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5.15 pm
Mr. Jim Marshall (Leicester, South): The hypocrisy and bare-faced cheek of Opposition spokesmen and women, on not only this subject but every aspect of Government policy, are incredible, but their attitude is especially inappropriate when we are discussing local government finance.
The hon. Member for Eastbourne (Mr. Waterson) criticised the Government for not doing enough to encourage what he called the vigour and independence of local government. I happen to believe that that accusation is unjust: I think that the Government's attitude to local government is in tune with their devolution policy generally, devolving power away from the centre and enabling more and more individuals, at national, regional or local level, to take the decisions that affect themselves.
Let us compare the hon. Gentleman's accusation with the practice of the previous Tory Government from 1979 to 1997, when year by year they took power and responsibility away from local government and put constrictions and constraints and a straitjacket on local authorities such as had never been seen before. It is bare-faced cheek for him to accuse my right hon. Friend the Minister of seeking to undermine the independence and power of local authorities.
Sir Paul Beresford:
Does the hon. Gentleman agree that the movement of funds into specific grants, with the ties and straitjackets involved, is a form of centralisation? If not, he disagrees with the Secretary of State for Education and Employment.
Mr. Marshall:
There is clearly some justification for that point. I have some fears about the direction that the Government are taking on that matter, but I think that central Government have a right, when trying to improve standards and to experiment at local level, to ensure that the necessary funds are spent on the services to which improvements are sought rather than on the generality of services.
The hon. Member for Eastbourne also accused my right hon. Friend the Minister of fiddling the formulae to benefit Labour authorities. If the Government are doing that, they are signally failing in my local authority in Leicester. The accusation is totally inappropriate from the spokesman of a party that, in government, fiddled the figures to such an extent that Westminster, one of the country's wealthiest local authorities, with some of the wealthiest people, received an exorbitant amount of help compared with that provided for Leicester. We should not have to listen to such humbug.
The threat to do away with capping after the next general election is an empty one, because the probability of the Tories winning that election is so remote as not to place it on the political agenda.
Mr. Peter Brooke (Cities of London and Westminster):
The hon. Gentleman referred to Westminster. Will he take it from me that the number of households living below the poverty criteria in my constituency makes it the poorest Conservative constituency in the country, and that the situation would be even worse in the constituency of the hon. Member for Regent's Park and Kensington, North (Ms Buck)?
Mr. Marshall:
I concede that there are poor people living in Westminster. I am one of the right hon. Gentleman's constituents, so I am as aware as he is of the population distribution in Westminster. That does not deny the reality that, in terms of global wealth, it must be one of the wealthiest, if not the wealthiest, constituency in the United Kingdom.
Mr. Watts:
Is my hon. Friend aware that Westminster is about the same size as St. Helens? If St. Helens received the same grant as Westminster, it would not need to charge any council tax whatever and could, at the same time, afford to send all its constituents on holiday to Spain. That shows how the previous Government fiddled the council tax system.
Mr. Marshall:
My hon. Friend's comments speak for themselves.
I should like to make a final comment on the speech of the hon. Member for Eastbourne. He made a cheap political jibe about the Government neglecting their heartlands. I think that he referred to Newham and, in the same context, to my hon. Friend the Member for Liverpool, Walton (Mr. Kilfoyle). However, the hon. Gentleman chose the wrong example, because he referred to the reduction in social service expenditure last year. I know about that, because my city suffered severely. It was as a consequence of the decision no longer to recognise ethnicity as producing an extra burden on social services. I remind the hon. Gentleman that the ethnic population in Walton is virtually zero, whereas in Newham it is fairly high. If he makes a cheap political point, he should at least ensure that the facts that he uses support rather than undermine it.
I should like to make a few points about the settlement's impact on the city of Leicester. My view is that the overall settlement nationally is good and to be welcomed. Perversely, Leicester has done badly, which is what I wish to highlight.
The Minister said last year that she did not wish this year to see deputations or delegations from specific local authorities about their position, but she kindly met me and my hon. Friend the Member for Leicester, West (Ms Hewitt) yesterday evening to discuss the longer-term financial plight and situation in Leicester, not the specific difficulties that we face at present, of which she is aware. I thank my right hon. Friend for that meeting, and just hope that, when the Department brings forward the longer-term solutions concerning the future funding
formula, she will take account of the particular difficulties that Leicester faces, and has faced for at least four or five years.
Mr. Waterson:
It is typically courteous of the hon. Gentleman to give way. He chose his words carefully, and I hope that he was not suggesting that he had had a meeting with the Minister to discuss this finance settlement for Leicester. Ministers have made it clear that they are not meeting any local authorities; I would not wish to think that they were meeting Labour authorities and not non-Labour authorities.
Mr. Marshall:
I thought that I chose my words carefully and had made the position clear. I said that my hon. Friend the Member for Leicester, West and I had a discussion yesterday with my right hon. Friend about the long-term financial position in Leicester. It became clear during the course of the meeting that my right hon. Friend was fully aware not only of the long-term implications, but of the short-term implications of both last year's and this year's settlement. My point is that, as my right hon. Friend is fully aware of those factors, they will be taken into account when the formula for future distribution eventually emerges from the Department.
Leicester has experienced well-documented deprivation and social exclusion. It is both unfair and unfortunate that year-on-year disappointments in financial settlements should have two effects. First, standards in some services are reduced. Secondly, the range of services that the local authority is able to provide is also reduced. For example, several neighbourhood centres in Leicester, which play a real part in the vitality of local communities, will close over the next financial year because of the cuts that the local authority must make as a consequence of this year's settlement. I regret to say that one of those centres--Lansdowne neighbourhood centre--is in my constituency, but I assure its users that I shall use all my influence and do everything in my power to try to save it.
The Minister is well aware that Leicester has faced a difficult financial situation for at least a decade. Successive settlements since local government reorganisation have put the council in an invidious position. Only extra financial resources will resolve the problems. I shall briefly put the problems into an historical context. In 1997-98--the first year of unitary status for Leicester--the capping regime resulted in cuts amounting to £17 million. The following year saw further cuts in services, and the overall grant settlement led to a council tax increase of 26 per cent. In 1999-2000, we had the lowest SSA increase of any local education authority outside London and a further round of cuts.
I can reinforce the point made by the hon. Member for Eastbourne by making it slightly differently. In part, this year's round of cuts was brought about by a change in formula for social services expenditure, which ceased to recognise ethnicity as a factor that gave rise to additional costs. That was particularly damaging in Leicester, where 30 per cent. of the population is of ethnic minority background.
We have not done as badly in this financial year as in previous years. However, we have still done worse than most. Leicester has received an SSA increase of only 3.9 per cent., which is below the national average. The general situation has been compounded by the loss of
central Government protection grant of £1.3 million. To make matters even worse, the increase in education SSA--3.3 per cent.--is again among the lowest in the country. Overall, Leicester believes that, since unitary status began, it has received the lowest cumulative increase in SSA of all similar authorities. It has also had the lowest increase in education SSA of all local education authorities.
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