House of Commons
Wednesday 18 December 2013
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
I have regular discussions with the Chancellor about a wide range of issues, and I can assure the hon. Lady that the whisky industry in Scotland and its employees are a key priority. My Department has long-standing contact with the Scotch Whisky Association, which aids our understanding of the industry.
Scotch whisky is exported to about 200 countries, and the industry directly employs 10,000 people in Scotland. According to a recent White Paper from the Scottish Government, there will be about 90 Scotch whisky embassies if the Scottish Government have their way after independence. Does the Secretary of State agree that trade agreements brokered by a strong and extensive United Kingdom diplomatic and international trade infrastructure are integral to the success of Scotch whisky exports? I—
The right hon. Lady is absolutely right. Given that 90% of the product of the Scotch whisky industry is for the export market, it is of supreme importance that Scotland has the best possible access to that market, and we have that facility through the network of some 270 embassies throughout the world and through United Kingdom Trade & Investment. That is what matters, and that is why the Scotch whisky industry makes such good use of it.
The Scotch whisky industry provides many jobs in my constituency, but I feel that it is very unfair that whisky is taxed at a higher rate per unit of alcohol than beers and wines. Will the Government look again at alcohol taxation with a view to creating a level playing field?
I may be wrong, and if I am I apologise, but I do not think my hon. Friend is right about the relative taxation of whisky and other alcoholic drinks. [Interruption.] I have now been informed that beer duty is 37% and whisky duty is 42%, but in any event it is wrong to play off one part of Scotland’s highly successful food and drinks industry against another. I am sure that the Chancellor will continue to listen to representations from the Scotch whisky industry, which my hon. Friend and I have made jointly over the years.
I declare an interest, as secretary of the all-party parliamentary scotch whisky and spirits group. Nearly every week the group receives representations about the whole question of the duty escalator and the unfair treatment of the spirits industry in relation to the beer industry. The Chancellor gave so much to the beer industry in his most recent Budget. What representations has the Secretary of State made to the Chancellor with the aim of overcoming the problem?
I will continue to make representations on behalf of the whole food and drink industry in Scotland, in which the hon. Gentleman and his all-party group play an important part. I have joined the hon. Gentleman on many occasions over the years as part of such delegations, and I will continue to give him as much support as I can.
Does the Secretary of State not accept that 80% of the price of a bottle of Scotch whisky is duty, which is paid to the United Kingdom Treasury? Duty discrimination by the UK Government is widening the gap between the price of whisky and the price of other beverages. How does that help the industry and employees?
The point to which the hon. Gentleman should respond—although I suspect that he will not—is that the Scotch whisky industry does very well as part of the United Kingdom industry, taking full advantage of the string of embassies and UKTI offices that we have throughout the world, and his policy of independence puts that at risk.
In opposition, the right hon. Gentleman and I, along with others, lobbied the Treasury to end tax discrimination. In fact, the right hon. Gentleman himself tabled an amendment for that purpose, supported by Liberal Democrat Members and the Scottish National party. Since becoming Secretary of State for Scotland, he has taken the Tory shilling, he is letting the industry down, and he is supporting a discriminatory duty. When will he stand up and be Scotland’s man in the Cabinet, rather than the Tories’ man in Scotland?
I do hope that that sounded better when the hon. Gentleman rehearsed it in the mirror earlier this morning, because it sounded pretty poor just now. There is no escaping the fundamental truth that his policy would be the ruination of the Scotch whisky industry, for no good reason.
With your permission, Mr Speaker, before I answer that question, may I draw the House’s attention to the fact that Saturday 21 December will be the 25th anniversary of the Lockerbie bombing? That remains the single largest loss of life ever in the United Kingdom, with 270 people perishing on that fateful evening. I am sure that the thoughts and prayers of the whole House will be with the community and with those who lost friends and family on that day. Much of the focus over the past 25 years has been on the perpetrators, but the friends and families of the victims and the community of Lockerbie deserve our respect and admiration for the formidable way in which they have coped with 25 years of unprecedented global attention.
The national minimum wage is one of Government’s key policies to support the low paid, and it is UK wide. On 1 October, the adult minimum wage increased to £6.31 per hour. We have also increased the income tax personal allowance to £10,000, taking 224,000 Scots out of income tax altogether and benefiting 2.2 million Scottish taxpayers.
I am sure that the whole House will commend and agree with the Minister’s remarks about Lockerbie.
In his subsequent answer, the right hon. Gentleman omitted to say that prices had risen more quickly than wages in 41 of the 42 months he has served as a Minister in this House, that low pay was on the rise in Scotland and that the value of the national minimum wage had declined in real terms under this Government. When are he and the Business Secretary going to do something concrete to deal with all that? Or is he just going to sit on his hands while the cost of living crisis in Scotland gets worse by the day?
The hon. Gentleman is simply wrong. The October 2013 adult minimum wage rate is around 27% higher in real terms compared with the consumer prices index and about 15% higher in real terms compared with the retail prices index than it was on its introduction in 1999.
The UK Government’s attitude to the living wage was encapsulated by the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson) earlier this year when she said:
“There is no recognised definition of a national living wage.”—[Official Report, 10 June 2013; Vol. 563, c. 211W.]
She went on to explain that the Government had therefore made no assessment of its consequences, were it to be introduced. Should not the Government move quickly to introduce a living wage for their employees, wherever they might be based in the UK, rather than hiding behind the vacuous argument that it is too difficult to calculate, given that we know it will be £7.65 an hour in Scotland and £8.80 in London next year?
It is never a surprise to hear the Scottish National party mention London in the same breath as Scotland. As I said to the hon. Member for Motherwell and Wishaw (Mr Roy), the Government believe that the living wage is a concept that should be supported, where employers can afford it and where it is not introduced at the cost of jobs.
May I associate myself with the Minister’s remarks about the terrible tragedy of Lockerbie?
Low pay is one of the reasons that people are using food banks in Scotland today. I wish nothing personal towards the Minister, but I am disappointed that the Secretary of State did not answer this question himself, because we know that the Secretary of State has recently begun to struggle with some of the details of his brief. Let me see whether the Minister can do any better. Will he tell the House what the percentage increase in the number of people using food banks in Scotland in the past year has been? Given that it is Christmas, I will offer him a hand. Is it (a) 100%; (b) 200%; (c) over 400%?
What the hon. Lady omitted to tell us was that under her Government the increase in people using food banks was 1,000%. Our Government are concerned about people needing to use food banks in a moment of crisis in their lives. We support the development of food banks and those who operate them, and I was very proud to open the food bank in Peebles in my constituency. But to pretend that these crises are of this Government’s making and that they have not been going on for a continuing period is to mislead the House.
The Minister should know that the increase in the past year has been 435%, which is more than 34,000 people, including more than 10,000 children, using food banks in Scotland. Those are shameful figures and all Members of this House should pay attention to them. He has refused to be drawn on why this is happening. Citizens Advice, the Trussell Trust and the Child Poverty Action Group are all saying that this Government’s policies are driving people in Scotland to use food banks. Are they all wrong?
Of course the hon. Lady does not acknowledge the 1,000% rise in the use of food banks under the last Labour Government. We want to look at, and understand, why there has been an increase in the use of food banks. That is why the Department for Environment, Food and Rural Affairs has committed to an extensive study on the use of food aid across the United Kingdom, and she will be able to read that when it is published.
