Category: Debates

Mr John Redwood (Wokingham) (Con): Would the Minister suggest that there should be a limit on how big the gap can be between the best and the worst per-pupil level of funding, as that would be a starting point for getting some justice?

The Minister for Schools (Mr David Laws): That is certainly a sensible principle, and it is exactly what we have tried to do through many of our reforms.

Throughout the Parliament we have introduced major reforms that have improved the fairness and simplicity of the system and laid the essential foundation stones to allow us, the two coalition parties, to introduce a full national funding formula in future. The major reforms we have made are changes to the local funding system, and changes to the way in which we fund disadvantage, with the introduction of the pupil premium and minimum funding levels. Time does not allow me to speak in detail about the first two changes, but I would like briefly to say something about the third—minimum funding levels.

We introduced minimum funding levels last year. I thank not only all the Members who lobbied for that change in the system but the excellent officials in our Department who worked hard, over a sustained period, on the new model. This Government have introduced the first reforms to the distribution of funding between local areas in over a decade. In 2015-16, every local area will attract a minimum level of funding for each of its pupils and schools. The £390 million increase in funding that we introduced as part of minimum funding levels represents a huge step towards removing the historical unfairness of the schools funding system. It ensures an immediate boost to the least fairly funded authorities and puts us in a much better position to implement a national funding formula in the next Parliament. All the logic of the reforms we have made indicates that they should be baselined into funding in the next Parliament. I can certainly make that commitment on behalf of my party; it is for others to make commitments on behalf of their parties.

Mr John Redwood (Wokingham) (Con): This debate is a disgrace. This is a massive work programme with huge implications for the British people and our own country, yet we have been given 90 minutes. I can now make only a few of the points I wanted to make because two of my colleagues rightly wish to join in.

The Minister told us that he was delighted that this was a small and compressed programme of just 23 measures. These measures are huge for the jobs, growth and investment area. There are proposals that will have a direct impact on the economies of the European Union. In the section on economic and monetary union, two new taxes are proposed—a common consolidated corporation tax and a financial transactions tax. The Minister did not even mention them: I believe that they will be opposing them for the United Kingdom. One would have thought that a couple of major European taxes might have been worth a mention.

Nobody has had a chance to discuss the energy union proposals, which will directly impact on the United Kingdom. It is put down as one measure, but it is a whole raft of measures. The one that is scored is a strategic framework, but the strategic framework will lead on to a massive programme of regulation and legislation. The Minister obliquely referred to the idea that we want to integrate the market. Why do we wish to integrate it? Why do we wish to integrate the United Kingdom’s rather different energy market—we are an island with access to a lot of its own energy—with the continent of Europe, which has a terrible geopolitical problem because it has made itself so dependent on Russian gas.

As if that was not enough, my hon. Friend the Member for Stone (Sir William Cash) rightly said that migration and border controls—one of the leading issues in the run-up to the general election—is at the core of this work programme. That is exactly right.

I found rather surprising the Minister’s remarks about our legal opportunities for benefit reform. It seems to me that most of the proposals for solving our difficulties on benefits for migrants in the United Kingdom would be illegal under the current treaty. I have been going on about this for years and have recommended to Ministers that they put our benefits on a contributory basis and that they should be paid only if people have paid in for a specified number of years and/or have been in full-time education in the United Kingdom between the ages of five and 16, so that all British people would qualify, without it being discriminatory on grounds of country. If we did that, we could make the changes we want, but Ministers do not respond. They pretend that they can make these other changes, but they have not delivered them all and I think they will discover that a lot of them are illegal.

The economic programme should be much more urgent. I find it extraordinary that the Labour party can come here and show no anger or passion about the mass unemployment on the continent. If there were anything like 50% youth unemployment in Britain today or 25% general unemployment, Labour Members would be outraged and they would be here in their hundreds—not just three Members as now.

