Oral Answers to Questions
Debate between Lord Blunkett and Lord Pickles
Mr Pickles
My hon. Friend makes a very important point. Indeed, we have been working very closely with the Local Government Association to try to free up procurement. Part of that, of course, has been ensuring that there is transparency so that we can see how councils are spending their money. I am particularly grateful to the LGA, with which we are trying to demystify the complexities of European procurement regulations to allow local businesses to bid.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
The Secretary of State will surely acknowledge that in cutting two thirds of the funds available to the regions of England when the regional development agencies were abolished, the Government struck a blow at the very innovation, growth and enterprise that he has been praising this afternoon. Is it not strange and revealing that it has been announced today that Sheffield Forgemasters will be given a third of the loan that was originally sought? Is that not an admission by the Deputy Prime Minister, the Chief Secretary and the Business Secretary that they got it totally wrong last year?
Mr Pickles
The right hon. Gentleman is, of course, absolutely wrong. The regional development agencies cannot be described as a success by any stretch of the imagination. The north lost out in economic growth compared with the south under Labour, and gross value added per head as a percentage of the total UK level fell across the north from 1997 to 2009 but rose in London. The north lost out in private sector jobs created under Labour—for every private sector job generated in the north and midlands, 10 were generated in London.
Local Government Finance
Debate between Lord Blunkett and Lord Pickles
Mr Pickles
My right hon. Friend raises an important point. In order to ensure that the system works, business needs to have certainty and predictability, and because we want growth to be generated, we cannot allow businesses to be used as some kind of favourite cash machine for councils. The rate will continue to be set by formula and from the centre. However, local authorities can work closely with business to bring in new businesses.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
If this is good news, it is certainly a bad day to bury it. There is no doubt that the Secretary of State failed to answer the question asked by my hon. Friend the Member for Sheffield South East (Mr Betts). He has already confirmed that the national business rate will be set by the Government, that growth will be held by the authorities that have encouraged it, and that, somehow, it will also be distributed to authorities that do not get growth. Given that last week the Department answered a question from me saying that it did not know what the spend would be as a comparator between Westminster and Sheffield, how does he think that he can answer this question this afternoon?
Mr Pickles
It would be horrible if businesses had to take the roofs off their factories in order to escape local authorities—as I believe the right hon. Gentleman will recall from his time in office. Sheffield does remarkably well out of this process. Over the past five years it has had above-average growth in its rate base, and I see no reason why it should not benefit from this. Basically, this is about ensuring that local authorities can benefit from growth in their business rates and can be encouraged to work with business. Frankly, it is no good being in favour of repatriating business rates unless we are also prepared to put in place something that is fair and equitable and will look after the vulnerable. I am very sorry that the two hon. Members from Sheffield do not seem to realise that.
Local Government Finance
Debate between Lord Blunkett and Lord Pickles(13 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Pickles
If the hon. Gentleman will forgive me, I will come to that point in a moment. If I do not satisfy him, I will happily give way to him again.
Thanks to Labour, the nation’s credit card is maxed out. The longer we leave it before we start to pay it off, the worse it will be and the more we will have to pay. Unless we tackle Labour’s borrowing, interest—just the interest—on its toxic legacy of debt will hit £70 billion a year by 2014-15. That is more than we currently raise from council tax, business tax, stamp duty and inheritance tax combined.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
The Secretary of State mentions the business rate. Could he tell the House how much, in billions, the Treasury contribution will be in the coming year over and above the yield from the business rate, which has to be redistributed to local government in any case?
Mr Pickles
Hammersmith and Fulham is obviously the apple of my eye in London, but the decision taken by my hon. Friend’s council is a very sensible one. I am delighted that chief executives have taken a cut in salary, and I am even more delighted that the salaries advertised for chief executives have gone down considerably.
It is only right for hard-working families to be given a helping hand. We are providing an extra £650 million so that local authorities can freeze council tax for a year from April without local services losing out. We give each council that freezes or reduces council tax the equivalent of a 2.5% increase instead. More than 130 councils have already said that they will take this offer and more will follow as they finalise their budgets. No council should think that it can get away with squeezing its residents.
In the long term, local people should have the power to veto excessive council tax rises, but for the time being the Government will use their capping powers to protect them. Today I have laid before the House a written statement explaining the principles that we are using to define what excessive council tax means. An authority will be liable to be capped if it couples an increase in council tax of more than 3.5% with a reduction in its budget requirement of less than 7.5%. However, for most council tax payers, I very much expect this to be largely an academic exercise, because I believe that every local authority will freeze council tax in this difficult period.