Given the ability of illegal and clandestine immigrants to move freely within the UK, it is not feasible to produce separate estimates for each part of the UK.
It would appear that the Government do not really know how many illegal immigrants there might be in Scotland. Given the attraction of the whole of the UK to people from other countries, I suspect that the problem might be rather greater than the Secretary of State imagines, particularly in cities such as Glasgow and Edinburgh. Will he reassure the House that he will work closely with the UK Border Agency to ensure that Scotland is not an easy route into the UK for illegal immigrants?
For years, immigrants have been vital to the economy—in my constituency, I see the importance of Filipino fishermen—and, since the Union, the problem in Scotland has been emigration, not immigration. But what can we do for Syrian refugees, to enable them to come here as legal immigrants? Although the Secretary of State might have failed to get his colleagues to vote for war in Syria, what might he do this Christmas to help refugees come from Syria, especially given that Germany is taking 80% of the European total and the UK is taking zero, which Amnesty International says should cause heads to hang “in shame”?
The Government have no plans to review the Barnett formula in this Parliament.
That is not quite what the Secretary of State said only a few weeks ago. Gary Robertson asked, “What about the Barnett formula? Will that change post-2014?” The Secretary of State said—because it was he—“Let me be absolutely clear, erm, erm, er, there will be no action taken on the Barnett formula, erm, erm, until the economy has erm, er, stabilised.” Help me Rona! Why is he not just straight with the Scottish people? We all know that the bosses and the paymasters of the no campaign—his Tory friends—want Barnett scrapped. Is that not the real cost to the people of Scotland—£4 billion?
It is a classic of the genre—synthetic outrage at its very best. The hon. Gentleman knows that the Barnett formula is one reason the people of Scotland reject independence. That is why he is operating his own little “Project Smear” to pretend that it is somehow at risk. The position has been put beyond any doubt today by the Prime Minister in a letter to the First Minister. The hon. Gentleman should explain that and tell the people of Scotland that the best way to get rid of the Barnett formula is to vote for independence.
Not only do I agree with my hon. Friend on that point, but I believe that the energies of the Scottish Government would be much better served if they were devoted to dealing with the implementation of those highly complex tax changes, which are due to come on stream in 2016, rather than running around and setting up scare stories of that sort.
The Barnett formula has served Scotland, and the Opposition believe that it is at the heart of redistribution across the entire UK, which is why we support it. I agree with the Secretary of State that the only threat to the Barnett formula is a vote for independence. Will he share with the House why he believes that the SNP Scottish Government do not understand that they are the only threat to the Barnett formula?
I have a strong suspicion that that is wilful on the part of the Scottish Government. As I said a few moments ago, they know that people in the United Kingdom value the Barnett formula so they try to pretend that there is some threat to it. That is part of their strategy. They identify things such as the pound, the Bank of England and the ability to build complex warships on the Clyde, which are the things that the people of Scotland value from being part of the United Kingdom, and then pretend that they can hold on to them while becoming independent. It is just not credible, which is why they are losing the argument.
I have regular discussions with Ministers in the Scottish Government on a range of issues, including fisheries policy.
My ministerial colleagues in the Department for Environment, Food and Rural Affairs also work closely with the Scottish Government to ensure that the interests of Scottish fishermen are fully recognised in the UK position in EU fisheries negotiations.
I congratulate the Government on achieving reform of the common agricultural policy and on introducing an element of regional control. What assessment has my right hon. Friend made of the implications for Scottish fishermen, and will they benefit greatly from it?
I have long been an enthusiast for the regionalisation of the common fisheries policy, and I am delighted that, for the second round of reform, we have seen that at the heart of it. There is still more that can be done, but anything that brings fishermen, scientists and other stakeholders together in order to manage fisheries away from Brussels has got to be good.
Was the right hon. Gentleman as surprised as I was to see Scottish Nationalist party Minister Richard Lochhead claiming that he has secured the quota deal for Scottish fishermen while, at the same time, complaining that he has no voice? Is it not the fact that Scottish fishing is best represented in the EU with a strong voice as part of the UK?
No, I was not at all surprised, because that is exactly the sort of double standard that we have seen from the SNP over the years on this and just about every other issue. The fact is that my hon. Friend the fisheries Minister led the delegation this year to the December Fisheries Council with exceptional skill. He delivered for the Scottish fleet the things that really mattered. In particular, he ensured that there was no further cut in effort and brought home important flexibility on monkfish quotas. He is to be commended for that—[Interruption.]
No pressure, then, Mr Speaker. When my right hon. Friend is giving proper consideration to the future of the fisheries industry in Scotland, will he pay particular attention to the village-based fisheries industry? That is a particular issue in areas such as my constituency, based as it is on Pittenweem and surrounding ports. It is essential that the interests of the village-based fishing industry are not subjected to the sometimes overbearing influence of those who go further out to sea.
I know from my constituency experience that the small inshore fleet is of great importance to the communities represented by me and my right hon. and learned Friend. His point is well made, and it is important that we do what we can to sustain the fleet in those small ports.
The Secretary of State knows that the postponement of the negotiations with Norway over shared North sea stocks means that the fishing fleet faces an uncertain new year. Will he support the Scottish Government’s calls for an increase in the North sea cod quota next year, in line with the scientific advice?
As the hon. Lady knows, that is a subject to be determined at the EU-Norway talks in January. They have been held over, and although such an increase would be desirable—it is certainly what the industry is looking for—that is not entirely within our gift, as it is an EU negotiation.
I know from my own constituency that rural consumers face particular challenges on energy bills. The Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Sevenoaks (Michael Fallon), who is responsible for energy, is working with all interested parties to obtain more secure and affordable off-grid supplies. I am due to meet the Office of Fair Trading early in the new year to discuss the matter.
I thank the Minister for that answer. As he is well aware, rural consumers who are off the grid are often forgotten in arguments over energy prices. The energy company obligation is supposed to be technologically neutral, but the major energy companies will not include LPG or oil boilers in their schemes, which is surely discriminatory. Will he press his colleagues in the Department of Energy and Climate Change to ensure that such boilers are included in ECO schemes?
Is my right hon. Friend aware of the particular difficulties in remote rural areas, where there is no access to main supplies for both gas and oil? Will he commend the concept of heating oil clubs, such as the one I am promoting in Landward Caithness? They have done much to depress that cost. What can the Government do to assist?
The Government are keen to support oil clubs like the one in Landward Caithness. I am sure that the issues that concern the hon. Gentleman’s constituents will be ably discussed at our proposed round table in the Scotland Office with DECC and Scottish MPs.
We believe that something should be done about the mess in the electricity industry that the hon. Gentleman’s party left behind. That is why we are seeking to move people on to lower tariffs, that is why we are rolling back green levies, and that is why we are encouraging competition. What his party offers is a gimmick and a con.
North Sea Oil and Gas
7. What assessment he has made of the interim report by Sir Ian Wood on the future regulation of oil and gas extraction in the North sea. (901639)
The interim report by Sir Ian Wood has given Government and industry alike plenty to think about and that is exactly why we asked him to carry out his review in the first place. After his final report is submitted early next year, the Government will set out our plans to make the most of our offshore oil and gas fields.
