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Scottish City Deals

Volume 636: debated on Tuesday 27 February 2018

I beg to move,

That this House has considered the progress of Scottish city deals.

As always, it is an honour to serve under your chairmanship, Ms McDonagh. The Localism Act 2011 created the concept of core cities in the UK and granted significant devolved power over financial and planning matters to city regions that successfully negotiated deals with central Government. As the greatest city in the world, it was inevitable that Glasgow was the first city region in Scotland to successfully negotiate a city deal in 2014. I pay tribute to the city region’s councillors—particularly the Labour councillors—who led the championing of that deal. Gordon Matheson, who was then leader of Glasgow City Council, and his colleagues played a vital role in ensuring that the deal was achieved, and it proved to be the harbinger of successful deals for Aberdeen, Inverness, Edinburgh and Stirling.

Glasgow’s deal was agreed by the UK Government, the Scottish Government and the eight local authorities in Glasgow and the Clyde valley: East Dunbartonshire, East Renfrewshire, Glasgow City, Inverclyde, North Lanarkshire, Renfrewshire, South Lanarkshire and West Dunbartonshire. It aims ambitiously to support the creation of 29,000 jobs, underpinned by £1 billion of Scottish Government and UK Government capital funding and £3.3 billion of private sector investment to support a proposed infrastructure investment programme. The purported aims of the deal are based on three themes: a £1.1 billion fund to support 20 major infrastructure projects in the region, including reviving plans for the long-awaited rail link between the city centre and the airport; three labour market projects to address local employment challenges; and innovation and growth projects to support the growth of small and medium-sized enterprises and enhance the city’s life sciences sector.

The city deal promises significant funds for Glasgow’s development, but very little progress has been made since 2014. For example, more than three years after the deal was agreed, the plan for the Glasgow airport rail link, which was meant to be a key component of the deal, has yet to be agreed. I would like the UK Government to take this opportunity to explain to us Glaswegians why there has been such a significant lack of progress. That raises serious questions about the way in which the Scottish city deals, particularly the Glasgow city deal, were set up, how they are being run and where they will go next.

The Glasgow city deal has been extremely badly handled by the Governments at Westminster and Holyrood. Both the Tories and the Scottish National party need to be held to account for their failure to progress the deal, having so far failed even to agree on the outcomes they want it to deliver. The two Governments seem more focused on arguing about constitutional issues. The UK Government lack oversight of what the money they committed is being used for. Put simply, the Tories do not care enough about the deal to monitor it and press for progress.

The development of the Glasgow city deal and other Scottish city deals is evidently not a priority for the UK Government. That is fittingly exemplified by the fact that no one from the Scotland Office, which I named in my application for the debate, bothered to turn up, and that the Minister for the northern powerhouse, which is a position designed for the north of England, was dispatched to respond instead. That begs the question: what is the Scotland Office actually doing beyond hosting the occasional soirée in Dover House? It has shown a lack of leadership on this vital growth opportunity for our cities in Scotland.

Before the hon. Gentleman was elected, the problem we had with getting Scotland Office Ministers to appear in this Chamber was that there was only one Government MP representing a Scottish constituency and the Secretary of State does not normally appear here. Given that he is now joined on the Government Benches by an illustrious array of talent from Scotland, is it not time that a Scotland Office Minister came to this Chamber?

I thank my honourable colleague from the great city of Glasgow for that observant intervention. I welcome the fact that some Scottish Conservative Members are here. It is just a shame that none of them are deemed worthy of holding the position of Under-Secretary of State for Scotland, which, bizarrely, was given to someone who failed to be elected to the House and sits in the other place.

This is not a bid for the job, but I thank the hon. Gentleman for his kind words. May I go back to what we knew as the GARL—the Glasgow airport rail link? The Strathclyde Partnership for Transport was heavily involved in that—in fact, the route was mapped out. Does he recall that that was shelved not by the SPT but by the Scottish Government?

The hon. Gentleman makes a valid point. Since the UK Government provided half the capital for the city deal—cash that was contingent on a no vote in the 2015 referendum—it appears that the SNP Scottish Government are at best apathetic about the progress and success of the deal and are therefore dragging their feet and putting nationalism ahead of the national interest and of the interests of Glaswegians. There is no better example of that than the way in which power was ripped away from the SPT and centralised in Transport Scotland. There has been a total lack of progress in infrastructure investment in Glasgow, particularly in the Glasgow metro rail network, which was built by the Strathclyde region. There has been no substantial investment to expand the network since the end of the Strathclyde region and the centralisation of transport powers under Transport Scotland.

