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Leaving the EU: Local Government

Volume 616: debated on Monday 24 October 2016

As well as some challenges, leaving the EU presents some fresh opportunities for the whole country. Working with Government colleagues, I am determined that local government takes advantage of those opportunities.

The Convention of Scottish Local Authorities has stated that only one third of the £1.3 billion of structural funds Scotland will receive up to 2020 has been allocated to local authorities. Some 20,000 businesses will benefit from these funds, potentially creating up to 11,000 jobs. Will the Secretary of State guarantee that there will be no financial detriment to our local communities if Scotland is dragged out of the EU through hard Brexit?

The hon. Gentleman will know that, first, the Chancellor has already guaranteed that any application for EU structural funds up to the autumn statement will be fully honoured and, beyond that, that fund applications will be honoured as long as they meet the UK national interest. However, leaving the EU also gives us an opportunity to design a new fit-for-purpose investment model that will benefit all our communities in the UK in exactly the way we want.

Does my right hon. Friend share the view of his predecessor—that local government should have a say in the withdrawal negotiations?

Yes, I do. I agree with my hon. Friend that the impact across the country of leaving the EU will be felt by local authorities in some ways—we have just heard a good example of that—and I assure him that I am having a very strong dialogue with the relevant Ministers to make sure that local government’s voice is heard.

The Secretary of State has just said that the Government will guarantee the funding for EU-supported council schemes signed off before the autumn statement, and perhaps those signed off before we leave the EU. On support for farmers under the common agricultural policy, however, the Government are going to guarantee every single penny up to 2020. Why will the Government not give the same treatment to local communities, which will really suffer if these important schemes are lost because of the Government’s failure to give them proper support?

We will make sure that no community suffers. That is why we have the transition process. The guarantees we have given local councils and local communities are very important. Again, once we leave the EU, we will be able to design a system that fits the needs of the UK and no one else.

My right hon. Friend is dead right to say there will be opportunities. Is it not the case that, whereas at the moment local councils and regions are forbidden to fund regional airports and other forms of infrastructure under EU law, that will no longer be the case and the United Kingdom will be able to choose what is best for our citizens?

As always, my hon. Friend makes a very important point. Once we leave the EU, no EU rules or regulations will apply, and we will be able to come up with those that best suit the needs of local communities.

It is a very interesting point that the hon. Gentleman over there has just made.

Does the Secretary of State not accept that, even if we are not members of the EU, state aid rules may still apply under World Trade Organisation rules, so local authorities will still have to abide by a lot of these rules?

The hon. Lady mentioned WTO rules, if I heard her correctly. That may or may not be the case, but even if it were, she will understand that WTO rules are not the same as EU rules.

I thank the Secretary of State for that answer. I will certainly table more questions to find out more detail on that.

The Secretary of State may be aware that Glasgow City Council has produced a document with a series of requests of the Scottish Government and the UK Government to help to prevent the detriment that is likely as a result of a hard Brexit. I expect other local authorities around the UK will do something similar. How will he ensure that the range of voices within local government is listened to and acted on by this Government?

I will make sure the voices of English local government are heard. When it comes to Scottish local government, I am sure it will work with the Scottish Government, who, as we have seen today, are engaged in the process.

I declare an interest as a member of Oldham Council.

In July, the Secretary of State highlighted the importance of local government having a say in the process of leaving the EU. He also committed to having a conversation with the Secretary of State for Exiting the European Union, so it would be great to get an update on those conversations and to find out exactly what role local government will have.

The hon. Gentleman will know that the process is ongoing and will take a number of months, if not years, so there will be plenty of opportunity for dialogue, including within the Government. I have had discussions with the Secretary of State for Exiting the European Union on various issues that will affect local government, but I will not give a running commentary on them.

I do not think that anyone is expecting a running commentary, but any commentary would represent progress, given the silence at the moment. Local government wants to know what part it will play; at the moment that understanding is fuzzy, to say the least. The Secretary of State will know the importance of EU structural funds—£5.3 billion of investment that is vital to many of our local communities—and the ability to administer those funds is a key component of the 10 devolution deals that are set so far. Does he agree that uncertainty about the future of those funds is stopping the vital long-term planning that is needed and risks damaging those devolution deals, which have only just been agreed, and that the poorest in the community will suffer as a result?

The Chancellor has provided significant certainty about structural funds, especially for applications that are made before the autumn statement. Recently, at the Conservative party conference, he provided further certainty about funds beyond then. That is exactly what business is looking for.