I thank the Secretary of State for that answer. He will be aware that Sir Ian Wood’s report refers to much of the North sea as a mature environment and to the need for collaboration to maximise the economic recovery for what is, by record, a volatile and, by definition, diminishing resource. Does he agree that the fragmentation of fiscal and regulatory regimes through separate arrangements for Scotland and for the rest of the UK continental shelf would minimise the chance of achieving that outcome?
I think it is very clear to all who have an informed view of the industry that its best future lies as part of the United Kingdom, rather than as part of a Scotland separated from the rest of the United Kingdom. It is a mature industry that still has a great deal to offer, but it is telling that the Scottish Government’s recent White Paper gives absolutely no guarantees about the future of field allowances in the industry, which will be absolutely crucial to its future development.
Is not the most exciting thing about Sir Ian Wood’s report the consensus he has discovered in the industry, which is that with more regulation and a stronger regulator with more resources there is the potential to unlock even greater investment, supporting jobs, taxpaying and energy security?
The Prime Minister was asked—
I am sure that the whole House will wish to join me in sending our warmest wishes for Christmas to our armed forces in Afghanistan. Having just returned from there, I saw at first hand once again their incredible commitment and dedication. We should remember the families who will be missing them, especially at this time of year, and indeed we should remember all our service personnel around the world. Our country owes them a huge amount for the work they do and the sacrifices they make on our behalf.
This morning I had meetings with ministerial colleagues and others, and in addition to my duties in the House I shall have further such meetings later today.
I join the Prime Minister in sending our warmest wishes to our armed forces, and also to all the public sector workers taking care of us over the Christmas period.
Unless the Mesothelioma Bill is changed, 6,000 victims who were criminally and negligently exposed to asbestos at work will not receive any compensation from insurance companies. Will the Prime Minister intervene at the eleventh hour to prevent that from happening? If he does not, it will be fair to assume that he would rather stand up for the insurance companies than for innocent people who were exposed to asbestos at work.
I very much respect the hon. Gentleman’s record of campaigning on this issue, but I will say this: the Mesothelioma Bill is a huge step forward. Frankly, for decades there has been no provision for these people, through no fault of their own, who will die from this terrible disease. Once the scheme that we are putting in place is up and running, roughly 300 people a year will receive approximately £115,000 each. I think that is an important step forward. I will obviously look at what he has to say, but I think that we should be proud of the fact that after a long delay we are tackling this issue.
Will my right hon. Friend join me in saluting the courage of the hundreds of thousands of people who have been peacefully protesting across Ukraine for the past few weeks against their President’s decision to break off talks with Europe and to move closer to Russia? Does he agree that if there is any further violence against them, those responsible should be held personally accountable, and will he continue to hold out the prospect of closer links with Europe in the longer term, which is what the people of Ukraine want?
I absolutely agree with my hon. Friend that we should pay tribute to those in Ukraine who want a future linked to Europe and the peace, prosperity and stability that that relationship would bring. I think we should also say, as he has said very clearly, that the world is watching what the Ukrainian authorities have done and are contemplating doing in response to the demonstrations. I think we should stand with the people of Ukraine, who want that peaceful, secure and prosperous future.
I join the Prime Minister in paying tribute to all our troops serving around the world, particularly in Afghanistan. Once again this year, they have done our country proud. They have shown the utmost courage and bravery. All our thoughts are with them and their families this Christmas.
Today’s economic figures show a welcome fall in unemployment, and for every person who gets back into work it benefits not just them but their family as well. Does the Prime Minister agree, however, that it is a major challenge for Britain that at the end of this year there are more people than ever before in today’s figures working part time because they cannot get the hours they need?
It is worth looking at these unemployment figures in some detail, because I think they do paint an encouraging picture. Unemployment is down by 99,000 and the number of people claiming unemployment benefit has actually fallen by 36,000 in this month alone. There are 250,000 more people in work. Youth unemployment is down. Long-term unemployment is down. Unemployment among women is down. We have talked before about 1 million more people in work under this Government; there are now 1.2 million more in work. There should not be one ounce of complacency, because we have still got work to do to get our country back to work. Having everyone back in work means greater stability for them, a greater ability to plan for their future, and greater help for their families. But the plan is working; let us stick at it and get unemployment down even further.
The Prime Minister did not really answer the specific question I asked. It is good that our economy is creating more jobs, but the problem is that too many of them are part time, low paid or insecure. Today’s figures show what is happening to wages. Does he agree with me that it is a matter of deep concern that at the end of this year average wages are £364 lower than they were a year ago and over £1,500 lower than they were at the general election?
Let me answer very directly the question about full-time and part-time employment. Actually, full-time employment has grown much faster in recent months, and overall since the election 70% of the new jobs—and there have been millions of new jobs—are full-time jobs. I agree that we have got more to do. We have got to do more to put in place our long-term economic plan to keep the economy growing. I have to say to the right hon. Gentleman that it is all very well standing up at the Dispatch Box and saying that there would be 1 million fewer jobs; we are still waiting for him to correct the record about that. Of course I want to see more money in people’s pockets. The only way we can do that is to keep on with the economic plan, keep cutting unemployment, keep people’s taxes down, and cut the deficit so that we keep interest rates down. That is our economic plan: what is his?
Let us talk about the Prime Minister’s predictions. He said that he would balance the books in five years; he has failed. He said that he would secure Britain’s credit rating; he has failed. The worst prediction of all is that he said he would be good at being Prime Minister, and he has certainly failed at that. He has got no answer—[Interruption.]
Is it not interesting, Mr Speaker, that the thing they want to talk about least of all is the cost of living crisis facing families up and down the country? That is because they know that families are worse off. Can the Prime Minister tell us how much higher the average gas and electricity bill is this Christmas compared to last?
They have a programme which will clearly lead to the disappearance of 1 million jobs. Now we have 1.6 million more private sector jobs and 1.2 million more people in work, it is time that the right hon. Gentleman apologised for his prediction talking the economy down. He asks about the cost of living; let us compare our records on the cost of living. They doubled council tax; we have frozen it. They put up petrol tax times 12 times; we have frozen it. They put up the basic state pension by 75p; we have put it up by £15. [Interruption.] Ah, we have a new hand gesture from the shadow Chancellor! I would have thought that after today’s briefing in the papers the hand gesture for the shadow Chancellor should be bye-bye. You don’t need it to be Christmas to know when you are sitting next to a turkey. [Interruption.]
I thought that, just for once, the Prime Minister might answer the question he was asked. Let us give him the answer: energy bills are £70 higher than they were a year ago—despite all his bluster, that is the reality—and £300 higher than when he came to office.
Let us try the Prime Minister on another important issue for families. The cost of child care is crucial for parents going out to work. Can he tell us how much the cost of child care has gone up this year?
We are providing 15 hours of child care—of nursery education—for two-year-olds, three-year-olds and four-year-olds. The right hon. Gentleman was never able to do that in government. It is all very well for him to make promises, but the only reason why we are able to keep our promises is that we took tough decisions about the economy. We took tough and difficult decisions to get the deficit down. We took difficult decisions to get our economic plan in place.
What the right hon. Gentleman cannot stand is the fact that this Christmas the economy is growing, 1.2 million more people are in work, our exports are increasing, manufacturing is up, construction is doing better, the economy is getting stronger and Labour is getting weaker.
I tell you what, Mr Speaker, that was a turkey of an answer. Why does not the Prime Minister, just for once, answer the question? Child care costs have gone up £300 in the past year—nearly three times the rate of inflation—and he is not doing anything about it.