The Glasgow airport rail link was scrapped in 2008, and there was a fire sale of the land—a scorched earth policy—that would have allowed it to happen. We struggle to see how we can revive that deal, because all the infrastructure that was put in place to achieve it was sold off in that fire sale by John Swinney. There is also a threat to the Crossrail scheme in Glasgow, which is vital for unifying the city region’s rail network. Transport Scotland has actually demanded its removal from the city region plan, which would open up the land for the construction of housing.

I will avoid the theatrics that some others have used. The hon. Gentleman talks about the danger posed to Crossrail. Does he accept that, under a previous administration, Glasgow City Council granted permission for 800 houses where Crossrail would have gone? I do not think he is in strong territory.

I do not accept that at all. The high street curve area was protected until June last year, after the change in administration. It was actually Transport Scotland—[Interruption.] No, the planning application was not before that. I am the only Member of Parliament who raised an objection to that planning application, which went to the city council only last month. Crossrail was enabled in the city region development plan, but it was removed from the latest edition of the plan in June last year at the demand of Transport Scotland. That is why a planning application went in that threatens the delivery of the Crossrail scheme, which is a vital project for Glasgow. I urge all Glasgow city region Members of Parliament to get behind it. We need to protect and safeguard the route for Crossrail. It is a critical project that should be funded by the Glasgow city region city deal, and it is another example of how dysfunctional and disjointed the whole administration of the deal has been.

At a time when public money is tight, it is unacceptable that the involvement of two Governments—in Edinburgh and London—can lead to a stalemate in the progress of the Glasgow city deal and a failure to draw up and implement a strategy for investing the allocated funds. The Tories and the SNP must get a grip if our urban areas are ever to catch up with and exceed the ambition of their English peers.

In an evaluation of their progress in 2016, the Fraser of Allander Institute commented that the three city deals that existed in Scotland at the time

“could have an important impact in increasing urban productivity, and increasing the culture of partnership and innovation in these…city regions,”

but “many more steps remain,” and that for cities in Scotland to move forward,

“they need to be empowered—with additional roles, funding and competencies, because they will need and are best-placed to identify their infrastructure investment requirements, especially in transport and housing.”

My constituency is not lucky enough to have a city deal yet—they are still under negotiation in Clackmannanshire and, in the form of the Tay cities deal, in Perth and Kinross. Does the hon. Gentleman agree that devolution does not mean separate? Edinburgh should pass more powers down to local authorities and work constructively with Westminster, so that we get more transparency about these deals and actually get the money to the communities where it is needed sooner rather than later.

I thank the hon. Gentleman for that intervention, which was timely because I am just about to address the question of municipalism in Scotland—a great tradition that is sadly diminished.

To achieve those recommendations by the Fraser of Allander Institute, we need substantially greater powers to act at municipal level, which the Glasgow city deal shows are sorely lacking. It is fair to say that Glasgow has been progressively smothered by the process of devolution in the past 20 years. Edinburgh holds too much power. It sucks up power from other parts of the country, including Glasgow. The SNP has only exacerbated the problem by drastically cutting funding to local government at twice the rate the Scottish budget has been reduced. Rebranding the city council as a city government is just dressing mutton up as lamb, because without any substantive changes to Glasgow’s real political power it is nothing more than changing the letterhead on the city council stationery. We need to appraise honestly how devolution can better support our great cities towards more responsive, representative government, rather than increasingly concentrating power in Edinburgh.

The north of England has been invigorated by a multimillion pound investment and innovative development through its city deals. Historically Britain’s second city, Glasgow is now at risk of losing out in terms of power and investment compared with other big, regional cities in the UK. City regions such as Manchester and Liverpool have made great gains in funding, voice and influence in recent years, including through the introduction of directly elected metro mayoralties. That greater devolution of power is to be celebrated, and Glasgow, which is bigger than each of those cities in northern England, needs to learn from the recent experience of cities such as Manchester to bring more power and investment to our great city. We need to ensure that Glasgow, as one of the greatest cities in the world, and once the fourth-largest city in Europe, has a greater and distinctive voice within the UK. We should be exploring all avenues for how we increase our political clout to improve the lives of Glaswegians.

