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5.36 pm
Mrs. Louise Ellman (Liverpool, Riverside): I support the Government amendment to the motion. I am a strong supporter of local government and am absolutely convinced that local government working at its best can respond to local needs and wishes in a way that no other layer of government can. Local government working properly meets the needs of its communities; acts as a community leader; shows imagination, flexibility and initiative; and looks ahead as well as reacting to immediate difficulties.
I also understand the enormous damage that was inflicted on local government and on our communities in the 18 years before the Government came to power.
Attacks were made on local government's financing and powers and on the whole principle of local government and local accountability itself. A start has been made on changing that in the two years since the Government came to power, but it is not feasible to imagine that those 18 long years of consistent attacks, consistent cuts and consistent denigration can somehow be ignored.
I consider what the Government have delivered to be the beginning of a new start for local government. Although I want a great deal more progress to be made in future years, that necessary beginning has been achieved, in the face of great difficulty and against that record of cuts and denigration.
The motion has been tabled by the Liberal Democrats, who are nothing if not opportunistic; indeed, they are everything to everyone. They are all in favour of public spending, as long as others are responsible for the bills. They hide away from responsibility, claiming that they want to spend public money, but blaming others if they are concerned that the public will not like the cost of meeting those bills.
Liverpool, the city that I represent, will benefit from next year's local government settlement; it is the most generous for many years and, at long last, recognises the needs of the city, which is in an objective 1 area--one of the poorest areas in Europe. The city has acute needs and tops the list of areas of urban deprivation in this country. For the first time, the real needs of the city are being addressed--by this Government; indeed, the settlement that they have delivered for next year has made it possible for a council tax freeze to be imposed.
Meanwhile, what are the Liberal Democrats doing in Liverpool? When the Government are delivering a revenue support grant settlement that starts to meet the needs of the people of Liverpool, the Liberal Democrats are mounting a major assault on pre-school services, on the youth service and on the voluntary sector. They are cutting funds for Lark Lane play association, and at Lodge Lane East residents association. They are cutting funds provided for children's services--after-school and pre-school services. They have threatened to close youth clubs, including Dehon youth club in Dingle, which is much used and much needed, and they are cutting funds for the pre-school education resource centre. While the Government are delivering money to Liverpool, the Liberal Democrats are mounting an assault on the voluntary sector and youth and pre-school services. That is what the Liberal Democrats mean, in practice.
Mr. Sanders:
I feel rather confused. The Minister blames councillors for council tax rises, but the hon. Lady is giving the Government credit for a council tax freeze in Liverpool. Can she explain?
Mrs. Ellman:
Certainly, I give the Government credit for increasing Liverpool's standard spending assessment for next year by 5.1 per cent.; increasing its education SSA by 3.7 per cent.; and increasing its social services SSA by as much as 11.3 per cent. It is right for the Government to be given credit for that, and for the Liberal Democrats to be deplored for cutting spending on the voluntary sector, the youth centre and pre-school services. That is a disgrace, and shows the hypocrisy of the Liberal Democrats.
The Liberal Democrats say a great deal in the Chamber about their support for public spending. I agree that public spending is critical to the existence of a civilised society which can attempt to achieve equity, but what we hear from the Liberal Democrats is simply a call for more spending on education. That, too, is important, but only infrequently do we hear about the need to spend on the health service, social services and transport.
Incredibly, only a few days ago, the Liberal Democrats voted against the introduction of working families tax credit, which will put an extra £22 a week or so into the pockets of the families who need it most. Their pragmatism allowed them to vote with the Conservatives against a measure that will benefit people. I bear that in mind when I hear them criticise what the Government are trying to do, and I shall always remember that they found it painless to vote with the Conservatives against a credit designed specifically to deliver extra cash to those in the greatest need. That may eventually be their epitaph.
At the beginning of my speech, I spoke of the legacy inherited by the Government--a legacy of local government cuts in particular, but of cuts across the range of public services. I do not pretend that, in their second Budget, the Government redressed the wrongs of 18 long years; indeed, I do not think that it is possible to do that. The Government have, however, delivered an extra £2.6 billion directly to local government for next year, on top of more than £42 billion extra for, in the main, education and health. That is a creditable beginning, although it is only a beginning.
One of the deficiencies and inequalities of what we have inherited from the last Government is the inequity of local government settlements, which we have now begun to address in Liverpool and elsewhere. The Government have also imposed a three-year freeze while there is proper study and consideration of how to put right those inequities. At long last, we are having a pause, so that a proper assessment can be made of the needs of various local authorities throughout the country.
That is an important initiative--indeed, I urge everyone with a view to make representations during the three years. I hope that, at the end of that time, we will do something to right the inequitable gearing effect, which was inherited and means that the poorer a local authority is, the harder it is for it to raise additional money to support local services. In Liverpool, where 67 per cent. of properties are in band A, compared with about 24 per cent. nationally, the gearing effect is drastic. I hope that the Government will use the three-year freeze to examine gearing, the area cost adjustment, equity, differing needs and a poverty index, so that we can have a fairer settlement at the end of that time.
Mr. White:
Does my hon. Friend agree that, in examining the area cost adjustment, we should meet the legitimate aspiration of councils such as Liverpool, yet not penalise councils such as mine in the south-east of England that would lose up to £7 million if the area cost adjustment were taken away just like that? There must be a way in which to satisfy the needs of both.
Mrs. Ellman:
I thank my hon. Friend for his comments. The purpose of having the three-year freeze is to allow proper consideration of the point that he has raised. That is the purpose of having time for assessment--for consideration of various points that have been made and of new points that are being made.
The hon. Member for Sutton and Cheam (Mr. Burstow) condemned the Government for what he described as a period of austerity. The Government's first two years in power have been not about austerity but about bringing stability to the inherently unstable situation that they inherited. That has allowed public sector deficits to be turned into surpluses. It has meant that we have the lowest long-term interest rates--and the lowest long-term mortgage rates--for more than 30 years. It means that we can look forward to a period of stability, where we can start to grow and move further on righting the wrongs of the past. In that economic climate, we will be able to continue to make progress and to look at the needs of varying communities throughout the country.
We must strike a balance between the need to spend more to protect public services and to promote higher standards, ensuring that there is efficient spending, and the problem of raising funds to pay those bills. I support public service. I have supported it for many years. When I was the leader of a major local authority, I took great pride in public spending--efficient public spending to promote high standards of service--working with the private sector to promote economic growth and economic development to support the needs of the community that I represented.
Mr. Adrian Sanders (Torbay):
As hon. Members will know, the history of council tax is really the history of the 1980s income tax cutting agenda. An unfair rating system--which people increasingly thought to be unfair, and which was certainly spotted by a previous Prime Minister as being particularly unfair--led to the introduction of the poll tax. However, the poll tax had a different consequence, enabling Chancellors in the 1980s to shift the taxation burden on to local government.
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