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29 Jun 2010 : Column 779
7 pm

Chris Kelly (Dudley South) (Con): Thank you, Madam Deputy Speaker, for calling me to make my maiden speech, and I congratulate you on your new position. I also congratulate my hon. Friend the Member for Wolverhampton South West (Paul Uppal) on his excellent maiden speech earlier.

Today is an Opposition day, so there are even more Labour Members than usual on the Opposition Benches. I am therefore more grateful than colleagues who made their maiden speeches in earlier debates that it is a tradition of the House to listen to a maiden speech without interruption or intervention. I am also pleased to see several fellow black country Members. I am incredibly proud to be black country born and bred. In fact, I could not be more proud of the area I have always called home.

As the new Member for Dudley South, I thank my predecessor, Ian Pearson, for his service to my constituency and its residents. From the moment that I was selected in September 2007, Mr Pearson was always courteous towards me-so courteous that in February this year he announced he would not contest the general election against me. Mr Pearson was elected in a by-election in December 1994 in Dudley West, and went on to hold several ministerial posts between 2002 and 2010. If I may say so, Graham Postles fought a valiant campaign for the Conservatives in 1994, but so much in politics is down to timing, and Dudley West was Tony Blair's first by-election as leader of the Labour party. It was therefore the first significant victory of the new Labour era, when Labour Members declared that they were the political wing of the British people. As they left the country on the verge of bankruptcy, that claim now has a hollow ring.

I also wish to pay tribute to the former Conservative Member for Dudley West, Dr John Blackburn, who sadly died following a heart attack in the Palace of Westminster in October 1994. I never had the pleasure of meeting John, but I know that he was widely admired by his constituents and even by his political foes. He was a hard-working local MP, and I intend to conduct myself during my time in this Chamber very much in the same manner. John's widow, Marjorie, is a supporter to this day and has been extremely kind to me during my time as the candidate in her late husband's old constituency.

If I may, I wish to pay tribute to the late former Member for Coventry South-West, John Butcher, or Butch as I knew him. If I won my seat, Butch and I were due to have dinner to celebrate and to discuss what he called the pitfalls of being an MP. Sadly, we never had the opportunity to dine together in this place.

Dudley South lies between Birmingham and Wolverhampton on the western fringe of the west midlands conurbation. We local people are fiercely proud of Dudley's own distinctive identity and heritage. The constituency is situated to the west of Dudley town centre and largely consists of residential suburbs and some rural fringes on the border of glorious south Staffordshire countryside. Wards include Brierley Hill; Brockmoor and Pensnett; Kingswinford North and Wall Heath; Kingswinford South; Netherton, Woodside and St Andrews; and Wordsley. Within my constituency, we have the Merry Hill shopping centre, now managed by
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Westfield, as well as the largest secure trading estate in Europe in the Pensnett estate, along with dozens of smaller trading estates employing many thousands of people in small and medium-sized businesses.

The businesses of Dudley South are the backbone of the British economy and typically employ no more than a dozen people each. It is the creativity and ingenuity of so many of my constituents-making, designing, building and fabricating myriad goods-that is so important to the viability of the British economy. I come from a business background and can see all around my constituency that the entrepreneurial spirit of local people is undimmed by 13 years of red tape, bureaucracy and increased taxation.

Many families in Dudley South are football households. The vast majority of my residents support either the Baggies-West Bromwich Albion, for those who do not know-or Wolves, as I do. In fact, I went to my first game at Molineux when we were in the old fourth division, and three of the four stands were then crumbling wrecks. Many of my constituents know me as a businessman from a well-known local company, headquartered literally in the shadows of the Hawthorns. However, for those constituents who are not Albion fans, I should add that the business also employs people in Kingswinford.