Kelvin Hopkins (Luton North) (Lab): rose—

Mr Redwood: I am sorry, but I do not have time. The hon. Gentleman wants to make his own speech.
Labour would be outraged, but because this is happening on the continent of Europe and is the result of the euro and economic union policies from which we have rightly opted out, they do not seem to care less. They just accept that it has to happen. I think this House should be deeply angry about the mass unemployment on the continent and deeply angry about the permanent recession that has hurt certain countries. We should be deeply angry about the shambles that is the euro, which is doing so much damage to prosperity, opportunity and life hopes. We have no time to discuss any of that because we have been given only 90 minutes.

Mr John Redwood (Wokingham) (Con): We are debating devolution in England, but if we are to have more devolution in England, we first need devolution to England. We must make sure that there is an English level of decision making for the strategic matters, and English Ministers who can then decide which matters could be properly devolved within their strategic framework.

If we take the case of transport, it is predominantly or wholly an English Department, yet it is treated as if it were a Department of the Union. But our Ministers have no control or influence over the roads of Northern Ireland or Scotland. They deal predominantly with English issues. In the new looser federation that we are going to create in the next Parliament, we need to identify the need for England to have rights and opportunities that equal these powers that the other parts of the country have already gained or will gain in the more generous devolution settlements now being offered to Scotland, Wales and Northern Ireland.

There is a good case for the English Transport Department to devolve some more powers to unitary, county and borough councils in the country. On the issue of railways, for example, we have a very expensive nationalised industry, which decides on the track, the track maintenance, the track investment and the principal train routes and is responsible for the signalling and most of the stations. These are very important issues for local communities.

They are massive budgets, but I found it extremely difficult as a local representative to get the ear of Network Rail and to get the right attention paid to the railway line in my area, even though my voters are producing a great deal of tax revenue which is going into Network Rail. A case can be made that there should be more devolved power to counties, boroughs, unitaries and maybe even to MPs over railway budgets, which can have a very important impact on the face of the town, the nature of the countryside and the commuter and freight services available.

We must be careful not to devolve too much. For the roads system, it is right that there is a strategic highway network of motorways and larger trunk roads which is controlled at the England level, masquerading as the Union level, and that those decisions should be properly taken by an English Minister responsible to this House, spending moneys collected in the normal national way and going through the national budgets. I hope that in due course we will have a proper English devolved budget, just as Scotland, Wales and Northern Ireland do.

In my area, we have a motorway that is a local road, and the council is responsible for it. It is a very useful and good motorway, but it stops at the boundary with Oxfordshire and Reading. Most of us want it to go over the river and on to more useful places as part of our economic growth and development. We are making a huge contribution in our area, with a lot of extra housing and jobs, and we need more road space, but Oxfordshire will not allow us to put a bridge over the river and take the road on to other parts of our burgeoning area and up towards Oxford. That may be a case where a devolved power should be given back. I think that my unitary borough would be happy to surrender control of the motorway in return for a promise from a Government Minister to finish the job and make the motorway go to other places so that it could take more of our traffic.

At the moment, a very large amount of traffic has to go through the neighbouring constituency of my right hon. Friend the Home Secretary in the small and beautiful village of Sonning, which has a single-track bridge over a beautiful stretch of the river. That takes a massive amount of commuter and freight traffic that ought to go on a motorway-standard bridge, away from a place of such great beauty, but we cannot do that because of the way in which parts of local government relate to one another. Those are two examples: one where we could devolve more once we had the right powers in England, and one where we might want to devolve less to get a better strategic answer at the national level.

The health service is also primarily or wholly an English Department. It is called the Department of Health, but it should really be called the Department of English Health because its Ministers do not run the health service in Scotland, in particular—although in the recent debates on Scottish devolution some people seemed not to understand that and to think that Scotland’s vote would somehow have an impact on their health service when it has been devolved to the Scottish Parliament. If we are going to pursue devolution, English Ministers should ask the question that my right hon. Friend the Chancellor has asked, and started to answer, in the case of Manchester. If it makes sense for Manchester to have more control over health budgets at local authority level to try to deal with the big border issues between social care and health, it must make sense for other parts of England to have exactly the same type of thing.

