Local Government Financing
Debate between Angela Smith and Hazel Blears
Hazel Blears (Salford and Eccles) (Lab)
I congratulate the hon. Member for Wolverhampton South West (Paul Uppal) on his maiden speech, which he delivered with grace and a sense of humour. I am delighted that he is the first Sikh Conservative Member and wish him the greatest of success. Grace and a sense of humour might well be qualities that will stand him in good stead in the coming months. I also congratulate you on taking up your position, Madam Deputy Speaker. I have no doubt that you will be a great champion of us Back Benchers.
When I came to this debate I thought, “Local government finance? It’s going to be bland, techie, full of references to area-based grant, formula grant, specific grants, ratios and numbers,” but I have been pleasantly surprised, because the debate has been lively and, on occasions, combative. That is quite right, because it shows how much all of us care about our local authorities and how important the services are to the people whom we represent. We must never forget that, behind all the technical jargon that we sometimes hear, we are talking about people who are struggling to bring up their children; people who are often trying to hang on to a job; people who are sometimes caring for their elderly parents, with the tremendous stress that that puts them under; and people who are looking constantly for work in this difficult economic climate.
Under this Tory-Liberal Democrat Government—I refuse to call it a coalition, because it is what it is, a Tory-Liberal Democrat Government—the prospects look extremely worrying. We have already had £6 billion of cuts, but the hon. Member for Birmingham, Yardley (John Hemming) said that that is not a great deal of money and does not know what we are all worried about. Well, I can tell him this: to my local authority it is a great deal of money. It is significant, but I have no doubt that further bad news is on its way, and that tremendous cuts will be made in the autumn. If they are signified by the same unfairness and north-south divide that we have already seen, Opposition Members will have a great deal to worry about. [Interruption.] I am delighted to welcome the Secretary of State, who has just taken up his seat on the Treasury Bench. I trust that he has hurried back from Bradford, and at the end of my speech I shall make a couple of remarks in which he might take a personal interest.
The Deputy Prime Minister once said that he wanted to see deep and savage cuts, and then he rowed back from that tremendously. However, he is about to have his wish fulfilled, and that is a bleak prospect. He also said:
“There will be no return to the kind of cuts we saw in the Thatcherite 1980s”;
“We’re not going to allow a great north-south divide to reappear”;
and, most interestingly of all, that
“the coalition will ensure that the cuts are fair and we will protect the poorest and the most vulnerable.”
He is wrong on all counts. He will face not only the wrath of his enraged constituents in Sheffield, quite rightly given his decision on Sheffield Forgemasters, but the anger of families throughout the country who will feel the brunt of the cuts that are made in local government services.
The Minister for Housing, the right hon. Member for Welwyn Hatfield (Grant Shapps), who opened the debate, claimed that the Government were essentially about fairness, and we heard about them wanting to hard-wire fairness into the country’s DNA. Let us straight away end that myth about fairness. Salford still has high levels of deprivation, but we are going to lose 1.1% of our budget, and Salford is of course Labour controlled. If we look at the different impact of the cuts on neighbouring Trafford, which is Tory controlled, we see just how fair those cuts are.
Compared with Trafford, Salford has double the number of people on housing benefit and council tax benefit; 3,000 more unemployed people; average earnings that are £40 a week less; and almost double the number of children in workless households. So, how is it fair for the coalition to reduce Salford’s budget by 1.1% compared with a cut of just 0.6% in Trafford? How is it fair that Salford loses £3.5 million and Trafford just £1.5 million? That cannot be fair, because we in Salford have made considerable progress since 1997. We have seen a huge fall in unemployment throughout our area, but people are still looking for jobs, and we need to get them back to work. We will not do that, however, by cutting the council’s funding to tackle worklessness. The working neighbourhoods fund—cut. The future jobs fund—cut. That is short-sighted and damaging and will crush the hopes of many young people in our communities.
Angela Smith
Will my right hon. Friend comment on the fact that the working neighbourhoods fund areas account for 71% of the reductions in incapacity benefit claimants since 2004?
Hazel Blears
My hon. Friend has made the extremely important point that despite what some Government Members have said, the working neighbourhoods fund is a long-term programme that is beginning to get results. We are seeing from the evaluation that it works in an intensive, neighbourhood-focused way and is getting people from some of the most difficult cases of intergenerational unemployment back into work. What do we see now? We see a Government who profess to want to reform the welfare system and get people back into work cutting the very programmes that can succeed in our communities.