Local Government Financing

Lord Jackson of Peterborough Excerpts

Tuesday 29th June 2010 Commons Chamber

[Mr Denham]

My hon. Friend makes a good point. Indeed, he owes his re-election to the awareness of his constituents of exactly what the Tory agenda for local government was in his constituency. I will return to that point later.

[Mr Stewart Jackson (Peterborough) (Con)]

While reflecting on the past, would the right hon. Gentleman like to apologise for the unprecedented situation that occurred when he was Secretary of State and his own permanent secretary disavowed the key policy of unitary status for various areas? The permanent secretary had so little faith in that policy that he went public with his view that it was a waste of public money.

[Mr Denham]

I am sure we all wish the former permanent secretary at my Department well in his new position as permanent secretary to the Scottish Government. I took the right decision on Norwich and Exeter, and I was right to back the desire of those cities to run their own affairs. It was a decision that I reached after many months of careful consideration, along with my right hon. Friend the Member for Wentworth and Dearne. I have to say that it was all too typical of this Government that, within two days of the new Government being formed, the Secretary of State—who talks about localism—decided to quash the aspirations of those councils to run their own affairs, in a timescale that meant that he could not possibly even have read the evidence that had been submitted by so many councils. I will return to the attitude of the Secretary of State in due course.

On 10 June, the Secretary of State announced £1.165 billion of cuts in local government spending in England in the current financial year. Because those cuts were so big, the Secretary of State should have come here to defend them. They were part of the £6 billion of cuts proposed by the Tories during the election. We opposed them as too early and too damaging to economic recovery. The Liberal Democrats also opposed them. As the right hon. Member for Eastleigh (Chris Huhne)—now a Liberal Democrat Cabinet member—said during the election campaign:

“If we took Tory advice and cut spending and raised taxes precipitately, growth would stop. Unemployment and benefit spending would rise further. Tax revenue would stall.”

But now he has taken Tory advice, and he will be held to account for what happens.

Now the Lib Dems support these cuts, and their credibility as a progressive alternative to the Tories is shot to pieces. These are cuts that no local council had any chance to prepare for, coming as they do well into the financial year. As the Tory leader of West Berkshire council told us,

“This is unprecedented. We have never faced cuts in the middle of the year.”

As the Tory leader of Telford said,

“this is money that we had planned to spend this year and will now have to be cut.”