There is one group the Prime Minister has helped out with the cost of living this year: those on his Christmas card list. I know he does not like my asking about this, but can he tell us how much lower the taxes of someone earning more than £1 million a year are this year compared with last year?
The top rate of tax under this Government is higher than it ever was under the right hon. Gentleman’s Government. The fact is that the highest 1% of earners are paying a greater percentage of income tax than they did when he was sitting in the Cabinet. Those are the facts. If he wants to talk about what he has done on the cost of living, we have cut income tax for 25 million people, but Labour voted against it. We have taken 2.4 million people out of tax, they voted against it. We froze the council tax, they voted against it. We froze fuel duty, they voted against it. The only reason we have been able to do this is that we have a long-term economic plan. The right hon. Gentleman ends the year with no plan, no credibility and no idea how to help our economy.
Order. The usual low graders can make as much noise as they like. Let me just say to them, for their own benefit—I will say it again; some of them do not learn very quickly—that however long it takes, right hon. and hon. Members will be heard. It is so simple, I think it is probably now clear.
The more the Prime Minister reads out lists of statistics, the more out of touch he seems to the country. This was the year that the cost of living crisis hit families hardest. This was the year the Government introduced the bedroom tax while cutting taxes for millionaires. This was the year he proved beyond doubt that he is the Prime Minister for the few, not the many.
The right hon. Gentleman may not like the facts, but he cannot hide from them. The typical taxpayer is paying £600 less because we cut taxes. The deficit is falling—it is down by a third—because we took difficult decisions. Today, for the first time in our history, there are 30 million people in our country in work. The fact is that at the end of this year we have a recovery Labour cannot explain, growth it said would never come, and jobs it said would never happen. Meanwhile, it is stuck with an economic policy that does not add up and a shadow Chancellor it cannot defend. That is why the British people will never trust Labour with the economy again.
I can give the House something to cheer about. Will the Prime Minister join me in welcoming the fact that investment in our North sea oil and gas industry this year will reach a record £14 billion, accounting for an unemployment rate in my constituency of just 0.7%, but is he aware of Sir Ian Wood’s report that says we need collaboration between Government and industry to unlock between 3 billion and 4 billion barrels of oil worth £200 billion that will otherwise be left under the sea?
My right hon. Friend makes a very important point: the Wood report is an excellent report and we are looking to put that in place because we want to maximise the returns and the employment and the investment in the North sea. In recent months we have seen very encouraging signs of greater investment in the North sea, not least because of the decisions taken by the Chancellor to bring into play some of the more marginal fields. We need to keep up with that and implement the Wood report as my right hon. Friend says.
Q2. Does the Prime Minister understand, even if Dr Richard Haass does not, that agreement and consensus in his talks are desirable but will be impossible to achieve if proposals re-emerge that are viewed in the Unionist community as diluting our very essence of Britishness as Northern Ireland seeks to strengthen its position within the United Kingdom, not weaken it? (901684)
I think we all agree that Richard Haass is carrying out a very important and extremely difficult task: looking into the issues of parades, of flags and, of course, the past. I have met Richard Haass, and I think he is an incredibly impressive individual. We should let him do his work and we should judge his work on the results he produces, but I hope that everyone will try to look at this process with some give and take to try and bring the communities together.
Unemployment in the Peterborough constituency stands at 5.5%, the lowest it has been since the financial crisis, and there were 1,180 fewer jobseeker’s allowance claimants than a year ago. However, there are too many young people who are jobless and lacking work skills, so will the Prime Minister give an early Christmas present to Peterborough people by giving his personal support to our bid for a university technical college, to be decided in the new year?
I know that my right hon. Friend the Education Secretary will look closely at the proposal for a university technical college. They are working well, and I think that is a very good innovation in our education system.
The news on youth unemployment is better—19,000 down this quarter—and the claimant count is falling as well, but there is a lot more work to do. I think we should particularly look at the work experience programmes which seem to have one of the best records at reducing youth unemployment and see what we can do to encourage companies and businesses to get involved in this work experience programme.
Q3. With the Archbishop of Canterbury reminding us of society’s responsibility to support the poor and the vulnerable, and the Archbishop of Westminster specifically criticising the inhumanity of aspects of Government policy, does the Prime Minister regret, as we approach Christmas, his Government’s retreat from the compassionate Conservatism he used to adopt? (901685)
I do not accept what the right hon. Gentleman says at all. There is nothing more compassionate than getting more people into work. The best route out of poverty is work and what we can see for the first time in our country is 30 million people in work. I enjoy debating and listening carefully to our Archbishops. I have to say that I do not agree with what the Archbishop of Westminster said about immigration, but I think we should be frank and open about these debates and not be concerned when we do have disagreements.
Q4. Thank you for calling me, Mr Speaker, and a merry Christmas to you and your family. The people of Suffolk have enjoyed a cracker of a Christmas present with the excellent news on the A14, which will encourage greater investment and growth. In that spirit, does my right hon. Friend agree that calls to abandon the Government’s long-term economic plan and adopt the Opposition’s plan to borrow and spend more will raise taxes and mortgage rates for hard-working people in this country? (901686)
First, I congratulate my hon. Friend on her ingenious way of ensuring that she is called regularly in debates and questions in this House, an example that I am sure others will follow. On that note, a very happy Christmas to you and your wife and children, Mr Speaker.
My hon. Friend has been very clear in her campaign against the toll on the A14, and I am glad that we have settled that issue. She is right to say that the biggest threat to our economy now would be to abandon our plan. We are getting the deficit down; we are keeping interest rates down; we are cutting people’s taxes; and we are seeing the country get back to work. The biggest risk is more borrowing, more spending, more taxes—all the things that got us into this mess in the first place.
Q5. At the end of November, I visited Handsworth Grange community sports college in my constituency. The head, Anne Quaile, told me about the school collecting food to help their needy families over Christmas. Indeed, there will be a food bank on the school site in the new year. What really shocked me was when she told me about a young girl, aged 15, who arrived on a Monday—just before my visit—not having eaten all weekend, because there was no food in the house. How does the Prime Minister expect that young girl to fulfil her educational potential? (901687)
We have to do everything we can to help Britain’s families and to help families into work, and that is exactly what we are doing under this Government. We also have to make sure that we protect the income levels of the poorest, and that is why, for instance, child tax credit is up £390 under this Government, protecting the money that goes to the poorest people in our country.
Q6. As the Prime Minister sits down for Christmas dinner to chillax with his family and friends, will he spare a thought for my Blackpool constituents and 500,000 others, whose Christmas will be mired in the incompetence and random cruelty of the benefit sanctions imposed by the Department for Work and Pensions? My casework on this includes a woman denied jobseeker’s allowance for doing voluntary work at one local branch of a national charity rather than at another. Will his new year resolution be to resolve the chaos of sanctions and of universal credit? (901688)
I think the best thing we can do for the hon. Gentleman’s constituents, and indeed everyone’s constituents, is to keep on with the economic plan that is generating more jobs in our country. If we look at the north-west, we see that the number of people employed is up by 37,000 since the election, and unemployment has fallen by 29,000 since the election. We need to keep on with that, while of course making sure that the benefit system works for people who need it, but he does not do his constituents any favours by talking down the performance of the economy.
