Lord Blunkett
Main Page: Lord Blunkett (Labour - Life peer)
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
Does my right hon. Friend not agree that the interventions he has just taken from the hon. Members for Brigg and Goole (Andrew Percy) and for Bromsgrove (Sajid Javid) both demonstrate that the coalition is intent on redistributing grant away from the poorest boroughs and the poorest education services and towards the better-off? Does that not completely give the lie to the idea that the so-called pupil premium will put more money back into the very boroughs and authorities that those Members have just attacked?
Mr Denham
My right hon. Friend, as always, is absolutely right.
I must say that this debate is turning out to be rather more useful than I expected. Just a small scratch on the surface of the Government’s supporters tells us what they really believe, stand for and intend to do. As a number of Members have said, this has got nothing to do with the economic crisis or the deficit; they just think that our spending more money in the areas of greatest need was the wrong thing to do. Let us agree that that is the difference between the Government and the Opposition.
Grant Shapps
The fund was announced in the Budget, Mr Speaker. If the hon. Member for Eltham (Clive Efford) was present last week, he will have heard the Chancellor of the Exchequer announce it at this Dispatch Box. Let me clarify another point. My hon. Friend the Member for Wimbledon (Stephen Hammond) also mentioned that he had telephoned the office of the right hon. Member for Southampton, Itchen to check that the letter had been received. I am very surprised by the rather discourteous and disingenuous comments about my right hon. Friend the Secretary of State.
Mr Blunkett
Is this the £1 billion that the Government have just announced that they are withdrawing as a result of the abolition of the regional development agencies, which they promised before and after the election that they would abolish only if there was no support at local level?
Grant Shapps
I will come in a moment to the RDAs that were set up by Lord Prescott. In the meantime, I can tell the right hon. Gentleman that this is a new £1 billion—the regional development fund £1 billion announced in last week’s Budget and designed to help— [Interruption.] Labour Members do not want to hear about this, but it is designed to help in exactly the kind of constituencies that they have come here today to complain are being underfunded. They do not want to know that this coalition Government are doing something to help those areas. That is the truth.
We live in grave financial times, and the previous Government bequeathed a scorched-earth policy. As Labour’s departing Chief Secretary declared, “I’m afraid there’s no money left. Good luck.” [Interruption.] They do not want to hear that either, but it was what the note said, and it also happened to be true.
We inherited spending commitments funded by a litany of IOUs scrawled on the back of fag packets and a toxic legacy of debt from an Administration who went on a spending spree with the nation’s credit card. Our most immediate priority is therefore to reduce the nation’s chronic public spending deficit to pave the way for economic recovery.
Grant Shapps
I cannot tell my hon. Friend how the approval process used to work, but I can tell him that, in the new Department for Communities and Local Government, that kind of expenditure would never be signed off without someone political taking the decision right from the outset.
We have announced that we will move away from the wasteful inefficiency of central targets and towards incentives involving more carrot and much less stick. Last week, we scrapped the comprehensive area assessment, saving the taxpayer £39 million.
Mr Blunkett
It will help us over the next five years if the right hon. Gentleman can give us an answer to this question. Is he seriously suggesting that every sum over £5,000 spent in government will be individually signed off by a Government Minister?
Grant Shapps
No, I did not mention the figure of £5,000, but I did say that decisions approaching anything like the levels of the £134,000 spent on Parisian-designed sofas would require sign-off—and they would not get that sign-off, either.
We have introduced a Bill to stop council restructuring in Devon, Norfolk and Suffolk, which will save the taxpayer £40 million of unnecessary costs. This was a botched restructuring; even the accounting officer at the DCLG had no confidence in it, and issued a letter of direction to the former Secretary of State about it. There was no reason to spend that £40 million, but the Labour Government did not believe that the country was in a financial mess. They seemed to miss that point entirely.
There is more to come. We will promote locally led joint working, building not just on the Total Place pilots, but on innovations—such as joint chief executives— being championed by many councils. In the Queen’s Speech, we announced a localism Bill that will free local government from central control and give voters more power over local government and over the way in which money is spent. As part of this, we will introduce a new general power of competence for local authorities, so that they are free to give local communities exactly what they want.
