Dan Rogerson (North Cornwall) (LD):
I hear the issues that the hon. Lady has raised, particularly on behalf of the metropolitan borough that she represents. However, does she recall her Government voting for
capping motions in the last Parliament, to cap police authorities and other authorities, which were subject to her Government's decisions to restrict the rates that they wanted to set in their areas?
Angela Smith: I do indeed remember the capping. I am with my hon. Friend the Member for Sheffield South East (Mr Betts) on this: I do not believe that capping is right. However, the situation in 1995 was incredibly desperate. By that time, we had suffered 15 or 16 years of year-on-year cuts. In the mid-1990s, there was less cash for the housing budget, in real terms, than we had had in 1979. By the time Labour came to power in '97, there was a backlog of £1 billion in the housing budget.
Many chief executives are expecting a tsunami of cumulative funding cuts, with many saying that they will ramp up charges for sales, fees and services. The hon. Member for Sherwood (Mr Spencer) talked about local government bureaucracy, particularly in relation to the example of free school meals given by my hon. Friend the Member for City of Durham (Roberta Blackman-Woods). Finland manages to provide free school meals for every child from four to 19, without the bureaucracy mentioned by the hon. Gentleman. I do not accept his argument, and the cuts to free school meals pilots will not be forgotten.
The revenue cut for Barnsley is £2.75 million, a 1% cut to be put in place over a nine-month period-or, when other cuts are added, a £3.2 million cut in cash terms. However, the main focus of the cuts in Barnsley is the £1.7 million cut in the education area grant, whereby vulnerable children will be disproportionately affected. When that is coupled with a cut of £750,000 to the working neighbourhoods fund, it becomes obvious that the deprived, and those who most need help in Barnsley, are being targeted by the coalition.
Sheffield is England's fourth largest city and ranks at No. 63 on the scale of multiple deprivation. Its cut is £6.5 million, or 1% of its budget, over nine months. This cut in funding has to be put alongside the withdrawal of £12 million of funding for the cleaning up of the Outokumpu site, the withdrawal of £12 million of funding for the redevelopment of the city centre, and the cancellation of the £80 million loan to Forgemasters, all of which mean that the coalition seems to have taken a sledgehammer to the city, making Sheffield probably one of the worst affected cities in terms of the impact of the coalition's ideological approach to government.
If that were the end of the story, it would be bad enough, but on top of these cuts the national funding for local transport plans has been reduced by 25%, with a number of major schemes, including improvements to the road network, now being put on hold. In addition, the local integrated transport authority has indications of a 38% cut, which could mean for Barnsley a cut of
£4.2 million. Government Members ought to tell me how people in Barnsley are going to get to work if their bus services and transport networks are to be so severely impacted by the cuts that are on the table. Interestingly, one of the aims of the coalition was a greener future. With cuts on this scale, there is no doubt that more people will be forced to use private cars. Even more worrying is the fact that, yet again, it will be the poor and the old, and those who cannot afford to use a car, who will suffer the most.
According to the Chancellor, this is only the beginning, with Departments being asked to make, on average, 25% cuts in their budgets as the required outcome of the comprehensive spending review. However, with spending on health and international development protected, the cuts in some Departments will have to be much larger than 25%. I started by saying how important I believe local government is. With, in some cases, cuts of about 38% being talked about, I fear very deeply that there are many things that local authorities will not be able to do in future.
"Not just the poor, but those on middle incomes will pay a heavy price for the government's rush to close the deficit...and rising joblessness will add up to a perfect storm".
Mr Deputy Speaker (Mr Hoyle): Order. Before I call the next Member, I remind the House that we have quite a lot of Members who want to speak. It would be very helpful if we could shorten speeches, because I would like to try to ensure that everybody contributes.
Nicky Morgan (Loughborough) (Con): Thank you, Mr Deputy Speaker, for inviting me to speak in this debate. First, I join other Members in congratulating my hon. Friends the Members for Wolverhampton South West (Paul Uppal) and for Dudley South (Chris Kelly) on their very fine maiden speeches.
What we have heard from Labour Members throughout the debate has been a reinvention of the past 13 years. They have talked about a number of schemes that are desperately important, very much needed, and must be funded, many of which, I am sure, have been very welcome and have done sterling work. However, the question is: where was the money going to keep coming from? At the front of the Red Book, there is a stark chart showing that for 2010-11 Government receipts were to be about £578 billion and Government spending more than £600 billion. That is unsustainable even in the short term, and that is why this Government are having to take the very tough decisions that have been discussed at great length today.
The hon. Member for Penistone and Stocksbridge (Angela Smith) talked about decent homes funding. I would like her to explain to my local arm's length management organisation, Charnwood Neighbourhood Housing, why it thought that it was going to be bidding for decent homes funding and then found that that
money had been diverted to build more social housing. I do not disagree that more social housing may be needed, but that was another example of game changes in the middle of the year, about which Labour Members have complained so bitterly.
