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29 Jun 2010 : Column 811

Those admirable community projects' money will run out in March 2011, and they are now facing a cut of up to one third. The impact of that on those projects and those communities will be absolutely devastating.

Sajid Javid: I am a former banker. I can see that the hon. Gentleman is probably still a trade unionist, rather than a former trade unionist. Does he realise that his party lost the election because it brought our country to the brink of bankruptcy? We are having to impose these cuts because of everything that you did or failed to do. They are your cuts, and there is no point in complaining about them now.

Jack Dromey: Thank you for owning up to your former occupation. I wonder whether you wish us to take any other offences into consideration-

Mr Deputy Speaker: Order. Members must show a little more respect. There must be less of the "you", and they must go through the Chair.

Jack Dromey: I was fascinated by the earlier contribution of the hon. Member for Bromsgrove (Sajid Javid), in which he demanded equal treatment for Bromsgrove and Birmingham. Forgive me for saying this: if you cannot tell the difference between Eton, Esher and Erdington, I can.

The cuts falling on my city are in grotesque contrast to what is happening in West Oxfordshire district council area, where not 1p is coming off the working neighbourhoods fund. Whose constituency falls into that area? It is that of the Prime Minister.

It is vital that we have an intelligent approach to the role of government. We have the example in the west midlands of Advantage West Midlands, a hugely successful organisation responsible for creating and safeguarding tens of thousands of jobs, but now facing abolition. It is no wonder that leading voices in the private sector are speaking out in opposition to that decision, which would be folly if we believe in the importance of a renaissance of our manufacturing base. However, the issue is not only the work that AWM does in promoting our manufacturing economy. It is also the work that it does in terms of the big society. I was at the opening of the Perry Common community hall the Friday before last. That was an excellent community initiative, with inspiring leadership from a local community that has been through very tough times. That community hall could never have been opened without half the money being made available by AWM. Can we therefore stop posing big government against big society? What we see in Perry Common is an ideal combination of big government and big society working together.

Ms Bagshawe: The right hon. and learned Member for Camberwell and Peckham (Ms Harman) has so far failed to explain exactly where Labour would have found savings in the unlikely event that it had been returned to power. As the hon. Gentleman is in love with every single expensive programme, can he indicate where we might be able to cut to save some money?

Mr Deputy Speaker: Order. May I remind Members that they should come into the Chamber a little earlier if they want to intervene? We are up against time.

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Jack Dromey: Our approach was fundamentally different. We think that it is folly to cut savagely and quickly. It risks threatening the economy with a double-dip recession, and it is cities like Birmingham that would suffer grievously as a consequence.

We are already seeing the consequences of what the Con-Dem alliance is doing, not only in government but locally in the council chamber. The parties have been in power for six years. Earlier this year, 2,000 job cuts were announced, hitting hard nurseries, youth services, park rangers and the most vulnerable in our community-those in local old people's homes. I was in an old people's home in Kingstanding and I met excellent men and women. After our discussion, an 80-year-old woman took me to one side and told me the story of how she had had a double mastectomy and her wounds opened up at 3 o'clock one morning. She could not get help, because there were no longer wardens on site. She had to ring a call centre 150 miles away. She was eventually told to ring 999, but mercifully her son was 3 miles down the road and he came out to take her to hospital.

My view is simple: the good men and women of Birmingham who built that city and this country, and who are now in the twilight of their years, deserve better than to be abandoned by this Con-Dem alliance. You will; we never will.

9.8 pm

Michael Ellis (Northampton North) (Con): Perhaps we could inject a dose of reality into the debate at this late stage. Listening to speeches by Labour Members, I could not help but be struck by the old adage, which they have obviously forgotten, that "You can't spend what you don't have." Interestingly, Labour members have clearly adopted the posture of collective amnesia when it comes to why this country is in this financial state and this economic mess, and why substantial savings are necessary in the Budget: it is because of their mismanagement of our economy. Why is it that of every £4 spent in this country, £1 is borrowed? How prudent is that? Why is it that 1 million nursing hours a week are spent on paperwork? It is because of Labour. Why are there as many managers in the national health service as there are beds? It is because of Labour. Why is it that the police spend 22% of their time on paperwork and only 14% on patrol? It is because of mismanagement by Labour.

Labour had 13 years to make the so-called improvements that it now claims we ought to make. Why did it not make those improvements? With the greatest respect, Labour Members are suffering from what can be called ostrich syndrome. They are sticking their heads in the sand, but the problem is that their hindquarters are still exposed. The hindquarters of this ostrich are there for all to see. It is disrespectful to the electorate to think that they are not intelligent enough to know why we are in this position. Why else did Labour achieve only 29% of the vote in last month's general election-its lowest in quite some time? The electorate can see who is responsible for the state of the nation's economy-Labour.

