Local Government Finance

Lindsay Hoyle Excerpts

Wednesday 12th February 2014 Commons Chamber

[Stephen Gilbert (St Austell and Newquay) (LD)]

May I start by saying that I do not speak for my party on these issues? My hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) does that. I find it discourteous to us as a party that the Chair routinely does not call the lead spokesperson from the Liberal Democrats at the appropriate point in these debates—that is a point for you, Mr Deputy Speaker, to take through.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The hon. Gentleman can call his speech over now if he wishes and we will bring on somebody else—I would be more than happy. I hope he is not questioning the Chair and the way that people have been called. It is for the Liberal Democrats to inform the Chair about who is speaking, and not us working off a list. I hope he wishes to withdraw his earlier remarks.

[Stephen Gilbert]

I will certainly withdraw those remarks, Mr Deputy Speaker, and I will pass to my colleagues your guidance on how we can resolve that issue going forward.

[Mr Deputy Speaker]

I will not enter into a debate with the hon. Gentleman, but if Liberal Democrat Members do not know that after all these years, I do not think there is any help for them. Does he want to get on with the debate, or should I call somebody else?

[Stephen Gilbert]

Of course I do, Mr Deputy Speaker.

I have found this an invidious and divisive debate. It pits rural areas against urban, towns against cities, and north against south. Hon. Members from all sides of the House want to make the best representations for their local communities and get a fair deal for their local areas, but as my hon. Friends have demonstrated, particularly with Cornwall and Devon, this debate pits rural against urban communities. I hope that the Minister can see across the House, across the parties and across the rural-urban divide a desire to consider fundamentally how we reform local government finance in the future, whether that involves my hon. Friends the Members for Beverley and Holderness (Mr Stuart) and for North Devon (Sir Nick Harvey), or the Chair of the Communities and Local Government Committee who is from Sheffield. There is a clear desire to consider properly and fundamentally how we as a national Government grant resources to local councils. At the moment we have this annual theatre in which Members from across the House pop up and defend their individual parts of the country, but without a settled consensus on how the debate goes forward.

I want to speak not about the size of the local government settlement—I recognise, as I am sure my hon. Friend the Minister does, that the economic situation bequeathed to the coalition Government by the Labour party makes an increase in spending very difficult—but about the balance between rural and urban areas. As my hon. Friend the Member for North Devon so eloquently put on the record, urban areas have historically received 50% more per capita funding than rural areas, despite the fact that in rural areas such as Cornwall people on average pay higher council tax, earn lower wages and have higher housing costs as a proportion of their income. Local authorities, whether in Cornwall, Torridge and West Devon or North Devon, face difficulties in delivering services across rural and sparsely populated areas.

The Government have recognised this. In the spending settlement for 2013-14, they suggested that £200 million would be made available to increase the ability of rural authorities to meet those challenging circumstances. What happened, however, was that three quarters of that gain was damped so that the authorities losing out—the urban authorities, pretty much—did not suffer a sudden fall in funding. What we did not expect, and what nobody expected at that point, was that the Government would suspend moving the remaining three quarters of that gain until at least 2020, kicking the argument into the long grass and further delaying a fair settlement for authorities such as Cornwall.

What we have seen today in the Government’s increase in the ESSSA, or efficiency support for services in sparse areas, grant is welcome, but it is really just an additional £2 million on top of a paltry £9 million. If that £11 million is divided across the 95 most rural local authorities, they will have barely enough money to employ a full-time officer to work out the differential between what they should be receiving as a rural area and what they are getting. I suggest to my hon. Friend the Minister that while it is welcome—it would be churlish to look a gift horse in the mouth, as it will make a difference—it is woefully insufficient to start to close the divide between rural and urban funding that so bedevils parts of the country such as Cornwall.

--- Later in debate ---

A Division was called.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Division off.

Question agreed to.

Resolved,

That the Referendums Relating to Council Tax Increases (Principles) (England) Report 2014-15 (HC 1056), which was laid before this House on 5 February, be approved.

Local Government Finance Report (England) 2014-15

Motion made, and Question put,

That the Local Government Finance Report (England) 2014-15 (HC 1055), which was laid before this House on 5 February, be approved.—(Brandon Lewis.)