Local Government Finance

Debate between Grahame Morris and Graham Stuart

Wednesday 12th February 2014 Commons Chamber

[Mr Graham Stuart (Beverley and Holderness) (Con)]

It is a pleasure to follow the right hon. Member for Salford and Eccles (Hazel Blears). She made an interesting speech, as one would expect. Many hon. Members’ speeches have been powerful, not least in suggesting the weakness of the system that guides local government funding.

There is a consensus of disappointment—albeit unspoken on Labour Benches—about the speech made on behalf of Her Majesty’s Opposition by the hon. Member for Corby (Andy Sawford). It entirely lacked any alternative narrative or suggestion, other than a platitude about the system being fairer and needing to be looked at in future, to give us an idea of what the Labour party would do. The right hon. Member for Salford and Eccles was a Minister in the previous Government, and the right hon. Member for Leeds Central (Hilary Benn) was a senior figure in that Government. After all, the previous Government led us into this calamitous financial state, meaning that today’s Ministers have to make tough and difficult choices. Her Majesty’s Opposition’s total failure to recognise responsibility for the mess that the Government inherited, or to provide any insight into the tough decisions or choices they would make if they were ever allowed back into government by the British people, was disappointing. The House deserved better, and I expected more of the hon. Member for Corby, of whom I am actually an admirer.

I am a founder of Rural Fair Share, a cross-party campaign group of MPs from both sides of the House, and I am chair of the all-party group on rural services, so I make no apology for speaking from a rural perspective. Powerful speeches have been given by my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox), the hon. Member for North Devon (Sir Nick Harvey) and my hon. Friend the Member for Newton Abbot (Anne Marie Morris). There was a very Devonian quality to much of their speeches. They spoke effectively for Devon, but also for rural areas right across this country, not least the East Riding of Yorkshire.

As has been said—I make no apology for saying this again—people in rural areas earn less than those in urban ones. The idea that people in rural areas are somehow all prosperous and wealthy compared with the massively deprived populations of urban areas is false. In truth, people on lower incomes are paying £86 more per head in council tax. That came about under the system instituted by Labour Members who talk about the cost of living crisis. It sometimes feels as though they do so with crocodile tears. They put in place a system in which poorer people pay higher levels of council tax, while their councils receive £145 less per head in central Government grant than those in urban areas, and the cost of delivering services in rural areas is higher, as my right hon. and hon. Friends have said. Look at a map: where does it cost more to empty the bins—in the city or in the vast rural area around it? It is obvious that there are cost pressures.

[Grahame M. Morris]

The hon. Gentleman is selling a misconception to the House. Where are services more expensive? Let us look at the numbers for looked-after children, which, as he well knows as chair of the Education Committee, cost £40,000 to £50,000. In my area of Newcastle, there are 101 looked-after children per 10,000 of the population; in Wokingham, there are 24 per 10,000. That is an example of where costs are much higher.

[Mr Stuart]

It is fair to point out that Wokingham is not representative of all rural areas in this country. It is a rather unhelpful comparison. However, the hon. Gentleman is right to say that urban areas involve costs, and concentrated areas of deprivation have costs. No Government Members are suggesting complete equalisation, but to have an area with more low-income people paying higher levels of tax for fewer services is not sustainable.

I know that, in his heart of hearts, the hon. Gentleman was disappointed by the speech of the hon. Member for Corby, who simply failed to explain how Labour would wrestle with the issues. The Minister is wrestling with those issues. [Interruption.] The hon. Gentleman is trying to heckle me. What we heard from him was a defence of a system that is indefensible. [Interruption.] It is indefensible to suggest that the system was based on need and that consensus had somehow been smashed. The truth is that the previous Labour Government refused to listen to voices from all parts of the House representing the rural interest. In fact, they allocated four times the weighting to population density—not deprivation, but density—than to sparsity. That was unjustifiable, but, sadly, it continues to be a fundamental part of the system today.

I, too, am pleased that there has been a minuscule increase today in the diminutive grant to rural areas from £9.5 million to £11.5 million. However, even the larger figure would not stretch to a grab bag of crisps for each resident who lives in a rural area, although that might depend on how competitive one’s local grocer is. My hon. Friend the Member for North Devon laid out just how many decades it would take to equalise the figures. Those of us who speak on behalf of rural areas simply say to the Government that we must take more action to narrow the gap. We think that the 50% rural penalty—50% more funding goes to urban areas—should be reduced to no more than 40% within five years.

We have asked for more evidence. The Government have undertaken to carry out research on the cost of rural services. I fear, as do many of my hon. Friends, that the research will look just at rural services. It must compare the costs of services across urban and rural areas. It would then be able to pick up on the point made by the hon. Member for Easington (Grahame M. Morris) about the number of children who are in care and the cost pressures that arise from that.

Not only must the funding system be dynamic and reward successful councils that promote housing and business, but it must have a baseline that genuinely reflects need. The system that Ministers are wrestling with today was inherited from the Labour party. It is not fair and it does not properly reflect need. The fact that rural communities have been penalised so much for so long just goes to show how morally bankrupt are the arguments that we have heard from the Labour party.