Q7. Will the Prime Minister pay tribute to Norfolk’s emergency services and volunteers, who have done such a brilliant job both in tackling the recent coastal floods and in helping to repair the damage? The floods were potentially worse than the floods of 60 years ago that killed 300 people and destroyed 25,000 homes. Does he agree that special mention should be made of two local newspapers, Eastern Daily Press and Lynn News, which have campaigned tirelessly? The former has raised more than £100,000 in its appeal. Will he tell the House what Departments can do, working in conjunction with Norfolk’s local authorities? (901689)
My hon. Friend is absolutely right to raise this issue. I was very impressed when I went to Norfolk—to Wells-next-the-Sea—to see the amazing contribution made by not only the emergency services, but, as he said, local newspapers in highlighting this issue and helping to prepare people for what was to come, as well as the flood co-ordinators and the people who work voluntarily to help our communities. I was particularly impressed by what I saw the lifeboats had done. An enormous wave swept through their station but, even with that, they were able to get out there and help people. As he says, because we have put money into flood defences, we protected a lot more homes that otherwise would have been affected, but the work needs to continue.
Q8. Ministers have admitted to me that there are delays in completing personal independence payment claims. My constituent, Kathy, who is suffering from cancer, made her claim in August, but a decision is still to be made. She had a home appointment yesterday with an Atos assessor, but they did not turn up. Why is the Prime Minister allowing cancer patients to suffer because of the incompetence of his Government? (901690)
The number of unemployed claimants in the Henley constituency has fallen to 439. That makes it the third best performing constituency in the country. Will the Prime Minister join me in congratulating local businesses for the role that they have played in that?
I am very happy to congratulate local businesses on what they have done. What we are seeing, which Labour predicted would never happen, is a private sector-led recovery. For every job that has been lost in the public sector, we have seen three or even four jobs created in the private sector, mostly by small businesses. We need to keep up the economic environment that is helping those businesses to take people on, invest and grow.
Q9. At the last election, many of my constituents truly believed the Prime Minister when he said“no ifs, no buts, no third runway”at Heathrow. They are now faced with the threat of a third runway and a fourth runway, with thousands losing their homes and schools being demolished. There is even the threat that we will have to dig up our dead from the local cemetery. Does he appreciate that many have lost all faith in him as a man who keeps his word? (901691)
The hon. Gentleman has a very strong view about this matter, but I simply do not accept what he says. We said that there would not be a third runway. We have stuck with that promise. We now have a report that is being done by Howard Davies, which has all-party support. The interim report is very good.
Order. I know what I am doing. I do not need any help from Back Benchers. A reference was made to the treatment of constituents, not to observations that have been made in respect of Members of the House. I am clear on that and the procedure is extremely clear as well.
In the north-east, all 29 constituencies have seen an increase in apprenticeship starts since 2010. I recently opened an engineering academy in Hexham. Does my right hon. Friend agree that it is only through the provision of better skills and apprenticeships that we will improve the living standards of our young people?
My hon. Friend is absolutely right. I saw for myself on a visit to Stockton and Darlington what a difference the extra apprenticeships and funding are making. We want the recovery to be shared right across our country. In the north-east, unemployment has fallen by 3,000 this quarter, but it is still too high. There are 28,000 more people in work than there were at the time of the election, but we have further to go and we must stick to the economic plan that is delivering.
The point that I would make to the hon. Gentleman is that disposable income is higher this year than in any year between 1997 and 2010. The reason for that is that, in spite of slow wage growth, we have cut people’s taxes. We can cut people’s taxes only if we take difficult decisions about the deficit and about spending. We have not had the support of the Labour party for a single one of those difficult decisions.
Will the Prime Minister help to get justice for my constituents, who want to know why an investigation into the meetings that were had by Theresa Villiers, the former Transport Minister, has not been reported on, despite four months of waiting and various assurances that I would have the answer?
Q11. On a slightly more seasonal note, may I probe the Prime Minister on the revelation in the autumn statement that over this Parliament borrowing is forecast to be £198 billion higher than originally planned? Will he accept that his pledge to balance the books by 2015 had all the credibility of a proposal to build an airport on a non-existent island in the middle of a bird sanctuary in the Thames estuary? (901693)
The hon. Gentleman always brings a flavour of pantomime to our proceedings. If he is worried about the deficit, and if he is worried about borrowing, he ought to look in front of him, rather than behind him, because we have not had one bit of support for anything we have done to cut the deficit. If he is worried about the deficit, why does the Labour party propose to put it up?
It is very good news that a record number of people are in work and keeping more of their take-home pay, but there was another milestone this week when we reached 2 million new pension savers, thanks to auto-enrolment. Is that another example of how this Government are taking the right long-term decisions for this country?
My hon. Friend is right to raise auto-enrolment. It means that more people are saving for their retirement, which means more stability and security for them, and a greater ability to plan for their future. There are 30 million people in work—so many more in work this Christmas than there were last Christmas—all of whom are better able to plan for their future and have that basic security that people in our country rightly crave.
I urge the hon. Gentleman to look at what I said when I was praising the role that our armed forces have played. They have carried out the tasks that we asked them to carry out, and they have done it with huge professionalism and skill. As I said, they will be able to leave that country with their heads held high, secure in the knowledge that we put in place what is necessary to stop terrorism and terrorist training camps returning to Afghanistan. Very clear rules are in place about redundancy, which mean that those people about to serve, serving, or having returned from Afghanistan, are not able for redundancy.
Q14. Today 1,000 fewer people are out of work in Worcester than when unemployment peaked under Labour. With 700 businesses in the constituency likely to benefit from the Government’s extension of small business rates relief, I urge the Prime Minister to continue to do everything he can to help the high street and remove burdens on businesses creating jobs. (901696)
What is happening in Worcester is welcome news. Across the country not only is unemployment down but vacancies are up, which is good news for the future. I think we have taken some important steps forward with the rate rebate of £1,000 announced in the autumn statement for businesses on the high street, and, of course, the £2,000 employment allowance, which means that businesses do not have to pay their first £2,000 of national insurance contributions. That means that businesses in Worcester and elsewhere will be able to take on more people.
Q13. Further to the question from the hon. Member for St Albans (Mrs Main), four months have passed since serious allegations were made that the Northern Ireland Secretary broke the ministerial code during her time as Transport Minister. Will the Prime Minister ensure that the Cabinet Secretary responds before the House rises for the Christmas recess? (901695)
I welcome the Prime Minister’s acceptance that something needs to be done to stop EU migrants accessing British benefits. Would he agree that what he is proposing—which will probably be found illegal by the European Court—is really spitting in the wind when it comes to the problem we face, and that the only way to get back control of our borders and our benefits system is to leave the European Union?
I do not share my hon. Friend’s pessimism and we are taking these steps—including the announcement today that people coming to the UK should not be able to claim benefits within the first three months—on the basis of legal advice, and looking carefully at what other countries in the EU do. I want to do everything possible to ensure that the right of free movement is not abused. There is a right to work in different countries of the European Union, but there should not be a right to claim in different countries of the European Union. Where I would agree with my hon. Friend is that I think we need to do more in future, and we must learn the lesson from the mistake that Labour made by giving unfettered access to our labour market when Poland and others joined the European Union. That led to 1.5 million people coming to our country and was a profound mistake.