The city deal appears to be a temporary fix to underlying structural issues for funding the Glasgow city region, which over recent decades has been both ravaged by a decade of SNP cuts and undermined by the Tory break-up of what it saw as a troublesome Labour-led Strathclyde regional council in the 1990s. I hope that the debate will force the Government to provide much-needed clarity on the future progress of the longest-standing Scottish city deal, the Glasgow and Clyde Valley city region deal.

The UK Government need to be proactive in pushing for progress while putting pressure on the SNP Government in Holyrood to deliver their commitments. As has been mentioned in interventions, we need to establish unity of purpose to ensure that the right projects are prioritised so that Glasgow finally gets the vital, world-class infrastructure it needs to thrive as a global destination in the 21st century, without further delay and procrastination. The current deal clearly shows that we cannot trust the UK Government to deliver on their financial commitments, we cannot trust the Scotland Office to show leadership, and we cannot trust the Scottish Government to implement their commitments properly.

Is that not proof that the deal was not fully thought- through by the UK Government at the start? Instead, it was a pre-referendum bribe, with them throwing out the money without laying out what the outcomes were going to be.

I do not accept that it was done in that manner, cynically put as it was. I think it was put together with the best of intentions, but it has been managed incompetently. Both Parliaments and both Governments are to blame for the lack of oversight. I hope that both Parliaments will rediscover a spirit of co-operation on this issue and reappraise and reboot the city deal to ensure that we get the best effect for the people of Glasgow. I have been elected to do that, and I am going to ensure that that happens.

The hon. Gentleman is a good friend of mine, and I understand that, as the sole Labour MP in Glasgow—on a wafer-thin majority—he has a job to do. The SNP has been in administration in Glasgow for less than 12 months, while his party presided over the deal for three years. Is there no responsibility on the part of his colleagues in Glasgow city chambers?

Glasgow City Council has been pressing valiantly to deliver projects such as the Glasgow airport rail link, but it has been thwarted at every turn by Transport Scotland. Why? Because municipal power has been progressively ripped out of city councils across Scotland by the Scottish Government. [Interruption.] It happened in 2008, when SPT was denuded of any executive transport planning powers. It has the capacity to do it.

Order. It is great to have so much enthusiasm in the room, but I remind Members that any comments should be made through the Chair.

Thank you, Ms McDonagh. I shall conclude by putting two direct questions to the Minister. What will he do to ensure that city deals in Scotland are properly delivered and to ensure the deals bring the hoped-for benefits to the city regions? What discussion has he had with the Scottish Government about enhancing the Glasgow city region’s political power in concert with the city deal, as has happened in other UK cities to their benefit? Will he show us some of the leadership lacking in the Scotland Office by committing to raise those issues with the Scottish Government without delay?

It is a pleasure to serve under your leadership, Ms McDonagh. I congratulate the hon. Member for Glasgow North East (Mr Sweeney) on securing this hugely important debate. The Government welcome the opportunity to talk about the huge success that Scotland’s city deals are already delivering for all seven of the major cities in Scotland, and will deliver in future.

I am slightly disappointed that the hon. Gentleman is so upset that I am responding to the debate. I am the Minister for the northern powerhouse—for most people in the Chamber, I guess that is the far-southern powerhouse—but I am also Minister for local growth, and it is my cities and local growth team, on behalf of the Government, in partnership with the Secretary of State for Scotland and his civil servants, who have negotiated many of these city deals. I hope today to bring to the debate not just the experience we have had in government of negotiating city deals in Scotland but other experience.

The hon. Gentleman referred to the huge success of the English city devolution programme. We have seen huge steps forward in places such as the West Midlands, which now has a Mayor for its combined authority, as well as Liverpool and Manchester—and, in particular, the Tees Valley. There are important lessons we can learn across our United Kingdom, both from this debate and, more generally, about how devolution—taking real power, money and influence away from Westminster and returning it to the hands of people in local communities to drive forward their own growth—can transform our economy.

Before I get to the main part of the debate, I want to put on record my congratulations to Scotland’s rugby team, who absolutely battered England at Murrayfield on Saturday. I was there, and it was a great privilege. It was not a great result from my point of view, but it was good to be at the match. It shows that sometimes the best team wins, and the team with the best spirit also wins. I therefore congratulate Scotland on winning back the Calcutta cup—after 10 years.