Speakers today and yesterday have railed against threatened cuts and savings, but these are Labour cuts. All day, public bodies have been cited and lists of endangered services highlighted, but Labour Members have made no acknowledgement of who pays for them-the
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taxpayer-and no suggestions about what Labour would do in respect of the cuts that are so obviously necessary. After all, we hear from some of them that billions of pounds of cuts are necessary and would have been necessary had we been in the unfortunate but highly unlikely circumstance of a Labour victory last month. Again, however, there is no collective memory of these issues.

Labour's tax-and-spend policies ended on such an irresponsible note that its Ministers were making spending commitments in the dying weeks of the last Administration which the country simply could not afford. "Grossly irresponsible" is not a sufficient phrase. Those outside this place who were led up the garden path by Labour will realise that when programmes have to be cut, these are Labour cuts. Labour acted like a tenant who has fallen out with their landlord and decided in the last few weeks of their tenancy to spend as much as possible on utilities and then do a runner on the last month's tenancy arrangement.

In common with a number of largely rural shire counties, which have been spoken of with some disrespect by Labour Members today, Northamptonshire residents suffered severe prejudice in terms of central Government funding during the 13 years of the Labour Government. Strangely, this phenomenon was not evident in Labour-held or Labour-marginal areas over those 13 years. The funding that Northamptonshire receives is based on out-of-date statistics calculating our population at several tens of thousands-about 10%-less than the reality. In a county whose population has been increasing exponentially-Northamptonshire is the fastest growing county in the country-the use by central Government of these seriously out-of-date figures under the Labour regime has had an unfair effect on Northamptonshire.

No doubt Conservative Ministers will be looking at these figures in due course, but I want to emphasise the point. I spoke this morning to the leader of Northamptonshire county council, who confirmed that Northamptonshire is the fastest growing county in the United Kingdom. The Office for National Statistics' figures are two years out of date. More than 10,000 more people live in Northamptonshire than the statisticians think, and of course those people use Northamptonshire schools, bin collections and the like. This imbalance between the fastest growing county and our underfunding costs the county £5 million a year-the equivalent of 2% on council tax. Yet Northamptonshire has the lowest council tax in the United Kingdom-£30 a year lower, at band D, than the second lowest placed.

Local government finance accounts for 25% of the budget, so what needs to happen? Well, there needs to be decentralisation, and I am delighted to see that the coalition Government are already moving in that direction. There needs also to be an end to the obsessive red tape that Labour Members have created-the bureaucracy, the extreme state control-and there also needs to be an end to the top-down diktats. We need the axing of unelected and ineffective quangos, while radical reform of the planning system is also necessary to give neighbourhoods far more power to determine the shape of the places in which their inhabitants live.

In Northampton North, the constituency that I have the honour to represent, there have been examples-one in particular in the Booth Rise area-of how we have suffered under the Labour Government's style of planning
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regime. Despite opposition from local residents, from the local councils, from the planning committee on the borough council and from Members of Parliament-including my Labour predecessor, I might add-a decision was taken to build 111 compact homes on green-belt land in a gateway area to the town where traffic is already heavy. That was pushed through by a Labour-created quango. Around the country, people are left feeling entirely disconnected from the powers that make these decisions.

Andrea Leadsom: Will my hon. Friend give way?

Michael Ellis: I will not, forgive me; Mr Deputy Speaker has indicated that we are in a rush.

In conclusion, we need to introduce new powers to help local communities to save facilities and services threatened with closure, giving communities the right to take over local state-run services. We need to cut the red tape and look with reality, unlike Labour Members, at what needs to be done to improve this country's economy and to improve the state of democracy for our local people and their elected representatives.

9.16 pm

Toby Perkins (Chesterfield) (Lab): When the hon. Member for Northampton North (Michael Ellis) suggested that we were going to get a dose of reality, I was hopeful, but, sadly, those hopes were dashed. It is ironic that on a day when the Secretary of State should have been here answering the charge of betraying local councils, he should instead-like the spectre of Tory cuts past-return to Bradford, where he would no doubt have asked for many other crimes to be taken into account. What we are seeing, of course, is simply the return to the Tory cuts from which local government suffered so badly in the 1980s.

One thing that stands out from this whole debate is the fact that the Liberal Democrats have not been involved in it. As far as I am aware, there has been only one contribution from them-from the hon. Member for Birmingham, Yardley (John Hemming)-yet the Liberal Democrats were supposed to be the party of local government. Here we are discussing 20% of the total cuts being made this year falling on the local government sector, and the Liberal Democrats are absent-absent without leave. I think it is simply scandalous that a party that prides itself on its contribution to local government should refuse even to engage in the debate.

Local government has not had a fair deal. Even in the current climate, local government has taken far more than its fair share of the cuts that have come this year. The cuts coming in future years will undoubtedly fall most substantially on the most deprived people in our communities.

