Andrew Gwynne
Main Page: Andrew Gwynne (Labour (Co-op) - Gorton and Denton)
John Healey
The hon. Gentleman must not have been listening carefully, because that is not the case my hon. Friend was making. His point was that providing special protection for pensioners when £500 million is being cut overnight from the available fund means that those people who are not pensioners but who are currently entitled to council tax benefit or council tax support will inevitably be hit harder. Local authorities and charities are making the same case, as did Barnsley Advice Network to me last week when we discussed the potential challenges and problems that people will be forced to face.
Andrew Gwynne (Denton and Reddish) (Lab)
I apologise for coming late to the debate. I had a meeting elsewhere in the Palace.
My right hon. Friend is making a pertinent point. Is he aware of the work done by the House of Commons Scrutiny Unit, which has estimated the impact of a 10% cut to council tax benefit, with protection for the over-65s, using DWP figures? It calculates that non-pensioners will face an average cut of 16% in their council tax support.
John Healey
The Minister has just told the House and me that, to run the new scheme from April next year, Rotherham will have available no less funding than it has during this financial year. I will look very carefully at the facts, and, if they match the Minister’s words, I will welcome them; if they do not, I shall demand that he puts the House straight and offers an apology.
On work incentives, will not the Secretary of State therefore use his powers under schedule 4 to specify that people in work must, and work incentives will, be protected as he proposes, and has pledged, to use them for pensioners? If that is the case, the Minister’s actions will match his words. If that is not the case, exhortations on the importance of local government schemes reflecting needs and not damaging work incentives will not be worth the paper of the circular on which they are sent out, because there will be no protections guaranteeing the preservation of work incentives until and unless the Secretary of State chooses to use his powers as he has pledged to use them for pensioners.
Until that point, it is reasonable for Opposition Members, who are concerned about the future of this support for council tax payments, to continue to press the Minister and to be concerned that non-pensioners are likely to bear a heavy cut in their current support. Those on low incomes who are not pensioners, but who would get the full council tax benefit under the current system, will, as the Barnsley advice network has told me, have to find 20% of their council tax bill from their basic income, whatever they earn, as councils try to make less go further.
The Minister is old enough, experienced enough and has been involved in local government long enough for this measure to sound a warning to him and his colleagues. This is the return of the poll tax—[Interruption.] There are a few groans from Tory Members, but let us remember that a 20% minimum payment expected of all people, whatever their means, was part of the flaw in, and at the heart of the unfairness of, the community charge a couple of decades ago. In practice, that is what we are building in for non-pensioners: a requirement to cover for themselves, whatever their income, about 20% of the council tax costs in their local area.
Given the way in which the measure will work for many, it is a return of the poll tax: rushed into law and rushed into practice, with a deaf ear to local government, to charities, to experts and to Members, who warn the Government, “You’re pushing too far, too fast with these changes.” I will return in a moment to the amendments on the legislation’s commencement tabled by my right hon. Friend the Member for Greenwich and Woolwich, but first let me do my job and introduce new clause 2 and the amendments that stand in my name.
With new clause 2 and amendment 2, I seek to challenge the Secretary of State’s powers over, and prescription of, the new council tax support schemes. My purpose is this: I believe that the House and local government require a justification for the inclusion in this Bill of such powers of prescription from the centre over the local, otherwise their removal from the Bill is justified. None of the arguments that I have heard from Ministers, on Second Reading, in Committee or today, justifies the extent of the centralised powers vested in the Secretary of State to design and to enforce a particular manner of council tax support scheme.
The Government claim that the reform is a localising one. If it is, they should localise the decisions on the design of, and procedure for preparing, the scheme. They should localise the decisions and let the local authorities that will run the scheme devise them, in the Minister’s words, to suit local circumstances.
Andrew Gwynne
My right hon. Friend is absolutely right that any system has to be flexible enough to ensure that, if there are changes in demand locally, the system can catch up with the increase, but is not the concern that the Government’s proposals are completely inflexible, and that any increase in demand will impact on local services?
John Healey
My hon. Friend is absolutely right. Any increase in need, demand and, as a consequence, cost will all have to be borne by the local authority—borne by switching funding from other budgets that perhaps support important local services, or borne by cutting back within the council tax support scheme the support that is paid to those who remain eligible.
