political agenda of the Conservatives and the Chancellor. They know what they are doing, and it has nothing at all to do with the proper devolution of decision making.
I concur that a constitutional convention would be very sensible, as my hon. Friend the Member for Nottingham North (Mr Allen) said.
I hear the idea of a hotel tax in London—I hope it is not on my constituents coming down for a good overnight stay, but on those coming from abroad. I am not sure a hotel tax would work particularly well in Bassetlaw, although it is worth considering. I recall that until the last few years Welbeck Estates levied £3 on every tonne of coal produced for a century. If local government had been allowed to do that, Bassetlaw would be a very different place, because the infrastructure and so on would have been appropriately remunerated for the coal that we provided for the rest of the country in wartime and in peacetime, at great cost. That concept of local decision making is a very good one, so I would accord with the idea, but I hope there would be some exemptions to anything that is done in relation to the good people of Bassetlaw.
My questions are solely on the technicalities, as I see a few ambiguities here. There seems to have been a bit of a rush to get into the model being used. Nobody in my area or elsewhere would know about D2N2, but it is apparently Derbyshire and Nottinghamshire, and it is deciding that it might want this model, rather late in the day. I am sure Derby is a wonderful place, but I cannot say I have visited it very often and so I do not know how wonderful it is. Like most of my constituents, I am a little unknowing of the joys of Derby. What we have in common with Derby I have no idea, but it is certainly not economic, social, cultural or in any way to do with business, including shopping. Things cobbled together are likely to be rejected if they are put to the people.
That highlights another genuine problem, no matter how enthusiastic or not one is for this concept: Derbyshire and Nottinghamshire each has a unitary authority, and we have two-tier authorities, so putting another level of governance on top, with another elected politician, creates more politicians, with deputy mayors to be appointed as well. Different parties have views on how that should be done, but it means more politicians. The inevitable consequence of creating such an entity would be that either the districts or the counties would disappear —it would be interesting if the Minister clarified that. There would be unitary authorities of some kind within the combined authority. Otherwise, we would have potentially competing authorities representing some areas, set against single-voiced authorities. It is very clear that, no matter who is running them, the unitary authorities will have far more power and influence, because they will be speaking with one coherent voice whereas the two-tier authorities will not be. Those bodies may well be competing, and because the larger county authorities could be controlled by people from an entirely different district, that could be to the disbenefit of any particular district and a huge potential conflict could be created.
Logically, if it is a good idea and people want it—councillors, politicians and the people—there should be clarity that it will result at some stage in the foreseeable future in fewer councillors, rather than more. That is an important principle. I have argued repeatedly over the years for unitary authorities, and I have always thought that having too many paid councillors is a bad idea and that reducing the number will lead to more efficiency. In areas such as mine, we are talking not just about those two tiers and a third tier that could appear if this is agreed in D2N2—it is not the best of names—but about 60 parish councils as well. I would shift a little bit of power to them—for example, a few of the planning powers. Giving slightly more power to parish councils, particularly on planning issues, would doubtless get a lot of support from those on the Government Benches. Therefore, we have an absurd level of tiers if one is not stripped out.
Clarity on that issue would be useful, as would clarity on the issue of democracy. Will the people of Bassetlaw, Bolsover, Chesterfield, north-east Derbyshire or the Derbyshire Dales be able to choose where they go? That is a fundamental question. We could have a situation in which we have two mayors. Now, if there is one thing that is worse than having one mayor it is having two mayors. We could have a mayor for D2N2—I am sure that the turnout for the election would be dramatically high as it was for that of police commissioners—elected at the same time as the mayor for Sheffield city region. We need a level of certainty. Without question, if we are talking about economics and transport, our money and influence should go to Sheffield city region, because that is where the link is. That is simply a fact. There is no ambiguity there. We link in on health as well—I will not stray into that debate as it is coming up next—but that has already happened. The skills budget has gone as well, with North Nottinghamshire college in my area now merging with Rotherham college in Sheffield city region.
It is essential that we have the choice and that we do not get bundled into something, either deliberately or accidentally, that does not work for us. I do not think that that is the Government’s aim—
My hon. Friend is reiterating the point that I was making earlier, and I entirely agree with him. Although Bassetlaw could not be forced into D2N2, could it not be prevented from joining the Sheffield city region as a full member? In other words, it could be left in limbo.
I suppose Bassetlaw would have the option of declaring itself a unitary authority, of getting approval for that and of joining Sheffield city region. There may be routes around it, but the principle is fundamental. We need to have the ability to choose. If those two choices were put to the electorate, I suspect that I know which they would choose, and probably decisively. They may have a different view to me, but that is their prerogative—we have a word for that: democracy. What we do not want is “undemocracy”. Some people are very hostile to what the Government are doing and some are much more sympathetic. Either way, will these two options—is it the D2N2 model—lead to more councillors?
I am very interested in what my hon. Friend is saying. He knows that I am very familiar with his constituency, having grown up there. Does he think that the fundamental weakness of this Bill is that there is nowhere for the people to have a say in what actually happens?
