Budget Resolutions and Economic Situation

Debate between Christian Matheson and Jon Trickett

Monday 21st March 2016 Commons Chamber

[Jon Trickett]

I shall make some progress now.

The same people who rely on the personal independence payments, which the Government so recently wanted to cut, rely on home helps and community services, yet nowhere is the pressure greater than the growing crisis being experienced by social care. The Tory-controlled Local Government Association estimates that despite the Government’s measures there is a big funding gap in social care—£700 million this year. Many of the frail elderly in our society are no longer being looked after properly. Lord Porter, the Tory leader of the LGA, put it starkly. He said that

“vulnerable members of the community still face an uncertain future where the dignified care and support they deserve, such as help getting dressed, fed or getting out and about, remains at risk.”

Yes, a Tory leader said that vulnerable elderly people will be denied help to be fed.

A few years ago my own family faced a crisis that so many of us have to confront at some time in our lives. Let me quickly describe what happened. I went to visit my dad in the fabulous St James’s hospital in Leeds, whose staff continue to amaze with their skills and dedication. But the nurse told me that my dad was coming to the end of his life and that he had to be discharged because there was little further the hospital could do. Clearly, he could not go home. By good fortune, I was able immediately to convert a downstairs room in our house into a bedroom and shower room and within days he came to live with me. He died in that room a few months later, but we spent a wonderful time together. The sun seemed to shine into our house every day that he was there. We were blessed to have the space available, and a loving family as well as loving neighbours who helped.

However, we could not have coped without the frequent house visits by the council’s care teams, who came every day, several times a day. Last year I held a fund-raising event at my house. One of our guests that day was a woman I recognised. She had been a carer who had helped me with my dad. She told me that she would always remember her visits to our house, but I felt a chill down my spine when she told me that because of the Government cuts, council carers could no longer provide the level of care to others that my family had received. “Honour thy father and thy mother” is an injunction that a civilised society should never forget.

Local government is facing £10 billion of additional future cost pressures. There are three main threats to council finances in this Budget. First, the Chancellor demands £3.5 billion of spending cuts, as we heard, to help to fill the black hole in the Government’s accounts. On top of that, there is the £4 billion that we heard about today.

The House knows that there are very few unprotected services left. Local government is one of them and is therefore a prime target. It is home helps, children’s centres, libraries, leisure centres, firefighters and youth clubs that are at risk.

Secondly, there is the overhaul of the business rates system. We welcome the extra help being given to small business in rate relief. That was in our manifesto; we campaigned for it, and it will cost about £7 billion. The Government have said they will compensate local government for this loss. The Secretary of State quotes page 84, line 15 in the Red Book, but he is wrong. That does not indicate where a single penny is coming from. Where is that £7 billion coming from? The Tory-chaired LGA has said that this will mean that once the 100% rate retention has been brought in, the resources to be retained will be less than previously projected as a consequence. By contrast, we would have financed these cuts to small business rates because we would have maintained, not cut, the level of corporation tax.

The third threat that the Budget outlines is the decision to ring-fence business rates in London, ahead of the rest of the country. But Westminster alone takes more business rates than Manchester, Liverpool, Sheffield, Birmingham and Bristol combined—£1.8 billion. If prosperous Westminster keeps this £1.8 billion, there will be a significantly smaller pot of money to be redistributed to less affluent areas. Tucked away in the Office for Budget Responsibility’s report are the implications of all this for the hard-pressed council tax payer—something on which the Secretary of State was silent.

The OBR estimates that 95% of councils will increase council tax by the maximum allowed, and they are being encouraged to do so by the Government. This means that for the first time ever, the average council tax bill payer will be paying £1,500 a year. Over the next five years local residents face a 14% increase above inflation in council tax. In return they will get a worse service. So much for the Tories being the party of low taxation: capital gains tax cuts for the well-off and council tax increases for ordinary families. It is an unacceptable set of priorities.

[Christian Matheson (City of Chester) (Lab)]

Is my hon. Friend aware that the Chancellor’s decision to remove retail rate relief for small shops will mean that more than 400 shops in Chester will be paying about £1,300 a year extra? Is that consistent with the argument that he has just made?

[Jon Trickett]

Of course. The Tories are not interested in looking after ordinary people and small businesses. They are interested in directing money at the privileged few.

Let me turn briefly to the subject of devolution, which the Secretary of State mentioned. In his Budget statement the Chancellor announced a number of devolution deals, about which concern has been expressed in all parts of the House. The Minister cannot say we did not warn him that there would be trouble on that from the Labour Benches. The whole process is far too top-down. The insistence on a single mayoral model has caused much resentment, especially in cities where the idea was recently voted down by local people in referendums.

It is not councils’ fault that there are these tensions—our councillors are under enormous pressure to get whatever they can for local residents. The fault lies entirely with the process imposed, not by the Secretary of State, but by the Chancellor, who is stubbornly refusing to allow ordinary citizens to have a say in how their areas should be governed.