Local Government Finance (England)

Part of the debate – in the House of Commons at 6:50 pm on 10th February 2021.

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Photo of Kate Hollern Kate Hollern Shadow Minister (Housing, Communities and Local Government) 6:50 pm, 10th February 2021

Like other Members, I pay tribute to the fantastic work carried out by Blackburn with Darwen Borough Council staff to enable communities to come through this dreadful time. I also thank the communities of Blackburn, which have pulled together to support those in vulnerable situations and those who are less well off than others.

There have been some excellent contributions to this debate. My hon. Friend Mr Betts spoke about the unfairness of this proposal and the failure to recognise the £5 billion pressure on councils before covid, and we also heard that from my hon. Friends the Members for Salford and Eccles (Rebecca Long Bailey) and for Wirral West (Margaret Greenwood). My hon. Friend Dame Diana Johnson said that this is not levelling up communities. Like my hon. Friend the Member for Salford and Eccles, I see this as a levelling down. My hon. Friend Helen Hayes said that this is a regressive tax that will not fix the problems of social care. That has been a constant theme throughout this debate.

The cat is out of the bag, and the Government’s plans have been exposed for what they really are. They are not giving councils additional funding to protect services; they are hiking council tax. I have serious concerns that, once again, they are mis-selling this to the public. The Conservatives are burdening the public with a £2 billion council tax bombshell, which would never had been needed if the Secretary of State had kept his promise to do whatever it takes. This council tax bombshell is central Government passing the burden over to local councils and, ultimately, to families across the country—the same people he described as heroes, hard-working and compassionate.

This rise is not only wrong; it is economically illiterate in the middle of a pandemic, and following the worst economic crisis of any major economy. The Secretary of State says that he always follows the professional advice. Well, you would struggle to find an economist who thinks that what he is doing is right, Mr Deputy Speaker. It is not the right time to hike taxes, but that is what he is proposing.

My hon. Friend the Member for Wirral West said that, going into this crisis, a quarter of UK households had less than £100 in the bank, 3.6 million people were trapped in insecure work, and in-work poverty was at record levels. For almost a year, many families have been on reduced incomes through self-isolation and furlough, many have been excluded from any support at all, and there have been sadly too many job losses.

The Conservatives have failed to invest properly in public services. They have let high streets go to the wall and have slashed the safety net that people depend on when times get tough. The Government are going to hit people with tax rises in the middle of the pandemic. People cannot afford to loosen their purse strings. The purses are empty for many. This is an additional financial burden on top of the Chancellor’s pay freezes and benefit cuts. It will blow a hole in people’s pockets and, ultimately, undermine the recovery as we come out of the crisis.

With that in mind, it is all the more disappointing that the Government have broken their promise to do whatever it takes to support councils, as evidenced by councils of all political persuasions. I gently suggest that Antony Higginbotham check with his council how much it received and how much the cost was. It would also be useful for him to check how many people received no support at all—either support to self-isolate or business support. The Local Government Secretary has a good poker face to stand at that Dispatch Box and claim otherwise, because time after time the Chancellor has put the economy before public health, against the advice of the experts, and now he is coming back on economic support, when the evidence clearly shows it is still needed. As my hon. Friend Steve Reed says, the Conservatives have had no trouble in handing £2 billion of public contracts to their friends and donors; they have wasted billions on outsourcing projects to their friends that have not delivered; and they have spent £22 billion on a test, trace and isolate system that is far from “world-beating”, leaving councils to pick up this function.

Covid might have closed our economy but, as a result of their incompetence and irresponsibility, the Conservatives have crashed it. The Prime Minister only today said that he bitterly regretted the burden this pandemic has put on families, so perhaps now he will listen to my hon. Friend the Member for Croydon North, who has made it crystal clear that the Government should scrap this council tax bombshell and stand by their pledge to do whatever it takes to support councils and ease the burden that the Prime Minister accepts has been placed on families.