Helen Goodman (Bishop Auckland) (Lab)

- Hansard - - Excerpts

May I say what a pleasure it is to follow the hon. Member for Beckenham (Bob Stewart) and say to him how much he epitomises the benefits to the House of having people with so much experience and so much to contribute to our understanding of military matters?

I wish to talk about the economic situation of my constituency. Some 100 years ago, the north-east was the main driver of economic development not just in this country, but in the whole of the British empire. Today, the north-east is still the most successful exporting region outside London. That is because it has the largest car plant in Europe; it has the largest chemical plant in the UK; it is leading in electric vehicle manufacturing; it is at the centre of sustainable energy innovation; and it can lead in the new industry of offshore wind. So I wish to pose the question: in this Government’s quest to restart growth, why do they not look to the north-east?

In order fully to develop the north-east’s potential, we need a region-wide approach that brings together the public and private sectors; concentration on those industrial clusters where the region’s university research and development can be translated into innovation; skills and retraining for adults and young people, so that people losing jobs in public administration can reasonably take up new opportunities in the private sector and so that young people are given a fair chance; a fair share of the Government’s infrastructure spend, particularly to improve transport and connectivity; and investment in housing and place making.

Unfortunately, what the Government have delivered to the north-east is massive cuts. According to PricewaterhouseCoopers, the scale of the cuts in 2010 was huge—in 2010 it came to £2.8 billion, which was 7% of the value of the regional economy. The cuts were also unfair; the cuts to the north-east’s local authorities were three times the scale of those in the south-east. In other words, the Chancellor of the Exchequer took £1,000 from every man, woman and child in the region. The cuts in the north-east are even larger than the cuts being faced by the Spanish people.

I had some new analysis undertaken by Oxford Economics on the second-round effects—the knock-on effects on the private sector—to see why we have such a high level of shop closures on the high streets in our region. Its analysis showed that there had been a further £1 billion in lost output; that is a 10% drop in the size of the regional economy. If the International Monetary Fund is right, the second-round effects are even greater, at £3.5 billion.

Helen Goodman

- Hansard - - Excerpts

I am afraid I do not accept the hon. Gentleman’s analysis. I was about to point out that last year, of the £40 billion infrastructure budget put forward by the Chancellor of the Exchequer, the north-east received 0.03%. As a consequence, unemployment in the north-east is the highest in the entire country at 9.9%. The Institute for Fiscal Studies says that public sector job losses so far are already at 45,000 and Oxford Economics projects that total job losses will be 68,000, whereas 46,000 new jobs will be created. So, in 10 years’ time, we will be left with a jobs deficit of 20,000.

The Government talked a lot about rebalancing the economy but have tipped the scales further against the north. Given the opportunities for growth in the north-east, that is at the whole country’s expense. [Interruption.] If I may say so, it would be more polite for the Deputy Leader of the House to listen to my speech rather than to the chuntering of the hon. Member for Hexham (Guy Opperman).

How did the Chancellor of the Exchequer use the chance he had in the autumn statement? On 5 December, he announced new capital spend in the region of £142 million, with £64 million spent on road improvements near Gateshead and £78 million on housing. At first blush, as the hon. Member for Hexham said, it sounded quite good. In fact, however, once again it was only 3% of the total capital spending proposed by the Chancellor.

Let us look at the other measures taken by the Chancellor, which will dwarf that capital spending in the long run. Yesterday, we heard that he had taken another £42 million from councils in the north-east, not just next year but every year. He also introduced the strivers’ tax on people on low incomes, which will take £25 million from people in the north-east next year, £90 million the year after that and £180 million in the third year.

At the same time, of course, the Government are giving millionaires a tax cut. What does that do? It puts £40 million into the economy of the north-east and £640 million into the economies of London and the south-east. That is not simply unjust; it is foolish. The north-east is contributing all the time to the savings the Chancellor of the Exchequer demands, but it is not receiving its proper share of investment.

What is the justification for those disproportionate cuts when the north-east economy plainly has so much to offer? Could it be that the Chancellor thinks the political battleground for 2015 will be the marginal seats in the east and west midlands? The Government appear to be playing politics with public money.

