Budget Resolutions

Clive Betts Excerpts

Monday 1st November 2021 Commons Chamber

[Michael Gove]

I have huge respect and affection for the right hon. Member, but I remember when we sat in Cabinet together and he was Secretary of State for Energy and Climate Change. I remember when he spoke to the Liberal Democrat conference, when such a thing occurred —when there were enough Liberal Democrats to get together to fill a conference hall. I remember him telling that Liberal Democrat conference hall that it was time—please forgive my language, ladies and gentlemen—to get fracking. Now that he is no longer in government and is in opposition, he seems, curiously enough, to have reversed his position, an unprecedented thing for a Liberal Democrat to do.[Laughter.] Saying one thing to one constituency and another thing to another? Remarkable!

I should say that my own views on fracking in Surrey—and indeed elsewhere—are on the record, and the right hon. Member can be reassured that my opposition to fracking in Surrey, particularly in a case that came up in my constituency, is on the record; but because my views are on the record of the past, I should say no more about the future.

[Mr Clive Betts (Sheffield South East) (Lab)]

May I return the Secretary of State to the 3% increase in spending power for local councils? Has he seen the analysis by the Institute for Fiscal Studies? It states that the 3% includes the £5.4 billion that the Government have used from the levy, but as the way in which councils must spend it is specified, it amounts to only a 1.8% increase in money that they can choose, and the 1.8% is there only if they put their council tax up by 3% a year.

[Michael Gove]

The hon. Gentleman makes an important point. Additional funding is, quite rightly, being devoted to improving adult social care, and it is also the case that the overall rise in core spending power for local government is at 3%. If we look back, we see that that is a significant increase, and it is also part of the broader increase of 4.7% overall in the spending that we are providing. Local government is not just being given more money for discretionary spending and for adult social care; we are also seeing additional spending from the Department for Education on special educational needs, we are seeing additional spending for transport, particularly in our city regions, and we are seeing the levelling-up fund as well. It is important to look in the round at the amount of money available to local government and spent in local areas.

[Mr Betts]

The IFS is right, is it not?

[Michael Gove]

The IFS is often—but not always—right.

--- Later in debate ---

[Mr Clive Betts (Sheffield South East) (Lab)]

First, I associate myself with the comments of the hon. Member for Harrow East (Bob Blackman) about the need for more money for social housing and cladding and the importance of dealing with the issues of rough sleeping. We have dealt cross-party with those matters on the Housing, Communities and Local Government Committee.

Generally, I am supportive of the whole idea of levelling up, but I must say to the Secretary of State that I could be a lot more enthusiastic if I knew what it meant, how it would be achieved and how success would be measured. The recent report by the Business, Energy and Industrial Strategy Committee said that, for all the current documents, levelling up was

“a wide ranging and disjointed programme of random policies…it is difficult to see how they all tie together under one over-arching strategy.”

I think that is a fair comment on what exists now.

Presumably, it is the job of the Secretary of State, with his new responsibilities, to produce that overarching strategy and to tie together all these disparate funding streams. I presume we will see all that in the White Paper, which is hopefully coming shortly, and no doubt we can explore that further with him when he comes to the HCLG Committee next week.

However, as well as having an overarching national strategy, councils need the ability to plan and have a local strategy. That means doing away with all the disparate pots of money they have to bid for. The Local Government Association last calculated that there are 117 different pots of money that councils have to bid for. I am not making a party political point here; if we go to Conservative leaders of councils, they will be just as strident in their criticisms as Labour council leaders on this. Will the Secretary of State please look at that as a major issue?

[Michael Gove]

indicated assent.

[Mr Betts]

I see the Secretary of State nodding, so hopefully we might be able to get some change there.

The Secretary of State is right to emphasise the importance of transport. Yes, the South Yorkshire region got £600 million, but its bid to the levelling up fund for transport expenditure got turned down completely. When councils look at their local plans, there is a levelling up fund, a bus service improvement plan, a city region sustainable transport settlement plan and a zero emission bus regional areas fund to bid for. That is four different pots of money that councils must bid for to fund local transport services and that they must try to tie together, in the hope they may get some of them. That is really no way to enable our city region Mayors to plan the transport for their areas—no way at all.

That, of course, is against the background that in the Sheffield city region, expenditure on buses is £5 per head of population. It is £70 per head of population in London. That really needs to be addressed in levelling up.