The public coffers are nearly empty, and the nation’s credit card is maxed out. Shadow Ministers are fighting the wars of yesterday, trying to justify why their pet projects were notionally signed off by the Treasury, but ignoring the huge elephant in the room, in the form of a looming public debt of £1.4 trillion. But in these tough times, we are defending the interests of families, pensioners, small firms and the underprivileged. We are empowering councils to put the front line first, and to make the right choices on how best to protect the vulnerable and the needy in our society. We are putting councillors and the people in charge of going through the state books and highlighting waste and inefficiency, rather than relying on unelected and unaccountable quangos and regional structures. There is a difference between this Government and the last one: we trust people. That is something that the centralising, nanny-state, interfering Labour Government never did.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
I congratulate the hon. Member for Dudley South (Chris Kelly) and welcome him to the House. He paid a decent tribute to his predecessor, Ian Pearson, and I too regret that he was not able to eat with John Butcher, whom I knew and who was a very decent man. I was warming very much to the hon. Gentleman’s speech until his eulogy for Baroness Thatcher, who we remember in a slightly different vein in my city of Sheffield, compared with those new Members who see themselves as her children. Children can have a blinkered view of their parents, and sometimes we see them through a glass darkly.
May I apologise to you, Madam Deputy Speaker, if I am not here for the whole of the rest of the evening? To put it delicately, it is not just the dog’s legs that are crossed.
I am pleased that the Secretary of State has returned from west Yorkshire. He may be able to confirm that the Prime Minister this morning did an interview on Real Radio in west Yorkshire and told the story of the making of the coalition. He invited the right hon. Member for Sheffield, Hallam (Mr Clegg) to supper at his house and presented him with ham and baked potatoes. I am not sure who was the ham and who was the baked potatoes. It might be apocryphal, but I believe that the Deputy Prime Minister asked the Prime Minister where the vegetables were, and the Prime Minister said, “You’re addressing them later to put the coalition together”. Of course, that is based on a very old story, and I apologise for recycling it.
I want to deal with issues of contradiction. Who, in this House, could not be in favour of decentralisation, devolvement and localism, which some of us have preached and practised throughout our lives? However, what is taking place is not the decentralisation of power, but the decentralisation of pain and of the implementation of policy that will cause pain; it is not the devolvement of decision making, but the devolvement of responsibility for actions taken by central Government that will have to be inflicted on people—I underline, on people—at a local level. We can take out so much resource and argue in the long term about Total Place, of which I am totally in favour, but we should not quickly take out the billions—not millions—of pounds that, over the next four years, will be withdrawn from local government. If we take one in four pounds—perhaps even one in three—out of local government spending, we will take it not out of bureaucracy, but out of the lives and well-being of ordinary people. As has been described this afternoon, the people who deliver adult services or child protection, who open and staff the leisure centres, who provide library services and clean the streets, are not bureaucrats; they are people delivering at the sharp end services that have already been pared back over many years.
I want to outline the danger, in this contradiction, of believing one’s own rhetoric—I have done it, so I should know—because Members will find that it catches up with them. It is possible to play off one set of people against another, as the Secretary of State for Work and Pension did yesterday when he said, “If we don’t cut the welfare budget more than we intend at the moment, we will have to cut it out of education, housing or other services.” That will turn the nearly poor against the very poor; it will turn those who aspire to something better against those whom they resent. The hon. Member for Dudley South was right about people feeling that, on occasion, there is unfairness—we were victims of that feeling at the general election—but we should not mistake resentment for unfairness. People often feel resentment towards those who do not have a job and are on benefits; they often feel resentment that someone is getting something they are not. However, we must not mistake that for an issue of fairness, because fairness is about protecting those who are most vulnerable. In the years ahead, local government will not have the capacity, as we had in the early ’80s, to protect our people.
In the seven years when I was leader of Sheffield city council, we experienced the most enormous reductions in the local authority budget at a time when we had a broader base for local government expenditure. We had the national business rate, as it is now known, and the local domestic rate. My hon. Friend the Member for Sheffield South East (Mr Betts), who has been kind enough to wait around this afternoon, took over from me as leader and had to continue dealing with those expenditure cuts. We were able to raise the local rate, and amazingly people continued to vote for us in a way that would not be possible today. However, if council tax is frozen—in other words, if it is capped universally—if resources are dramatically reduced, if the health service is ring-fenced and so unable to help by intervening and crossing boundaries, and if there is no longer joint funding, as there was in the 1980s after it was introduced by Barbara Castle, those services will inevitably be decimated.