However, I want to exemplify the challenge that the Minister faces to justify the powers that the Secretary of State is taking in the Bill in order to prescribe from the centre. In paragraph 3(4) of schedule 4, the Secretary of State may make regulations on the procedure for preparing the scheme, including in paragraph 3(5) regulations to
“require the authority to produce documents of a particular description”;
regulations to
“include requirements as to the form and content of documents produced in connection with the preparation of the scheme”;
regulations on the
“requirements…about the manner in which such documents must be published”;
regulations to
“require the authority to make copies of such documents available”
in certain ways, and “to supply” copies of such documents to certain people; and even regulations to prescribe the charges that local councils should make for those documents.
In all honesty, that is the sort of prescription we expect to find in a memorandum from a publications manager to a graphic designer and a press officer, not from central Government to elected local government officials throughout England. If the Minister and the Secretary of State are to have any credibility on the claim that this is a localising move and a localising measure, they should back off and guarantee what they say. If the schemes should be under local control, as the Minister and Secretary of State claim, the Government should give local authorities the powers to control them, not take those powers and exercise them from the centre.
Amendment 1, which is also in my name, is in the same vein although more moderate, because it seeks simply to require the Secretary of State to consult before making any changes to the requirements that he chooses to impose nationally on local schemes. As the Bill stands, there is not even any obligation to consult local government on the requirements that central Government impose.
Paragraphs (8) and (9) of schedule 4 make it clear that the Secretary of State may make regulations to require any matter to be included in the design of a local scheme; may prescribe any class of person to be included in the scheme; may prescribe the reductions that cover any class in any area; and, to reinforce my earlier point, may prescribe the way in which the provisions are made. That completely undermines not only the constant mantra of Ministers across the range of their departmental responsibilities but the specific pledge that they made in their response to the consultation, where, on page 2, they said that this is
“a policy of decentralisation that will give local authorities increased financial freedoms”.
Helen Jones
I could not agree with my right hon. Friend more. The Government simply have no idea of the pressures on people on very low incomes.
The Prime Minister said that carers were the
“unsung heroes of our society”.
He went on to say:
“We should all support, recognize and celebrate the incredible work that carers do”.
That was in 2010, and times have changed. Now he wants not to support them, but to increase their council tax—another broken promise.
The Government also do not want us to talk about those who are receiving council tax benefit and are in work. The Minister for Housing and Local Government, who is not here this evening, likes to pretend that those people do not exist. He told the Communities and Local Government Committee that
“if somebody is in work they will not be receiving the benefit because they will not need to.”
That is another example of why he is tipped for promotion: it shows his incisive grasp of complex issues. Only someone as wilfully blind as him could come out with that, and only someone with no experience of what it is like to live on a low wage.
Andrew Gwynne
My hon. Friend is coming to the crunch. A substantial number of people in receipt of council tax benefit are in work. It is an in-work benefit, not just an out-of-work benefit as some Government Members would like to portray it. Given that the Government’s statement of intent states:
“Local schemes should support work incentives, and in particular avoid disincentives to move into work”,
can my hon. Friend fathom the thought processes of those who are bringing in this scheme, which will clobber the working poor?
Helen Jones
My hon. Friend is correct and I will come on to some examples of what he says in a moment.
I received a parliamentary answer from the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), which said that in 2010-11, the last year for which we have the figures, 743,660 non-passported council tax benefit recipients were in work. There were 2,860 such people in Stockport, which is the area that the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell) represents. That is more than 743,000 people who the Minister for Housing and Local Government does not think exist. They do not go to Tory fundraisers, I suppose, or attend the black and white ball. All the time, his implication has been that council tax benefit goes only to those not in work. The further implication, of course, is that they are deliberately not in work, which is what underlies most of what he says. Coming from a Government who preside over unemployment of 2.6 million, that is breathtaking arrogance.
Helen Jones
My hon. Friend is right. The same group of people is being hit again and again. Whatever the Government tell us, we are not all in it together.
Andrew Gwynne
My hon. Friend mentioned in passing the borough of Stockport. I will leave the Minister to speak for the people of Hazel Grove, but I assure her that I am acutely aware that a substantial number of my constituents in the Reddish part of Stockport are in work and qualify for council tax benefit.
