Local Government Finance

Justin Tomlinson Excerpts

Tuesday 10th February 2015 Commons Chamber

[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.

[Justin Tomlinson (North Swindon) (Con)]

My hon. Friend is making an excellent speech. Labour has said that it would raid the new homes bonus, which is worth £6 million to my local authority and which we are getting to fund infrastructure as a reward for taking development and building the new houses we need. Frankly, it is disgraceful that Labour wishes to raid that and redistribute it to other areas. My residents will certainly not support that.

[Mr Stuart]

My hon. Friend is absolutely right. The hon. Member for Liverpool, Riverside (Mrs Ellman) said how deprived Liverpool is, but what she did not mention was what has happened to unemployment there, which, as in Leicester and Derby, is down under this Government. That is not because Labour has suddenly become enterprise friendly or is the result of decades of failure to promote enterprise, prosperity and wealth creation; it is because this Government have created the conditions that have helped drive down unemployment. By putting in place incentives such as the new homes bonus and understanding that incentives drive behaviour, this Government have tried to create a response in councils that will lead to the right outcomes for people.

In that way, in 20 years’ time, the successors of Labour Members representing urban areas will not be shroud-waving proudly in the Chamber about how deprived their communities are; they will be celebrating the fact that their communities have been transformed and made more prosperous. That is the coalition Government’s vision, but through all the years of false boom presided over by the Labour party, so many people in urban centres represented by Labour Members were left to fester. Too many people were left on dole queues, from which they are now being removed by precisely those policies, such as the new homes bonus, that encourage the right behaviour.

As my hon. Friends have said, there is a risk. Areas doing the right thing and challenging the nimbys—saying, “Look, we need housing, and we want it to be affordable; we want affordable housing and market housing; and we want housing to accommodate our young people and give them hope for the future”—need to be rewarded with the funding to put in place the infrastructure to make such developments saleable to their residents. However, Labour Members want to strip away the new homes bonus. Yet again, they just do not understand. They want everyone to take the money from the central public purse. They talk about devolution, but that in fact means more central control. They talk about improving incentives to do the right thing, but they want to strip away the new homes bonus. Their approach to local government finance is incoherent and damaging, and it will lead to a raid on the already poorly funded and inequitable settlement for people in rural areas.

The discussion today has covered social care. Like the right hon. Member for Mid Dorset and North Poole (Annette Brooke), I attended debates about care during the last Parliament. I cannot say they were massively attended, but time and again she and I faced Labour Ministers who said they were sympathetic to bringing social care and the NHS together. What did they do? Absolutely nothing. I remember, as she will, that after they had been particularly sympathetic to the direction of travel, they gave a 4% increase to the NHS and a 1% increase to social care in their next financial announcement —and they wonder why we have not created a more co-ordinated system. This Government are working to bring the NHS and social care together so that there is seamless support for an ageing population.

The ageing population is disproportionately located in rural areas, such as the East Riding of Yorkshire—including my constituency of Beverley and Holderness—which have had the largest increases in the numbers of over-65s and over-80s in the country. That drives cost, but the Labour party would allow the money to be skewed to their core areas, which on average have much younger populations and no such needs. To look at the NHS settlement as a parallel, at the end of Labour’s time in office, Tower Hamlets, with its peculiarly young population, spent four times more on each cancer patient than Dorset, with a very aged population. That is gross inequity, but the first time we hear anything from Labour Members is when a Government who inherited appalling public finances seek, inch by inch, to create a little more fairness.

I want to finish in the same way as my hon. Friend the Member for Newton Abbot. I am sad that no Conservative Ministers are on the Front Bench at the moment, but I know they are assiduous readers of Hansard. I say to the Under-Secretary of State for Communities and Local Government, the hon. Member for Bristol West (Stephen Williams), that I hope the Liberal Democrats and the Conservative party—I would like to say this of the Labour party, but I am not holding my breath—will make a manifesto commitment to bringing in a truly fair funding formula based on need. The right hon. Member for Leeds Central talked about that, but he would not in fact implement it.

As my hon. Friend the Member for Newton Abbot said, I hope that a commitment will be made in the Budget before the election to increase the grant to at least £30 million a year. In that way, we can close the gap between urban and rural areas by 2020, recognising that people in rural communities are older, have lower average incomes and pay higher council tax, and recognising the fact that they deserve justice—at last—from whoever is in power on 8 May.