All my life in active politics and in government, as a local government Minister and in other roles such as Secretary of State for Wales, I was very conscious that there were always border issues between the UK-wide nationally controlled health service and local government, dealing with social care. Both sides were prone to blame each other. The health service would say, “We could get our costs down and put more people through our hospitals if only local government did a better job on providing care facilities for people who should leave hospital,” and local government would say, “Our budgets have been starved because so much money goes to health, but perhaps that isn’t the right priority, because it is a lot more expensive to keep someone in a hospital bed for a few extra days when they do not need the urgent care any more than it is to provide them with good care in a care home without all the medical staff and additions that you have in a hospital.”

There has always been that problem, and I look forward to seeing the more detailed work and the results of the negotiations, because it would be good if there could be a new solution. Once again, however, we need to make sure that the right things are defined at the England level, because it is still meant to be a national health service, although there are now going to be several different national health services because of Scottish and other devolution.

In relation to England, I think that a lot of our voters in England want there to be national standards, a national level of service, national protocols and national agreements, so quite a lot needs to be settled by an English national Minister sitting in the English Health Department. However, we can see whether we can devolve certain things. It would be really good to have a new and novel solution to the cross-border issues between social care and health care.

The third Department that is already clearly an English Department is the Department for Communities and Local Government—the origin of this debate. The Select Committee has produced an interesting report to influence English local government Ministers. They must make sure that they have unrestricted English control over English local government, and I am sure that many of them, in this Government and successor Governments, will be interested in exploring the big issue of how many more things can reasonably be left to councillors and their serving officers to decide.

I look forward to there being more things and I have suggested one, namely railways, but we need to be realistic and understand that people also want a national agreed level of service. They also want to know that, when a decision in one place has a consequence on other places, people above the fray of the locality will be making the decisions. Not all the decisions will go downwards; some will have to go upwards.

Above all, we need justice for England. We need English votes for English issues and to make sure that England has a voice and can decide the things that apply only to England.

 

Mr John Redwood (Wokingham) (Con): Can the Minister comment on the balance in his settlement between the money that goes directly in the block grant and the money that goes for special purposes and as a reward for certain kinds of conduct? How is that developing, and what difference does it make to the percentage change?

The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins): I hope my right hon. Friend will forgive me; I cannot give him the percentage change, but I can give him some clear figures. For example, business rate retention by local authorities alone is some £11 billion, and as the Prime Minister said this morning, should a Conservative Administration be returned at the forthcoming general election, we would hope to increase that to two thirds.
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Mr Redwood: The shadow Secretary of State is usually very fair-minded, so does he agree that the largest local authority service is education, which has over the past five years had cash increases and small real increases in spending, and that the biggest local public service is the NHS, as administered locally, which has had real increases as well? Were they not the right priorities and would not his party have shared exactly that priority of protecting health and education?

Hilary Benn (Leeds Central) (Lab): Indeed. If one looks back at the record of the previous Labour Government, one can see that that is precisely what we did. In fact, we increased investment in those two things as that reflects public priorities.
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Mr Redwood: Did my hon. Friend notice the continued insult to England? The Opposition say absolutely nothing about allowing England to settle her income tax levels, but they want Scotland to settle theirs. They want Scottish MPs to come down here and help dictate to England our income tax while they Balkanise England and pretend that breaking it up into mock European areas is some substitute for proper devolution.

Madam Deputy Speaker (Dame Dawn Primarolo): Order. The right hon. Gentleman has got his point on the record, but you will stick to local government finance, won’t you, Mr Neill?

Robert Neill (Bromley and Chislehurst) (Con): Indeed I will, Madam Deputy Speaker. As we consider the future shape of the United Kingdom, I hope we will have a genuine debate about serious devolution of financial responsibility to local authorities, but that is certainly not what the Labour party’s proposals will achieve.

Mr John Redwood (Wokingham) (Con): Is this not further proof that Labour’s fundamental changes to banking regulation at the beginning of its period in government did a lot of damage and meant that banks could not be regulated properly—most notably, they led to the collapse of a number of HSBC’s important competitors—and further evidence that Labour Members are blaming this Government for things that went wrong on their watch?

The Financial Secretary to the Treasury (Mr David Gauke): My right hon. Friend makes a very good point. There are many issues that Labour Members should apologise for, but the one issue that they have apologised for was their failures in bank regulation, and this is further evidence of that.

