Local Government Finance

Tony Lloyd Excerpts

Wednesday 9th February 2011 Commons Chamber

[Mr Pickles]

Over recent weeks, my coalition colleagues and I have had many conversations with local government. We have spoken to individual authorities, the Local Government Association, London Councils and other representatives, and let me say how much I respect the mature and responsible attitude that all have taken throughout those discussions. They know that we are sailing in choppy economic waters, and that cutting Labour’s massive budget deficit is the responsible and the right thing to do—and many have planned ahead.

Only the most blinkered could have failed to see tough times coming. The House will recall that the right hon. Member for Edinburgh South West (Mr Darling) said in March 2010 that if Labour were to remain in power we would see spending cuts “deeper and tougher” than those of the 1980s—I suppose that that is one Labour pledge we are able to deliver—so let us not pretend that anyone thought that we could spend, spend, spend indefinitely.

[Tony Lloyd (Manchester Central) (Lab)]

Even if the Secretary of State sets the context in terms of a cuts agenda for local government, why have this Government chosen to hit most harshly local authorities such as my own, the fourth most deprived in the country, while not inflicting the same level of cuts on authorities that are politically from a coalition background and socially in a much more advantaged position?

[Mr Pickles]

If the hon. Gentleman will forgive me, I will come to that point in a moment. If I do not satisfy him, I will happily give way to him again.

Thanks to Labour, the nation’s credit card is maxed out. The longer we leave it before we start to pay it off, the worse it will be and the more we will have to pay. Unless we tackle Labour’s borrowing, interest—just the interest—on its toxic legacy of debt will hit £70 billion a year by 2014-15. That is more than we currently raise from council tax, business tax, stamp duty and inheritance tax combined.

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[Tony Lloyd (Manchester Central) (Lab)]

I have spent almost my whole political life not wanting to personalise politics, but I must say to the Secretary of State that he should be ashamed of himself for losing the battle in the Cabinet and the spending review so that local government has become the victim of his incompetence. He should be ashamed of himself because the settlement is divisive within the local government family. It will inflict damage on vulnerable authorities while, as we have heard from my hon. Friend the Member for Hammersmith (Mr Slaughter) and the hon. Member for Wells (Tessa Munt), some local authorities are feather-bedded and treated with kid gloves. This political decision of his is an outrage because in cities such as mine it will be the most vulnerable people who suffer, as my right hon. Friends the Members for Wythenshawe and Sale East (Paul Goggins) and for Salford and Eccles (Hazel Blears) and my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) have pointed out. [Interruption.]

The Secretary of State chunters from a sedentary position. The reality is that, like previous Tory Secretaries of State for local government, he has no compassion or consideration for those who will lose their home help or for the children who will lose the life chances that people in his constituency will take for granted. What we have had from him and his Ministers is a campaign of ridiculous disinformation such as the nonsense that has been repeated by Tory Members today about £150,000 going on statues in Manchester or about the Twitter tsar who was an invention of the Minister for Housing and Local Government. [Interruption.] The Minister says something from a sedentary position that I cannot hear, but I am happy to give way to him if he wants to make his point. [Interruption.] He indicates that he will reply when he winds up. No doubt that will allow him to peddle his ridiculous fantasies again.

[The Minister for Housing and Local Government (Grant Shapps)]

Is the hon. Gentleman saying that an advert for a new media expert for £38,000 was not placed by the council?

[Tony Lloyd]

I have checked and there is a communications officer, whom, the House might be interested to know, was asked to have competence in new technologies such as Twitter and is equivalent to a number of people in the Minister’s Department who have the same role, the same salary band and the same competences. His Twitter tsars massively outgun Manchester’s ability to communicate. He should think very carefully, because trading insults at this level does nothing for the people who are going to lose adult social services. [Interruption.] Does the Secretary of State want to intervene?

[Rory Stewart (Penrith and The Border) (Con)]

Will the hon. Gentleman give way?

[Tony Lloyd]

I will give way to the Secretary of State. I hope the hon. Gentleman will forgive me.

[Mr Pickles]

Some of the problems that the hon. Gentleman is talking about relate to the working neighbourhoods fund, which was cut by the Labour party. Where was he then? Why was he not lecturing the Labour party about those cuts? He criticises us but he was silent on his constituents’ behalf then.

[Tony Lloyd]

I invite the Secretary of State to come to my constituency any day of his choosing. We will walk around and talk to local people, and we will ask them about the record of local government under a Labour Government and under previous Conservative Governments. As my right hon. Friend the Member for Salford and Eccles said, when the Labour Government came into power in 1997, Manchester had seen services consistently destroyed. They were fragile and vulnerable. Under a Labour Government there was an improvement in standards in education, health—a much more difficult task—housing and crime and disorder. All those improvements strengthened our communities and put the cement back into our society.

That Secretary of State, who chunters away to his friends, is putting all that at risk and he is doing so deliberately. There was choice. There was choice in the Budget process that he lost with his friends in Cabinet. There was choice when he decided to put money into local authorities such as Somerset, and not to put money into local authorities such as Manchester. That is a particularly cruel cycle of choice and a cruel deception.

