Amendment of the Law

Jack Dromey Excerpts

Tuesday 29th March 2011 Commons Chamber

[Jack Dromey (Birmingham, Erdington) (Lab)]

This is a Budget for growth: growth in insecurity, growth in inequality and growth in unemployment, which was up by 27,000 in the west midlands last month alone. It is not a Budget for economic growth, which was down last and this year and will be down next year, as are living standards. Not only is unemployment up, but so too are borrowing, inflation, debt interest payments and higher debt interest, which is up by £17.8 billion. Yes, the Budget contains some modest measures, but despite evidence that the economy is getting into choppy waters and despite the widespread concern being expressed, the Government remain lashed to the mast, rejecting any but plan A and sailing on regardless, oblivious to the consequences of their actions.

I want to focus on the consequences for the people of Erdington and Birmingham of the Budget measures of the past nine months in relation to the public, private and voluntary sectors. In the public sector, this Friday 1 April we will see the biggest cut in local government history—£212 million. It is a Budget launched by a laughing Conservative leader and supported by a Liberal Democrat deputy leader who only 24 hours earlier had been one of those who wrote to The Times to protest about the scale and speed of the cuts being imposed on local government.

The consequences will be felt by everyone, whether they are three, 13 or 73: three-year-olds who go to one of Birmingham’s excellent children’s centres will find the centres’ budget cut by 16%; 13-year-olds who go to one of Birmingham’s 60 excellent youth service centres will see many of those centres face closure; and 3,500 73-year-olds, those who built Birmingham and Britain, face losing their care packages altogether, which for them make the difference between a decent life and a life on the margins.

[Mr Lilley]

What would the hon. Gentleman cut instead?

[Jack Dromey]

Bankers’ bonuses and, as our Front-Bench team proposes, among other things, we would have a sensible programme of investment, just as we invested in the construction industry to get it going at a time of recession, providing 110,000 homes, 70,000 jobs and 3,000 apprenticeships. We would invest now in a fresh stimulus package of much-needed social housing, creating jobs, apprenticeships and hopes. That is what we would do, and that is the difference between them and us.

The police, too, are feeling the consequences. This Friday 300 of the most experienced police officers in the west midlands will be forced out under regulation A19. I was with five of them this morning. They included an inspector, the national champion of designing out crime, who on one Birmingham estate achieved a 97% reduction in crime levels; a sergeant leading an excellent team of neighbourhood policemen; and a detective constable, the specialist in robbery, who has put away those who robbed old people at cash points and those who robbed shops with a machete. They all now face having to leave the force against their will. The Government have said to them, “Thanks for your past loyalty, but here’s your notice.” Governments should cut crime, not the police.

With regard to the impact on the private sector, 1.2 million people in that sector depend on public expenditure, particularly the £38 billion spent on local government procurement. If local government budgets are cut by 28%, major job losses in the private sector are inevitable. The estimate for the midlands is that 67,000 jobs will go as a consequence of what is happening in local government.

On rebalancing the economy, the Government have abolished the most successful regional development agency in Britain—Advantage West Midlands—and put in its place local enterprise partnerships that have no money, no power, no statutory basis and no power over skills. The planning proposals are a cocktail of confusion and the regional growth fund has only a third of the funds that were available to the RDAs. Incidentally, the RGF is the most elastic fund in history, designed to cope with all sorts of applications according to the Government.

Then there is the impact on the voluntary sector, the good society. Billions will be lost to the voluntary sector, including, in Birmingham, the oldest citizens advice bureau in Britain and 13 advice centres—all facing closure. The CAB was founded in 1938 and is the quintessence of the good society. Excellent people give first-class advice with an army of volunteers, but, just when the people of Birmingham need their support and advice most, those centres are facing closure.

My constituency of Birmingham Erdington is one of the 10 poorest in Britain, but it is rich in talent, with young people who are deeply aspirational and want to get on. What now haunts the people of Erdington is the spectre of the 1980s and TINA: there is no alternative. I know families in Erdington, Kingstanding and Castle Vale, where excellent men and women in the 1980s were made redundant two, three, four, five times. Some of them never worked again, because they gave up hope. The idea that once again the spectre of mass unemployment should haunt north Birmingham is absolutely wrong.

[Stephen Lloyd]

Is the hon. Gentleman aware that, after 13 years of Labour Government, there are 2 million children in households where no one works?

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[Jack Dromey]

We acted, by way of a range of measures, to help the poorest families, including the poorest families with children. It is a record of which we are proud.

There is a fundamental difference between the Government and this Opposition, not just on economic strategy but on this point: for us, unemployment will never, ever be a price worth paying.

--- Later in debate ---

[Stephen Barclay]

Had the hon. Gentleman bothered to be here for the whole debate he would have heard some of the points made by my colleagues, including the fact that £42 billion is being spent on debt interest this year alone.

The hon. Gentleman is quite right to ask where the money is going, which brings me to my second point: waste in spending. The focus is often on top salaries in the public sector, but in Cambridgeshire there is one station manager, or a more senior officer, for every four full-time firefighters, one police sergeant for every four constables, one inspector for every three sergeants, and one chief inspector or above for every inspector. There has been huge inflation in management costs.

Opposition Members may chunter, but let us look at what many of those managers do. The Ministry of Justice asked local authority youth offending teams to collect more than 3,000 bits of data on process, and yet outcomes were still not measured, so the YOTs still cannot say which prevention schemes work. There has been an inflation of management salaries, but often the same people are paid for the same performance. The chief fire officer of Cambridge earns £190,000—£60,000 more than the chief constable—and has three deputies on £150,000, £140,000 and £130,000 each. Perhaps Opposition Members were marching on Saturday to protect such salaries, but we need to look at productivity, and at what we get in return for those salaries and that inflation in management spend.

[Jack Dromey]

On productivity, the Prime Minister hailed local government as the most efficient part of the public sector. Can the hon. Gentleman square that with demanding up-front, front-loaded 28% cuts, the consequences of which are being felt in my constituency?

[Stephen Barclay]

The hon. Gentleman mentioned productivity, but I urge him to read what the independent National Audit Office says about the health service. Spending doubled, so of course waiting lists went down—we would expect that—but the NAO found that health productivity fell dramatically. The spending fell to many of the best-paid staff such as consultants, so productivity did not match funding.

On procurement waste, the NAO says that Firebuy, an arm’s length body set up by Labour, cost twice as much to set up and run as the savings that it made. On NHS procurement, the NAO found that

“NHS…trusts pay widely varying prices for the same items.”

One NHS trust bought 177 types of surgical gloves.

The huge waste in the opaque spending in local budgets needs to be addressed. For example, Cambridge fire service spends £1.77 million, an increase of £600,000, on what it defines as “other services and supplies”. It cannot explain what that spending is. Cambridgeshire police define £7 million of spending as “other”.