Helen Jones
My hon. Friend is quite right. We can go through every local authority in England and find a number of such people.
It is not just people in work and on low wages who will be affected but disabled people deemed unable to seek work, carers, and part-time workers who do not even show up in the figures. An increasing number of people are being forced to seek part-time employment, and they will pay the price of the Government’s cuts.
As my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) said, there is a form of “doublethink”. The Minister for Housing and Local Government told the Select Committee that people could be protected by
“getting economic activity going so there are jobs.”
The Government are prone to lecturing everybody on getting economic activity going. They lecture councils and the European Union, but the one set of people they do not seem to lecture is themselves. They have no plan for growth at all.
Many people in receipt of council tax benefit are in work or not expected to seek work because of their circumstances. For them, the cut will depend not on their individual circumstances but on where they live and, crucially, how many pensioners there are in their local authority area. That varies hugely from one area to another. Claimants of non-working age make up 34% of the total in East Dorset. In Tower Hamlets, the figure is 68%.
The benefit cut that people receive could vary between 13% and 25%. The worst thing about it is that it is entirely arbitrary, with no pretence of fairness whatever. In fact, in their recently published statements the Government have explicitly rejected the idea of taking into account the number of pensioners in a local authority area when setting the funding level. Many Government Members will have cause to regret that in future years.
As some of the Opposition amendments point out, the new system will hit not only those in work or unable to work but those seeking work. The Government have been in such a rush to bring it in that they have failed to align it with universal credit, to which the Minister referred earlier. If they are so keen to have universal credit, they should have waited to align council tax benefit with it. Their own consultation document acknowledged the problem, stating:
“There is a risk, however, that some of the advantages from the single Universal Credit taper…could be lost if there is a separate and overlapping withdrawal of council tax support through localised schemes. This would produce a marginal deduction rate higher than 76%”.
If millionaires were having to put up with that, the Government would be rushing in to rescue them. What sort of Government include those warnings in the consultation and then ignore them? They are either incompetent or vicious—one or the other. [Interruption.] Both, somebody says, and I am beginning to think so.
As we have seen with business rates, the areas in greatest need will be hit hardest. Let us take the impact on people in work as an example. In Liverpool, there are 6,570 people in work and receiving council tax benefit. In Durham, there are 5,810, in Birmingham a whopping 16,780 and in Hackney 7,910. Just down the road in the City of London, there are precisely 40. In Purbeck there are 580, in Runnymede there are 610 and in Wokingham—I could not pass up another chance to mention Wokingham —there are 780.
This change is a triple whammy for the poorest areas. First, it will mean that local authorities with more people in work and receiving council tax benefit face a much bigger risk of default in their council tax collection. Secondly, it will make it much harder for them to mitigate the effect of the cut on people of working age. Thirdly, there will be a bigger impact on their local economy, because money will be taken from people who would otherwise go out and spend it. It will come as no surprise to my right hon. and hon. Friends to hear that the New Policy Institute estimates that five of the 10 hardest-hit local authorities will be among the top 10 most deprived in the country—Hackney, Newham, Liverpool, Islington and Knowsley.
In the Liverpool city region, it is estimated that the Government’s proposals will result in cuts of 17.23% for those who are not pensioners. In Halton, a single person will have to find at least £179 more each year. In Sefton, which has a higher than average number of pensioners, a couple in a band A property will have to find an extra £226 a year. That is probably small change to Government Members, but to people who struggle to keep their heads above water—those who have to count every penny to get to the end of the week without getting into debt, and without being driven into the arms of the loan sharks who are on many of our estates and ready to batten on vulnerable people—it is the difference between surviving and not surviving.
I sometimes wonder what Ministers know of that world. Have they ever stood in a supermarket watching people put things back because they cannot afford to pay for everything in the basket? Do they understand the struggle that some families have if a child needs a new pair of shoes? They know nothing of it, and they have no wish to understand it.
Andrew Gwynne
It is not yet clear how local authorities’ needs will be assessed for the purpose of determining the proportion of the business rate that they will retain. We need to see the bigger picture, not least because services and needs vary widely, as does the ability to generate income locally.