Q15. Average household incomes will be substantially lower in 2015 than they were in 2009. Is the Prime Minister concerned about that? What does he say to my constituents, who are struggling with the cost of living crisis caused by his Government’s policies? (901697)
The first thing I would say to the hon. Lady’s constituents is that we are raising to £10,000 the amount people can earn before they pay income tax. That is worth £705 to a typical taxpayer. Because of the progress we have already made, disposable income this year is higher than it was in any year between 1997 and 2010. Opposition Members might not like those facts, but they are true. It is worth remembering why we are in this situation in the first place. [Interruption.]
The point I was making is that the reason we are in this situation was laid out by the Institute for Fiscal Studies two weeks ago. It pointed out that we had the biggest recession for 100 years under the last Government, which cost the typical family £3,000. Opposition Members should apologise for that before moving on to the next question.
Christmas in Syria will be defined by unstopping grief and horror in sub-zero temperatures. I encourage the Prime Minister to keep a relentless focus on humanitarian relief in Syria, to encourage the rest of the international community to meet the UN’s demands for £4 billion of assistance, and to ensure that that assistance is much more imaginative and generous.
On behalf of the House, I am grateful to my hon. Friend for raising that issue before Christmas. That is where our thoughts should be. There is a huge humanitarian crisis affecting up to half of the Syrian population. Britain can be proud of the fact that, at £500 million, we are the second-largest bilateral donor of aid going to Syria and neighbouring countries and we are helping people in those refugee camps. We should encourage other countries to step up to the plate in the way we have done, and ensure that we fulfil our moral obligations to those people who will suffer at Christmas time.
On a point of order, Mr Speaker.
Local Government Finance
My Department has today published the provisional financial settlement for English local authorities for 2014-15 and 2015-16. The technical details are outlined in a written statement, and associated documents have been placed in the Library and in the Vote Office. This is effectively the second year of a settlement announced last year. We have been consulting over the summer on the detail of the statement, so it should not come as a surprise to any local authority.
This year’s settlement is fair to all parts of the country—rural or urban, district or county, city or shire—meaning that councils can deliver sensible savings while protecting front-line services. Every bit of the public sector needs to do its bit to pay off Labour’s deficit, including local government, which, we should remember, accounts for a quarter of all public spending.
Opinion polls clearly suggest that satisfaction with local government is either constant or even improved compared with 2010, despite the need for councils to make savings to tackle that deficit. Today’s fair funding deal arms councils with a significant spending power average of £2,089 per household.
The autumn statement protected local authorities from further spending reductions for 2014-2015 and 2015-16. Overall, the average spending power reduction for councils in 2014-15 is expected to be limited to just 2.9% per household. Extra funding has been provided for sparse rural areas. With English councils spending £117 billion this year, councils must continue to focus on cutting waste and making sensible savings. There is significant scope for councils to merge back-office services or do more joint working: get more for less and they will do better with their £60 billion a year procurement budget; tackle £2 billion of local fraud; reduce the £2 billion of lost money in council tax arrears or use their record £19 billion of reserves; and get better value for money from their billions in property assets.
Local authorities should be looking to protect their residents and give them help with the cost of living. Extra funding is on offer to councils to freeze council tax for a fourth year in a row. The Government have provided up to £550 million for the next two years, which allows for a fourth year of freeze worth up to £718 for the average bill payer, with more savings to come next year. I am proud to be part of a Government that have allowed that freeze in council tax. In contrast, the previous Labour Government doubled council tax for hard-working people.
From April next year, funding for the 2011-12 and 2013-14 freezes will be in the main local government settlement total for future years. Funding for the next two freeze years will also be built into the spending review baseline, which will give maximum possible certainty for councils that the extra funding for freezing council tax will remain available without a cliff-edge effect. The Government are clearing up the mess left by the previous Labour Government, paying off Labour’s deficit and helping hard-working people with the cost of living. Councils are doing well and playing their part.
Given the scale of the cuts affecting local authorities, the Minister really should have made an oral statement today instead of having to be dragged to the House. Will he explain why the further cut of, supposedly, 10% in real terms—announced by the Chancellor in the spending round for 2015-16—is actually a 15% real cut to the settlement funding assessment? Why are the most disadvantaged communities once again the hardest hit? Will he confirm that by 2017 the city of Liverpool, the most deprived local authority in the country, will have lost 62% of the Government grant it was receiving in 2010? How on earth can he justify that? As the Audit Commission recently reported:
“Councils serving the most deprived areas have seen the largest reductions in funding relative to spending.”
Tough times do indeed require tough decisions, but this Government, as they have shown time and again, from the bedroom tax to the top rate of tax and local government funding, take most from those who have least. That is unfair and unjust.
Despite Government talk of a freeze, many councils, including Tory authority after Tory authority, will increase the council tax next year, including for residents who work but are on the lowest incomes and will lose council tax benefit. Why is the Minister top-slicing money from council funding that is based on need, and putting it into the so-called “new homes bonus” in areas where new homes would have been built anyway? Does he not realise that hundreds of thousands of vulnerable people have already been denied social care due to cuts in council funding, while the Government have wasted money on their expensive and failed reorganisation of the NHS? Is it not the case that even more people will lose out because of what has been announced today?
Another week, another Minister in denial—when will the Government realise that the future set out today means that more and more councils in the years ahead will simply not be able to maintain the services on which so many people rely?
I am somewhat surprised; I had been expecting the right hon. Gentleman to outline for the first time these several years exactly where Labour’s promised £52 billion of cuts would come from.
In reality, we have heard nothing new this morning. This statement comes after last year’s statement set out a two-year settlement for local authorities. In fact, whereas more than 3% had been predicted, this year local authorities will get a 2.9% reduction, falling to below 2% next year. So it is a good news day for local government. [Interruption.] The right hon. Gentleman’s comments did not match up with the facts of life. The Audit Commission’s recent report outlined how local authorities were coping well with the changes. [Interruption.]
Order. Mr Ronnie Campbell—[Interruption.] Order. Your apprenticeship to become a statesman will never be completed at this rate. I know you are a bit over-ebullient, but you must calm yourself. [Interruption.] Calm yourself. I say two things, if I may: first, Members must not shout at the Minister, and secondly, I think the Minister was deploying a rhetorical device, but he will be aware that on these occasions, a question is put to Ministers; it is not an occasion for another party to set out policy. That is not the nature of the urgent question procedure, but I know, from his wry smile, that the Minister is well aware of that important fact.
Thank you, Mr Speaker. Your point is well made. I think the hon. Member for Blyth Valley (Mr Campbell) must be excited about the local government settlement, as we all are today—it is an exciting day for local government.
If the right hon. Gentleman looks at the figures, he will see that we have gone even further this year to protect the most difficult areas and those councils left abandoned by the last Labour Government through their reduction in the working neighbourhood fund. I am thinking of councils such as my local authority of Great Yarmouth and others such as Pendle and Hastings, which they left with massive black holes that this Government have filled with the transitional grant. Those councils will be protected even further this year with a reduction of no more than 2.9%, which is good news for local authorities working hard to deliver good front-line services—services that Labour left hanging on a ledge.
The right hon. Gentleman referred to councils such as Liverpool. I gently remind him that Liverpool and Newcastle are similar in being among the best-supported councils in the country and having the highest spending power per dwelling. For example, Newcastle receives £2,400 per dwelling, which is about £900 more than areas such as Windsor and Maidenhead. I think that he and his colleagues should look at the figures. [Interruption.]