The public will be helped in that process by increased transparency. I am pleased to announce to the House that every council in the country has now agreed to publish every amount over £500, so that their council tax payers can judge whether cuts in services or decisions about those services are just. I say “every council in the country”, but I mean “every council in the country with the exception of Nottingham”. The Labour deputy leader in Nottingham says that the council has
“no intention of publishing the data unless it is forced to do so by law.”
He says:
“We have said that we will publish accounts over £500 if it becomes a legal requirement to do so,”
before adding, rather peculiarly:
“We are happy for information to be”
transparent. Well, information cannot be transparent unless it is published. How come every council tax payer in England can look on their council’s website and see how it is spending their money except for those in Nottingham? Is there something peculiar about people in Nottingham that means that they cannot be trusted with that information?
Mr Pickles
I shall give way in a moment, once I have made this point. The right hon. Gentleman is a senior Member of the House, but I would be grateful if he extended me the courtesy of allowing me to make a few points.
The deputy leader of Nottingham city council is a gentleman called Graham Chapman, which is obviously the same name as the late and long-missed member of “Monty Python’s Flying Circus”. It seems to me that the right hon. Member for Don Valley (Caroline Flint) should get on the phone to that gentleman and tell him, as his namesake’s mother did in “Life of Brian”, that he might be the deputy leader of Nottingham city council, but he is a very naughty boy. If it is necessary for me to use the powers that I have to force Nottingham, I will, but why should this process be held back by one obdurate council that simply wants to play politics with transparency?
Mr Pickles
I can bring better news to the right hon. Lady, because the figure will not be 8.9%, but 8.8%, which I hope she finds helpful. She arrives at those figures only if she completely ignores the figures for council tax, which are such that we can give her a guarantee that her council’s spending power will not be reduced by more than 8.8%. Because I have enormous respect for her, I shall make just one further point. I thought about this issue seriously, in a situation where money was clearly being reduced, and I came to the conclusion that if I increased relative need, the best way to help authorities such as hers in taking the money down would be to put it into the block grant. That is because the block grant has such a distributive effect. I accept that there is a degree of swings and roundabouts involved, but her authority came out of that process better than it might otherwise have done.
Mr Blunkett
This issue of transparency is absolutely crucial. Is it not a fact that the 8.9% and the distribution of grant took place after the area-based grant—and therefore the specific funding for specific deprivation—had already been taken out?
Mr Pickles
The right hon. Gentleman will forgive me for correcting him: it is not 8.9%; it is 8.8%. We have put some additional sums into the process—[Hon. Members: “Answer!”] I am sorry that he perhaps did not hear the answer that I gave to the right hon. Member for Salford and Eccles (Hazel Blears). I took a view, which I think was correct, that his authority, Sheffield, would have lost out more had we not put those sums into the block grant. He seems to forget that we have moved relative need to 83%.
Thanks to the constructive approach of many councils, we have arrived at a funding settlement for the next two years that is progressive, fair and sustainable. It is important to see this settlement in context. This coalition Government are committed to an historic shift of power and influence. We are seeking to restore real responsibility and authority to councils. We are ending the regional spatial strategies, comprehensive area assessments and local area agreements, and we have made a bonfire of the three-letter acronyms.
The general power of competence in the Localism Bill will give councils confidence to get on with the job. We have already ended grant ring-fencing, with a few exceptions, so that councils can decide for themselves how to spend their money. I am determined that we will continue to push back the tide of bureaucracy, end once and for all the micro-management from Whitehall, and give councils the space to show the ingenuity, ambition and leadership that local people expect. The settlement shows that this coalition Government will not shy away from the tough decisions needed to tackle Labour’s public sector deficit, and we will continue to do everything possible to support local councils as they protect and improve front-line services over the years to come.
Localism Bill
Debate between Lord Blunkett and Lord Pickles(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Pickles
My hon. Friend tempts me to become a bit Maoist in these matters, but we will certainly consider what he says and look towards giving greater powers to local people.
The Bill will return the planning system to the people. Targets do not build homes, and regional plans do not get communities involved. Today, we have an adversarial, confrontational system, fomented on mistrust and a sense of powerlessness. It is simply not working. The Bill will therefore create genuine neighbourhood planning, by which the community will develop in ways that make sense for local people. Instead of instructions being handed down from on high, the Bill will offer incentives to invest in growth. Instead of unelected commissioners making national decisions on important national infrastructure, those choices will again be down to democratically elected Ministers in this House.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
There is a genuine worry among the infrastructure industries, particularly the utilities, about the current interregnum. When will the Secretary of State issue guidance on major infrastructure processes? When will the words used by the Minister of State, Department for Communities and Local Government, the right hon. Member for Tunbridge Wells (Greg Clark) be fulfilled? In Question Time, he spoke of a fast-track political process, which might give some certainty for investors and some knowledge of how the system will actually work.