John Healey
My hon. Friend, who has experience of local government, has put his finger on the button. What worries me is that the Bill gives the Secretary of State power to set the central and local shares—in other words, to determine the division of the business rates take—in each and every year, indefinitely. I am not talking just about what will happen next year and the year after that, or about what will happen until the end of the current spending review period. From year to year, local government simply will not know where it stands until the Secretary of State makes the decision. The central and local shares could vary, and central Government could decide to take a greater share.
The Government’s top-slicing of at least 50% of the business rates revenue and 50% of the business rates growth above the baseline will reduce the incentives for local authorities to support growth, which were meant to be part of the design of the system. It will also reduce the certainty that would enable authorities to plan their finances on more than a year-by-year basis, and reduce the Government’s own ability to claim that this is a localising reform. I am sure that we will hear from the Minister—and I have heard this before—that the Government have declared their intention of returning the revenues in the central share to local government; but, as has been pointed out by my hon. Friend the Member for Denton and Reddish (Andrew Gwynne), we have been given no details, and we do not know what purposes or constraints that may entail.
John Healey
My hon. Friend may well be right, and his Select Committee will doubtless keep a close eye on the matter. I hope that the Minister will give us some answers tonight, but I am sure that, if he does not, Ministers in the other place will be pressed on the point.
The other gaping hole in the Bill is the absence of any specific measure that would tell us when and how the Government would deal with the reset in the future. The two options that they presented in their statement of intent last week could lead to fundamentally different outcomes. There could be a full reset, whereby all the business rate growth up to the point of the reset was redistributed—meaning, in effect, that the baseline of the whole system would be reset by means of the new, and total, business rates pot—or there could be a partial reset, meaning that business growth would be retained at local level, and just the initial baseline would be reset. That represents a very wide range of possibilities for local authorities. If the Minister wants authorities to be able to plan for the future on the basis of the new system, he must provide them with some of the answers to such questions, sooner rather than later.
Andrew Gwynne
Getting the reset procedure right is important not least because the initial baseline is so unfair. It locks in unfair local government settlements and in-year cuts. It is crucially important for local government to be certain that the reset procedure will work in the future, because otherwise the gaps will continue to widen.
John Healey
Indeed. I have my misgivings about whether any approach to the reset procedure can make the system fair after more than a few years. Indeed, I am still to be convinced that the system can be reset in a fair and proper way. But, Mr Deputy Speaker, I digress beyond the scope of the amendments that I tabled.
Let me now turn to amendment 63. During earlier debates on the Bill in the Chamber, I argued that this was an unsuitable system for long-term Government funding. Ultimately, business rates yield is too volatile, and it is too volatile on a year-by-year basis. Let me give three examples, a couple of which will be close to home for those on both Front Benches.
In Warrington the business rates yield has dropped by £10 million over the last 10 years, from £53 million to just £43 million. In Sunderland there was a £17 million drop between 2010 and 2011, and in the year before that there had been a £12 million rise. I can tell the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill), that in the middle of 2005-06, the business rates income in his borough of Bromley halved. In two of the last four years, the changes—up and down, and up and down again—have amounted to more than 10%. The funding stream is inherently volatile, and, in my view, is inherently unsuitable as a basis for the funding of essential local government services.
The main purpose of amendment 63, however, is to draw attention to concern about the volatility caused by appeals. I believe that areas in which there is a particular concentration of a single or consistent business type are particularly vulnerable to a big impact from them. The hon. Member for Cities of London and Westminster (Mark Field), who has just left the Chamber, may recall that in 2007-08 a full 20% of the business rates yield of the City of London was lost as a result of successful backdated appeals. So the appeals add another important, volatile element to the system of business rates.
Those appeals are made against decisions by the Valuation Office Agency, not local authorities. The system is managed by the VOA and tribunals, not the local authority, and it brings benefits to the companies that are successful, not the local authorities. We must ensure that the impacts of appeals do not affect the funding base of the local authorities; we must not expose authorities to vagaries in the system and to the impact of appeals, when they cannot predict them, control the risk of them or benefit from them. Actually, neither can they benefit from business rate increases through revaluation, at least while the Government put in place transition relief.
