Budget Resolutions

Debate between Lord Jackson of Peterborough and Bob Blackman

Thursday 9th March 2017 Commons Chamber

[Bob Blackman]

The right hon. Gentleman and his party are experts in broken promises. It is important that we are seen to be fair and reasonable in this process, and that we encourage people to become entrepreneurs. That is the key element.

I now move on to funding for social care. The Communities and Local Government Committee, on which I have the honour of serving, recommended that the Chancellor make available £1.5 billion to fund adult social care. I am delighted that the Chancellor announced an extra £1 billion for adult social care. I am also pleased that the Secretary of State for Communities and Local Government confirmed today at the Dispatch Box that that money will be added to local authorities’ baseline budgets, and that he confirmed the formula by which it will be distributed. I think that that will be warmly welcomed by local authorities up and down the country, and it is a continuation of much needed funding.

I hope that the Economic Secretary to the Treasury will be able to clarify in his winding-up speech one or two points in the Red Book that are slightly confusing for me and may be so for other Members, if they have looked at them. Line 9 of table 2.1 on page 26 mentions a spend of £1.2 billion on adult social care in 2017-18, which is more than the Chancellor announced yesterday in his speech. I hope that that can be clarified. However, the extra £1.2 billion does not appear to have been added to the CLG items in the table on page 21. It is not clear whether the money is ring-fenced for adult social care—I hope it is—and how the Government will ensure that it is spent in the intended manner. The funding was clearly needed, and I am delighted that it has been announced. It shows that the Chancellor and the Treasury are listening to concerns raised by hon. Members from right across the House.

I am equally pleased to see the additional funding that has been introduced for the national health service, particularly capital funding to provide much needed A&E improvements. Those improvements will take some pressure off A&E departments by allowing for the triaging of individuals who turn up at A&E when they should have gone to their GPs in the first place. That will clearly take the pressure off our health service, and it will be warmly welcomed across the country. I trust that we can get on with implementing those capital schemes as fast as possible, so that next winter A&E will not face the problems that it has experienced over the last couple of years.

I note that the Chancellor has allocated an extra £325 million of funding for sustainability and transformation plans. However, the estimated requirement is £9.5 billion. I just wonder where the extra money will come from to support that. The extra money for that in the Budget is welcome, but there seems to be rather a shortfall by comparison with the demand created by the various STPs.

On business rates, we all welcome the relief for pubs and the reinstatement of a three-year revaluation cycle. If we have learned nothing else from the process, we have learned that a seven-year revaluation period is ridiculous. Although many businesses across the country will be warmly happy about the fact that their business rates were effectively frozen for seven years, after the businesses are revalued they will almost face a cliff-edge. The implementation of a three-year revaluation period has to be the right approach.

I warmly welcome the £300 million given to local authorities to grant discretionary relief on business rates. My only concern is that we know that a large number of appeals will be lodged against the revaluations, and some local authorities may therefore be hesitant about granting relief while appeals are going on. In London and other parts of the country where 100% of business rates are devolved, that may have a huge impact on local authorities’ income. That is my one concern.

We need absolute clarity on what will happen about the billing of business rates and the reliefs that will be offered thereafter. Businesses up and down the country will receive their bills without necessarily knowing what reliefs they will get. In terms of cash flow, that will be a serious concern. The additional money to provide businesses with relief from the increase in business rates is extremely welcome, but the devil is in the detail, and we must resolve businesses’ uncertainty as quickly as possible.

[Mr Jackson]

My hon. Friend is, as I am, a vice-president of the Local Government Association. Does he agree that there is probably a case to be made for introducing a regional aspect to non-domestic or business rates? The potential difficulties in Greater London and the south-east are not replicated throughout the rest of the country, where bills are being reduced. That speaks to a need to look at London as a unique entity.

[Bob Blackman]

As we move forward, and before we get to 100% devolution of business rates across the country, we must resolve the conundrums that have arisen in relation to business rates. Equally, we have to recognise that business rates raise in the order of £25 billion a year as a tax, so changing its basis could be extremely cumbersome and might lead to hikes for some businesses, which would not be welcome, as well as reductions for others. We should look at that in the round and make sure, following the consultation that we are going to embark on, that the new policy works for all businesses and business people.

On education, the funding for the 500 free schools, including the new free schools, will be extremely welcome. Certainly in my constituency and across my borough, the reality is that we need an additional four new schools immediately. We have expanded every single primary school to its capacity and built on every piece of land available to provide new school places—all with Government funding, allocated under the coalition Government, which was extremely welcome—but we still need additional schools. I am delighted that a new faith school will be opening soon in my constituency, which will be the first state-sponsored all-through faith school in the country for the Hindu community. We will still need additional schools, however.