I am calling for a one nation approach in which the assets of the north-east are valued and nurtured, in which there is a fair funding formula for public services based on need, and in which investment in infrastructure is based on economic potential not political calculation. I hope very much that the Deputy Leader of the House can pass those messages on to his colleagues in the Treasury and the Department for Business, Innovation and Skills. It merely remains for me to wish you, Mr Deputy Speaker, and the whole House a very happy Christmas.

Stephen Gilbert (St Austell and Newquay) (LD)

- Hansard - - Excerpts

It is always a pleasure to speak in these end-of-term Adjournment debates. Their value has just been aptly demonstrated by the hon. Member for Hayes and Harlington (John McDonnell), who has sent a chilling note through the Chamber, and a warning call that I hope the authorities will listen to. It is always a great pleasure to hear my hon. Friend the Member for Southend West (Mr Amess), with his tour de force of constituency issues. Sadly, I can take no pleasure in having to raise in this House access to flood insurance and support for flood-hit local authorities yet again.

Last night, we saw torrential rain across the south-west cause considerable damage to businesses and homes, and disruption on many key travel routes. In my constituency, the villages of Par, Bugle, St Blazey, Gorran Haven and Mevagissey have been flooded again. Across Cornwall, other communities in Polbathic, Altarnun, St Keverne and Gunwalloe have all been hit too. This is not uncommon for the people of Cornwall—just four weeks ago we were hit with flooding. The House may remember that shortly after the general election in 2010 Cornwall was hit with serious flooding too, occasioning the Prime Minister to join me in some of the communities I have just mentioned.

I would like to take this opportunity to extend my thanks and give praise to the work of the emergency services overnight—the firefighters, the police, ambulance workers across Cornwall and the south-west, and the 100 Cornwall council staff—who were out all night helping people to move to safety, and trying to minimise the damage to properties and to life. However, we are not out of the woods yet. The Met Office and the Environment Agency are predicting continued severe weather in the south-west. The EA currently has 19 flood warnings and 52 flood alerts across the region—stark warnings about large swathes of the south-west being at imminent flood risk due to the saturation levels already in the ground.

It is clear that we cannot always build flood defences that will protect people against all eventualities. I am sure that if the hon. Member for Brent North (Barry Gardiner) was in his place—he is an assiduous campaigner on environmental issues—he would agree that with climate change we will see increasingly unpredictable weather across our country for years to come. However, we in this House should be able to ensure that everybody has access to insurance when the worst happens. That sounds very simple, but the Government, flood groups and insurers have been grappling with the problem for a long time and seem no closer to resolving it. The typical cost of flood damage to a home is approximately £30,000, and approximately 200,000 homes are at risk of flooding.

The last Government agreed a statement of principles—a five-year agreement—that meant that flood insurance had to be included in house insurance. It was a worthy goal and a good step forward, but it was not perfect. For example, it did not apply to homes built after October 2009 and, more importantly, made little attempt to help those in the severest flood-risk areas, which was bewildering, frankly. Despite that, however, that statement of principles was a worthy effort to ensure that when flooding hit a community, people were able to rebuild their lives. Unfortunately, it expires next June, and at the moment the House is yet to see any concrete proposals for how this important issue will be dealt with after that point. Communities across the country, including those that I represent, are already struggling to get affordable flood-risk insurance, even though it might technically be available. I urge my right hon. Friend to look into this issue and ensure that the proposals come forward in a timely way and can be adequately debated by the House.

I have raised before my concerns about the Bellwin scheme—the threshold at which central Government support comes in to help local authorities hit by flooding. In Cornwall council’s case, the existing Bellwin scheme has a threshold of 0.2%, which is currently £1.41 million, as the amount it must defray before any assistance is forthcoming from central Government. This scheme is outdated and does not seem to make any allowance for the new unitary authorities. If Cornwall still had a two-tier local authority system, that threshold would be just £58,000. That, coupled with tight rules limiting funding to the additional costs incurred in dealing with the immediate emergency only, basically means that the likelihood of an emergency incurring eligible expenditure greater than the threshold is now significantly less than if the two-tier were still in place. We need to modernise and update the Bellwin scheme. Cornwall is also a fire and rescue authority, but the scheme does not factor in those parts of the country where the principal local authority is on a unitary basis and also the fire and rescue authority.