Mr John Redwood (Wokingham) (Con): Does my hon. Friend agree that our party’s excellent policy of extending GP opening times and days is crucial, but it will require more GPs to work more flexible hours on an agreed basis?

Sarah Newton (Truro and Falmouth) (Con): My right hon. Friend makes a good point. The plan that NHS England has put forward is about shifting resources from the acute emergency care sector into primary care sectors, especially GP practices. The point that he makes about flexible working fits well with my point about enabling more women to stay in the NHS or to return to it. Many walks of life are addressing the issue of enabling women to combine their caring responsibilities with their desire to play a full part in society, whether that is in public service as a GP, as a Member of Parliament or in business. Much more work needs to be done by the NHS to look at ways to enable women to combine caring for children or elderly parents with being a GP or fulfilling other roles in the NHS.

Mr John Redwood (Wokingham) (Con): Will the Minister ensure that other Government Departments fully participate in enforcing the covenant? I have a case of a couple who have had to move twice recently to meet the husband’s requirements in the armed services. The wife is a nurse. She was on maternity leave. There was a delay in getting a job at a new hospital in the new place they were going to. The Government are now demanding all the maternity pay back because she was a few days out of time. That is not helpful and does not seem to be in the spirit of the covenant.

The Minister of State, Ministry of Defence (Anna Soubry): On the basis of what my right hon. Friend has just said, I would agree. I urge him, and any other hon. Member, to come to see me. I would have no difficulty in taking up whatever case it may be on behalf of a constituent or an hon. Member. I would be happy to do that. He makes a good point. It is imperative that we work across government. I am pleased that that includes working with local authorities.

Mr John Redwood (Wokingham) (Con): I am grateful to the shadow Secretary of State. Can he explain why Labour only ever now has any interest in England’s health service? We would like to hear about Labour’s conduct of the Welsh health service and its message for Scotland. Does Labour not know that this is an English devolved matter?

Andy Burnham (Leigh) (Lab): It is my responsibility to hold the Government to account on behalf of patients in England for what is happening in England now. That is my job, and I will make no apologies to the right hon. Gentleman or anybody else for doing it.

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Mr Redwood: Does my right hon. Friend understand Labour’s attack on privatisation? Under Labour, the NHS always had private-sector contractors as GPs— and nothing has changed; and it always bought all its pharmaceuticals from competitive, profit-making pharmaceutical companies—and nothing has changed. What is the shadow Secretary of State’s grievance?

The Secretary of State for Health (Mr Jeremy Hunt): Privatisation is one of the most pernicious fears that Labour is seeking to stoke up—not least because, as Secretary of State, the right hon. Member for Leigh allowed the decision to go through that Hinchingbrooke hospital should be run by the private sector. He has been running away from that decision faster than anything that anyone has seen before, because he is still trying to curry favour with the unions.

The companies on the shortlist for Hinchingbrooke hospital were Circle, Serco and Ramsay Health Care. He could have stopped that as Secretary of State, but he did not. He knows—[Interruption.] Those were the three bidders for the private sector-led bids. He could have stopped that process when he was Secretary of State, but he chose not to. That makes my point very well.

Mr John Redwood (Wokingham) (Con): Does my hon. Friend remember Labour’s gloomy predictions that our economic policies would deliver mass and rising unemployment? Instead, they have delivered record levels of new jobs for young people in her constituency.

Nicola Blackwood (Oxford West and Abingdon) (Con): I do indeed. I can also tell those young people that we are investing in their future through the Oxfordshire city deal and growth deal—not through centrally mandated planning committees, but through universities, local further education colleges, and future employers—and that local authorities of all stripes are working together to develop our own long-term local economic plan. We are targeting that funding exactly where it will stimulate growth and jobs—infrastructure, skills training, local business support, and urgently needed housing and flood defences. That twin message of more jobs and growth alongside targeted local investment is possible only because of the essential precondition mentioned by my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke). Incredibly difficult decisions on spending cuts across Government have been made with one end in sight: reducing our deficit while reforming our public services and protecting front-line services. That is why I support the motion.