I would like to celebrate the achievements and successes we have seen in our city deals. An additional £1 billion of UK Government investment and funding is going into local growth priorities in Scotland, which has been matched by £1 billion put forward by the Scottish Government, with additional investment from local authorities, universities and—let us not forget it, because it has not yet been mentioned in the debate—the private sector, which together brought forward a further £835 million. That shows that when city deals, and devolution and growth deals, are at their most successful, they are a partnership of equals between the UK Government, the Scottish Government, Scottish local authorities, the private sector and, of course, our colleagues in the public sector.

As we set out in our industrial strategy White Paper last November, the Government are committed to driving forward growth across the whole of the United Kingdom. It is about helping areas to achieve their full potential by building on local sector strengths that attract investment and supporting local businesses to grow. The city and growth deals that we have already negotiated and those that we have committed to negotiate in Scotland, Wales and Northern Ireland are absolutely central to that ambition. Moreover, they show how the Government can work hand in hand with partners in the devolved Administrations across our United Kingdom and local authorities to deliver, in a co-ordinated way, real impacts for local economies.

The first Scottish city deal was agreed in 2014, three years after the then coalition Government launched the first groundbreaking English city deal. It was interesting to hear it referred to as a pre-referendum bribe. If SNP Members believe that—I do not believe it; the deal was about driving forward the city of Glasgow’s economy for the people who live there—I wonder why they signed up to it. Perhaps they can deal with that later.

The deals provide place-based solutions, building on local expertise to co-ordinate investment and policy, and interventions to help to drive economic growth. Recognising that city deals, as piloted in England, could boost local economies across our United Kingdom, Her Majesty’s Government and the Scottish Government agreed that the programme should be extended beyond England, to demonstrate our commitment to supporting dynamic businesses and local communities represented by devolved Administrations. We have agreed four deals across Scotland and are negotiating three more, meaning that we now have deals being either implemented or negotiated for each of Scotland’s great seven cities. We are also working on a cross-border deal between Scotland and England, referred to as the borderlands deal, which was confirmed in the most recent Budget, to see how we can drive forward the ambitions and desires of businesses in the borderlands area of our United Kingdom.

There has been a lot of talk specifically about city deals. On the Tay cities deal, which comes into my constituency, I just wanted to confirm that we will use as much pressure as possible to ensure that the deals cascade out into rural economies as well, because they need just as much support.

I thank my hon. Friend for that intervention. We should never forget that the majority of people in this country do not live in a city, but in towns, villages and rural communities. Therefore, every city deal and every growth deal that the Government negotiate, regardless of where it may be in our United Kingdom, has to be about driving forward the economies of areas outside cities as well as in cities. I happily confirm that the hopes and desires of her constituents who do not live in a city will be part of that deal.

The Minister touched on the borderlands growth deal. He will know where I am going with this: the Ayrshire growth deal was on the table before the borderlands growth deal, which now seems to be going forward. At the last Housing, Communities and Local Government questions he committed to meeting the backers of the Ayrshire growth deal. Has he progressed that meeting yet?

We are in conversations about dates that work. I have already met with the representatives of the Ayrshire growth deal. As I committed to in the Chamber following the hon. Gentleman’s question, I am happy to meet with them again to discuss what we can take forward and how we can work together on proposals that they may have for an Ayrshire growth deal. I will keep him informed about my diary, but I hope that he will not have to wait too long for the second meeting. I know that discussions are ongoing with my colleagues in the Scotland Office.

An important aspect of all the city deals is that their content cannot be imposed top-down by the UK Government or the devolved Administration. They need to be promoted by local partners and draw on the expertise in the local communities, because such deals work best where they are ground-up and locally driven.

I turn to the achievements of some of the city deals that we have already agreed. The Glasgow and Clyde Valley deal was the first Scottish deal agreed, and included a joint £1 billion investment fund from both the UK and the Scottish Governments to support growth across the city region through a regionally controlled investment fund. Good progress continues to be made, with a number of key milestones already achieved. Significant funding—£209 million—has been approved, and many projects have been successfully completed. One example is the positive investment—some £89.3 million —of city deal funding to deliver the canal and north element of the Sighthill regeneration project, which is one of the biggest of its type outside London. I could not put the difference that the project will make better than the hon. Member for Glasgow North East. In one of his recent tweets, he said that the Sighthill regeneration project is

“an incredible legacy for my constituency.”