I have real concern about the principles of the fairer funding formula. The reality is that if the money coming into the formula is flat, then when some people are gaining, others will be losing. The current estimate is that 75% of the schools in my constituency will have not just a reduction in real terms, but a real cash-terms reduction in the funding available to them per pupil. They cannot increase the number of pupils, because the schools are full, so the only alternative is to cut staff and implement a worse service for the children in my constituency. I place it on the record right now that that is unacceptable.

I welcome the investment being made in skills and vocational studies. For far too long, academic skills have been recognised and applauded in this country, while vocational skills have not received the investment they deserve. I welcome what the Chancellor is doing to make that happen, using the funding to drive forward such a process, which must be the right way to encourage young people to develop their skills. If they have academic capabilities, that is wonderful, but if they have vocational skills, we desperately need them in the construction industry, our services industries and right across the board. This is one of the areas in which, for far too long, we have not had such investment, so I welcome the change that is taking place.

I also welcome the new deal on London devolution. I note that the Labour Mayor of London has welcomed the Chancellor’s decision to devolve such money. I have not heard that from Labour Front Benchers, but there is clearly always a disconnect between the Labour Mayor of London and his own Front Benchers in this House. We warmly welcome such a devolution. Local authorities in London, as well as in other parts of the country, will keep their business rates and have the opportunity to make local decisions for local people.

There is, however, a gap in that the Chancellor did not talk about the funding needed to replace the EU regional funding schemes. The schemes have been used for particular purposes right across the country. We clearly do not need to make such a decision now, but the Chancellor must consider this in the future, because these funds are vital right across our regions.

I welcome the provisions on alcohol duty in the main, but it would have been sensible for the Chancellor to maintain the policy of not increasing beer duty. [Interruption.] I am sure that is warmly welcomed among Conservative Members, and I declare an interest in that it is my favourite drink. The cuts in beer duty in previous Budgets have been an appropriate way to encourage people to drink lower-strength beers rather than higher-strength alcohols, which is important.

On tobacco duty, which is significant, I welcome the changes that the Chancellor has made, but I think he could have gone further. If he and my hon. Friend the Economic Secretary want to increase duties on something, let us increase them on tobacco. The fact is that there is a straightforward translation: the less people smoke, the less demand they will make on the national health service.

[Bob Blackman]

Quite clearly, anything we can do to encourage people to give up smoking has to be good for their health and for the national health service overall.

[Mr Jackson]

Before my hon. Friend moves on from vices, does he agree that the Red Book shows that there is only a commitment to consult on white cider and other high-strength ciders? Given the argument that they cause disproportionate harm—with policing, health and so on—is there a case for increasing the duties on such high-strength alcoholic products?

[Bob Blackman]

The position is quite clear. In particular, I want the Treasury to look at the differential duties on licensed premises compared with those involving off-sales, because such an approach could make a quite massive difference.

My one concern about what is proposed for tobacco duty is the possibility of driving individuals away from normal standard cigarettes to hand-rolled tobacco. Young people might be encouraged to switch to hand-rolled tobacco, which is even more harmful to their health than smoking cigarettes. The duty on hand-rolled tobacco should be looked at, so that we can discourage that.

I was disappointed—my hon. Friend the Economic Secretary will know what I am about to say—not to see further compensation for the victims of the Equitable Life scandal. The Treasury believes that the scheme is closed. It is quite clearly closed to new applicants, but there is still the burning injustice that people who saved for their future and their future pensions have not received the full compensation due to them. I am very proud to say that the Government allocated funding in early 2010, which has helped to compensate some of the victims of the scandal, but a total of £2.8 billion or £2.5 billion—it depends which figures one looks at—is still owed to the victims of the scandal. Those individuals are getting older and more vulnerable, and if we give them any money, it will go straight into the economy because they desperately need it for their old age.

I hope my hon. Friend will look at that again in the round. I understand how difficult it is to balance the books, particularly at the moment, but this is clearly a debt of honour. As the economy recovers, we should look at increasing the compensation, not saying to individuals, “That’s it. That’s all you’re going to get.” If we do that, we will suffer the consequence of people’s mistrust.

The housing White Paper has demonstrated large elements of what we need to do to increase the volume of housing. There was a great deal of comment in the autumn statement on funds for housing, but there was no mention of that, or of the further measures we need to undertake, in the Budget yesterday.

