Clive Betts
Main Page: Clive Betts (Labour - Sheffield South East)
Meg Hillier
My hon. Friend raises an important point. It is a matter of concern when too many free schools do not fill their places and in many cases are not required to pay back to the Government—indeed to the taxpayer—for those empty spaces. Some 46 secondary free schools—a fifth or 21% of the total—are in local authority areas in which no new capacity is needed up to 2020. Free school places are also much more expensive than places provided by local authorities, mainly because of the land purchasing that the EFA is pursuing.
A place in a primary free school opening in 2014-15 cost an average of £14,400—a third more than one created by a local authority through a more planned programme. A place in a secondary free school cost £19,100, 50% more than a local authority place. Taxpayers’ money is being overspent, and it is not delivering results. We have seen a number of failures of free schools, and we have seen free schools undersubscribed. In Suffolk, for instance, more than half the total number of places in three free schools have not been filled. Two schools in Greater Manchester are also having problems. My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) mentioned Collective Spirit, which is set to be broken up because of educational and financial failings.
In Hackney, what has worked is good leadership, good education and committed pupils and parents. The structure of a school is much less important than those things. However, spending this amount of money on a hell-for-leather delivery of 500 schools, a numerical target that must be met by 2020 whatever the cost, is not sensible, and spending money on selective free schools—grammar schools—on top of that beggars belief.
Business rates are a big issue in my inner London constituency. There were more than 10,000 signatures to a petition from small businesses throughout east London that we presented to Downing Street yesterday. Those businesses are concerned about the impact of business rate increases of up to 250%. It is very difficult for someone who is running a bike shop, a coffee shop or a small jewellery company to increase prices to cover such overheads. The reliefs are welcome, but we need to know more about the long-term review and what it will mean for businesses. One year of relief will do no more than stave off problems and save them up for the future.
The problem is that the Government have banked that money in their local government settlement, and councils cannot then reduce business rates themselves. There is no magic pot of money, and they did not see this coming. In our area, we are proud of our diverse high streets with their many small independent businesses. More than 96% of businesses in my constituency employ fewer than six people, and most employ only one or two. Because they are so small, the business rate increases are a real issue for them.
Mr Clive Betts (Sheffield South East) (Lab)
My hon. Friend is right: these measures may be welcome, but they are temporary. The Government have said that they will compensate local authorities for any loss of income resulting from the changes. Will the Public Accounts Committee try to ensure that the compensation does not last for only one year or two years, but is permanently built into the system?
Meg Hillier
My hon. Friend has raised a very important point. In the coming weeks, the Public Accounts Committee will be looking into the proposal for retention of business rates, and how effective and efficient that would be. I will keep my hon. Friend and other Members informed, because this is a cross-party issue that concerns many of us. I welcome the changes, but I worry that they do not go far enough and that there may be hidden costs.
The Chancellor mentioned tax, but I was disappointed that he did not say whether the Government would be considering tax reliefs. The Public Accounts Committee does a fair amount of work on tax, as does the Treasury Committee. There are many tax reliefs out there that cost more than was budgeted for them, some of which lie fallow in the system for too long without challenge. When we have challenged HMRC to publish its list of reliefs, it has been very reluctant to do so. We find that extraordinary, because transparency would enable effective and serious change to take place. It is possible that, quite often, industries, individuals and companies point out that some of the tax reliefs are no longer fit for purpose. I believe that the black beer tax relief, which had been on the statute book for more than 100 years, was dropped only recently. Perhaps that is the pace at which some of these matters are considered, and perhaps we should urge the Government to think a bit faster about whether tax reliefs are delivering what they set out to deliver.
The Chancellor talked a great deal about the security and dignity of people at work. I echo what some of my hon. Friends have said about the impact on the self-employed, of whom there are a large number in my constituency, but I was particularly disappointed that the Chancellor did not refer to people in low-paid, part-time jobs. Many of them want to work more hours, but their employers do not create full-time jobs because of disincentives in the tax system and, in particular, the national insurance system.
Those people, many of whom are doing multiple part-time jobs, are at the difficult end of the scale. They are working hard, and they are paying tax because they are over the threshold, so they do not receive free benefits such as dental care. They are struggling to survive: “just about managing” barely covers it. They find it very hard to reach the next rung of the ladder. I think that it behoves the Treasury to have a close look at that situation, and I intend to take it up with the Minister outside the Chamber.
The national living wage is very welcome in my constituency, but we do need to look at the knock-on effects. It is already causing huge challenges—for example, in delivering social care. I hope the Treasury is working across government to look at how it can ameliorate the impact on the costs of provision in some sectors.
This is not a Budget that is really on the side of ordinary people, because of the impact on the self-employed, the lack of action on the lowest paid, the smoke and mirrors on funding for the NHS and social care, and the facts that there are too many short-term cash injections into the NHS, that it is not looking at the evidence before injecting more money into programmes like the free school programme and that there are no measures to support stability in low-paid jobs. The Budget therefore leaves many questions unanswered. In particular, there is the fact that, as many Members have pointed out, the Chancellor did not really address the elephant in the room: how will Brexit affect our economy and what measures will he take at the Treasury to make sure he provides a buffer?
