Local Government Finance

Debate between Jonathan Ashworth and Graham Stuart

Tuesday 10th February 2015 Commons Chamber

[Jonathan Ashworth (Leicester South) (Lab)]

I rise to make a few remarks on behalf of the city of Leicester, which I am fortunate enough to represent. In common with my hon. Friends the Members for Liverpool, Riverside (Mrs Ellman), for Derby North (Chris Williamson) and for Sheffield South East (Mr Betts)—he is no longer in his place—I represent a city that sadly often scores far too highly in the deprivation league tables, yet it has had to cope with significant budget cuts under this Government. That is why I wholeheartedly endorse the vision laid out by my right hon. Friend the shadow Secretary of State in his opening speech on the need for a fairer funding settlement.

I also endorse the shadow Secretary of State’s vision for devolving more powers to local government, because although our city has huge levels of deprivation, we have tremendous potential. We are an exciting and vibrant city, with 9,000 businesses in our city centre and two first-class universities producing graduates who go on to work in the east midlands’ manufacturing base and computing base. Our mayor, Sir Peter Soulsby, has been integral to our city deal and central to getting a deal that will see IBM bring 300 jobs to the city. Indeed, IBM praised the work of the city council when it announced that it was coming to our city.

Leicester’s cultural life is rich. Next month we will reinter King Richard III at Leicester cathedral. While we will be putting on a celebration that is literally fit for a king, 2 miles down the road in Spinney Hills a third of children are growing up in poverty—half the children if we include housing costs. Later this year we will host rugby world cup games, which many will enjoy coming to Leicester to watch, yet 2 miles down the road from the King Power stadium, on the Saffron Lane estate a quarter of the children are growing up in poverty. Some 3,000 families across Leicester are trying to cope with the bedroom tax. Food banks have doubled across our city over the past two years. Our Sikh gurdwaras report that the number of people turning up for free food has increased over the past two years.

However, by 2015-16 Leicester city council will have seen a real-terms cut of 45%—£95 million cut from its budget—for a city that ranks in the league tables as the 25th most deprived in the country. On the Government’s own figures for revenue spending per head, it is losing £205 per person. As my hon. Friend the Member for Derby North and others have said, what a contrast that is with the losses in some of the wealthier and more well-heeled parts of the country, such as in the Prime Minister’s backyard. We are seeing the ending of crisis loans and community care grants and the ceasing of funding for welfare support. In a city where there is such reliance on food banks and other providers of that ilk, I dread to think what that will mean.

[Mr Graham Stuart]

I wonder whether the hon. Gentleman can tell us what the unemployment rate is now in his constituency, including that for young people, compared with 2010.

[Jonathan Ashworth]

The unemployment rate increased quite significantly under this Government, and it has now begun to come down, but in my constituency it is still above average. Is that okay for the hon. Gentleman? I concede that unemployment has come down, but in Leicester it is too high and we need to get it down further.

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[Mr Stuart]

I appreciate the hon. Gentleman’s point, but that would mean a further bill for a left-wing organisation and we know where that leads. He will be aware that in the past couple of years the wages of non-unionised workers have eclipsed those of unionised workers and that the TUC is, for the most part—as, indeed, is the hon. Gentleman’s party—a front organisation for those who receive money from the public purse. Trade union membership does not have a great deal of relevance to those who work in the private sector, which exports across the world and generates the wealth that pays for those of us, including MPs, who are paid from the public purse. However, I would always welcome and support anyone who wished to join a trade union, if they saw fit to do so.

Although there is a smaller gap of £73 per person between rural and urban spending power, it is smaller only because it takes into account the higher council tax that rural residents have to pay. Poorer rural residents are subsidising richer urban authorities. That is worth repeating, because anyone listening to the impassioned protestations of Labour Members would think that was not true: poorer rural residents are subsidising richer urban authorities. There is no acceptable justification for that status quo.

The fact that the Government have introduced the rural services delivery grant during this Parliament and increased it every year is welcome recognition of the rural penalty. This year its value has been set at £15.5 million, or £1.20 per head. At just 1% of the shortfall in the main central Government grant, that additional money does not by itself deliver a fair deal for rural areas.

[Jonathan Ashworth]

Will the hon. Gentleman give way?

[Mr Stuart]

I will happily give way to the hon. Gentleman. Perhaps he will be able to provide us with more honesty than those on the Labour Front Bench and give the House the honest account of who the losers will be if Labour comes to power. I suspect there would be further injustice for rural residents across England.

[Jonathan Ashworth]

The hon. Gentleman was very keen to intervene on virtually everybody else who has spoken, so I am pleased he has eventually given way to me. If I follow his argument correctly, is he saying that the funding settlement for cities such as mine is too generous?

[Mr Stuart]

I am grateful to the hon. Gentleman for making that point. I had hoped that he would talk about the fact that his party would not invest any more money in the local government funding settlement. If his reading of what his Front-Bench colleagues have said is that his area will receive more money—I think that is the case—that means that the injustice for poorer rural residents will increase. It is not the case that urban authorities in general are unfairly funded or have had disproportionate levels of cuts, because that funding was skewed in the direction of urban areas in the first place. The Labour party refuses to explain how it would have dealt with local government funding in this Parliament.