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 you 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.
5.15 pm
I will not repeat the arguments, but I want briefly to raise another matter. The Local Government (Independence) Bill proposed that local government’s ability to raise bonds or loans should be much clearer to ordinary people. We heard earlier about transport issues. If someone wished to raise a bond on the local government bond market, which is a multi-trillion dollar market in America, they could use their credit rating—people are more likely to be willing to take a risk on local government than on central Government—to raise bonds or loans. I argue very strongly that should happen once there has been a debate with local people, not because someone in a closed finance committee or the mayor and his or her deputy made a decision in a smoke-filled room. People should be involved so that we can ensure they have signed up to raising bonds to create a dozen children’s centres, an early intervention programme or whatever it may be, and so that they will watch such a project and take pride in its success, as people who do in so many civic arenas. The people in Nottingham are very proud of their tram system and their workplace parking levy that raises money for all sorts of transport projects in our city. Every Member of the House could reel off examples of their own.
That is at the heart of the new clauses I have tabled, but there is one last and very significant bottom line. We have so often seen central Government offer local government baubles or a few extra crumbs on this, that or the other, but when it suits central Government—of all parties—they take back what they had recently given away. If devolution is to mean anything, it has to be sustainable. It cannot be that if a Secretary of State does not like something an authority is doing—for example, re-establishing grammar schools—they can say, “I don’t like that. I’m going to take back that power.” No, the Secretary of State must win the argument about schooling. The same would apply if a local authority had ownership of the Work programme and everything to do with tackling employment, but the Secretary of State said, “No, I don’t think they’re doing it right; I wouldn’t do it like that” and sought to take back such powers.
If devolution is to mean anything, it must be permanent and entrenched. If it is entrenched, people can get on with it, build and have some certainty. At our disposal, we have number of weapons to entrench a proper settlement for English devolution. We can give local government independence and then protect that behind the Parliament Act 1911 so that any attempt to veto or to suck back powers can be refused by the second Chamber, or perhaps the device of a super-majority—it defends our right always to have a fixed-term Parliament
of five years—could be used to defend the rights of local government. Without that protection, such powers are favours, not rights.
Finally, I want to touch on a minor but important issue—tabled as my new clause 33—that has been raised with me by the National Association of Local Councils, who represent town and parish councils. I hope that the Minister will reassure me on this point, which relates to local energy production. In Germany, local energy that comes from renewable sources accounts for 46% of all renewable energy. In the UK, it accounts for less than 1%—0.3% is produced by our localities. That is an appalling record in anybody’s book. I hope that we can liberate our parish and town councils and those who currently cannot sell their electricity that is made by renewables. That would do everybody a favour. Currently, Cambourne parish council is inhibited in doing what it would like to do.
This relatively minor change could see the development of cost-effective solar panelling on school and community centre roofs. I will not press new clause 33 to a vote and if the Minister is not prepared to respond to it today, I would be most grateful if he wrote to me. It was put to me in a spirit of consensus by the National Association of Local Councils.
I will finish with one small example of how energy impinges on what we are talking about today. I have talked of boasting about civic pride, and it is a matter of pride that Nottingham City Council has launched Robin Hood Energy. Every domestic consumer can apply to that not-for-profit organisation and get the best tariff from all the existing suppliers. That has been done in an era of massive constraint on local government. Just imagine what local government could do if it was free to be sensitive to what the delivery of local energy could mean both at the district and county level and, as under new clause 33, at the parish and town council level.
I will not ask the Committee to vote on the new clauses I have tabled. I have put them down as a marker. If the Minister wants to take forward the debate about what will come next in the English devolution arena, I will send him my personal copy of the Local Government (Independence) Bill—signed or unsigned, whatever he prefers—to give him ideas that might find the light of day the next time we legislate on devolution.