Mr Clive Betts (Sheffield South East) (Lab)
I want to address two issues, social care and business rates, which are related to inquiries undertaken by the Select Committee on Communities and Local Government.
On social care, the Chancellor mentioned the rising number of elderly people in this country. People are living longer, which is obviously to be welcomed. What he did not say, of course, is that cuts to local council budgets mean that they have reduced spending on social care by 7%, despite prioritising it since 2010. He did not mention the extra costs of the minimum wage or the Care Act 2014, or the fact that councils are now, in the words of the Comptroller and Auditor General, Amyas Morse, moving from doing more for less to doing “less for less”.
When our cross-party Committee looked at the issue, we had a range of forecasts for the gap in next year’s social care funding. Age UK believes that more than 1 million people in this country should be receiving social care but are not. That range of forecasts led the Committee to say that we need £1.5 billion to bridge the gap next year. Although I welcome the fact that the Chancellor recognises that more needs to be done, I am disappointed that the more he has identified is not sufficient to deal with the problem.
I am also disappointed that the Chancellor has not taken up another of our suggestions: that we ask the National Audit Office to undertake a review of the funding gap for the rest of this spending round. I do not believe that the extra £500 million that has been allocated for the next two years is sufficient, given that the Local Government Association says that the total gap in local government funding will be £5 billion by the end of this Parliament. We need the NAO to conduct an independent review.
I am pleased that the Government are prepared to undertake a long-term review of spending for social care, but I am disappointed that the Chancellor has, at the beginning, effectively ruled out one of the options. There are clearly a limited number of ways to raise money to fund social care properly in the long term. The money could be raised from general taxation, from people’s direct contributions to the care they receive, from a new system of discrete taxation through increased national insurance contributions, as happens in Germany, or from an increase in the tax on people’s estates when they die. The Chancellor ruled out the last of those options, even though people might be taxed on their estate, depending on whether they end up in residential care. That is an arbitrary tax. It depends on whether someone ends up in social care because they have dementia, for example, or whether they die of a heart attack without having needed that kind of care at all. The way in which someone’s life ends can determine whether their house and other assets make a contribution to the Treasury.
Karin Smyth
Does my hon. Friend agree that the opportunity has been missed to give us an understanding of what postponing part 2 of the Care Act will mean, and of the Conservative party manifesto commitment that people would not have to sell their house to fund their care, once their spending on care had gone above a certain level?
Mr Betts
Absolutely. That is clearly a major problem with the system, and it needs to be addressed. I think my hon. Friend is referring to the Dilnot recommendation that people should pay no more than £72,000 in total for their care. When the Minister with responsibility for social care came to the Select Committee, he said that Dilnot would be implemented, but I am not sure how that fits in with this long-term review. I hope that the Government can explain that better in their Green Paper.
There has been no commitment to a cross-party look at this issue. The Chair of the Health Committee, the hon. Member for Totnes (Dr Wollaston), and the Chair of the Public Accounts Committee, my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), have requested a cross-party review before the publication of the Green Paper, or at least an element of cross-party scrutiny of its proposals. At some point, we have to look at this issue for the long term, assuming that the Conservatives will not be in office for ever.
I also want to address the issue of business rates. The Government have brought this problem on themselves by extending the period between revaluations from five to seven years. That has made the problem worse, because the difference between what businesses were paying before the revaluation and the new rates is wider as a result of the period being longer. We need a commitment to more frequent revaluations. The Government mentioned that in 2015, but it seems to have fallen off the radar. The Select Committee agreed with the Government at the time, so let us have a commitment to more regular and more frequent revaluations.
Will the Government give an absolute commitment that the extra money that they have brought in to help with the revaluation, which I welcome, will not cost local government a single penny, either next year or thereafter? The Treasury should pay for it all. I also agree with the point made by my hon. Friend the Member for Rochdale (Simon Danczuk) that we need to know how the extra money that will be given to local government for discretionary reliefs is to be allocated between councils. Will it be allocated on a fair and transparent basis? When will we be given that information?
I have said to the Communities and Local Government Secretary that if the Government are looking for a fairer way of conducting valuations for business rates—to ensure that the digital services and online shopping sectors pay more, for example—we in the Select Committee will help with that review. It is also clear that there is something wrong with the proportion of payments being made by shops on the high street and by shops in out-of-town centres, and we need to look at that as well.
In 2010, the Conservative Chancellor at the time said that after five years of austerity he would have balanced the budget. Seven years later, after an awful lot more austerity than most of us could possibly have imagined, another Conservative Chancellor is saying that there will be five more years of austerity, after which he will still not have balanced the budget. That is an awful lot of pain for my constituents for very little gain, and there is no sign at all that austerity will end while this Government are in power.