Budget Resolutions and Economic Situation

Debate between Lord Barker of Battle and Hilary Benn

Friday 20th March 2015 Commons Chamber

[Hilary Benn]

I will come on to that very point in just a moment if the hon. Gentleman is willing to be patient. He will have seen what Councillors Keith Wakefield and Peter Box have said about the new Leeds city region deal. Peter Box described it as “disappointing”, which I would call one of the kinder comments. What has really got up the noses of the existing combined authorities is that Labour’s offer of 100% retention of business rate income growth has been made to Manchester and Cambridge but not to the other existing combined authorities. Why is that?

For all the Government’s rhetoric about the “northern powerhouse”—now running a close second to “long-term economic plan”—the truth is that the most deprived parts of the country have faced the biggest cuts in local authority funding. Yes, Labour will change the formula because what the Government have done is unjustifiable. There is nothing empowering about taking a load away and then giving a little less back.

[Gregory Barker]

The right hon. Gentleman says that Labour will change the formula. Will he spend more money, in which case where will that money come from, and if he is not going to spend more money, who will lose out?

[Hilary Benn]

We have made it clear that we will have a fairer allocation from within using funding that is there at the moment. The right hon. Gentleman’s problem is that he cannot justify what the Government have done, and therefore applying more fairness so that everybody has to make a contribution is the right thing to do.

The National Audit Office and others have said there is not much evidence that the new homes bonus encourages house building that would not have taken place anyway. It is top-sliced from revenue support grant and tends in the main to be taken from the more deprived communities with the greatest needs and to go to communities that are less deprived with fewer needs. We will phase that out and redistribute the money back to local authorities on a fairer basis. Government is about making choices. We will devolve £30 billion of economic powers from existing money for county and city regions.