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Orders of the Day — Local Government Finance

Part of the debate – in the House of Commons at 8:52 pm on 1st February 1995.

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Photo of Mr Tony Banks Mr Tony Banks , Newham North West 8:52 pm, 1st February 1995

I understand that I have seven minutes in which to speak.

It is a bit rich for the hon. Member for Norfolk, North-West (Mr. Bellingham), living in his Norfolk castle, surrounded by his servants and champagne and shooting small furry creatures, to lecture local authorities, especially in areas such as the one that I represent, about the need to secure further savings. He continues to lecture them on their inability to deliver services. The hon. Gentleman should experience the problems that we have in the east end of London. I can only say, having listened to his litany, that we dream of having problems like that in the east end.

One of the features of the debate throughout has been the way in which Tories have been running scared of Liberals in the west country. It has been quite a lesson. To paraphrase some great words of Winston Churchill, never before have so many underpants been filled so often by so many.

It seems that no one really understands local authority finances these days. The formulae are complicated, arcane and, at times, semi-lunatic. Unfortunately, the debate will be given little coverage on the television and in the media generally. That is because journalists, especially, do not regard debates on revenue support grant as sexy. They arc: wrong, of course, because of the significance of the debate for every man, woman and child. From nursery schools to residential homes for the elderly, everything is affected by the terms of the settlement that we are discussing. All that provision will be seriously affected.

There was a time when central Government exercised little touch and only light control on local government affairs. It is now a hands-on approach. Unfortunately, the hands are effectively on the throat of local government. There is far too much interference, even now, by central Government in local government affairs. I accept that ministerial attitudes have improved since the rabid days of some years back, but there is still too much of a tendency for Conservative Members to perceive local authorities as enemies of the state and of democracy.

Local democracy and accountability have been almost fatally undermined by the persistent actions of Conservative Governments. We must remove the shackles from local authorities and allow democratically elected councillors to get on with the job for which they were elected by local people, which is to run local services for local people. They should be accountable to local people through the ballot box.

We all have our own whinges, because this is a whingeing debate. I shall have my whinge on behalf of Newham, but I acknowledge—I always want to seem to be fair to Ministers—that Newham has received considerable additional funding over the past couple of years from the Government and the European Union. City challenge at Stratford has objective 2 status, we have assisted area status, and we have received considerable sums from the single regeneration budget. I am grateful, as are all my hon. Friends from Newham, who are in their places.

Newham deserves what it has received because it is an area of acute deprivation. It is top of the poverty league, which is one league from which I would like to see Newham relegated at the first possible opportunity. Despite the Government acknowledging that Newham has problems, they have said in the House that it stands to lose an additional £20 million over the next three years as a result of standard spending assessment and rate support grant settlement.

A way out from Newham's point of view would be to include it as an inner London borough for financial purposes. Newham, Tower Hamlets and Hackney comprise the most deprived sub-region in the country. It is ridiculous that two of the boroughs are classified as inner London while Newham is outer London. That situation is based on historic administrative reasons, not on a financial regime.

As a group, led by my hon. Friend the Member for Newham, South (Mr. Spearing), I and my hon. Friend the Member for Newham, North-East (Mr. Timms), with council officers and others, have asked Ministers for inner London status for Newham. I hope that our case will be considered favourably. I know that there will be problems with some Labour inner London boroughs, and we shall have to face them ourselves. We shall do so by arguing our case, as my hon. Friend the Member for Newham, South has said, on the basis of merit. We are more than prepared to argue with our colleagues.

We are definitely disadvantaged in Newham by the needs indices in the SSA formula. Ministers should take that on board. Newham is ninth in the social index and in 10th position in the new economic index. When it comes to the urban conditions index, Newham is in first place. That index should be included in the SSA formula. Specific consideration should be given to homelessness in Newham. It is an incredibly pressing problem.

All hon. Members have said that we are faced with a tight settlement. More than that, it is a strangulation of a settlement. We are being pushed to the limits in Newham. The Government must recognise our case. The Minister should understand that the three Newham Members hunt in a pack. We shall be hunting at ministerial doors in the years to come.