Devolution in England

Simon Danczuk Excerpts

Monday 2nd March 2015 Commons Chamber

[Simon Danczuk (Rochdale) (Lab)]

It is a pleasure to follow the hon. Member for Cleethorpes (Martin Vickers). I congratulate my hon. Friend the Member for Sheffield South East (Mr Betts) on both his speech and his excellent chairmanship of the Communities and Local Government Committee. Wherever he or I end up after the general election, I shall be pleased and privileged to say that I served under his chairmanship. It is something I have learned much from.

Some people dream of becoming a politician because they love the fame and the glamour; some because they picture themselves as the next Gladstone or Churchill; and some, let’s face it, because they quite like the sound of their own voice. But I was different. I came into politics because I want fiscal devolution—that is the reality. It may come as something of a surprise, but it is true. Fiscal devolution sounds like an obscure and impenetrable topic, but for me it speaks to one very simple principle: that decisions should be taken as close as possible to the people who are affected by them. Belief in fiscal devolution has therefore always come down to simple faith: faith in local people, faith in local decisions and faith in local elections—and a healthy scepticism of central Government and Whitehall.

It seems that the public share that faith. The Local Government Association asked members of the public who they trusted to make decisions about their local areas: local councillors, MPs or Government Ministers. With apologies to those on the Front Benches, I can reveal that 72% of the public went for their local councillors, 11% for MPs and only 7% for Ministers. I can reassure hon. Members that I do not believe this is a reflection on their competence or integrity. I certainly do not think I have become less trustworthy since I left Blackburn council and took my seat in this place, although some hon. Members may disagree. It is not about personalities at all; it is simply that local people prefer decisions to be taken by their local representatives on the ground, rather than by remote mandarins in the capital. Many of my constituents would not understand why people who could barely point to Rochdale on a map should be taking decisions about their town. It is an understandable frustration. In principle, I want to see decisions made at a local level. The public seem to agree, but all hon. Members know that decision-making powers count for very little when they are not accompanied by control of the purse strings.

I have two young children. Often it is fun to let them make decisions about where we should go or what we should do, but I would never dream of giving them my credit card, because that is where the real power lies. For too long, central Government have treated local government as a wayward child—happy to devolve some powers, but never letting go of the credit card. I can understand that instinct. After all, it is not so long ago that a quarter of the world was quite literally run from this postcode. It must be quite a wrench for civil servants to consider giving up the power they have left. However, just as we left behind the era of empire, we should now abandon the era of the mighty central state.

Despite progress over recent years, the UK remains one of the most centralised countries in the world. Even here in London, our most autonomous city, only 7% of the taxes raised are kept by the Mayor. That compares with 50% in New York and 70% in Tokyo. In fact, the economies that are prospering at the moment, from the USA to Germany, are those with high levels of local and regional devolution. That is a point made in our report, which finds a connection between fiscal devolution and economic growth. Devolution is an idea whose time has come, and it is time that this country joined the modern world.

If devolution is the aim, how do we get there? That is the question, and I believe that the Committee’s report provides a good place to start looking for answers. Hon. Members will be familiar with the recommendations, but I would particularly like to lend my voice to the idea that we need to balance the desire for local authorities to keep as much money as possible with the recognition that money must also be fairly distributed across the whole country. I would also endorse the idea that fiscal devolution should happen within the local government structures that already exist. We do not need an English Parliament, creating yet another layer between people and power.

I do not want to go into detail about which spending powers should be devolved; that is for another time. What I would like to do is try to set out some broad principles. First, the process of devolution should not be uniform. The British state has often seemed obsessed with rigid uniformity, when the opposite is often more appropriate. If we look at Scotland or London, we see that devolution can often be quite messy. Instead of smooth sides, there are often sharp edges, but that is not something we should be too worried about. The mess of devolution breeds the innovation and energy that are the drivers of growth and prosperity. Nor should we be concerned if devolution happens at different rates in different areas.

That brings me to my second major point. With great spending power comes great responsibility. We need to make sure that the governance is in place to cope with new powers. This is something I have real concerns about. The Select Committee has recently seen a number of local authorities regarding serious failings, not least Rotherham council. One has to ask whether we would devolve more power to such an authority, yet there are clearly some local authorities, such as those in Greater Manchester—or Greater Rochdale, as I would prefer to call it—that want and deserve more control. The key will be to make sure that local councils can handle the powers that are devolved to them and that we manage to monitor their performance.

That brings me to the recent issue of devolved NHS spending in Greater Manchester. I should say from the start that I welcome the increased governance being given to the city region through a directly elected mayor, although I understand the concerns raised by my hon. Friend the Member for Wigan (Lisa Nandy). Elected mayors are something I have long campaigned for. However, I have a number of reservations regarding the latest announcement. The key to devolution is that the right powers are given to the right level at the right time. I have real questions about both the level of government and the timing.

Devolution on such a scale should be part of a long process and kept separate from party politics. To make such an announcement in the middle of an election campaign seems irresponsible and makes me question the motivation behind the decision. It seems to me that the announcement was designed to show that the Chancellor can appeal to northern cities in a way that some of his colleagues clearly cannot. The decision should not be driven by personalities, but by clear evidence and arguments. This cannot simply be a case of securing the legacy of Howard Bernstein, the chief executive of Manchester council; it must be about much more than that. Finally, I am worried that the decision will mean yet another structural revolution in health provision in Greater Manchester, when what we need is a focus on outcomes. This example goes to show that someone can be committed to devolution, as I am, but also cautious about going too far, too fast.

To conclude, I am sure that there will be disagreement in this House in the coming years about fiscal devolution. People will question individual settlements, powers and decisions; however, I hope our report shows that we can have those disagreements within a framework of consensus about the principle behind it. Personally, I favour a plan that is ambitious but also gradual. I do not want to see huge amounts of power and money thrown at local authorities that are not ready for it. That would not be good for local government or for the principle of devolution. I want to see a pragmatic approach that goes as fast as we dare, but does not overreach what is possible. I am not clear exactly how that will look, but I am comfortable with this unknown. The process needs to be organic, which will mean some confusion at points, but I am clear about what kind of country we will have once we devolve more fiscal powers: a country that is more open, free, democratic and prosperous. That is why we should all back this report.