Budget Resolutions and Economic Situation

Debate between Lord Bruce of Bennachie and Brian Binley

Tuesday 22nd June 2010 Commons Chamber

[Malcolm Bruce]

I am aware that some people employed by Royal Mail have argued that they are not in favour of that, but they include people who are involved in the downfall of Royal Mail, too. We have to undertake a consultation, and let those people make a judgment. Royal Mail needs capital, without which it cannot survive and compete. It is a good idea to give the employees a real stake in a reinvested and reinvigorated Royal Mail. I hope that when many of them see what has been proposed they will welcome it as a positive.

[Mr Brian Binley (Northampton South) (Con)]

Does my right hon. Friend accept that the real need for Royal Mail is to get an injection of management skills, which is what the proposals will create?

[Malcolm Bruce]

Good management and good industrial relations are something that Royal Mail needs. Perhaps we all need to pull together a little bit to make that happen, but reinvigorating the organisation financially is part of the process.

I had some reservations and concerns about the proposal to freeze council tax, although my fears have been substantially allayed by what the Chancellor said. We have had a freezing of council tax in Scotland under the Scottish National party Administration, and I believe that it is a populist but extremely regressive development, because it effectively weakens local authority control and accountability and strengthens the centre.

The tone of the Chancellor of the Exchequer’s explanation of the measure allayed many of my fears. He said, first, “for one year” and, secondly, “based on incentives and encouragement, rather than imposition”. However, I hope that the measure will be set against a background whereby we think again—this is in the coalition agreement—about how we finance local authorities in a way that not only makes them locally controlled and accountable, but reduces the intervention of central management and control. I repeat that, although freezing council tax in Scotland is popular because people do not have to pay for an increase, people realise over time that their local council does not have the flexibility to fund some of the services that they want. People have certainly said to me, “We’d rather pay a little bit more council tax and have more investment in our schools,” or roads, or whatever it may be, so it is not the right long-term way in which to operate local government finance.