I tabled amendment 63 because the Government are creating a one-way bet, in which the Chancellor wins each way and the councils lose each time. If the appeals are won by the company, the local authority has to manage the volatility and has to bear the loss up to the level of the safety net threshold—which, according to the statement of intent in the Government’s publications of Thursday last week, is likely to be somewhere between 7.5% and 10%. Amendment 63 is an attempt to make sure that once the calculations and the thresholds are determined, safety net payments take full account of rating appeals. Linked to that, I hope the Government will accept the case for fully compensating local authorities from the levy pot for the impact of any successful business appeals—over which they have no control, and which they cannot predict.
New clause 11 is relatively modest, and I hope the Minister will accept it in principle, if not in practice at this stage. The power for setting and changing business rates policy—business rate reliefs, which are mandatory, as well as the payment schedules for business rates and the transition periods for business rate increases—will continue to rest with the Secretary of State and the national Government. Currently, any national business rate policy changes have no direct impact on local authority finances or local authority budgets. In future they will, however. They will not be local government decisions, but they will create consequences that local government will have to deal with. If the Government decide to change the rate or the type of mandatory rate reliefs, or to allow the deferral of part of the change in business rate bills, that will have a direct impact on that year’s yield in the area concerned, and therefore on the local authority’s funding. Local authorities will be hit by the consequences of decisions that they did not make and that they cannot control. That is unfair and unreasonable.
It may surprise some Members to learn that the Federation of Small Businesses has also made that argument. It said in response to the consultation of October 2011 that
“the FSB is concerned that the incentive system could actually deter local authorities from promoting and utilising the reliefs available to small businesses such as small business rate relief, rural rate relief and hardship relief…It would mean that a local authority would lose out on income if it increased the proportion of businesses that received rate relief or would make money if the number of businesses able to get reliefs fell.”
I am sure the Minister does not want to design into the new system perverse incentives that will hit small firms in that way.
As currently proposed, the new system will be bad for local authorities, and could be bad for local small and medium-sized firms. My new clause requires that, at the very least, the Secretary of State must consult the parties that would be affected by changes in national business rates policy before making such decisions. Under the new system, the stakes for councils will be higher, so the guarantee to consult them before any changes are made is the minimum that Ministers should promise.
Helen Jones
Once again, I am very pleased to follow an interesting, passionate and well-informed speech from my right hon. Friend the Member for Wentworth and Dearne (John Healey). I can add little to the case he made for his amendments, so, given the time constraints, I shall focus on new clause 6, which stands in my name and that of other right hon. and hon. Friends.
We make no apologies for returning to the issue of need and the different levels of need within local authorities —the elephant in the room that the Government want to ignore. This issue has been raised time and again in our debates on the Bill by hon. Friends, many of whom represent some of the most deprived communities in this country and have seen at first hand the impact of the Government’s policies on those communities.
Why are the Government so wilfully blind to the effects of their policies? They have already hit local authorities with cuts that are larger than those inflicted on any Government Department, and we have heard from Opposition Members about the real and serious impact the cuts are having on front-line services—the cuts in school food provision, increases in home care charges, library closures in the poorest communities. However, none of this has any influence on Ministers, so out of touch are they with most people’s lives, and it now appears that they are going to make things worse.
First, they entrench unfairness in the system by basing it on the current local government finance settlement, so the inequalities and unfairness of the current scheme will form the basis of the settlement for years to come. We have heard many times during our debates on this Bill about cities that are losing spending power: Manchester is losing spending power of £186 per person, Birmingham £155 and Nottingham £147. Those are the cities that the Government think will drive the economic recovery; there is no linked-up policy here. Wokingham, of course, gains, however. Basingstoke and Deane gains £6.30 per person. East Dorset gains £3 per person.
According to the Government’s statement of intent—it is one of many, so I am unsure how much weight we can place on any of their statements of intent—each authority will keep 50% of its business rates and the Government will provide a revenue support grant to make up the difference between the local share of business rates at the outset of the scheme and the spending controls for local government. However, they will, it seems, have top-sliced that for the new homes bonus first, which already benefits most those authorities with a high tax base, and it appears that many other grants will also be included, as listed in the statement of intent.
We already know how the grant system has been used to penalise the poorest authorities with communities that are most in need, and there has been a significant reduction in resource equalisation. Under this scheme, the gap between richer and poorer authorities will widen. First, as the Yorkshire and Humberside councils have said,
“a baseline may not reflect the actual levels of funding councils need to deliver services from April 2013.”