Given the limitations of time, I want to focus on one particular area-the impact of the cuts on the voluntary sector. I spent the weekend at the Old Whittington and Brimington galas in Chesterfield. There were numerous examples of great community groups there. In every single case, they were worried about the funding they would receive. How can the Conservative Government possibly create the big society when the voluntary sector, which will be fundamental to it, is going to face such substantial cuts in their funding when these local government cuts go through?

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What needs to be acknowledged is the vital role that local government plays in our society as the founding stone and bedrock of democracy. As to the funding cuts to area-based grants, they will specifically target the most deprived communities. What we have seen, then, is an ideological Budget and an ideological decision that specifically disadvantages the poorest people and reduces the ability of those in the more deprived communities to work their way out of poverty. It is a strategy of diminishing local government and scrapping the measures that would demonstrate the damage being done. Many of the measures the Government are currently taking will, under the cloak of reducing bureaucracy, actually reduce the accountability of local government and other public sector organisations, and reduce the ability of the public to hold those services to account. It is all part of the seizing of power by the Secretary of State under the cloak of localism.

These measures will reduce the ability of councils to provide their services. Council leaders know that when they want to provide their services they will be told they have more power, but they will not have the money to deliver the services, and neither will they have the ability to raise the money, because the Secretary of State is informing them that they cannot increase council tax. Therefore, what they will actually have is simply a choice between scrapping services, which will disadvantage the most deprived people in our community, and hiking up charges for a whole raft of services, which will mean fewer people access them.

If the Secretary of State genuinely wants to make efficiencies, then let us see a commitment to Total Place, which is the ideal way of supporting partnership working to deliver the changes to communities and of reworking spending to be more efficient. That will also engage other organisations to work with local government, so we can create a progressive society out of the situation we are in, rather than our having these savage cuts that will disadvantage the most deprived people in our communities.

9.21 pm

Gavin Barwell (Croydon Central) (Con): I will try to limit the length of my remarks to five minutes so as to allow others to speak.

The shadow Secretary of State set the tone for the debate. There was some good knockabout, but one got the impression that he does not actually understand the system that he was administering until very recently, and he had nothing to say about the fundamental problems with local government finance in this country. The reality is that councils are too dependent on central Government for their funding, and too much of the money that they get from central Government is controlled by central Government in respect of how they can spend it. Also, the grants system that is used to distribute money is hugely complex, not transparent, unpredictable and unfair.

Let me give an example involving my own local authority. In this financial year, Dorset county council received the largest increase in the country: 7.1%. The England average was 2.6%, and Croydon got 1.5%. I will not take up time by going back over the past four or
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five years, but the pattern is repeated. Has Croydon suddenly lost a large chunk of population, or are we suddenly a much more affluent place than we were a few years ago? No. The system makes no sense whatever.

The London borough that is most similar to us is Enfield. It receives £423 per head of population, whereas Croydon receives £348. If we received the same level of funding as the borough that is most like us, we could cut council tax bills by £200 per head. In London, we have the nonsense of the area cost adjustment that divides London up into three areas and pretends that the London borough of Croydon can pay people a lot less than the London borough of Sutton right next door. That is complete nonsense. The system is in urgent need of reform, yet we have heard nothing from the Opposition about any of these issues.

On savings, let me repeat something that I said in the Budget debate. Almost every Labour Member who has contributed today has said that we are driven by some kind of ideological passion to slash public services. The NHS saved my life when I was seven years old and had lymphatic cancer, and I also have two sons at state school. The most urgent issues in my constituency are the need for more police officers on the streets and the need to do a better job of repairing our roads. I did not come to this place to slash public services, but I and my constituents know that the Government cannot continue to spend money that they do not have. That does not work in the long term.

There is real scope for making savings in local government-my council saved 6.8% in the previous financial year-but there is no doubt that the level of savings envisaged over the course of this Parliament is significant and will lead to some really tough decisions for local authorities across the country. I have to say to Opposition Members that although the Chancellor has proposed going further than the Labour party was proposing, we are protecting fewer departmental budgets so in terms of the unprotected Departments there is actually very little difference between the plans. People who have sat here listening to the debate all day, as I have, would not have got that impression, however.

May I end by making a few pleas to my Front-Bench colleagues? They can do a number of things to make this situation easier for local authorities. First, they can press forward with the proposal for a general power of competence. In London, we used to have a mutual arrangement between the borough councils to buy insurance, but it was ruled to be illegal. Bulk purchasing of that kind can save local authorities sizeable amounts of money. I also agree, actually, with something that was said by the Opposition about the Total Place initiative. Croydon was a pilot for early years, to which a lot of bureaucracy is attached. There is real potential to drive up savings over the long term in that regard.

Finally, I ask that we look at the possibility of working across the public sector. In Croydon we have a PCT that is coterminous with the council. There are separate finance directors, separate human resources departments, separate properties. If we can bring the different bits of the public sector together, there is huge potential for saving money and protecting our front-line services.

There is so much more that I could have said, but other Members want to speak so I will take my seat.

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