Cities and Local Government Devolution Bill [Lords] — House of Commons, 2015-10-14
Topic: Government Operations
Robert James MacGillivray Neill (Conservative, Centre-right): Thank you, Madam Deputy Speaker. I warmly welcome the Bill, which places my right hon. Friend the Secretary of State, who is a friend in more ways than one, in a very great tradition of Conservative municipal reformers. It is worth remembering that a great deal of the architecture of local government as we now know it is due to Conservative radicalism. We can trace this back through the work of Richard Cross, Disraeli’s Home Secretary, the work of the Salisbury Administration and the creation of county councils, as we know them, in the Local Government Act 1888, and the creation of the forerunners of the London boroughs through the municipal reform legislation of the 1890s. They were all the result of Conservatives who were prepared, where necessary, to shake up the mix a little when they realised that the existing structures needed to change, to be built on and to be reformed If my right hon. Friend looks at some of the debates then, as I had the chance to do, he will see that Salisbury’s Home Secretary, Ritchie, was told that the vestries were all doing perfectly nicely and there was no appetite to change them, that people would be very happy with that, and that the idea of a London-wide council was most dangerous because the rates were much lower in Paris, as the Paris city council existed only for the discussion of communistic principles. One or two things have changed, I suppose, and my experience of London council leaders takes me nowhere near that route Those who want to use local government as a dynamic force sometimes have to fight against a degree of institutional inertia. We sought to do that in the previous Government with the Localism Act 2011 and with the reform of local government finance. The Bill is a further step on the road. The Secretary of State was right to talk of it as a suite of powers that are being given. There are those who may say that some powers come with conditionality attached, but it is up to the councils concerned to decide. If they want that devolution, it is not unreasonable to accept the condition of direct accountability that goes with it, so I have no difficulty with the Government’s proposal in that regard. If councils have so great an objection to a directly elected chief executive, which has worked perfectly well in London, they do not have to apply for devolution. That is the simple answer. Enlightened self-interest will, I am sure, make any sensible council willing to apply My own experience of London government has been that the traditional format of London-wide governance in the Greater London Council did not succeed, whereas a much slimmer, more strategic Greater London Authority with a directly elected and accountable Mayor—a direct focus point for the people of London, and a direct focus point for inward investors to London—has worked, particularly when collaborating with the second-tier authorities. That is the model that the Government are moving forward and we should endorse it The reason I intervened on the Secretary of State earlier about the financial powers is that it is important that we see this change also in the context of the very important announcement at my party’s conference of the return of the business rate to local government. The two go hand in glove, although they are not legislatively linked, because the creation of good-size combined authorities creates the critical mass for those authorities to work as economic drivers. It is accepted that we will have to raise funds for that economic investment. They will have the size and scale and, if they are sensible with their use of the retained business rate, the ability not only to invest directly but, for example, to promote further the already fledgling municipal bond market, which would be regarded as the norm in most other advanced democracies, but which we have lacked in the United Kingdom Reference has been made to the undoubted need under the new financing system to have some form of equalisation. We all accept that. A very interesting piece of work has been done through the Independent Commission on Local Government Finance which suggests that it might well be possible to do that equalisation not necessarily on a single national basis, but on a sub-national basis. If, as I hope is the case, we see combined authorities and other authorities voluntarily pooling their business rate receipts because that makes sense, particularly if the combined authorities are to be based upon natural economic units so that the development area is not likely to be in the area of one single constituent authority but within the combined authority, the logic then for pooling business rates is all the more enhanced. That provides the critical mass to borrow against that income and perhaps the ability to deal with at least some elements of the equalisation within that pool, instead of a one-size-fits-all formula. That opens up a very considerable number of opportunities My final point is London-related. London does not feature specifically in the Bill, but I echo the point made by the hon. Member for Harrow West (Mr Thomas) that many people feel that London’s devolution is not finished business. I hope the Secretary of State will look favourably upon a London devolution bid brought forward by the Mayor and the London boroughs, consistent with the terms of the Act. We, too, are anxious to be part of that continuing devolution I strongly commend my right hon. Friend. He will certainly have my support. We ought to seize the opportunity, which is entirely consistent with the one nation Toryism that he, I and many others signed up to.