Not only am I proud of my constituency and my area, I am proud of my country. I am fortunate to have travelled extensively, but no matter how exotic or cosmopolitan the destination, I have always yearned for England. Part of that is the people. The people of my borough are decent people who strive to do the right thing by society and, most importantly, by their families. As they told me during the general election, they get frustrated when they see others ahead of them who have not "done the right thing". Their sense of fairness was seriously challenged by the last Government. I am pleased to see this coalition Government restoring that sense of fairness and balance while addressing the scale of the deficit and debts bequeathed to us. That sense of fairness has been severely tested over the last 13 years as we have seen neighbouring Sandwell metropolitan borough council receiving far more per head from Whitehall than Dudley metropolitan borough council. That massive disparity cannot be fair, and my constituents have also expressed their unhappiness in large numbers about many of the local government funded quangos with questionable track records of productivity and efficiency, and a democratic deficit, when my constituents struggle to make ends meet and pay their council and personal tax bills.

I was born in 1978 under James Callaghan, but I am a child of Thatcher. I was honoured to receive letters from the former Prime Minister both during and after the election, and they now hang proudly on my wall. Baroness Thatcher truly is a guiding inspiration. She comprehensively proved that one person can make a positive difference. My political interest began at the age of 14, when I wrote to the Express and Star, still the largest circulation local paper in the country, about the increase in the entry fee at the local swimming baths. I then joined the Conservative party in 1996 at the age of 18 when I arrived at university in Headington in Oxford, to be greeted by the beaming faces of my hon. Friends the Members for Huntingdon (Mr Djanogly) and for North Swindon (Justin Tomlinson). The former was at
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that time the Conservative prospective parliamentary candidate for Oxford East, and the latter was the chairman of the university Conservative society. In 1996, who would have believed that, come 2010, Justin Tomlinson and I would join Jon Djanogly, who has been an MP for nine years already, on the Government Benches?

It is a huge honour to represent Dudley South in this Chamber, and I will work tirelessly to get a fair deal for my residents.

7.8 pm

Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab): I congratulate the hon. Member for Dudley South (Chris Kelly) and welcome him to the House. He paid a decent tribute to his predecessor, Ian Pearson, and I too regret that he was not able to eat with John Butcher, whom I knew and who was a very decent man. I was warming very much to the hon. Gentleman's speech until his eulogy for Baroness Thatcher, who we remember in a slightly different vein in my city of Sheffield, compared with those new Members who see themselves as her children. Children can have a blinkered view of their parents, and sometimes we see them through a glass darkly.

May I apologise to you, Madam Deputy Speaker, if I am not here for the whole of the rest of the evening? To put it delicately, it is not just the dog's legs that are crossed.

I am pleased that the Secretary of State has returned from west Yorkshire. He may be able to confirm that the Prime Minister this morning did an interview on Real Radio in west Yorkshire and told the story of the making of the coalition. He invited the right hon. Member for Sheffield, Hallam (Mr Clegg) to supper at his house and presented him with ham and baked potatoes. I am not sure who was the ham and who was the baked potatoes. It might be apocryphal, but I believe that the Deputy Prime Minister asked the Prime Minister where the vegetables were, and the Prime Minister said, "You're addressing them later to put the coalition together". Of course, that is based on a very old story, and I apologise for recycling it.

I want to deal with issues of contradiction. Who, in this House, could not be in favour of decentralisation, devolvement and localism, which some of us have preached and practised throughout our lives? However, what is taking place is not the decentralisation of power, but the decentralisation of pain and of the implementation of policy that will cause pain; it is not the devolvement of decision making, but the devolvement of responsibility for actions taken by central Government that will have to be inflicted on people-I underline, on people-at a local level. We can take out so much resource and argue in the long term about Total Place, of which I am totally in favour, but we should not quickly take out the billions-not millions-of pounds that, over the next four years, will be withdrawn from local government. If we take one in four pounds-perhaps even one in three-out of local government spending, we will take it not out of bureaucracy, but out of the lives and well-being of ordinary people. As has been described this afternoon, the people who deliver adult services or child protection, who open and staff the leisure centres, who provide library services and clean the streets, are not bureaucrats; they are people delivering at the sharp end services that have already been pared back over many years.