I turn to the final reason why I would like my right hon. Friend to investigate whether the Bellwin scheme can be reconsidered. Why is the dedicated schools grant used in the calculation of when a threshold is reached by a local authority? It is another instance of where the Bellwin scheme has not kept pace with the change in how local government across our nation is administered. At the moment, Cornwall council estimates repair costs of £2.5 million on the highways alone. When flooding occurs, it is not only a threat to life, but it destroys homes, wrecks businesses and leaves a significant clear-up operation in its wake, and that operation often falls to the local authority to fund.

The biggest Christmas present for all those across the country facing flooding risk would be to ensure that, as we go into next year, flood insurance is available and affordable, and that, when floods hit, local authorities have the support they need from the House and the Government to ensure that the clean-up can happen in the swiftest possible way.

Bob Blackman

- Hansard - - Excerpts

The process of local plans is key for local people participating in democracy. Does my hon. Friend agree that it is quite wrong for any councils to drag their feet on this, postponing the process of getting democracy into planning at a local level?

Sir Bob Russell (Colchester) (LD)

- Hansard - - Excerpts

These are difficult times for local councils, and with further financial constraints confronting them, I pay tribute to the councillors of all political persuasions and officers who find themselves in ever more difficult situations. This is not an experience that I faced as a council leader, but one thing I do understand is the importance of ensuring that public money is not wasted or used for purposes that are inappropriate for a local authority or ultra vires under local government legislation.

In the hope that the Department for Communities and Local Government will pursue the matter with vigour, I bring to the House’s attention the extraordinary situation involving the former leader of Essex county council, whose exploits have been much publicised in recent weeks in local newspapers and on local radio, and in some national newspapers. It has been revealed that, from March 2005 to January 2010, he spent £287,000 using the council tax payer-funded credit card that he had been issued. That equates to a rate of more than £1,000 every week for five years, all tax free. Items of expenditure included 62 overseas visits to such places as Uganda, New Zealand, China and the United States—not places normally associated with the local government activity of Essex county council—often accompanied by council officers and councillors.

I can now reveal, thanks to a Freedom of Information Act request that I made to the council, that the same leader first had a credit card issued in “mid-2002”. On the assumption that his spending pattern in the years from 2002 onwards was the same as that in the five years following the first published item on 9 March 2005—£89.21 for a lunch at the Barda restaurant in Chelmsford for the leader and an unnamed county councillor—it is likely that the leader’s credit card spending to fund his lifestyle of expensive tastes in the UK and overseas, paid for by Essex council tax payers, was in the region of £450,000. His last entry, funded by the good people of Essex, was on 27 January 2010 when, with an unnamed county councillor, he billed £77 for lunch at the Loch Fyne restaurant in Chelmsford. Last week, a motion was put forward at a meeting of Essex county council in respect of the credit card bills of the former leader, who resigned from the council in 2010, but it was not agreed.

I can perhaps best describe what happened by quoting distinguished journalist Mr Simon Heffer, who is a council tax payer in Essex, from his column in the Daily Mail of Saturday 15 December:

“Tory-controlled Essex County Council decided this week not to sue their disgraced former leader…for the £287,000 of ratepayers’ money he spent flying around the world with cronies and dining in style. This is a rash move. In four and a half months, the council is up for re-election. I am appalled that Essex Tories have such a cavalier view of financial accountability. Anyone who votes to put them back into office next May is mad. Did they take this view…because some of them, too, have things on their conscience?”

Simon Heffer may say that; I could not possibly comment.

In fairness, the current leader is a breath of fresh air. He was issued with a credit card on taking over in May 2010, and it was cancelled in August 2011 having never been used. That shows how much the previous leader abused his position and took Essex council tax payers to the tune of circa £450,000 to fund his expensive tastes and lifestyle. It is also fair to say that a new broom at county hall has ensured that new procedures will not allow such a situation to happen again, but it is not enough to clear up the stables—although pigsty might be a more appropriate description.

What has happened needs to be investigated. As the council is not prepared to have an independent investigation—I believe that is important; otherwise all county councillors will be tarred with the same brush—it must be for central Government to do so. Unless there is an independent inquiry, the stench will remain. That is not in the interest of Essex county council, its councillors and officers—a whitewash is not acceptable.

