Local Government Finance

Diana Johnson Excerpts

Wednesday 12th February 2014 Commons Chamber

[Diana Johnson (Kingston upon Hull North) (Lab)]

Hull is a very proud and resilient city, despite many setbacks that include being one of the most heavily bombed cities in the second world war outside of London and the loss of the fishing industry in the 1970s. Now we are looking at opportunities to renew Hull. We are looking at building on the city plan to develop our renewables industry and to develop and extend the industry around the Humber, and of course we have been nominated as city of culture for 2017, building on the wonderful facilities that we have in the city, like Hull Truck theatre and our excellent museum quarter, and the possibility of a Hockney gallery. I pay tribute to the Labour council in Hull and its leader, Councillor Brady, for having a vision of how Hull can go forward positively.

However, we are hampered by the unfair slashing of the local authority funding to Hull, repeated in many other northern cities. That is despite the Government saying, when they came to power, that they wanted to rebalance the economies of the north and south and address the problems of the general split between north and south. Hull is losing 25% of its budget. Of course, Hull has traditionally relied on central Government grants because our low property values mean we have a low council tax base and we have high levels of need. I fundamentally object to what the Minister said in his opening remarks—he said that local government was moving away from the begging bowl approach. That says a lot about the way he sees local government funding.

My city has more people in long-term unemployment than anywhere else in the United Kingdom. In one ward in Hull, men live seven years less than the English average. We have more low-skilled jobs, part-time work and people on zero-hours contracts than many other parts of the country. From this unfair local authority funding cut, we have already seen nearly 2,600 real jobs go in our local authority. I stress that those are real jobs—care assistants, and early years workers and support workers for troubled teenagers so that we do not end up having to spend a lot more money down the road when those children grow up and have more problems. Those are real jobs that are necessary in a city like Hull, and of course, when people lose their jobs, their spending power is lost to the local economy.

My constituents are finding out that the Government are balancing the books on the backs of the elderly, the disabled and the young, through the DWP changes that we have seen, such as the cruel bedroom tax, with 4,228 claimants affected in my city. Some 20,000 people who previously did not have to pay any council tax will now have to pay 8.5%, which will go up to 20% next year. As my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) said, it is the pressure on the low-paid and the vulnerable that is really affecting cities such as Liverpool and Hull.

It is suggested that efficiency savings can be made, but they have already been made—they are long gone. It is not the fat that is being eaten into now; it is the bone. Hull was very badly flooded in 2007, and it is at such times that the resources that are available to local authorities, the fire brigade and the police come together to provide the support that communities need when they are in crisis. If we cut and cut and cut, those support mechanisms will no longer be there. My heart goes out to people in the south who are suffering flooding problems currently, but perhaps they are recognising that cutting statutory services is very foolish in the long run. The statutory services are retreating into their silos, which is not helpful for dealing with crises in our communities.

As I have said, when the Government came into office, they said they wanted to rebalance the economy between the north and the south, but the unfairness of the cuts in our city means we are struggling to provide support to our communities, develop the skills in our communities and bring businesses in. We just do not have the resources to do those things.

When Labour was in government, the Liberal Democrats always called for more money for Hull, but in this House they have consistently voted all the way to cut money for my city. The Liberal Democrats on Hull city council have now called for a council tax freeze, which would mean even more cuts to services. Lib Dems support the unfairness of the cuts to areas in the north such as mine. At the last general election, they pretended to be friends of the north and said they would stand up for Hull, Sheffield, Leeds and other cities, but the people of those cities will very well remember the actions of the Liberal Democrats in government. They are not friends of the north and that will not be forgotten.