Local Government Finance — House of Commons, 2015-02-10
Topic: Government Operations
Graham Charles Stuart (Conservative, Centre-right): It is a pleasure to take part in this debate. We have heard a number of excellent speeches from both sides of the House, none more brilliantly delivered than that of the shadow Secretary of State, the right hon. Member for Leeds Central (Hilary Benn), who in the most lucid way presented a picture of a much fairer settlement for local government, if only the Labour party came to power. No one in the House has such a pleasant and agreeable manner as the right hon. Gentleman, yet beneath that surface we heard nothing to tell us about what the Labour party would do if it got into power Despite all the protestations from Labour Members about the dreadfulness of spending reductions for local government, we know that the Labour party is not committed to spending any more at all. So if anyone is to win, by the sound of it, it will be the local authorities that already have the largest and most generous settlements from central Government, whereas those local authorities in rural areas with an ageing population which, on average, is poorer and has a lower average income will lose out. People in rural areas already pay a significantly higher level of tax and have weaker access to services, yet they will lose out if Labour comes to power. That has not been stated categorically. Members have asked for greater transparency. We got no transparency from the Labour party today Tonight our job is to vote. The House decides this evening on the settlement—the distribution of funding to local government across England. It is Labour policy that in a year’s time 35 or perhaps—in the Labour party’s worst nightmares, and it is not that unlikely— 40 Scottish National party Members of Parliament will be able to dictate the distribution of local government funding in England, despite the fact that at the general election people expressed a preference for an entirely different vision. That is possible. When there is greater devolution to Scotland, it is quite wrong that we are unable to distribute our own funds within England in a way that does not allow that to be dictated by those who represent people whom it does not affect. I would like to put that on the record As we discuss this subject, I am disappointed that I must again highlight the unfairness that my rural constituents and others across this country face in the settlement. I do not accept the Government line that this is a fair settlement for all. I recognise, though, that they inherited from Labour a funding system so skewed, so indefensible and so politically rigged that it was a shameful scandal. It was one in which, when the numbers could not be made to work out to the political preference of the then Labour Ministers, officials were asked to invent new technicalities in the system—new ways of ensuring that the money went where those Ministers wanted it to go. What did they come up with? They decided that they would use density as the weighting to drive the money where they wanted it The new formula had all sorts of perverse outcomes. For the most part, it delivered the additional funds to Labour seats that Ministers were aiming for, but it was totally wrong, because density, which does not link to need in any way, was set at four times the weighting given to sparsity, which does link to need. Although it served the party political purposes of Labour at the time, it also led to perverse outcomes in distribution across seats in areas represented predominantly by Liberal Democrats or Conservatives. It was fundamentally unfair, and areas of the country that are rural and have lower incomes have lost out ever since. This Government inherited a deeply skewed, morally unjustifiable funding settlement from Labour, and nothing we have heard from Labour Members today suggests that they do not plan to return to precisely the same methodologies if they get back into power I welcome this year’s announcement of an additional £4 million for rural authorities through an increase in the rural services delivery grant, which did not exist until this coalition Government came to power and recognised the need to do something to address the inequalities in rural areas. In meetings with Ministers this year, colleagues from multiple parties have received the clearest recognition yet that the Government accept the principle that the funding system is biased against rural areas. I am grateful to Ministers who have begun to right the historical injustice brought about by the previous Government. My right hon. Friend the Member for East Yorkshire (Sir Greg Knight) wished to be present when I was speaking but was unable to be here. However, he fully supports the points that I am making on behalf of all the people in east Yorkshire On average, as has been said—it is worth repeating after the excellent speech by my hon. Friend the Member for Newton Abbot (Anne Marie Morris)—that rural residents pay £81 more in council tax than their urban counterparts and earn less, on average. Over time, it has been good to see Labour Members slowly taking in this fact; it has been dripping in. People in rural areas are not living in some prosperous idyll—far from it. On average, they have lower earnings than people in urban areas and face greater costs in accessing services. Yet rural residents, who pay more council tax and are poorer, on average, receive £153 less per head in central Government grant than do those, on average, living in cities.