It is difficult to believe that the former leader was able for eight years to live the life of Riley paid for by Essex council tax payers, without others knowing. After all, many of the credit card bills refer to the leader being accompanied more often than not by officers and councillors. Why did the internal audit not notice the monthly credit card payments and ask questions? Why did the external audit not notice and ask questions?

On 17 October last year, a council spokesman said:

“All employee expenses are subject to audit and public scrutiny”—

but not, presumably, those of the former leader. How is it that the entire finance department and line management within it, leading in due course right into the office of the chief executive, did not notice and draw attention to it? Or is it the case, as has been put to me, that some people did try, but that there was a climate of fear and bullying at county hall? People were afraid to speak out for fear of losing their jobs. This attitude was not confined to the leader, as some councillors and some senior officers were involved. Only an independent inquiry can get into that barrel of apples to identify any rotten ones that are still in place.

I have been advised by a lawyer that he is prepared, at no personal cost to himself, to look at the paperwork and help draft a claim against the council and its officers for an apparent, and I quote,

“breach in fiduciary duty to Essex ratepayers who are owed the opportunity to see these matters rectified.”

It is said that the credit card records from 2002 to 2005 have been destroyed, but I believe the council’s records should still show the total credit card sums claimed by the former leader, even if the individual items cannot be listed. Perhaps the credit card company’s records exist, which an independent inquiry could look at.

The roll-call of countries visited by the former leader between 2005 and 2010 could well make him Britain’s most travelled politician. At 62 visits, that is probably more than the Prime Minister and Foreign Secretary, and it is certainly not what one would expect of the leader of a local authority. Usually with at least one officer, his Cook’s tour reads as follows: United States of America, eight times; Belgium, 15 times; Poland, twice; Croatia and Sri Lanka, twice; Cyprus, Bulgaria and Austria, three times; France, three times; Slovakia and Italy, three times; China, six times; Hungary, Germany, Holland and India, three times; Australia, New Zealand, Uganda, Hong Kong and Finland, twice; Vietnam, Albania and the Bahamas, ending with his last overseas trip to Canada. In December 2005 Essex council tax payers funded the leader, a councillor and an officer to attend the winter Olympics in Italy at a cost of circa £1,400.

Perhaps an example of the leader’s extravagance is a visit he made, accompanied by a council officer, to Hungary on 17 May 2006 for a one-day meeting described as the “First Assembly of European Regions”. Putting to one side the fact that the wonderful county of Essex is not a region, which begs the question why he was there in the first place, the visit was stretched out over a total of five days and involved staying in three separate hotels—two in Budapest, which is 230 km distant from where the one-day conference was held, one of them five-star, with the other described as “art-nouveau extravagance” and “the World’s most famous spa”—having expensive meals at restaurants and hiring a car. This is a grand total, including flights, of £1,530.

Other interesting entries, completely contrary to local government rules and expenditure legitimacy, relate to the council leader using his credit card to pay for attendance at Conservative party conferences for himself and up to three officers of Essex county council, including their travel and hotel accommodation costs. One of his popular watering holes was an establishment in Chelmsford called Muddy Waters where in December 2007 he treated county officers to a meal, paid for by council tax payers, which came to £736. In July 2008, he claimed £42.94 for a Little Chef breakfast. I know that the Little Chef Olympian breakfast is good, but I think customers can get four for the price he paid, as he pigged himself into some sort of record book. Another interesting item is the £327.50 he paid for

“gifts purchased for Transformation Awayday”

from the Crooked House gallery in Lavenham, Suffolk.

That list surely in itself comprises an appalling betrayal of the people of Essex by the then leader of the council, but I must now refer to a further abuse. Throughout this period, the leader was also based at another establishment for which five full-time employees of Essex county council had security passes. A sixth, listed as his secretary in the directory of this other establishment, was actually based at county hall, and taxpayers paid all the office costs. When not on council business, the leader was frequently chauffeured here and there at all times of the day and into the early hours by a car and driver provided by the council. The five council officers were providing services that were not part and parcel of the leader’s position with Essex county council, but the council tax payers of Essex were paying all the costs. It is difficult to estimate what they amounted to over what was an eight-year period.