Lord Stunell
Main Page: Lord Stunell (Liberal Democrat - Life peer)
The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)
It has been a lively debate with plenty of passionate opinions and not too many facts from those on the Opposition Benches. Thirty three hon. Members have contributed to the debate, and before I deal with as many of their points as I can, I pay tribute to the hon. Members who made maiden speeches today— the hon. Member for Wolverhampton South West (Paul Uppal), who demonstrated a light touch but also a determination to stick up for his constituents, and the hon. Member for Dudley South (Chris Kelly), who is local and proud of it; his sense of fairness, he thinks, is embedded in his constituency.
We in the Government are under no illusion that local authorities face significant challenges, but deficit reduction and continuing to ensure economic recovery is the most pressing issue facing Britain today. Given that fact, it is fair that local authorities make a contribution to that reduction in Government spending—a proportionate reduction. It will enable the Government to take immediate action to tackle the UK’s unprecedented £156 billion deficit inherited from the previous Government.
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.
Andrew Stunell
About the time that, instead of simply banks failing throughout the world, countries were failing throughout the world.
We expect councils to continue to protect essential, front-line services this year. The decision on where to make the changes to their budgets is one for them to take. We have given them the flexibility that they need to deliver that, and, with local government accounting for about one quarter of United Kingdom public sector spending, the level of cuts that they are taking is proportionate. In the context of greatly reduced public finance, it is right that all parts of the public sector bear some part of that.
Like Opposition Members, I wish that this programme were unnecessary or avoidable, but unlike them I remember my right hon. Friend the Secretary of State for Business, Innovation and Skills, when he was the Liberal Democrat Treasury spokesman, warning them time and again, year after year, Budget after Budget, that they were following a path to fiscal destruction. On uncontrolled debt, unregulated banks and unfounded public spending, they would not listen then and do not want to listen now. They hollowed out Britain’s economic base, mortgaged Britain’s financial future, gambled on the banks and blew away our manufacturing industry, and now when the bailiffs are at the end of the street, they still want to spend, spend, spend.
It is time that the Opposition got real, faced up to their catastrophic destruction of this country’s public finances, hung their heads in shame and confessed that their misplaced love affair with the casino bankers leaves this House, this Government and the British people with no choice but to tighten our belts, pick up Britain’s economy and get it going again. I urge the House to support the Government’s amendment.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.