As you will know, Madam Deputy Speaker, my private Member’s Bill is progressing through Parliament. It is in the other place at the moment and, I hope, will become law very soon. It aims to reduce homelessness in this country, but the most important impact we can have on homelessness is to build more homes. I trust that the Economic Secretary will consider measures to encourage local authorities, housing associations and private builders to build low-cost housing that is relatively easily affordable for the people of this country, so that we can combat homelessness once and for all in our civilised society.

The Budget must be looked at in the round. I have been critical of certain areas. It is our duty as Back Benchers to be critical friends of our Front Benchers to make sure that they keep abreast of what is going on, particularly when the Opposition do not seem able to critique the Budget. I welcome the overall thrust of the Budget and trust that we can look at ameliorating some of the areas I have mentioned. I commend it to the House.

Housing and Planning Bill

Debate between Lord Jackson of Peterborough and Bob Blackman

Monday 9th May 2016 Commons Chamber

[Bob Blackman]

Does my hon. Friend agree that one of the principal costs of developing new housing is the cost of the land that has to be acquired for that housing? Therefore, if low-cost land is available in an area such as Sheffield, low-cost housing will be provided on that site.

[Mr Jackson]

My hon. Friend, who has a great deal of experience in local government housing and planning, makes an important point. He is right to draw the House’s attention to the anomalous nature of some of the comments from the hon. Member for Sheffield South East (Mr Betts), the Chairman of the Communities and Local Government Committee, on which, I think, my hon. Friend also serves.

Housing and Planning Bill

Debate between Lord Jackson of Peterborough and Bob Blackman

Tuesday 3rd May 2016 Commons Chamber

[Bob Blackman]

It is a pleasure to follow the hon. Member for Westminster North (Ms Buck), although I suspect that my perspective on housing in London, the south-east and the rest of the country is very different from hers. We have to start from the housing problems that we have and to remember that, as I think the Chair of the Select Committee pointed out, for far too long we have not built enough homes—irrespective of whether they are for sale, for rent or for social rent—in this country. The key point is that we have to ensure that the delivery of new housing begins apace, and the Bill contributes towards exactly that requirement.

We need to face up to the fact that a small number of very large house builders in this country ration the development of land to maximise their profits from the sale of the homes that they build. We must break the stranglehold of that consortium and encourage small developers to develop new groups of houses, which will give people the opportunity to buy those homes. In addition, over the past 10 years, social rented accommodation has been completed solely by registered social landlords—what we call housing associations—which sit on huge bank balances and assets that they could utilise to build far more units than they do. Far too many housing associations are coasting and not providing the sort of accommodation that we all wish to see. Somehow, we have to break through.

The Bill also resolves the problem that it is very hard for young people to afford the deposit that they need to buy their first home. The principle—the Labour party has not yet fully appreciated this—is that the Government are switching resources from social rented accommodation to the development of starter homes for sale, so that young people and families have the chance to own their own home. Home ownership among that group of people has dropped through the floor. The average age at which someone buys their first property is now about 37, and it is going up all the time. Many people now believe that they will never own their own home, because their income is insufficient.

[Mr Jackson]

Is there not an issue of fairness and social equality here? It was reported today that 25% of the funding for first-time buyers comes from mum and dad—the family. Is it not unfair that if an individual has wealthy parents, their parents can cascade that wealth to them? This policy, under a Conservative Government, will spread the wealth and enable people on modest incomes not to have to rely on the bank of mum and dad to buy their first home.

[Bob Blackman]

It is quite clear that we want a more democratic system in which people have the opportunity to buy their own homes. The principle introduced in the Bill of encouraging home ownership through that process must be right. Equally, it is quite clear that an unfinished piece of business from the Thatcher revolution of the sale of council homes under the right to buy was that housing association tenants did not have the same opportunity, so I am delighted that the Government are putting that right.

It is right to ensure that people who exercise the right to buy continue to live in their properties as owner-occupiers. It is not right that people should suddenly have a windfall because, having been in social rented accommodation, they are offered a discount on a property that they can either immediately resell or re-let. There should be a taper, and I am glad that the Government have seen sense in accepting that such a taper should apply. There is an argument—or a discussion—about where the taper should start, but the reality is that the vast majority of people see that as the right way forward. People buying a property under the buy-to-let process should also have the opportunity to ensure that they get a discount under the Help to Buy arrangements but, equally, they should not be allowed suddenly to get a windfall and then move on.

