Steve Reed
Main Page: Steve Reed (Labour (Co-op) - Croydon North)Local Government Finance (England)
Steve Reed Excerpts(8 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Steve Reed (Croydon North) (Lab)
I will do my best to keep my remarks brief.
It is always a pleasure to listen to the Secretary of State’s engaging manner, but it is not so pleasant listening to what he has to say. He repeated his claims to have protected funding for councils over the next four years, but there can be no one left who believes that anymore—judging from what we have heard over recent weeks, not even his own MPs believe it. That is no wonder, because the settlement funding assessment takes away £1 in every £3 given to councils for funding core services, and that is on top of cuts in excess of 40%—indeed, in many councils, in excess of 50%—that have already been imposed.
Barbara Keeley
I tried to intervene on the Secretary of State and he would not take my intervention, but I cannot leave what he said about social care because it is just wrong. There is no injection of cash into social care; there is only a maximum of £400 million this year. That funding is uncertain, risky and back-loaded, and the LGA has asked him if he will inject £700 million over the next two years because it is so concerned. There was not even funding for its own policy of national living wage increases, so let us not hear such things about social care.
Mr Reed
My hon. Friend is absolutely right, and I will pick up on those points later in my contribution. Returning to the settlement funding assessment, because increases elsewhere do not plug the gap that those cuts create, it will result in cuts to front-line services, including cuts to youth services, fixing potholes, cleaning the streets, emptying the bins, looking after parks, keeping the street lights on at night, Sure Start centres, libraries, museums and rural bus services. The Secretary of State has not protected any of those; he has sharpened the knife.
Mr Jim Cunningham (Coventry South) (Lab)
Councils such as Coventry will lose 60% of their income from grants over a 10-year period—that is £80 million—which will inflict unnecessary hardship. The Secretary of State talks about business rates, but it was a previous Conservative Government who changed those in the first place. He is now passing the buck of paying for the police and social care on to local authorities, and three or four years down the line, he will do what Ministers always do and come in and cap it.
Mr Reed
My hon. Friend is right, and devolving the blame for their cuts is part of what the Government are up to with this settlement.
Some funding for social care has been handed over to councils, which certainly sounds welcome. According to the Tory-led Local Government Association, however, the Government have handed over a £1 billion funding black hole. They have told councils to impose a 2% council tax rise every year for four years to plug that gap, but even that does not raise anywhere near enough to pay for the care that older people need. That increase raises the least money in the poorest areas that most need the funding. The Government have cut the funding then handed it over to councils to take the blame.
Andrew Gwynne
That is exactly the problem Tameside Metropolitan Borough Council finds itself with. This year, it has a £16 million social care deficit. Raising 2% on council tax—based on 100% collection, which is not going to happen—will bring in £1.4 million. The sums do not add up.
Mr Reed
I am grateful to my hon. Friend for making a very graphic illustration of the point I was making.
What this all means is denying vulnerable older and disabled people the home care they need. It means turning away frail, older people who cannot clean their own homes or cook their own food. It means closing down day care centres. It means cutting back on home care visits. It means leaving people stuck in hospital beds because they have no support to go to at home, with the knock-on effect of lengthening hospital waiting times for other patients.
Mr Marsden
Does my hon. Friend not think it bizarre that the Secretary of State should be trumpeting his reviews for the future for elderly people in places such as Blackpool, where we have a larger than average number of elderly and disabled people, but he is not prepared to identify the really savage cuts to adult social care in Blackpool, which is leading exactly to the sort of situation my hon. Friend describes?
Mr Reed
What is really worrying is that the Secretary of State does not seem to understand what is really going on in councils and in public services across the country.
Even Tory MPs were terrified of what voters would make of all this, and they threatened to vote it down. On Monday this week, the Secretary of State came to the Chamber with a fix to head off the rebellion. He announced he had found £300 million down the back of a sofa—he would not tell us where it had come from—and then handed nearly all of it to the wealthiest Tory councils as a sweetener just weeks before the council elections. Some 85% of the money will go to Tory-run areas and barely 5% to Labour-run areas, despite the fact that those Labour areas have suffered far bigger cuts since 2010. Whatever happened to the one nation Tories? What about the northern powerhouse? If the word gerrymander did not already exist, we would have to invent it to describe a fix like this.
Graham Stuart
The hon. Gentleman is making a powerful speech, but I think that it is factually incorrect. As he will know, rural areas tend to have the oldest populations, yet when this Prime Minister came to power, there was a 50% premium going to urban councils with much younger populations. Whatever the future might have held for them, they were not old then and they did not have the need. Rural areas did and his party did absolutely nothing.
Jack Dromey (Birmingham, Erdington) (Lab)
Birmingham has been hit by the biggest cuts in local government history, with cuts of £90 million next year. The city put a powerful case for a fair deal and transitional funding. How can it be right that Birmingham got not one penny in transitional funding, but Surrey got £12 million and Cheshire East, in the Chancellor of the Exchequer’s constituency, got £3 million? It is simply not fair.
Mr Reed
My hon. Friend makes an important point. Actually, Surrey got more than £12 million. Surrey, which of course is where the Secretary of State just happens to be an MP, gets the most of any council. [Interruption.] The council next door to where the right hon. Gentleman happens to be an MP gets the most, with £24 million. Hampshire gets £19 million, Hertfordshire gets £14 million and the Prime Minister’s campaigning mum—admirable woman that she is—will be very pleased to see that Oxfordshire gets £9 million.