They were right about that. Secondly, as we have discussed during the passage of this Bill, some authorities will find it easier to grow their business rates than others. It has been estimated that even if the top-ups and tariffs increased in line with the retail prices index, the gap between the richest and the poorest authorities, and between the north and the south, will widen. Cash growth in the City of London could be 139% over four years and the figure for Westminster could be 90%, whereas the estimate for Liverpool and Knowsley is 21.9% and that for South Tyneside is 22.7%.
When we add into that this Government’s abject failure to take into account the differing tax bases of local authorities, the situation becomes even worse. That failure means that local authorities do not start on the level playing field that the Deputy Prime Minister kept telling us about—although he was the man who said he was not going to raise tuition fees, so I am not sure that anyone takes much notice of him. In the long term, fortunate local councils might reduce or even get rid of council tax, whereas others whose tax base is low and where it is harder to attract investment will be unable to do so. When we also take into account the amount that some councils will lose through changes in council tax benefit, it is clear that they could be heading for the perfect storm.
Andrew Gwynne
May I use the example of my constituency to illustrate precisely the issue that my hon. Friend is raising? My constituency covers two metropolitan boroughs that lie side by side; Tameside predominantly contains band A and band B properties, so its ability to increase its income from council tax is less than that of neighbouring Stockport, which contains a much larger amount of properties in a wider range of bands. Is that not the fundamental unfairness of all this?
Helen Jones
It is the fundamental thing that the Government fail to understand: councils are not starting from the same baseline. Those who pay the price for these inequalities, which will increase, are those most in need. Need is the thing that the Government do not want to talk about. That is why our new clause 6 seeks to require the Government to take into account both the likely capacity of an authority to benefit from business rate growth and the authority’s level of need.
When the Secretary of State issued all these statements of intent last week, he sought to dismiss the whole concept of need. He talked of grants as a
“system of Government handouts to local authorities”.
He said that this
“encourages a begging bowl mentality, with each council vying to be more deprived than its neighbour.”—[Official Report, 17 May 2012; Vol. 545, c. 39WS.]
I have never heard such an appalling slur on local councils or such an arrogant dismissal of the needs of many of the poorest people in this country, and he should apologise for that. Is he really suggesting that councils are pretending to represent areas that are poorer than they actually are, simply to get Government grants? That is nonsense. So why is it that under this Government the needs of people who are out of work, of people who have long-term illnesses and of people in poverty can be treated as if they do not exist? These people do not have loud voices, because most of them are just trying to get by from week to week. They do not share mulled wine and mince pies with the Prime Minister or get invited to dinner at Dorneywood. By contrast, those who pay 50% tax—millionaires, who are apparently squeezed beyond endurance—must be relieved of their burdens. [Interruption.] The Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill) says that that is a cliché. It is not a cliché; it points out the moral laxity of this Government, who cannot see that treating poor people unfairly while giving handouts to rich people is exactly what most of the country finds wrong.
Andrew Gwynne
My hon. Friend is making precisely the point that needs to be made in these debates, which is that the demands on local services vary widely and that it is often the poorest communities that have the greatest demands. I am very pleased that her proposal recognises children in care, because they are a big issue for local authorities in need. That argument needs to be made in this debate.
Helen Jones
My hon. Friend is right about that, and I shall discuss the number of people in care later. It is important that we recognise that many of the things we are discussing are statutory services, which the local authority has to provide.
Let us examine some of the differences between areas. In Knowsley, whose case was put forcefully in Committee by my right hon. Friend the Member for Knowsley (Mr Howarth), 58,000 people—more than one third—live in areas that are among the top five most deprived in the country. In the north-east, 32.7% of people live in the most deprived 20% of areas. Those are the areas that will struggle as the gap between needs and resources widens. Such authorities are often the same ones that are having to cope with the biggest increases in unemployment. That both reduces the finance available to local councils, because more people are claiming benefit, and increases the demand for their services.