Mr Pickles
I am happy to reassure the right hon. Gentleman that there will be no gap in the system, and that the utilities are very much in favour of what we are doing. In terms of general national policy statements, we will move at pace, because as he rightly identifies, infrastructure, particularly in respect of the utilities, is immensely important.
The Bill will give councils and communities the power that they need to tackle the housing challenges that they face. The coalition Government have inherited a deep housing crisis. Five million people languish on waiting lists, and many of them have no chance whatever of being allocated social housing. It is a failing that hundreds of thousands of families live in overcrowded conditions while other homes are under-occupied, and that in half of all families who live in social housing, no one works.
The Localism Bill will create a much fairer and more flexible system. Councils will have the discretion to help families meet their needs in the most appropriate way, and we have of course made sure that there will be appropriate protections for the most vulnerable families. However, there are also many families who simply need a short-term helping hand—and councils will now be able to offer just that. I remind the House that we are only talking about new entrants to the system; existing tenants are unaffected. We are also reforming council house financing, building on proposals from previous Governments, but with a more generous offer. All councils will have more money to manage their stock.
Finally, the Bill represents the final nail in the coffin for the most illogical and unpopular measures of the previous Government: it will get rid of bin taxes, home information packs, the outdated port tax, and the sort of bonkers bureaucratic measures that we get when decisions are taken far away from the people they affect—the sort of measures we will not see anymore. The era of big government is over. Look where it got us: uneven and unstable economic growth; frustrated front-line workers slavishly following the rulebook to the letter; and residents and community groups left powerless to solve their problems.
Local Government Finance
Debate between Lord Blunkett and Lord Pickles(13 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Pickles
Increasingly, we will encourage more parish councils to be formed. We believe that the neighbourhood is the natural point to which funding should go for local authorities, and I am very happy to confirm to my hon. Friend that, indeed, parish councils will get a general power of competence. Basically, the chain will turn on its head: the normal presumption is that councils have to find a law to take a particular action; now, they will have to find a law that prevents them from doing so. I think that that will allow for greater flexibility.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
I congratulate the right hon. Gentleman, whom I must describe as Eric through the looking glass, on being able to persuade his minority coalition partners that a scorched earth policy is actually fair and progressive. This year, the national business rate will raise just over £22 billion. Is it not the case that, by 2014-15, the amount that central Government distribute will equal the business rate and run very close to breaking the current law, whereby they are required to distribute the whole grant to English local government?
Mr Pickles
I thank the right hon. Gentleman for the allusion. He seems to be vying for the title of the Red Queen: judgment first, judgment first, before he hears the facts.
Mr Pickles
Before the right hon. Gentleman disappears down his own rabbit hole, I will continue.
There is a theoretical surplus in 2013-14, but the right hon. Gentleman knows that we have an obligation to distribute the national non-domestic rate to authorities. The figure of £3 billion is overstated, because the Office for Budget Responsibility has not taken into account the number of grants that we have rolled into the block grant. We have done that because of its distributive effect, and by 2013-14 we hope that a new system of local government finance will be in place.
Oral Answers to Questions
Debate between Lord Blunkett and Lord Pickles
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
This week my Government will be co-operating with interfaith week, celebrating how faith communities are adding to the well-being of our society. We have published details of our plans to build 150,000 more affordable houses over the next four years. We have welcomed the decision of the Local Government Association’s chief executive to take a cut of £200,000 a year, and we hope that more town hall chiefs will follow his example in these austere times.
At the 2010 British curry awards, the Government paid tribute to the spice industry’s £4 billion turnaround—a real bhuna for the British economy. From bin collections to small business tax relief, we will do our utmost to ensure that Britain’s curry industry is second to naan.
Mr Blunkett
Sorry, Mr Speaker, I can hardly follow that.
The proposal to refund 2.5% of income to councils freezing their council tax next year, which was touched on by my hon. Friend the Member for Derby North (Chris Williamson) and the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell), will have the perverse outcome, will it not, of top-slicing the money from all councils and then rewarding the wealthiest, high rateable value authorities such as Surrey twice as much as the poorer low rateable value authorities such as Hull, Newcastle or Sheffield? Given that those three councils are Liberal Democrat-controlled, will the Secretary of State tell me which conjuring trick he managed to do in persuading the Deputy Prime Minister and his colleagues that this was fair or even acceptable?
Mr Pickles
I am sorry to tell the right hon. Gentleman that he is wrong about the top-slicing. It is in fact new money, and we will not be top-slicing the authorities. I face a great dilemma. As the money that each local authority has varies, the grant differs considerably; he alluded to that. The particular problem I face is the decision taken by the Labour Chancellor to remove £300 million from the working neighbourhoods fund, which will hit Sheffield particularly hard. At the moment, I am trying to ensure that Sheffield and all those authorities are cushioned against Labour cuts.