Under the leadership of councillor Russell Roberts, Kettering borough council, of which I have the privilege to be a member, has for the past three years offered a policy of “triple zero”: no cuts to front-line services, no cuts to voluntary grants and no increase in council tax. The Minister will know, because he has twice visited Kettering borough council, that it is an exemplary local authority. Does the message not go out that if Kettering can do this, other councils, if they really want to, can also do it?
My hon. Friend makes a very good point. Kettering is an excellent example of a good Conservative council managing its finances properly for the benefit of local residents, keeping down the cost of living by keeping council tax frozen and providing excellent front-line services, as good councils all over the country are doing.
In the June spending round, the Chancellor stated that in future years local government spending would drop not by the 10% to 15% that the Local Government Association said, but by 2.3%. The Prime Minister has repeated that figure. I wrote to him asking how it was calculated, but got a response from the Chief Secretary to the Treasury that did not do that. Will the Minister now explain where that 2.3% figure is in the document and how it is calculated? If it is not in here now, will he write to me, placing a copy in the Library, showing how it has been calculated?
I am happy to write to the Chairman of the Communities and Local Government Committee with the figures. He will find that the gap between some of the points the right hon. Member for Leeds Central (Hilary Benn) made and the real figures is explained by the fact that we are interested in how much local authorities have to spend on their residents, not just what they spend on bureaucracy and red tape, through the Government grant.
I welcome for the second year running the one-off payment to sparse rural areas, but many well-run councils of all political colours are predicting a cliff edge in 2015, when they fear they will have to cut services dramatically. What advice would the Minister give those councils following today’s statement?
I am sure my hon. Friend will be pleased to know that the settlement for rural areas will be rolled into the base, giving them a better base going forward, enabling them to continue their good work of sharing services and management and ensuring they are efficient and delivering good front-line services for residents.
I remind the Minister that for many years—in fact, decades—it has been an accepted practice for Ministers to announce the provisional settlement in the House, to allow proper debate and discussion, in good time and preferably around the end of November or early December. I put it to the hon. Gentleman that it does not help local government to have a late—no, very late—provisional settlement put out by written statement, with the Minister subsequently being dragged here to answer an urgent question.
Far from being dragged here, I always find it a pleasure to be at the Dispatch Box. The right hon. Gentleman might like to look back at past records and see that his own party regularly made written statements. More importantly, local government has had two years’ notice, as we made an oral statement on a two-year settlement last year.
Does the Minister agree that it is unacceptable that Enfield Labour council has allowed uncollected council tax to increase over the last three years, against the trend for the rest of London, from £6 million to a staggering collective £32 million, particularly given that those figures already discount uncollectable council tax?
My hon. Friend makes a good point. There is some £2 billion-worth of uncollected council tax, and councils should be working on the problem. This is not councils’ money, but taxpayers’ money. Whenever there is uncollected council tax, it costs other taxpayers more money. My hon. Friend is absolutely right to highlight this issue; good councils will be working hard on it.
Thank you, Mr Speaker, and a merry Christmas to you.
Is the Minister aware that in Northumberland, where I come from, we have had to cut £30 million this year and £60 million last year, and we are sacking workers and cutting social services, while education has been cut right down to the bone—and there is no money left? The Minister is living in cloud cuckoo land.
I hope that the hon. Gentleman will go back and convince his local authority, using his great powers of persuasion, to do the right thing by its residents—to cut back-office costs and bureaucracy and perhaps look at our Department’s “50 ways to save” document. That would help the council to protect front-line services rather than try to score political points with people’s everyday lives.
Last year, hard-working families in my Bury North constituency faced an inflation-busting increase of 3.5% in their council tax, which was put down to the levies imposed by the Greater Manchester joint authorities. Can the Minister assure them that the same thing will not happen again next year?
I thank my hon. Friend for his question. It is unacceptable for council tax payers to have to pay that level of increase when there is so much more local authorities can do to save money—and the good ones are already doing it. Yesterday saw the Third Reading of the Local Audit and Accountability Bill, which contains provisions on levies and council tax referendums that will prevent that sort of thing from ever happening again.
As the Minister will be aware, it has been said that all the cuts have fallen in the north and not in the south. Does he agree that that is not the case and that the Government have, in fact, been just as vicious in cutting the budgets of the most deprived towns and cities in the south of England as they have in the north, looking after the more prosperous councils wherever they are?
Let me tell the right hon. Gentleman that the Government have produced a settlement that we believe is fair to rural and urban areas, north and south. We are having to make tough decisions—difficult, complicated ones—following the complete financial mess left to us by the last Labour Government.
My hon. Friend will be aware that the Government’s getting rid of many regulations has helped councils with the cost of services. I am keen, however, for the Minister to reinforce the message that district councils should pass on the tax grant to parish councils that have a reduced tax base.
Does not the Audit Commission’s finding that the most deprived areas have been hit with the biggest cuts show that this Government are on the side of the rich and are quite happy to balance the books on the backs of the poor?
As I have said to other Members, the hon. Lady should look at the total amount. Areas such as Liverpool and Newcastle have a much higher spending power than pretty much anywhere else in the country. Even those areas most affected by the black hole left by the last Labour Government—areas such as Hastings, Great Yarmouth and Pendle, which are doing good work to transform themselves—are being protected with an efficiency support grant, which the last Government never bothered to provide.
I very much back the rural fair share campaign and I welcome the money that has come forward. Given that it is Christmas, I would have liked it to be a little more generous, but can you outline exactly how much extra you are going to give to rural authorities that you would not have given otherwise?
My hon. Friend has participated in a strong and ongoing campaign with colleagues across the House—including at least one Opposition Front Bencher—about the gap between rural and urban areas. We listened last year and made a one-off payment. This year we have provided increases, which will be rolled into the baseline. My hon. Friend will see that from the figures in the Library.
Birmingham city council’s controllable spend has been cut from £1.2 billion to £400 million. We will have to cut services. Will the Minister tell my constituents whether we should cut school patrols, school libraries or public conveniences?
I would suggest that the hon. Lady use her powers of persuasion to encourage Birmingham city council to do the right thing and, instead of playing political games with its local taxpayers, be more efficient with its back office, and look at how to use its reserves to invest for the future.
People living in rural areas earn less on average than people living in urban areas, pay higher council tax and get fewer services, which are more expensive to deliver, yet there is a 50% rural premium or penalty, with 50% more going to urban areas than rural ones. We welcome the rolling of this grant into the general fund, but it will do nothing to close the gap between urban and rural, which cannot be defended.
My hon. Friend has made a passionate and strong case for rural areas throughout the year. That is why we rolled an increased amount into the base. It goes further to narrow the gap. It narrowed last year and narrowed slightly further this year. I am sure that my hon. Friend will be lobbying me on the issue over the next few weeks of consultation procedures.
Now that the Minister, like most of his Tory Front-Bench colleagues, has referred to debts being left behind, is he aware that in Derbyshire, where the Tories lost control last May, they have left behind the biggest mess that Derbyshire county council has ever had to deal with—£151 million in cuts? Is not the truth of the matter that this Tory Government, with their coalition allies, are intent on wrecking the public sector and bringing local government to its knees? That is the policy of this Government, whose massive cuts have mostly been in the Labour-controlled areas.
