Local Government Finance

Debate between Geoffrey Cox and Graham Stuart

Wednesday 12th February 2014 Commons Chamber

[Mr Geoffrey Cox (Torridge and West Devon) (Con)]

I wish I could say it was a pleasure to follow that speech.

The shadow Minister could have come to the House, in a statesmanlike way, and acknowledged that there was a serious crisis in the public finances that the previous Government made a considerable contribution to creating; that the Government faced a difficult task; that the four-block formula was widely discredited; that for 13 years under Labour council tax spiralled in areas such as mine, more than doubling and creating hardship for those on low wages and the elderly; and that for 13 years MPs for rural areas tried to persuade Ministers that the four-block formula did not capture need properly. Like most people, he knows it does not capture need or deal with the heterogeneous nature of rural deprivation, but rather discriminates against rural poverty and is fundamentally flawed. Instead, all we heard was that the system he would employ would be fairer—well, without the detail, nobody will believe that.

Torridge has the lowest wages in the country—lower than Liverpool, lower than Manchester, lower than the cities for which the shadow Minister was speaking, lower than other Labour-represented areas—the lowest average household incomes in Devon, the lowest income in Devon, the lowest output per capita in the south-west and the highest unemployment in the south-west. There are really deprived areas in these rural areas. For 13 years, Members on this side of the House, as well as some on his side, endeavoured to persuade the Labour Government that this formula was morally bankrupt, but all he can do is pick out and criticise specific aspects of how the Government have dealt with local government funding.

The problem is that the whole formula is wrong. I want to concentrate on certain difficulties that he acknowledged—although he did not say what he would do about them—concerning the highly discriminating way the system treats rural areas. Council tax has spiralled in rural areas: it is £86 per head higher than the average, yet they get £145 per head less in grant funding. Those of us who represent these areas, including, I believe, those on the Opposition Benches, feel that that is an inequity. What would he do about that? We have got to do something about it.

I have to say with regret to my hon. Friend the Minister that this Government are not doing enough about it. It is not enough to say that £11 million, with the extra £2 million that he has found today down the back of the sofa, corrects the anomaly that small rural district councils and shire county councils are facing. West Devon has had to take out the best part of 14% of its budget over the last three years. In Torridge, there are similar problems.

One point that the hon. Member for Corby (Andy Sawford) made with which I did agree was that this Government and any future Government that the Labour party may one day in the distant future form will have to decide whether they want small rural district and borough councils, because many of them—certainly some in the south-west—are on the brink of viability. I agree with the hon. Gentleman on that. It may be that we have to look hard at the whole question of the reorganisation of local government in those areas and at whether we can maintain them.

I urge my hon. Friend the Minister to look again at the issue of rural sparsity and fairness to rural areas. The issue seems to be widely acknowledged and what has been done so far is not sufficient. One of the most frustrating factors that those of us on the Government Benches have experienced in meeting the Secretary of State—he has been very good with his time, as has my hon. Friend the Minister—is that every time we present a case, we are told that the figures are not what we say they are. Yet there seems to be no agreed common ground as to what those figures are so that we can both talk on the same level and on the same playing field. I urge my hon. Friend to sit down with the campaign that is growing in momentum and force on this side of the House—I hope that he acknowledges that—and see whether we can agree common terminology and common ground as to what these figures mean, so that we can achieve fairness in the future. I respectfully suggest to the Government that that is something to which they need to attribute the greatest priority because there is a growing sense of frustration on the Government Benches which will not for much longer be capped, if I can put it that way. I hope that, in closing, my hon. Friend the Minister will be able to help us with that.

I want to deal very briefly with the position of Devonshire county council, which is facing a huge problem following the recent severe weather. The new changes to the Bellwin formula are welcome but I understand that the formula does not deal with repair and maintenance. The Devonshire county council has £750 million—

[Mr Graham Stuart]

The East Riding was devastated by floods in 2007 and I am very interested to hear further observations from my hon. and learned Friend.

[Mr Cox]

My hon. Friend’s intervention enables me to say that the problem with the Bellwin formula is that it does not cover repair and is for a limited period. Repairs in the south-west, and particularly in Devon, are now up to a backlog of £750 million. I urge my hon. Friend the Minister to look again at the Bellwin formula to consider whether it properly takes account of the costs that large rural shires are facing after this hugely problematic and severe weather.