Communities and Local Government (CSR)

Debate between Lord Jackson of Peterborough and Bob Blackman

Thursday 13th January 2011 Westminster Hall

[Mr Jackson]

Absolutely. Credit where it is due; authorities of all political colours were mindful of the fact that, whichever party was elected, there would be a reduction in the revenue stream because of events in the world economy and the financial collapse. We should also mention the three pillars of the previous Labour Government’s economic policy. One was house building, which, as we have seen, did not work out too well. Another was unlimited public expenditure without proper reform. The third was financial services. I am afraid that all three pillars crumbled, and we are now having to pick up the bricks and mortar left by the parlous economic mismanagement of the elusive right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown).

That is the situation that we face. Let us remember that we are now paying £120 million a day in debt interest. In September last year, we were borrowing £15.6 billion a month. During the same month, interest payments on borrowing rose to £2.3 billion, up 150% on the same period in the previous year. Indeed, at the present rate of borrowing, had the Government not taken the decisions that they did, Government debt as a percentage of gross domestic product would peak in 2014 at 70.3%. We would be in the Portugal, Greece, Iceland and Ireland ballpark. For the Opposition to say that the Government should not have taken the decisions they took in the emergency Budget and comprehensive spending review is extremely irresponsible.

To move on to the issues about local government, the CSR is an opportunity for local government to scrutinise spending, make financial savings and redesign the way it provides services. It is also a challenge for local authorities to consider not only the costs of services but their value to communities. The CSR is pushing councils in the direction of being more innovative and involving the private sector, the voluntary sector and business sectors—I shall talk about some practical examples of the big society a little later—in a dynamic and intelligent use of resources. Removing the ring-fencing of grants, and the aggregation of grant funding from 90 income streams to 10 is exactly the right way to do things. I shall talk later about some of the additional funding issues that will give sustenance to local government in looking to the future, when the economy begins to grow and we have reduced public sector debt, such as the regional growth fund, the new homes bonus and, of course, early intervention grant. All those are extremely important.

As the Minister said, we are facing a net reduction of 26% in real terms between now and 2015, but the likely reduction estimated by the Office for Budget Responsibility is 14%. Of course that is speculative because we do not know the level of the income streams, and how each council will innovate to maximise income and assets. The Localism Bill contains good news for councils about their ability to exert more control over assets and share community assets with local people. My local authority is involving the private sector. Peterborough’s core front-line services, such as street cleaning, recycling, grounds maintenance and household waste, will be handled by a preferred bidder, Enterprise Managed Services Ltd. That is an example of a local authority that is innovating, and that has in recent years been thinking hard, with a business transformation team, to prepare for less than benign financial circumstances.

I was an Opposition Front-Bench spokesman on Communities and Local Government, and I want to think about areas that could have been examined, but were not. Fire control was an utter shambles. The predecessor of the hon. Member for Sheffield South East as Chair of the Select Committee, the sometimes fearsome Dr Starkey, was pretty straightforward and robust in her analysis. It was a financial, management and political disaster on many levels. It was bad. Now, because the Government have bravely picked up the baton of dealing with that issue, local authorities are being forced to think in innovative ways. They were doing that before, anyway. I visited Wiltshire and Swindon fire authority, in the constituency of my hon. Friend the Member for North Swindon (Justin Tomlinson), 18 months ago. The authority was already working with Vosper Thornycroft and with Avon and Gloucestershire on such things as premises, training and vehicle maintenance. The CSR will, I believe, be a catalytic change, so that fire authorities can do that. It will spread throughout payroll, human resources, senior management training and that kind of thing, and we will all agree with that.

One of my responsibilities in opposition was to think about the Thames Gateway. If ever there was an alphabet soup of shambolic mismanagement, it was that—100 separate bodies receiving grant funding, and about 120 statutory consultees. It was the Schleswig-Holstein question of local government. Anyone who understood the Thames Gateway was either mad or dead. I was neither, and did not understand it. That is now being subsumed into mainstream funding.

I want to talk about tax increment financing. One of my criticisms of the Government is that although they talk about it, they are not as yet persuading their Treasury colleagues to buy into the concept of supporting it practically. For want of a better expression, invest to save: with a little bit here there will, further along the line, be a lot. That will be a catalyst for building local economic regeneration and renaissance. I am still not convinced that the Treasury is fully committed to that, in the same way it was, incidentally, to other initiatives of the Labour Government in the previous Parliament.