If a party is really about cutting expenditure, not services—and I wonder whether some people in the coalition want to cut the latter and not just the former—it must do so over a substantial time scale. Otherwise, next year and the year after, there will be the most enormous cutbacks in expenditure—to pay for redundancy payments for thousands of local authority workers. The benefits that will have to be paid to them and the loss in tax and national insurance will add up to the billions that the previous Government managed to cut from the welfare budget—£4 billion a year was eventually saved by a reduction in wasteful expenditure on cutback and retrenchment.
We are in a dangerous situation. We might find that, having cut expenditure and services, resentment and bitterness arise in a way that will lead to the kind of disturbances and lack of social cohesion experienced in the early 1980s. Fortunately, Sheffield was the only major town or city that did not experience disturbances at that time. I hope that that will be true of Britain as a whole in the future. However, great care needs to be taken, not just to involve people, to talk to them and to learn what they can contribute towards their services, but to preven the plug from being pulled on other aspects as well. This year’s round of cuts is so unfair because aggregate external funding—to use a technical term—is designed for specific funding for specific purposes targeted at the most disadvantaged. That is what the area-based grant, the working neighbourhoods fund and the local enterprise growth initiative are about. Incidentally, the latter also triggers funding from Europe and external funding from elsewhere that will also be lost. Pull that out and we pull the plug on those services.
Some have said that we can un-ring-fence expenditure and everything will be fine. The Minister of State, Department for Education, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb) gave me a written reply recently in which he referred to ring-fencing. It read:
“This flexibility means that reductions in spending could be managed without a reduction in jobs or frontline services.”—[Official Report, 28 June 2010; Vol. 512, c. 423W.]
That is either duplicity or complete naivety. In the four years ahead, we cannot afford for ordinary people to have their services destroyed because Ministers and Treasury officials do not understand the consequences of their actions. If that happens, we will regret it for many years to come.
Andrew Stunell
I will give way in a moment, but let us be clear that for every £300 of income we are getting, we are spending £400 and putting the extra £100 on the credit card; £156 billion is going on the card this year, adding to £1,400,000 billion of debt. Putting that right does not guarantee recovery, but failing to put it right guarantees failure of the British economy.
No local authority will face a reduction in its revenue grant of more than 2%, where councils have received final allocations. I want to nail one of the myths that came up in the debate—the idea that the other grants somehow are tilted against the north, or the inner urban areas. The housing and planning delivery grant reduction has an impact of £1.45 per head in the metropolitan boroughs. In the shire districts, which Opposition Members thought were getting a free ride, the cost is £3.10 per head. The south-east is paying 90p a head, the north-east is paying 70p a head. Opposition Members’ charge is completely misplaced.
The £29 billion of formula grant—the main source of funding for local government—will be protected. There are no controls on how that money is spent in these reductions. The ring-fencing of non-schools revenue and capital funding is reduced from 10.6% to 7.7%.
Andrew Stunell
I will give way in a moment, but I want to tell the right hon. Gentleman one or two facts that he has failed—
Madam Deputy Speaker
Order. Mr Blunkett, the Minister is declining to give way at this point, and he says that he will give way later on.
Andrew Stunell
I shall give way in a moment, when the right hon. Gentleman has listened to this statistic. [Hon. Members: “Oh!”] Well, a few facts would not go amiss in this debate. In 1998, 4.6% of local government expenditure was ring-fenced. The previous Government put it up to 14%, and we are getting it down to 7.7%. That will give councils the freedom and flexibility that they need to concentrate on local priorities and to protect the front line.
Mr Blunkett
Will the Minister repeat the statistic that he gave on the £29 billion revenue support grant and explain how it will be protected? What will a 30% cut in that grant mean in real terms to local government over the next four years?
Andrew Stunell
My point was about the £6.2 billion of cuts that have been referred to throughout the debate. The decisions on the comprehensive spending review are not mine to reveal.