The Secretary of State seems to think that authorities are competing to be the most deprived, so let me ask him something—I would if he were here, but he seems to take these debates so lightly that he has not even bothered to turn up for most of this one. So let me ask this Minister: is unemployment in Birmingham, Ladywood higher or lower than in Henley? In Birmingham, Ladywood, it stands at 11.2%, whereas in Henley it is 1.1%.
Does Middlesbrough have a higher or lower unemployment rate than North East Hampshire? Middlesbrough’s rate is 9.7%, whereas that for North East Hampshire is 1.1%. Is the figure for Liverpool, Walton higher or lower than that for Wokingham? The figure for Liverpool, Walton is 8.5%, whereas that for Wokingham is 1.3%. Does he think that councils are making this up and deliberately causing unemployment to get Government grants? Not even he could get up to argue that. It is not local councils that have caused this recession, yet still we hear from Government Members that councils are “reluctant” to promote economic growth. Coming from this Government that is a bit like King Herod accusing someone of child cruelty. Local authorities are still having to cope with the long-term legacy of heavy industry, followed by de-industrialisation.
Andrew Gwynne
The question of developing local economies also does not take into account the relationship between city regions. Often the drivers for economic growth might be outside a borough’s boundaries, or in a neighbouring local authority to which people will travel for work.
Helen Jones
My hon. Friend is quite right and that is true in many conurbations, such as Manchester and London, for example.
Let us also consider the need for children’s services. Levels of child poverty, and thus the demand for services, vary hugely between authorities. In Hartlepool, 29% of children are in poverty. In Newcastle, the figure is 27%, as it is in Liverpool. That is 91,000 children. I could not resist looking at that often mentioned authority, Wokingham, where the level of child poverty is 7%. Which area has the most need for services, yet which is benefiting most and is likely to benefit more from this Government’s plans?
Such high levels of child poverty mean a higher demand for children’s services. In Liverpool, for example, 77% of the children in poverty are in single-parent families, meaning there is an even greater need for child care and support for families to help parents go to work, as well as for other support. Children in those areas need better service, not worse, and they need more help. There is no point in the Deputy Prime Minister’s banging on about the need to address inequalities in education unless the Government recognise that to make a real difference those inequalities must be tackled before children get to school.
So, we have places such as Middlesbrough—the hon. Member for St Austell and Newquay (Stephen Gilbert) is shaking his head, but anyone in education knows that to make a real difference to educational attainment we need to tackle the inequalities before the children reach the age of five. By the time they get to school, those inequalities are entrenched and, if he does not think that that is true, I suggest he asks some teachers.
Middlesbrough is the ninth most deprived local authority in England and has seven times as many children receiving free school meals as Wokingham does. It clearly needs greater investment in children’s services. Poverty also drives the number of children being taken into care. We spoke earlier in the passage of the Bill about the huge increase in the number of referrals and children taken into care following the case of baby Peter, but the differences between authorities are stark. There was a 10% increase nationally in safeguarding referrals in the period around 2009-10, but in Liverpool the increase was 60%. Those are the differences that we are dealing with. The same applies to the numbers of looked-after children—children for whom the authority has a legal obligation to be the corporate parent and to provide. It cannot cut those services, it cannot trim them and it cannot decide how great the demand is.
Andrew Gwynne
I ought to declare an interest, as my wife, Councillor Allison Gwynne, is the cabinet member for children’s services in Tameside council. My hon. Friend’s point about children’s services and the cost of those services is absolutely correct, not least because children’s services, particularly for looked-after children, is such a resource-intensive service and cannot easily be cut, nor should it be. It is those councils that often have the least ability to raise business rates that are likely to be penalised the most.
Helen Jones
I could not have put it better than did my hon. Friend. These services are demand-led; they are not within the control of the local authority, and they are, as he said, very expensive to provide, as they must be. We are dealing with some extremely damaged and vulnerable children in local authority care. Surrey has 32 looked-after children per 10,000 of population, and Wokingham has 22, compared with 104 per 10,000 in Middlesbrough and 100 per 10,000 in Newcastle. That is a stark example of the differing levels of need in local authorities, and the idea that those services should be left to the vagaries of the market is breathtaking.
My right hon. Friend the Member for Wentworth and Dearne, who is no longer in his place, gave some good examples of how business rates can vary from year to year. It is entirely unpredictable, yet this Government still refuse to recognise those different levels of need within local authorities.