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I want to outline the danger, in this contradiction, of believing one's own rhetoric-I have done it, so I should know-because Members will find that it catches up with them. It is possible to play off one set of people against another, as the Secretary of State for Work and Pension did yesterday when he said, "If we don't cut the welfare budget more than we intend at the moment, we will have to cut it out of education, housing or other services." That will turn the nearly poor against the very poor; it will turn those who aspire to something better against those whom they resent. The hon. Member for Dudley South was right about people feeling that, on occasion, there is unfairness-we were victims of that feeling at the general election-but we should not mistake resentment for unfairness. People often feel resentment towards those who do not have a job and are on benefits; they often feel resentment that someone is getting something they are not. However, we must not mistake that for an issue of fairness, because fairness is about protecting those who are most vulnerable. In the years ahead, local government will not have the capacity, as we had in the early '80s, to protect our people.

In the seven years when I was leader of Sheffield city council, we experienced the most enormous reductions in the local authority budget at a time when we had a broader base for local government expenditure. We had the national business rate, as it is now known, and the local domestic rate. My hon. Friend the Member for Sheffield South East (Mr Betts), who has been kind enough to wait around this afternoon, took over from me as leader and had to continue dealing with those expenditure cuts. We were able to raise the local rate, and amazingly people continued to vote for us in a way that would not be possible today. However, if council tax is frozen-in other words, if it is capped universally-if resources are dramatically reduced, if the health service is ring-fenced and so unable to help by intervening and crossing boundaries, and if there is no longer joint funding, as there was in the 1980s after it was introduced by Barbara Castle, those services will inevitably be decimated.

If a party is really about cutting expenditure, not services-and I wonder whether some people in the coalition want to cut the latter and not just the former-it must do so over a substantial time scale. Otherwise, next year and the year after, there will be the most enormous cutbacks in expenditure-to pay for redundancy payments for thousands of local authority workers. The benefits that will have to be paid to them and the loss in tax and national insurance will add up to the billions that the previous Government managed to cut from the welfare budget-£4 billion a year was eventually saved by a reduction in wasteful expenditure on cutback and retrenchment.

We are in a dangerous situation. We might find that, having cut expenditure and services, resentment and bitterness arise in a way that will lead to the kind of disturbances and lack of social cohesion experienced in the early 1980s. Fortunately, Sheffield was the only major town or city that did not experience disturbances at that time. I hope that that will be true of Britain as a whole in the future. However, great care needs to be taken, not just to involve people, to talk to them and to learn what they can contribute towards their services, but to preven the plug from being pulled on other aspects as well. This year's round of cuts is so unfair
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because aggregate external funding-to use a technical term-is designed for specific funding for specific purposes targeted at the most disadvantaged. That is what the area-based grant, the working neighbourhoods fund and the local enterprise growth initiative are about. Incidentally, the latter also triggers funding from Europe and external funding from elsewhere that will also be lost. Pull that out and we pull the plug on those services.

Some have said that we can un-ring-fence expenditure and everything will be fine. The Minister of State, Department for Education, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb) gave me a written reply recently in which he referred to ring-fencing. It read:

That is either duplicity or complete naivety. In the four years ahead, we cannot afford for ordinary people to have their services destroyed because Ministers and Treasury officials do not understand the consequences of their actions. If that happens, we will regret it for many years to come.

7.18 pm

Mark Pawsey (Rugby) (Con): It is a great pleasure to follow the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) and to be in the Chamber for the maiden speeches of my hon. Friends the Members for Dudley South (Chris Kelly) and for Wolverhampton South West (Paul Uppal). Their speeches distinguished themselves from those of the Opposition, who seem to be seeking to renew some of the battles of the past 13 years, and seem to have failed to recognise that the world has moved on.

It is appropriate that we are discussing local government funding in the context of the Budget debate of the past few days, which, it is important to remember, was an emergency Budget debate that arose as a consequence of the severity of the economic position in which the country finds itself-even worse than was expected. I want to consider why the local government funding debate is necessary and what other sectors have done already, and I want to put in perspective what local government is being asked to do and how it may do it. It is entirely appropriate that local government should make its contribution to tackling the budget deficit. Labour has left behind one of the largest budget deficits in Europe, and we are borrowing one pound for every four that we spend, increasing our national debt by £3 billion a week. The crisis in the eurozone shows that the consequences of not acting are severe, in terms of higher interest rates, sharper rises in unemployment and potentially even the end of the recovery. Those issues are recognised in the country.

