Cities and Local Government Devolution Bill [Lords] — House of Commons, 2015-11-17
Topic: Government Operations
Graham William Allen (Labour, Centre-left): I want to talk about the very broad amendments that I have tabled. New clause 29 and new schedule 2 get to the heart of the debate—that is, we can have all the powers we like, but if we do not have the financial capability to use them effectively, they are an empty charade. We are accompanied in this Chamber by people of great expertise, with at least three former leaders of councils and other colleagues who have great experience on local authorities. The hon. Member for Bromley and Chislehurst (Robert Neill)—my hon. Friend, if I may call him that—has great experience that he put to the service of the Political and Constitutional Reform Committee in the previous Parliament. He enhanced our reports particularly where they touched on local government. There is great expertise in the Chamber, and I defy anyone to counter the truism that without finance powers are useless That is why I return again to the question of what happens next on devolution. This Bill is absolutely essential. The Minister has heard me say on many occasions that it is a good Bill that makes good progress, but he has also heard me ask on many occasions, "What comes next? Once the foundations are in, what do we do to build a more secure construction on them?" If the Minister does not intend to accept my new clauses, I ask him to look to the future and to consider how we can expand the financial capability of local government. We can do that in a number of areas. Indeed, my Select Committee in the last Parliament inspired me to draft the Local Government (Independence) Bill, which is available from all good Vote Offices or even from me, should anyone who is viewing the debate care to read it. It laid out a number of areas where we could use existing precedent to free local government in England and enable proper devolution One of the key precedents was and is Scotland. The efforts of Donald Dewar, the Scottish citizens convention, the coalition’s Scotland Act 2012 and the cross-party consensus among those of us who do not wish to split up the Union and who support the current Scotland Bill, which delivers on the promise that was made before the Scottish referendum, have all contributed to enhancing the capability of the Scottish Parliament to raise and retain its own income What is good enough for Scotland is good enough for England. England would need a different mechanism to deliver the heart of the deal, which is income tax assignment, but it is not beyond the wit of mankind to create that capability. Drawing on the lessons of the Scottish experience, we could soon get to a position where income tax assignment, channelled through the Department for Communities and Local Government, filtered down into a clear, honest and accountable amount of income tax without having to make any changes to the rates, the method of collection or equalisation. That would provide local people with transparency and clarity with regard to where and when their income tax is spent, via central Government, by local councils and local authorities. That would be a significant step forward, just as the Scotland Act 2012 was for the Scottish people On equalisation, many people get anxious about income tax assignment and say, "That means you’re retaining the income tax raised in your locality," but that is not what it means. As happens now, income tax would go to the centre and it would be reallocated through the existing formula or a slightly changed formula, depending on the consensus at the time. Equalisation would stay exactly the same as it is now, unless all players—including, above all, local government, perhaps represented by the Local Government Association—consented to any change The Local Government (Independence) Bill was the product of a lot of thinking involving academics, Queen’s counsel, the Public Bill Office and this House, to try to make sure that everything was defined as accurately as possible so that it could be legislated on. It outlines ways in which local government could raise additional income, but with the very strong caveat that it could not use any additional sources of income unless it involved local people in the decision and they agreed to them. The issue has been discussed before on the Floor of the House, and we raised the obvious example of charging a hotel tax—or bed tax, as it is sometimes called—if local people consent to it. The heart of devolution is represented not by the Government saying, "Everybody should do this", but by the freedom of local areas to try, if they wish, to get the consent of people in their locality Members have touched repeatedly on the idea that that approach will be so much stronger if it is done voluntarily. Rather than looking for ways to get out of a straitjacket, people will be seeking means to join the club of local authorities that can raise money in particular ways. They would learn from each other, from the experience of colleagues down the road or from further afield and perhaps, as I have suggested in new clauses, from a best practice centre of some description—owned by local authorities, contributed to by central Government —to take devolution to the next step. Let us look at some of the good things that have happened, although not everywhere, and offer them to other authorities so that they can, if they wish, move forward.