I welcome the successful levelling-up fund bid from Sheffield for the regeneration—or the beginning of the regeneration—in Attercliffe in my constituency. I also welcome the £1.8 billion for brownfield sites, which is really important. Peter Freeman, the chair of Homes England, came to look at Attercliffe and the sites there, and I say to the Secretary of State that some changes to the way Homes England distributes its money are needed. First, we need to do away with the 80:20 rule, whereby Homes England is obliged to spend 80% of its money in the south-east—that simply cannot be right. We must look again at the Green Book evaluations of spending on housing sites, which are totally biased towards uplift in land values. There is bound to be a bigger uplift in land values on a greenfield site in the south than on a brownfield site in the north, and that needs addressing. We also need to look at the no additionality rule; where a derelict site with 100 old homes is cleared and 100 new ones are put in, thus really regenerating the area, Homes England funding cannot be got towards that. Those three issues do need addressing.

Finally, we had a discussion about the Institute for Fiscal Studies analysis of local government spending and what that meant. I say to the Secretary of State that in the past 10 years local government has been the major subject of austerity cuts—it has had bigger cuts than anywhere else. Those cuts have fallen disproportionately on the poorest areas; it has not been levelling up, but a major exercise in levelling down. The very areas that he says he now wants to help have had the biggest cuts to their funding in the past 10 years. This Budget will probably stop the cuts getting worse, but it is not seriously going to reverse them. There is a Government policy on levelling up, an aspiration and even a Department and a Secretary of State with “levelling up” in the title. I look forward to him actually showing us what levelling up means, and producing the policies and a coherent strategy that actually deliver it.

--- Later in debate ---

[Helen Whately]

I am delighted to pick up on the hon. Member’s comments. I am surprised that he did not welcome the level of funding—the highest ever block grant—that Scotland is receiving as part of the Budget and spending review. We are making much-needed reforms to the alcohol duty system, which has been recognised by many commentators over the years as dysfunctional and in the interests of neither public health, nor our economy. We are now moving to a fairer system that taxes more alcoholic drinks at a higher level. This is also fair to whisky. The hon. Member for Glenrothes (Peter Grant) called for whisky and wine to have the same duty rate by unit of alcohol. That is exactly what we are proposing in the reforms that will be introduced in 2023, because we recognise the importance of many parts of the sector—whether it is beer, cider, English and Welsh sparkling wine, or whisky—to the UK economy.

We are ensuring that regions that have historically received less investment are no longer overlooked. For example, some £500 million of the £1.7 billion of the first round of the levelling up fund will indeed go to the north of England, but there are examples of levelling up fund investment all around the country.

[Mr Betts]

Will the Minister give way?

[Helen Whately]

I will make a bit more progress.

I heard some Opposition Members say that rich people are not paying in enough. Well, I ask them to look at the Government’s distribution analysis and the analysis of the Resolution Foundation. These analyses say that the Government’s policies boost incomes for those on the lowest incomes, while those with the broadest shoulders—the better off—are the ones who will be paying the most. I also ask Opposition Members to acknowledge, as so many Government Members did, how both the increase to the national living wage by 6.6% and the changes to the universal credit taper rate will help millions of households on the lowest incomes. For example, a single parent of two children who works full-time will be £1,200 better off next year thanks to these changes.

[Helen Whately]

I stand by what I said: the Government’s distribution analysis and the Resolution Foundation analysis say that this Budget and spending review boost the incomes of those on the lowest incomes, and that those who are better off are paying in the most. The crucial point about the changes to the taper rate for universal credit is that it is about ensuring that people keep more of what they earn, and get the benefits and rewards of their hard work. The effect that it has is a tax cut for those on the lowest incomes.

There were times when I wondered whether Opposition Members were scrutinising the same Budget as Government Members. At many points, it felt as though they had missed the point. It was clear that the Opposition have no alternative plan. It was not clear whether they felt that we were spending too much or too little; what they would cut; what they would change; or where they would raise funds from. We on the Conservative Benches know that we are making the hard, responsible decisions, and setting ourselves up for the future.

I come to a serious point I want to make. Colleagues rightly pointed out that public spending is relatively high, and I share colleagues’ concerns about the size of the state at the moment. In fact, the Chancellor himself spoke about this last week. We on the Conservative Benches know that government should have limits. We want people to keep more of the rewards of their efforts, and we have said that, by the end of this Parliament, we want taxes to be going up, rather than down.

[Mr Betts]

The Minister referred to a plan. Will she explain where I can find a copy of the Government’s plan for levelling up?

[Helen Whately]

I would like to quickly correct the record. My apologies: I wanted to say that, by the end of this Parliament, we on the Conservative Benches want taxes to be going down. [Hon. Members: “Hear, hear!”] I thank my hon. Friends for their support.