The hon. Member for City of Durham (Roberta Blackman-Woods) talked about free school meals. Perhaps she could explain to a constituent who recently wrote to me about this why she and her husband, who are still together, struggling on a low income, and who really need free school meals for their children, are unable to get them, while children of parents who have split up, with at least one parent certainly able to afford school meals, are getting them.
Nicky Morgan: That brings us back to the point that my hon. Friend the Member for Sherwood (Mr Spencer) made about bureaucratic schemes, in many of which the help is not getting to the people who actually need it.
This has been an interesting debate, and it was particularly interesting to listen to the three former Secretaries of State and the former Housing Minister on the Opposition Benches. I feel I should declare that I have never been a councillor, and I have learned a great deal about local government finance this afternoon, not least all the acronyms. I speak in this debate as a council tax payer, and I agree that local government is incredibly important. For many people who have come to my surgery so far, their experience of government comes from dealing with local government, whether through the administration of benefits, council tax, rubbish collection, social services or particularly education, the funding for which I shall come on to in a short while. The Local Government Association has said that town halls have already committed to making 4% efficiency savings this year, so they are leading the way where the former Government failed to do so.
As I mentioned in an intervention, one of the former Secretaries of State said that Labour had identified £40 billion-worth of cuts, but we do not know where those cuts were to be made. I believe that everybody in the House agrees that cuts have to be made. The former Housing Minister, the right hon. Member for Don Valley (Caroline Flint), talked about progress having stalled. I suggest to her and other hon. Members that progress stalled when the former Government ran up a deficit of £156 billion, which will lead to £70 billion of interest being paid-more than the budgets for education and many other things put together.
There has been little mention of council tax levels-although since I scribbled a note saying that, council tax has been mentioned. The level has increased, and in fact in Charnwood it more than doubled in the 13 years of the Labour Government. That has hit those on fixed incomes, particularly pensioners, very hard. I was approached by many pensioners during the election campaign who talked to me about how they were struggling to make council tax payments on a fixed income.
There has been talk this afternoon about ring-fencing. I welcome the fact that the Government have scrapped £1.7 billion of ring-fencing and got rid of the comprehensive
area assessment, and that the £29 billion formula grant remains intact. Talking of the comprehensive area assessment, councils across Leicestershire used to employ 90 full-time staff to prepare 3,000 individual data items, leading to 83 inspections at a cost of £3.7 million a year. I defy any hon. Member, particularly any Opposition Member, to tell me that that could not be better spent on front-line services.
I am conscious of your exhortation not to speak for too long, Mr Deputy Speaker, but I wish to make two more points. First, we have heard a lot this afternoon about decentralisation, and I particularly welcome the Government's first move to abolish the regional spatial strategies. That is a huge step forward and has been welcomed enormously by my constituents. They recognise that new houses need to be built, but they are incredibly concerned about where they are to be built. It is welcome that elected local councillors will make decisions about that.
I agree entirely with what the right hon. Member for Salford and Eccles (Hazel Blears) said about the need for creativity and innovation in the delivery of services. That is absolutely right, and there has been too much overlap between what central and local government do. I am sure that we all have talented councillors in our constituencies, and many Members have spoken about their local government experience. Talented councillors and staff do not need Whitehall and central Government breathing down their necks.
I am sure I am not the only Member who is happy to say that they do not want to say too much about local planning matters, particularly when they boil down to extensions here or there, and so on. I am happy, and believe it is right, to leave it to the local planning authority and planning committee members to decide on such matters. This Budget provides an opportunity to reinvigorate local authorities by allowing our local councils really to take charge of local issues. I wish to make a plea to the Government and the Minister, however. I am concerned about recent changes to legislation on the conversion of houses to HMOs-houses in multiple occupation. Although I welcome the fact that local authorities are to make decisions on that, as they know their local areas best, if they are to do so they need regulations that have teeth. In my constituency, the conversion of houses into student-occupied homes is a matter of real concern.
Total Place has been mentioned this afternoon. I am not an expert, but I know that in Leicester and Leicestershire, Total Place has been considering drug and alcohol treatment. It is a huge step forward, which is to be welcomed, and I endorse comments from hon. Members of all parties about the way in which Total Place has worked. I hope that it will continue.
The trouble with speaking late in a debate is that other hon. Members often steal one's thunder, and my hon. Friend the Member for North West Leicestershire (Andrew Bridgen), who is no longer in his place, did that effectively when he spoke about spending on education in Leicestershire, so I will not say too much about that. However, I left the Chamber earlier to meet some schoolchildren from De Lisle school in Loughborough. When I told them that I hoped to speak in the debate, they immediately asked what I would say, and I said that I would talk about funding for education in Leicestershire. My hon. Friend the Member for North
West Leicestershire pointed out that the funding gap between schools in Leicester and in Leicestershire is now £600. The trouble is that there is no difference in national pay rates for staff, so schools in Leicestershire have less to spend on other things if they rightly want to retain a decent staff-pupil ratio. They were penalised when the direct support grant was introduced because Leicestershire had topped up school funding. The difference between average funding in the country and that for our schools in Leicestershire meant that a 300-place primary school in Leicestershire would be £99,000 worse off every year. That cannot be right.