If we look at what has happened, we find that even the independent report last year showed that the settlement was fair as between north and south, urban and rural—and we would argue that the same applies this year. It is true that, thanks to the mess created by the last Government, we have had to cut back. Local government accounts for a quarter of all public spending, so it has its part to play. The last Labour Chancellor outlined £52 billion-worth of cuts, which the Opposition have not outlined yet, but they have opposed every single change that this Government have made. That is not a credible position, so I take no lectures from the hon. Gentleman. I suggest that he go back to his now Labour-controlled authority and ask it to do what the last Conservative authority was doing, which was managing better so that local taxpayers do not have to be punished by increased council tax. It should freeze its council tax, as the Conservative-led coalition Government have done, and make things better for its local residents.
A significant group of authorities, mainly in rural areas, have been historically underfunded. The Government have recognised that, but does the Minister understand that improving the distribution formula does no good whatever if a damping mechanism is then imposed, which removes the benefit?
This is a good settlement for local government generally. Councils’ spending power is being reduced by just 2.9%, and a reduction of 1.8% is predicted for next year. That will ensure that local authorities can manage. More important, the Government are putting money—taxpayers’ money—into a council tax freeze for the fourth successive year in order to help hard-working people. I hope that all Labour authorities will follow the example of good Conservative and Liberal Democrat authorities and deliver that freeze to their residents.
On 25 November, in the House, I raised the issue of the council tax benefit support grant, which is not being passed on to all the parish councils in Northumberland. On that occasion, my hon. Friend responded by saying that local authorities should be ensuring that that was done. Has he made any further progress in forcing them to do so?
It is true that a very small number of authorities are not yet passing on the grant, and we are telling them that they should. It is a matter for the authorities themselves, but we made it very clear in today’s written statement that they should be passing the money on to the parish councils.
This morning I received a phone call from a representative of North Tyneside council, who was very anxious because the council had not received any confirmation that the details of the settlement were to be issued today. Why were they not issued to my local authority through the normal channels?
Let me gently say to the hon. Lady that they were issued through the normal channels. That is the normal procedure. As for the question of timing, which was raised by the right hon. Member for Greenwich and Woolwich (Mr Raynsford). we are a prudent, sensible, fiscal Government. It would have been imprudent to do anything before the autumn statement. Perhaps we take the finances of the country slightly more seriously than the last Government.
My hon. Friend has made a very good point. Local authorities should indeed be freezing council tax, and we have now adopted a reward-based system. We reward councils that do good work through the new homes bonus, the business rates retention scheme and the innovation fund. All those measures benefit good councils such as my hon. Friend’s in Swindon, which has done some really good innovatory work. The council tax freeze grant is now in the baseline, and there can be no questions, no ifs and no buts: councils should freeze the tax to help hard-working families.
Bolton will have lost £100 million since 2010. It is not celebrating, but mourning the services that it is losing, and it is desperately worried about its vulnerable residents. When will the Minister stop blaming the last Government and local authorities, and take responsibility for what he himself is doing?
Does the Minister agree that enlightened and far-sighted local authorities such as Rugby borough council anticipated several years ago the tough economic environment in which we now find ourselves, and started to put their houses in order at an early stage by taking a hard look at all their items of expenditure?
I do agree with my hon. Friend. There are very good councils all over the country which have been streamlining their bureaucracy and administration, sharing management, sharing services, improving their procurement practices, and delivering great front-line services to their residents. They should be warmly thanked for doing great work while also playing an important role in lowering the country’s deficit.
Birmingham is reeling from the biggest cuts in local government history, totalling £840 million, and the other core cities have also been particularly hard hit. Common to all the cuts has been a grotesquely unfair approach. Why has Birmingham been hit twice as hard as the national average, and why is every citizen in high-need, high-unemployment Birmingham losing £149 of local government services while in leafy, low-need, low-unemployment Wokingham the figure is only £19?
The Minister accepted in his statement that rural areas were being comparatively underfunded, but I am sorry to say that, once again, the adjustment in the settlement is chicken feed when it comes to addressing the inequality between rural and urban areas. Does the Minister not realise that, at this rate, it will take more than 1,000 years to put that right?
We have actually increased last year’s amount. We have put it into the baseline. I appreciate the point made by Members about the need to narrow the gap between rural and urban areas, but they should appreciate that we are acting against the backdrop of the financial mess in which we were left by the last Government and with which we now have to deal. Obviously, that somewhat restricts our room for manoeuvre.
Is the Minister aware, or willing to admit, that a council tax freeze is a very regressive measure? Those who did not pay previously receive nothing back, and the higher people’s council tax band, the more they gain. We in Scotland have had a great deal of experience of that regressive tax policy over nearly seven years.
I am not sure whether the hon. Lady is arguing that councils should increase the tax, but that is certainly not something that we would support. We think that freezing council tax in order to make families several hundred pounds a year better off is a good thing to do for hard-working families.
I thank the Minister for taking the time to visit Pendle and meet the council’s leader, Joe Cooney, and its chief executive, and for meeting them again when they came to London recently. Will he join me in congratulating councils such as Pendle, which has already made significant savings by, for instance, reducing by 35% the disgraceful number of properties in the borough that were left empty by the last Labour Government?
It was a pleasure to meet Joe, the leader of Pendle borough council, a couple of weeks ago, when I met a number of council leaders. Pendle is a fine example of a small authority that has worked hard to make really good savings while protecting front-line services. I congratulate that council, and other councils that are taking similar measures, on their excellent work.
Plymouth city council has won awards under different administrations. Over the past five years it has cut its back-room staff, innovated, and, sadly, laid off staff. Now it is telling us that it will not have enough money to fulfil its statutory duties over the three-year period, which is not acceptable. Will the Minister please tell us what the council is supposed to do when it is being encouraged to freeze council tax, which is a wholly regressive measure?
If the council freezes the tax, which would be good for its residents, it will receive a support grant from the Government. If it is looking for ideas in order to do more than it has already done, I am sure that the Local Government Association will be happy to help. It could probably learn a lesson or two from Hammersmith and Fulham, which has some good ideas that would help it to cut its tax for local residents.
Cumbria has six district councils and one county council for half a million people. Many Cumbrians believe that the councils should merge in order to save money and improve local services. Were the councils to make such an approach to the Government, would it be favourably received?
As my hon. Friend knows, we are not fans of top-down reorganisation in local government, unlike the last Administration. However, I am very supportive of any local authorities that join forces to find new and innovative ways of saving back-office costs, and I shall always be happy to meet their members and discuss what is achievable for them.
If the Minister believes in fairness, can he explain why West Oxfordshire, one of the richest local authorities in the country, will gain from the settlement, while, according to the Audit Commission, the most deprived areas in the country will lose from it? Are not the Government pursuing a systematic policy, in local government, health and taxation, of transferring money from the poorest areas to the richest?
The hon. Lady’s argument falls completely flat for a couple of reasons. First, we are helping the hardest-hit councils, such as Pendle, Hastings, Great Yarmouth and Hyndburn, whereas the last Government left them with a black hole to fall into in 2010. Secondly, the hon. Lady is living in the past, because this year the Government adopted a reward-based system that enables local authorities to increase their income through the business rates retention scheme and the new homes bonus. Councils that do good things such as building houses and securing economic growth will experience the benefits of that.