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Mr Redwood: Did my hon. Friend hear the shadow Chancellor make it clear that not only does Labour not think that the current debt is excessive, but it would carry on increasing the debt every year of the next Parliament if it was leading it?

David Rutley (Macclesfield) (Con): It always does. It is as if there is a drug that Labour is addicted to called “debt”; they cannot get away from it.

Mr John Redwood (Wokingham) (Con): First, may I remind the Committee that, as listed in the register of Members’ interests, I provide advice to an industrial company and an investment company?

The Minister has produced what is on the whole an excellent scheme. I support most of it and was one of those, along with my hon. Friend the Member for St Albans (Mrs Main), who was lobbying hard to get this major reform through. I congratulate the Minister and the Chancellor on dealing with the problems that the slab system created. The peaks and the dead areas were damaging to the property market and made it difficult for some people to buy or sell properties in certain price ranges. The system probably distorted pricing as well, to the benefit of some people and the detriment of others. It is therefore good that we have smoothed it out and introduced a more sensible progression up to £937,000, where most of the transactions lie. The new arrangements will represent a fairer, lower-cost system for practically all transactions, which is wholly admirable.

I want to tease out a little more information about the rather pessimistic forecasts of how much revenue will be lost up to the end of this decade. It is clear from the figures that cutting the higher rate of income tax has produced considerable extra revenue, as it was bound to do, given that the previous rate deterred people or meant that they did not come here at all. It is also clear from the figures that the much higher rate of capital gains tax has been very damaging to revenues, which are still miles below where they were prior to the crash. This is a difficult one to call, and I am not saying to the Minister that the proposals would either damage or increase revenues. I am merely suggesting that the Treasury’s forecasts for that lengthy time period could prove to be inaccurate, and that it would be nice to unpack those forecasts in order to understand what the Treasury thinks is going on.

The problem with trying to forecast the revenues at this juncture is that, on the one hand, we have seen a slowing of the mortgage market in recent months through regulatory intervention, and we would therefore expect fewer transactions because the regulators and the banks are now being much tougher about mortgages. On the other hand, however, we have Government intervention trying to mitigate that effect through the very successful and helpful Help to Buy scheme, which I believe to be necessary. It is certainly helping people in my area to buy their own home. However, the net result of these arrangements seems to be a dampening of transactions, and we must bear that in mind when trying to judge the impact of those policies and to assess the impact of the stamp duty change. All things being equal, we should expect to see an increase in the volume of transactions under the £937,000 level because buying such homes will be a bit cheaper, and in certain price bands we will see activity occurring that would not have occurred at all because of the slab effect.

Mrs Anne Main (St Albans) (Con): Does my right hon. Friend share the optimism that I feel, having talked to small businesses in my community, that there could be a knock-on effect from people having a bit more money to carry out home improvements? Those businesses have suffered in recent years because people have not been investing in their own homes.

Mr Redwood: Yes, indeed there could.

This is difficult to predict, because all these things need to be modelled. The level of the reduction in some cases is quite large, and it will be difficult to make up for all that lost revenue through increased transactions. That is why it would be interesting to probe the Treasury a little more on its forecasts. I expect it thinks that there will be quite a big revenue gain where the rate has gone up, but that effect might not prove to be as strong as it hopes, because there will definitely be a disincentive effect at the top end following the introduction of the very top rate for the privileged few who can afford those types of properties. Those people are often in the fortunate position of owning more than one property, and of being able to decide whether they wish to buy property in this country or elsewhere. There will be some kind of disincentive effect, and we need to look at relative taxes and relative prices in relation to London and other centres.

It would therefore help if we knew a little more about the Treasury’s numbers at this stage of the debate, so that when we review this policy in a year or two, we can see what was right and what was wrong. For example, does the Treasury think that there will be extra revenue from the higher rate? That has clearly not been the case in relation to the two big taxes that I have mentioned. Does it envisage a loss of revenue despite the effect on transactions at the lower level? It would be good to have more detail, so that we can have some benchmarks as we try to assess the financial impact of the policy.