My hon. Friend the Member for North West Leicestershire also mentioned police funding. In Leicestershire, we have received £9 million less than the average in the past four years. Despite all that, Leicestershire county council still managed a four-star rating. That shows that, with good management and good political leadership from councillors, local authorities can run services to a high standard on less money than they would ideally like.
I support the amendment. The Opposition have totally reinvented and forgotten the past 13 years, and all the projects and schemes that have been mentioned. The Government are now taking tough decisions, which mean that, in several years, we can fund our services fully, and help the vulnerable and the poor who have been mentioned in today's debate.
Jack Dromey (Birmingham, Erdington) (Lab): The Budget is bad news for Birmingham, a proud city, which suffered grievously in the 1980s and now faces unprecedented cuts in public investment. Why? The Con-Dem alliance says that it is Labour's legacy, but it is nothing of the kind. The Greek defence that it prays in aid is but an excuse for the modern Tory party-modern-day Leninists-to cut back the role of the state nationally and locally. As for the Liberal Democrats-a hollow shell of the once great, progressive party of Lloyd George, Beveridge and Keynes-never have so few let down so many for so little: a handful of ministerial cars and Red Boxes.
Birmingham was the birthplace of municipal government and municipal enterprise. It is Europe's biggest council, which employs more than 40,000 and funds thousands of community projects and voluntary initiatives. It is a key purchaser of goods and services from the midlands economy. It is also, historically, a champion of the people of Birmingham. In the best traditions of Chamberlain on the one hand and Dick Knowles on the other, next Tuesday, Sir Albert Bore and the Labour group on Birmingham city council will table a motion for debate that calls on all councillors to stand up and be counted in opposition to what the Tories said they would not do and the Liberals said they should not do: put up VAT. The motion calls on councillors to speak out against a broken promise-an unfair tax that will hit pensioners, the unemployed and the poor hardest, and a jobs tax, which will hit the economy of the midlands, from house building to retail.
Bill Esterson (Sefton Central) (Lab):
My hon. Friend's comments about the motion that the Labour group in Birmingham will table remind me of what happened at a Sefton council meeting last week. The Labour group
there tabled a similar motion, and I hope that the same result does not occur in Birmingham, because the Liberal Democrat and Conservative councillors in Sefton decided not to turn up to debate how to deal with the Budget crisis and the Government's national cuts.
Jack Dromey: It would appear that, in your local authority, they have found Lord Lucan, and they are now looking for the Liberal Democrat and Tory councillors. In Birmingham, they are going to have to stand up and be counted.
There is a grotesque contrast between the £2 billion levy on the banks-not on the bankers, by the way-on the one hand, and £11 billion off welfare and £12 billion on VAT on the other. I want to take this opportunity to pay tribute to the leadership shown last night by the truly honourable Members for Colchester (Bob Russell) and for Portsmouth South (Mr Hancock) when they voted against their own Government in opposition to the VAT increase.
The shadow Secretary of State was absolutely right to point out earlier that the areas with the greatest needs should not bear the brunt of the cuts. Birmingham has great problems of multiple deprivation and high unemployment, yet, as a consequence of the Budget, it will see the biggest cash reduction-more than £12 million. It will have the largest cut in area-based grant in any local authority in Britain, at £8 million, and the seventh largest cut to the school development fund, at £633,000. That money was designed to help struggling schools to succeed.
Birmingham will have the second largest cut to Connexions, at £2.7 million. This will harm the ability of our city to help the young into work and to get apprenticeships. It will also have the largest cut to the children's fund, at £1.14 million. That will damage the capacity of our city to reach out to disabled, disadvantaged, troubled and sometimes abandoned children. It will also see the largest cut to the working neighbourhoods fund-a highly successful programme of concentrated, co-ordinated, community-led action to get Birmingham's citizens off benefit and into work.
I have seen these programmes at first hand, in the form of the remarkable Employment Needs Training Agency in my constituency, and three excellent employment Connexions contracts focusing on the long-term unemployed, lone parents, ex-offenders, those who have engaged in alcohol abuse, and those who lost their jobs under Mrs Thatcher in the 1980s and never worked again. Those programmes have an outstanding track record of reaching out to those people, giving them hope, and helping them to rebuild their lives and get back into work.
Nadhim Zahawi (Stratford-on-Avon) (Con): The hon. Gentleman speaks eloquently about the problems in Birmingham without telling us how we got there in the first place. Does he think that borrowing £500 million, not every month or every week but every day, represents responsible behaviour towards the people of Birmingham?