Budget Resolutions and Economic Situation

Jim Cunningham Excerpts

Tuesday 22nd March 2016 Commons Chamber

[Catherine McKinnell]

I do not understand the hon. Gentleman’s point. He is digressing on details of capital gains tax when the point I am clearly making is about the context in which the cut has been made, where the burden of this Budget very much falls on the poorest and the most vulnerable in our society. If that is compassionate Conservatism, bring the nasty party back!

I am pleased and relieved that the Government have backed down on this issue within less than a week. However, I am angry that those people who rely on the personal independence payment, including 1,100 people in Newcastle upon Tyne North, have endured days and weeks of huge anxiety about how they would cope if this level of support was cut. It is unforgivable. I remain equally concerned about how the existing reforms to PIP are quite clearly failing disabled people. Constituents continue to get in touch with me following my recent question to the Prime Minister because they have been told that they are no longer eligible for a Motability vehicle despite its clearly being the only means by which they can leave the house, or indeed get to work. The new PIP assessment is fundamentally flawed. I strongly urge the Work and Pensions Secretary and the Chief Secretary to the Treasury to revisit this issue with fresh eyes and look at reforming the current PIP changes before they embark on any further welfare reform.

Despite the Chancellor’s so-called

“revolution in the way we govern England”,

with the pledge last May to give local areas greater control over local transport, housing, skills and healthcare, it appears that he does not place the same faith in local communities when it comes to our schools. Last week’s Budget confirmed that, far from handing control to local communities, the Government are about to embark on the greatest ever centralisation of our schools system, which will see an end to the role, now a century old, of democratically accountable local authorities as the stewards of our children’s education. My Front-Bench colleagues have already highlighted the glaring black hole in the finances of this plan—£560 million—which raises questions about the extent to which the schools budget will be raided to make up the shortfall.

[Mr Jim Cunningham (Coventry South) (Lab)]

My hon. Friend mentions the schools budget. I do not know whether she is aware that in Coventry one or two academies are already in serious trouble because of falling numbers as a result of certain changes in the education budgets.

[Catherine McKinnell]

I appreciate my hon. Friend’s point. It is not just local academies that are in trouble—there are some much bigger and more serious questions that we need to raise. First, why are the Government doing this? There is no proof whatsoever that academies per se raise educational standards. It is a distraction that schools now need to focus on this rather than on their educational attainment. Secondly, how will the Government enable the local political leadership to drive up standards and work together, as happened so effectively with the London Challenge, if the power and decision making is so centralised in Whitehall?

Is the Department for Education even fit for purpose to deal with over 20,000 schools across the country—about 3,400 secondaries and almost 17,000 primaries? There are signs that it is already struggling with its current workload of 4,000 schools. As the Education Committee, of which I am a member, recently uncovered, the Department could not even deliver its annual accounts to Parliament in time and required a statutory extension, and there remains doubt as to when it will ever be able to present them. This mass rush to conversion will only add to the current mess. We need only look at the fiasco of the free schools application process, where there is no clear rhyme or reason to the Department’s decisions to authorise new schools.

We see a Department in disarray. Of particular concern for my constituents is how the forced academisation process will fit alongside the large-scale programme of house building that is planned for our area. As a result of the coalition’s national planning policy framework, some 21,000 new homes are expected to be built in Newcastle by 2030, a large proportion of which will be in my constituency. That will require new school capacity, but who will be the guiding mind that will match and create that new school capacity in an area that will be controlled by Whitehall? Newcastle City Council already finds itself in the impossible position of being unable to establish new community schools to cope with existing demand. How on earth will it be able to deliver the right school places across Newcastle upon Tyne North when every school is accountable to the Secretary of State?

Finally, in addition to the fact that apprenticeships were not mentioned in the Chancellor’s Budget even though we were promised that they would be, another glaring omission was the lack of any announcement about how the Government intend to protect our regional airports from the impact of devolving air passenger duty to Scotland. That is crucial to Newcastle airport, which supports 12,000 jobs in the region, and through which £300 million of goods are exported every year. All talk of a northern powerhouse will be completely undermined if the Chancellor fails to deal with the issue urgently.

--- Later in debate ---

[Mr Jim Cunningham (Coventry South) (Lab)]

I am interested in something that the hon. Member for Croydon South (Chris Philp) said when he mentioned Denis Healey. There was another individual who said, “You never had it so good” in 1959, but by 1963 the economy of this country was in very serious trouble. People should be very careful when they start sloganising like that.

To be charitable about this Budget, the most one can say about it is that it is divisive. Frankly, it puts the burden of the national debt and the national economy on the shoulders of the poorest. Over the past few days—I will not rehearse it now—we have had the fiasco with the Chancellor and the Secretary of State for Work and Pensions. If the Chancellor had an economic plan, why was he blown off course over the past 48 hours or so? He would not have been blown off course if he knew what his economic plan was. Did he not know the implications of the cuts he was inflicting on the poorest members of our society?

During the general election, the Conservatives bandied about a figure for cuts in benefits—I think it was £12 billion —but when they were pushed to spell out exactly where they would find that sum, they never answered the question. There has been a deception on the British public based on the argument that the country was in an economic mess that they inherited when in fact it was the world economic situation that had deteriorated. If Ministers really want to know about this, they should watch the second part of the BBC 2 programme about Obama. The first part was about how Obama dealt with the debt that he inherited—from a conservative Republican, George Bush, by the way. Interestingly, at that stage Obama spent $85 billion on bailing out the motorcar industries, so I have no doubt there was an economic problem.

The Government are preparing the ground for some of these measures by always hinting at the international economic situation, so if we listen to them very closely, we can expect more cuts. It is no economic strategy to continually inflict cuts on the poorer people in society, and on local government and the public services. On the one hand they say they value those in the public services, but on the other they only give them a 1% wage increase. If they really value the nurses and the doctors in this country, then they ought to give them a decent increase.

Equally, in fairness to the Government, I have to say that I certainly welcome the help given to small businesses. That is an important factor, because 3 million or 4 million jobs have been created in this country by small businesses, but sometimes they are picked up by the larger companies. People tend to forget that.

Not enough is being invested in skills, and we must be careful about that. It is one thing to have a target of 200,000 apprentices, but the question is: are they quality apprenticeships? More importantly, we had the recent example of student nurses, whose grants have been cut. A married woman who suddenly wants to study part time will no longer qualify for that grant.

Once again, the Government have placed the burden on local authorities. Over the next few years, Coventry City Council will have to find between £70 million and £90 million for something that has been slipped out in the Budget. Not a lot of people have picked up on this, and it certainly has not been mentioned today, but Government grant will be shifted on to local authorities. When local authorities have to put up council tax to counter that and to deliver public services, the Government may come along and call local authorities prolific spenders, or they may want to cap it three years down the road. These are things that we should be conscious of. In the west midlands, the police budget is 80% funded by Government grant. Can people not see the implications for those services and for local government in terms of jobs? As I have indicated, local government is paying a terrible price, along with the poor of this country.

I will finish by talking about academies. An academy is closing in Woodlands ward in Coventry, which is in the constituency of my hon. Friend the Member for Coventry North West (Mr Robinson). I do not want to intrude on his territory, but I intend to start taking the matter up with Ministers, as a route for consultation, and with the local authority.