It is now seven days since my right hon. Friend the Chancellor stood at the Dispatch Box and gave his Budget statement. As a new Member, I have had to come to terms with the massive amount of e-mail and letters that Members receive. On the Budget, I have had plenty of correspondence-from think-tanks and lobby groups-but since last Tuesday I have had very little from the electors in my Rugby constituency. The reason is that there was little in the Budget that electors were
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concerned about or surprised about-despite the protests of Labour Members, who do not want to hear about the true state of the public finances. The people in the country understand and support the measures that we need to take. These measures are necessary as a result of past mistakes, and the coalition Government have been forced to take strong and decisive action to sort out the deficit and ensure that confidence is not lost in UK markets. The public understand that the action being taken is unavoidable and that Britain must build a new economic model founded on the principles of freedom, fairness and responsibility.

The private sector has already borne the brunt of the recession, and it is important that this responsibility is shared by all of us. The private sector endured job losses and business closures during the dying days of the previous Government. Businesses have been forced to make savings, to cut back and to make redundancies, so it is only right that this pain is shared by all, because we are all in it together. [Laughter.]

I ran a business for 25 years, and I know that no matter how tightly run an organisation is, there are always additional cost savings that can be made. Here we are looking at additional cost savings of between 1% and 2%; they are there if people look hard enough. It is interesting that the Local Government Association briefing document issued today makes

That shows that there is clear acceptance of the need for savings and a desire to get on with them.

There are many examples of current public sector waste. The Minister told us about some of them earlier when he spoke about tranquillity rooms, cappuccino machines and Pravda-style magazines. An article in The Sunday Times of 13 June showed that local government still "doesn't get it", as it is advertising well-paid non-jobs. Brighton and Hove city council is recruiting four new "strategic directors" on £125,000 each; their job is to "look outwards". An "internal communications change consultant", the article also mentioned, is being recruited in Sheffield at a cost of between £380 and £400 a day. A "community development co-ordinator" in east London-

Mr Kevan Jones: I am fascinated by the hon. Gentleman's examples, but should he not be telling members of his own party in local government to practise what they preach, as most of the councils concerned are Tory and Liberal Democrat councils?

Mark Pawsey: The message is going out loud and clear: this kind of waste cannot go on and should not happen. It is entirely right for the Government to conduct a full review of local government finance and right that that review should restore to our councils a general power of competence. For far too long, councils have been dictated to by central Government. Reference has already been made to the estimate that only 5% of local government spending is controlled by elected councils. That means that of the £7,000 a head spent on local public services, only £350 is under local democratic control.

I was a councillor for five years, and in that time I became increasingly frustrated with Government interference, much of which prevent my colleagues and me from doing our job. It is for that reason that local
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government has often been described as a delivery arm of central Government. We often took decisions not because they were the right ones for our community, but because the Government had told us that that was what they wanted us to do and they applied pressure through directives, centrally set targets, inspection regimes and the final sanction of taking away grants. It is refreshing for all involved in local government-both officers and councillors-that the coalition Government plans set out to provide councils with the freedom and the resources to concentrate on local priorities and deliver front-line services by stopping the ring-fencing of central Government grants.

Tom Blenkinsop: Does the hon. Gentleman regard the recent Department for Work and Pensions policy of "on yer bike" as a centrally driven target?

Mark Pawsey: It is not centrally driven at all.

The changes will be made by local authorities and I believe these changes, restoring freedom to local authorities, will encourage more people to put their names forward for the role of councillor. The previous Labour Government presided over more than a decade of economic prosperity during the '90s and the early part of this decade-and they should have been taking advantage of that; as we said, they should have been mending the roof while the sun was shining. They failed to do so, and it falls to the coalition Government to implement the efficiency savings, to cut the quangos and to reduce the regulatory burden, as is so desperately needed.

According to a PricewaterhouseCoopers report entitled "Mapping the Performance Landscape", commissioned by the Department for Communities and Local Government in 2006, it was estimated that a typical council spent £2.6 million a year in reporting performance information to central Government. The previous Government also failed to heed the warnings provided by the very councils that they so tightly guarded. In a comprehensive area assessment published in January 2010, the councils were warned that

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