I have already talked about ring-fencing and the general need for fiscal consolidation. I believe that the issue of targets and ring-fencing gives an important message to local government that we believe in localism. The power of general competence is an enormously important message to local government about civic renaissance, civic pride and putting local people in the driving seat. I am mindful of the fact that the Labour Government promised that in 1997. For some reason—I do not know why—it was not delivered. I think we can all agree that trusting local authorities, which is what the enactment of the power of local competence will achieve, will give councils of all parties that strong and powerful message. I suspect that in the next two or three years there may be a few more councils of the party of the hon. Member for Sheffield South East than of mine—but no names, no pack drill.

Of course the Bill also contains a duty to co-operate on infrastructure. That is important for a facilitation of strategic partnerships with primary care trusts and other larger and smaller local authorities. There are local authorities in west London sharing chief executives, and some smaller local authorities—South Holland, and one in Leicestershire, but I forget which—are also doing so, with a significant revenue effect.

[Bob Blackman (Harrow East) (Con)]

Will my hon. Friend give way?

[Mr Jackson]

I am happy to give way to my hon. Friend, who has great experience in local government.

[Bob Blackman]

Does my hon. Friend agree that, although the sharing of services and offices is being talked about adequately, what is not being put forward or debated is the question of councils coming together to use their buying power in the market, rather than getting into a reverse auction in which they compete to buy services, and must pay more than they would otherwise have to?

[Mr Jackson]

My hon. Friend makes an astute point. In fairness, one interesting success—my hon. Friend the Minister may not agree—was the Firebuy initiative. It was mixed, admittedly, but the model was that, in the procurement of equipment for the fire service—whether helmets, appliances or other kit—instead of the authorities making 46 pitches and carrying out 46 tests and experiments, there were economies of scale and purchasing power. It never quite worked, but I think it was on the right track. No doubt the Minister will consider my words when he thinks about the future of Firebuy. However, my hon. Friend the Member for Harrow East (Bob Blackman) is right that that side of local government function has not worked as well as it could and should.

Local government makes a massive impact in local economies in terms of people who work for local government and people who contract with local government. In fairness to the present Government, throwing open the contracting process, the tender process and the purchasing process in terms of who makes the decisions and what value judgments they make on what they are buying is being looked at by the Minister of State, Department for Communities and Local Government, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), and by others, including, I think, my right hon. Friend the Minister for the Cabinet Office and Paymaster General, to revolutionise transparency and openness in local government, so that we know why it costs £400 for every 1,000 wheelie bins in Reigate and Banstead but in Windsor it costs only £250. People have every right to know that in this age of transparency. After all, if they know how many toilet rolls that the Member of Parliament for wherever is buying for his office, they should certainly know about and care about how their money is being spent on key services, although God help the concept of the Independent Parliamentary Standards Authority being involved in purchasing in local government.

--- Later in debate ---

[Mr Stewart Jackson]

On that point, Manchester city council, which is by no means the largest bottom-tier authority in the country, has already been mentioned. Its chief executive earns £90,000 more than the Prime Minister. Does that situation not point to the fact that my hon. Friend’s comments are absolutely right?

[Bob Blackman]

I thank my hon. Friend for that intervention. I have not done a study on all these things, but I reckon that virtually every chief executive of every metropolitan authority is probably earning more than the Prime Minister, and that is a serious concern. Is it right? There has to be a measure, because all the chief officers and those below take their lead from the chief executive. That is clearly a concern.

I also ask the Minister to consider seriously the fact that local authorities desperately want certainty over funding. I understand why the settlement this year is difficult, but I have had experience of a three-year funding settlement. Even though it was not too good, one was at least certain about what one would get. Planning for the future is all important, so a long-term settlement that gives local authorities knowledge about the funding they will receive for a multiple of years is something that we absolutely should put in place.

Other hon. Members have mentioned new sources of funding. I am afraid that I do not agree with the hon. Member for Sheffield South East (Mr Betts) on returning the setting of business rates to local authorities. I can imagine nothing worse for business people—they would quake in their shoes—than allowing people at town halls, civic centres and so on to set business rates that potentially could put them out of business in a big way. However, we have to move away from just Government grants, the council tax and the share of business rates as sources of income. We must accept the concept that we need other sources of money, and an attractive way of consulting people on what those sources should be.

We must also examine the Barnett formula, which has been in operation since the 1970s. The Labour Government did not do anything about it, nor did the previous Conservative Government. Lord Barnett, who set it up, has probably forgotten how it was developed. My hon. Friend the Member for Croydon Central (Gavin Barwell) has done a study of local authority funding over several years. It is bizarre how the formula grant has changed inappropriately—this is not a partisan point or a matter for authorities of particular political control. There must be a complete review of all the different indices for the formula so that funding is seen to be fair and understandable. At present, I do not believe that anyone could possibly understand it.