I accept that the Sighthill transformational regeneration area is a wonderful example of the city deal in action, but my point was that, given the lack of political power compared with the powers given to other city regions in the UK, we cannot progress critical infrastructure projects such as transport because those powers are no longer in the locus of the city region. Only when we have the powers to match the investment will we see real progress in areas such as infrastructure. Does the Minister not accept that we are seeing a lack of progress in those areas?

I do not accept that the only point that the hon. Gentleman is seeking to make is that the region wants further political powers. He set out that there had been a lack of progress in the Glasgow city deal. I have pointed out a project that he himself has said will be

“an incredible legacy for my constituency.”

Some £89.3 million has already been drawn down into that project. That ably makes the point that the city deal is making progress, and shows the commitment of both the UK and Scottish Governments to driving forward the economy of Glasgow.

The city deal investment in the Sighthill regeneration project, which the hon. Gentleman acknowledges is a good legacy for his constituency, will fund connections between that area and the city centre. It will provide a significant economic boost to north Glasgow. In addition to the regionally managed investment fund, as part of the Glasgow city deal the Government have committed funding to specific innovation projects across the city region. Those projects have already begun to support small and medium-sized businesses with high-growth potential as part of our strategy to back Glasgow’s life sciences sector.

Among those projects is the world-leading Imaging Centre of Excellence, which is part of a £64 million investment in stratified medicine at the new south Glasgow hospitals campus. Again, that part of the city deal is drawn-down, completed and open, showing that the city deal is already delivering for the people of Glasgow. It is a unique medical research facility, which will translate science into economic and patient benefits for the city of Glasgow, Scotland and the UK. The project will bring 396 new high-skilled, high-wage, high-value jobs to the city region over a seven-year period, and an independent assessor believes that it will contribute at least £88 million to the local economy—another demonstration of how the city deal in Glasgow is already delivering for people on the ground.

On the comment made by the hon. Member for Glasgow North East about the delay to the rail link with the airport, I share his disappointment that the Scottish Government have failed to make proper progress on that. It is already fully funded from the city deal agreed gainshare fund. The money is available and ready to be drawn down. I hope that the hon. Gentleman will take the message from today’s debate that there is certainly ambition from the UK Government, who are calling for the project, in partnership with Transport Scotland, to be brought forward as quickly as possible to deliver not just for the people of Glasgow, but for the wider Scottish region.

I note that the transport woes in the city of Glasgow are not isolated. Trains between Edinburgh and Glasgow have been both reduced in frequency and halved in their length, because the lease is about to run out on the diesel trains that currently ply that line. I wonder whether one solution could be to take the steam train from the Bo’ness and Kinneil line to supplement the transport between Glasgow and Edinburgh. That should not be a solution that any of us want, but given the incompetence with which the Scottish Government seem to be managing that line, it may be the only one available.

On the subject of transport, the £120 million investment in the city bypass in my constituency of Midlothian is welcome, but does the Minister agree that it must be a priority, as the majority of people working in Edinburgh are now living in Midlothian—the fastest-growing constituency in Scotland?

The hon. Lady makes a good point on behalf of her constituents, and I am sure that she will continue to drive that argument here in Westminster in representing them.

We have built on the success of the Glasgow deal. In 2016, we agreed a deal for both Aberdeen and Inverness. In Aberdeen, we now have the £180 million Oil and Gas Technology Centre—an industry-leading research and knowledge organisation, which is fast establishing its reputation.

Does the Minister accept that the Aberdeen and shire city deal actually fell £254 million short on the UK Government side, compared with the Scottish Government side, and can he explain why the estimates document shows that £72 million is being surrendered to Her Majesty’s Treasury?

On the subject of Aberdeen, I would have thought the hon. Gentleman would be celebrating the fact that the centre has invested in more than 70 projects in just 12 months to develop technology that could transform the North sea. I think it shows that we cannot cover the success of Scottish city deals in a half-hour debate. Perhaps there will be an opportunity to have another debate to cover Aberdeen, Inverness and other areas.

Question put and agreed to.

Sitting suspended.