The Minister will clarify whether, legally, people can have a say, but I am sure that there are ways in which a say can be created to ensure that there is popular consent. There are ways in which we could choose to do that. I am not talking about my own informal consultations, which are pretty huge. It would be interesting to get the Minister’s take on that. Those are key points.
Can we have some assurance that, over time, these measures will not lead to more elected representatives? If people are honest, they understand that if we have a two-tier scenario linked in with unitaries, either the districts or the counties will inevitably go at some stage, and probably sooner rather than later. That is bound to happen. Some may say that that is a good thing. As I have said, I have argued for unitaries before, but it is important that councillors understand that that is what is happening. Similarly, it must be clear that we will be able to choose, and the Derbyshire districts will be able to choose, where we will go. I am sure that the Government want that. They say that it is a brilliant idea, so they must want us to be part of it. It is really how we do that with guarantees. It would be useful to have that on the record.
As a former leader of a council and a member of a combined authority and local enterprise partnership, I welcome the thrust of the Bill. There is no question about that. I said in a previous debate that the train is going out of the station—the cat is out of the bag, to mix metaphors. Whichever description we use, this is the reality.
I do not deny that the governance structure in local regions is important, but whatever that structure is we must move the debate on. Local government has changed over centuries. In the 19th century, it changed to reflect the industrial revolution. It changed at the beginning of the last century and at the end to reflect the patterns of population, demography, business and so on. It has changed over time. London changed in the early ’60s, we changed again in the 1970s and it is now time to change once more. People might have concerns, but that is life. It has to move on.
My hon. Friend the Member for Bassetlaw (John Mann) made a point about having too many councillors, but I am pretty agnostic on that. The United States have significantly more councillors proportionately than we do, and they get on okay, and the same applies to the French. It is part of the heart of a community that there might be lots of councillors. I am not arguing for that, but I do not think that it is a reason for not going ahead with changes.
I support the comments made by my hon. Friend the Member for Nottingham North (Mr Allen) about the principle. There will be changes to local government and devolution in the coming years, and we might as well recognise that while we are in this transition and get on board with the constitutional convention. That does not stop things happening now, but we really need to get on with it, and I ask the Government to consider that seriously.
I also support what my hon. Friend the Member for Sheffield South East (Mr Betts) said. He referred to some of the specifics. It seems remarkable that a mayor would not have the borrowing powers he described. I hope that is just a mistake—a lacuna in the legislation—that will be put right. It is important that the detail is picked up.
There is a danger that this debate will get a bit too esoteric. Do I think that devolution will be good for my city region of Liverpool? Yes, it will. Why? This is not unique to us, but we have a thriving visitor economy. For many years, that has been our direction of travel and Liverpool is now the fourth most popular city in England for national and international visitors. That could link into the point made by my hon. Friend the Member for Bassetlaw about hotel taxes and the ability, if that many people are coming into the city from abroad, to use that revenue if we so wish. I am not saying that we should, but we should have that flexibility if we want it. The visitors are coming to my city, not to anybody else’s, and that is important.
At the moment, the visitor economy brings in £3.8 billion and 40,000 jobs, and it is a major growth sector. Do I think that the city region would manage that, grow it and progress it better? Yes, I do. There is no question about that. If we wait for Whitehall to help us, we will be waiting until the cows come home, and I mean no disrespect to Whitehall.
My hon. Friend reminds me that Thomas Jefferson once said that were people to wait for Washington to tell them when to reap and when to sow, they would soon go hungry. The same probably applies if we wait for Whitehall to figure out how to do some of these things. Will my hon. Friend also comment on local government borrowing and social investment bonds? In America, there is a multi-trillion dollar local government capital market. People borrow, they return, they use their liquidity and they stash money overnight. That would be a fantastic source of revenue that is currently denied to local government.
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.
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.
We have had an interesting and wide-ranging discussion. I recognise the comments made by hon. Members across the Committee and the range of amendments that have been tabled.
New clauses 2, 4, 5, 6, 7 and 16, and amendment 2, tabled by the hon. Member for Nottingham North (Mr Allen), are about the constitutional position of local government and putting in place arrangements for a constitutional convention to review this and implement any constitutional reforms considered necessary. I recognise his consistency in pursuing this issue; indeed, he also has a private Member’s Bill related to it. No one would deny the importance of constitutional matters. The traditions of this country are that we approach these matters in a pragmatic, evolutionary way. Our constitution has evolved over the centuries and continues to do so to meet the real needs of our people across the United Kingdom and to reflect the changes that are taking place in the wider world. I absolutely recognise the hon. Gentleman’s intentions and interest in this area, but I feel that this approach has served us well and I am confident that it will continue to do so.
The thrust of the hon. Gentleman’s amendments is that, for the first time in our history, we would put our constitution on a more rigid basis, seeking to codify issues and, in a sense, to set them in stone. Although they recognise the importance of constitutional issues and strongly support the passing of power down to the lowest practical level that this Bill will enable—the essence of devolution—the amendments are unnecessary and would be out of step with our traditions. They are also somewhat outwith the scope and intention of this particular Bill. However, I recognise his desire to put these matters on the agenda and his belief that they need to be addressed. I am sure it is not the last time that they will be discussed across the Floor of the House.