I am not criticising what those councils are getting. They did not deserve the scale of the cuts the Government had lined up for them, but then neither do Middlesbrough, Knowsley, Hull, Liverpool, Manchester, Birmingham, Darlington and all the other more deprived areas that have suffered far deeper cuts in the past six years but have been offered absolutely no help whatever.
Greg Clark
I suggest gently to the hon. Gentleman that if he aspires to be a Local Government Minister, a little geography might help. He is welcome to come to Tunbridge Wells. I would be happy to show him that delightful place. Since we are talking about geography, I am sure he is familiar with Durham County Council. In its submission to the consultation, it said:
“In our view, no authority can now claim that this approach is ‘unfair’”.
Does the hon. Gentleman agree?
Dr Roberta Blackman-Woods (City of Durham) (Lab)
I have absolutely no idea what the Secretary of State was saying or where he got it from. According to headlines in our local paper, the funding settlement for Durham has been slammed as unfair by the leader of the council.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. The hon. Member for Croydon North (Mr Reed) has to answer, and then he can give way to the Secretary of State.
Greg Clark
The hon. Member for City of Durham (Dr Blackman-Woods) asked a very reasonable question. The quote came from a document headed: “Durham County Council response to the 2016/17 Local Government Finance Settlement Consultation.” It states:
“The new approach is fairer and should never be reversed.”
Mr Reed
That is a misinterpretation of what Labour council leaders are saying. However much the Conservatives think this pre-council elections sweetener will work, the Rural Services Network is clear that this political bung will not change the dire financial crisis facing even rural councils over the next four years.
Mr Betts
Has my hon. Friend had any indication from the leaders of metropolitan councils whether they think the new arrangements are fair? As I understand it, only three metropolitan councils will get any of the transitional funding, and two of them happen to be Trafford and Solihull—the only two Conservative metropolitan districts.
Several hon. Members rose—
Mr Reed
No, I will not give way again. I will continue.
Some areas represented by Tory MPs, such as Stockton on Tees and Nuneaton, get nothing from the additional money. Those MPs need to ask themselves what their voters will think of MPs who vote for deep cuts and council tax rises for their own areas but throw millions at wealthier areas such as Tunbridge Wells.
Mr Reed
I have given way to the Secretary of State twice, and now I am going to continue.
I turn now to council tax. On Monday, the Secretary of State denied he had written to councils, telling them to put up council tax. Indeed, it was not the Secretary of State who wrote that; it was the Under-Secretary of State for Communities and Local Government, the hon. Member for Nuneaton (Mr Jones). [Interruption.]
Madam Deputy Speaker
Order. The House is making far too much noise. Both the hon. Gentleman and the Secretary of State have important things to say. Let them fight it out. Do not make so much noise.
Mr Reed
Barracking will not stop me saying what needs to be said.
I have a copy of the letter the Minister sent to councils with the provisional settlement. The spreadsheets it links to, which were sent to every town hall, include figures setting out the Government’s expectation that councils will put up council tax by 1.75% every year for four years and, on top of that, impose a further 2% rise to help plug the gap arising from the Government’s failure to fund social care properly. That is 3.75% a year more every year for four years. By 2020, it adds up to a council tax hike of well over 20%. That will cost the average band E council tax payer about £300 more a year. It is very hard indeed to square that massive Tory tax hike with the Tory manifesto pledge to keep council tax as low as possible. The Tories are breaking their promises—they are hiking council tax up.
Andrew Gwynne
My hon. Friend is making a very important point about council tax. During his statement earlier this week, the Secretary of State failed to understand that different councils have different council tax bases, and he told me to go away and speak to Trafford Council about how it is managing its affairs. There is a 27.4% difference between the council tax bases of Tameside and Trafford. Does my hon. Friend agree that such a difference is inherent in the unfairness under discussion?
Paul Farrelly
The situation regarding transitional help is even worse than my hon. Friend has described. The west midlands, Newcastle-under-Lyme, Stoke-on-Trent and Birmingham will all get nothing, but already well-rewarded Conservative counties and districts in the south, including St Albans, Sevenoaks and Surrey Heath—those are names to conjure with—are going to benefit. Does my hon. Friend think that that is right or fair?
Mr Reed
The figures speak for themselves: 85% to Tory councils and 5% to Labour councils. Everyone listening to this debate knows precisely what the Government are up to.
Turning back to the council tax rises that will be imposed over the next five years, what will people get for all the extra money the Tories will take off them? Will their streets will be swept more often? Will their bins be emptied more regularly? Will their library be saved, or will older people be looked after properly? No, because the Government have cut council funding so hard that the extra money they will take off people will not make up for what the Chancellor has cut.
Taxpayers will pay more, but they will get less in return. That is Tory value for money—tax hikes and service cuts, picking people’s pockets, while damaging the quality of life of every community up and down this country. That is the story of this funding settlement, which is why every Member should vote against it this evening: a 20% council tax hike designed in Downing Street; services cut to the bone; and £300 million hurled at a handful of wealthier areas in a desperate bid to buy off a Tory Back-Bench rebellion. People pay more but get less from these tax-hiking, pledge-breaking, self-serving Tories.