The Prime Minister stood at the Dispatch Box earlier today and told the House that he was guaranteeing that Sure Start centres would continue to operate. Let us talk about the reality in a city such as Manchester, which is having to cut children’s services by some 25%. It has had to say that it will give up control of those Sure Start centres, and it hopes that the running of them will be taken over by the voluntary sector or possibly schools. There is no guarantee for the young people in Manchester that the Sure Start centres, which are praised by everyone on the Government Benches, will continue to operate.

My hon. Friend the Member for Hammersmith says the political choice of the Tory council is to cut the Sure Start centres. In Manchester, a Labour council has to put those Sure Start centres at risk because of the actions of the Secretary of State and his friends.

[Charlie Elphicke]

The hon. Gentleman talks of political choices. Yes, we can talk about statues, Twitter tsars, creative directors and the junket in the south of France, but the key political choice in Manchester is to axe 2,000 jobs while there is £100 million in reserves. How can the hon. Gentleman justify that?

[Tony Lloyd]

I think the hon. Gentleman is either a little hard of hearing or not too fast at understanding. My right hon. Friend the Member for Wythenshawe and Sale East made the point earlier. Those balances that the Secretary of State and his Ministers have traded and which they said are there as some luxury cushion are, in the case of Manchester, allocated money.

[Grant Shapps]

Does the hon. Gentleman recognise that there is £108 million of non-schools money held by his local authority? Earmarked does not mean the same as allocated.

[Tony Lloyd]

The £64 million that will now be allocated will be for the redundancies that the Government are forcing the council to make. That is the answer to the hon. Member for Dover (Charlie Elphicke). It is a disgrace that Manchester must spend such a huge amount of money making good local government workers redundant. That is the responsibility of the Secretary of State. As a result, the things that the Housing Minister described as being merely earmarked will now not go ahead, so Manchester will lose provision and facilities because of the Government’s decision.

[Charlie Elphicke]

The hon. Gentleman speaks of the £64 million earmarked for redundancies. What we did in Lambeth, what happens in most authorities, and what the Government are doing, is to examine the possibility of natural wastage and introduce a slower programme of voluntary redundancies, which would not mean as great a shock as the hon. Gentleman is talking about.

[Tony Lloyd]

Let me try to bring the hon. Gentleman forward a little in his thinking. Manchester would love to have done that. Manchester has not made compulsory redundancies—possibly it is true to say—in my lifetime. Manchester is now having to do that because the pace of the cuts that his Secretary of State is making is so rapid that it has no choice. For an authority such as Manchester, 25% of the budget cannot be taken out of the pot without that resulting in compulsory redundancies.

[Paul Goggins]

Does my hon. Friend agree that the comments, remarks and challenges coming from Government Members reveal a complete lack of understanding of the nature of a city like Manchester? Manchester is a world leading city. It is founded on two things—first, a strong partnership with the private sector and secondly, over recent years, having the money to invest in the communities that need it. Does my hon. Friend share my concern that their ignorance and arrogance mean that the progress that we made is put at risk?

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[Tony Lloyd]

The only thing I disagree with is that my right hon. Friend’s words are too mild, because what the Secretary of State is doing is the result of political malice. It is political malice because the simple reality is that he chose not to exercise the options that were available to him. He chose to make a local government settlement that puts at risk not only money—if it was only money perhaps we would move on—but the resources on which people depend for living their lives. It puts at risk those things that saw crime and disorder diminish in Manchester and that began to give young children in inner-city areas like mine opportunities in life that he would take for granted—the Secretary of State smiles. He is smiling while I talk about children being denied the opportunity to get on in life, because that does not matter to a Conservative Government, or to their Liberal Democrat friends and supporters. It does matter enormously, because they are brutalising our society.

[Andrew Gwynne (Denton and Reddish) (Lab)]

Earlier, the Secretary of State mentioned extra resources for the concessionary fares for shire district councils, yet two weeks ago the Conservative and Liberal Democrat-led Greater Manchester transport authority scrapped the young people’s concession and the peak-time pensioners’ concessionary fare. That is the reality on the ground, and is it not another example of the unfairness?

[Tony Lloyd]

My hon. Friend makes an important point, because all of this is about political choice, and we have to face that squarely. The Secretary of State knows that it is about political choice, because he has form in local government. I remember when he was a national figure in local government; he is now a national figure in national government, but sadly the rhetoric and the reality have not changed. I believe that local government is fundamentally important to the lives that my constituents live. I believe that things such as swimming pools and leisure centres really do matter as part of the process of making our society more decent and more liveable and of properly giving our young people some stake in that society and some opportunity for the future. Frankly, he does not share the view that local government is the answer to our nation’s problems; he regards it as part of those problems.

I must admit that I genuinely like the Housing Minister—I am sorry if I damage his future by saying so—because he is a nice man. He said that he was going to Manchester next week, so I hope that he will come and talk seriously with the people in my town hall, and perhaps in the other local authorities around Greater Manchester, because he needs to recognise that the Government have simply got it wrong. If he wants to stand at the Dispatch Box, as he will in a moment, and tell me that the cuts are not the result of brutal, cynical, malicious and political choices, he can offer to come to my city and talk through the finances. If I am right and he is wrong, and Manchester cannot possibly manage without making serious cuts in public services, perhaps he will have the good grace to admit that the Government must change their minds. I hope that that will happen, but I fear that it will not.