Steve responds to the Budget
Steve Reed MP’s speech to Parliament on the 2016 Budget. You can watch Steve’s speech above.
I share the many concerns raised about the Budget’s giveaways to the rich at the expense of the poor and disabled. It is despicable and against the British sense of fair play but entirely in line with the behaviour of a Government who are pushing more people into poverty and then blaming and punishing them for it.
Others have spoken movingly about that, but I would like to focus on what the Budget says about the Government’s commitment to devolution. Their actions do not match their rhetoric. The Secretary of State, who introduced the Cities and Local Government Devolution Bill, at the same time introduced the Housing and Planning Bill, which contained more than 30 new centralising measures. The Budget contains more of that same centralising instinct. Yesterday, the Government centralised control of every school in the country. They have learnt nothing from the Trojan horse scandal in Birmingham and are now stripping away local accountability from every school.
There is no way that the Department for Education can provide proper oversight of 24,000 schools from Whitehall, and a lack of oversight means that problems will not be noticed or tackled until they have grown into crises. It is not devolution to hand schools over to giant national academy chains, and it is not localist to do that in the teeth of opposition from parents, teachers and communities. I do not understand how the Secretary of State can come here and lecture the House on the need to listen to parents, when she will not listen to parents over forced academisation.
There is little evidence of devolution over how local services are funded as a result of the Budget. Yesterday, as the Institute for Fiscal Studies has now confirmed, the Chancellor tightened his fingers around the neck of local government funding. He has handed over limited powers to city regions and others but refused to link those powers to resources. I want to see the Government go much further on devolution—more local control over schools, housing, health and the Work programme—but we need real fiscal devolution as well. If the Government hand over services but then cut the funding centrally, all they are really doing is devolving the blame for cuts made in Downing Street.
Yesterday’s Budget graphically underscored that point. The Chancellor made much of his plans to allow 100% retention of business rates, which of course sounds good, but he will not be clear about which services they will have to pay for. At the same time, he is entirely scrapping the central Government grant, leaving councils far worse off and less able to fund the services that local people rely on. He will not explain, either, what mechanism, if any, will be in place to ensure that business rates retention does not just benefit areas that are already wealthy and penalise those that are not. There needs to be a fair funding mechanism in place that helps areas to expand their capacity for economic growth, otherwise they will be locked into a downward spiral, with no way out.
Of course, we should not be surprised that the Budget did not include anything about fair funding. Under this Government, the 10 poorest councils have suffered cuts 23 times bigger than the 10 richest. Last month, the Government voted to cut Croydon’s funding by another £44 million, but handed a £23 million windfall to far wealthier Surrey next door. Unfairness is the defining feature of this Government.
What these further cuts mean for the vast majority of communities in this country is the closure of libraries, museums, youth services and children’s centres. They will leave streets unswept and street lights turned off at night. They will mean home care taken away from frail older people, and disabled people left to struggle alone. They will mean a cut to early intervention in troubled families, and social workers will not be there to protect children from the impact of domestic violence. Services will not be there any more to protect children at risk of abuse. We are simply storing up problems for the future, while watching young lives get ripped apart.
This Chancellor has got so much wrong. He has had to downgrade growth forecasts that he made only four months ago. He missed his own deadline for paying down the deficit caused by the banking crash. He delayed the recovery by cutting big infrastructure projects early on in his tenure, and he is now struggling to make up for lost time. He has failed to tackle the economy’s desperately low levels of productivity. Now, the IFS has questioned his ability to meet yesterday’s forecasts without more cuts or tax rises to fill a £55 billion financial black hole. The IFS further says that the Budget will reduce wages, lower living standards and lead to further austerity.
Quite simply, this is a Chancellor who cannot be trusted, and who is himself unable to trust. He gets the big decisions wrong, and he is afraid to devolve decisions to others. Instead of reforming public services, this Government are laying them to waste. Instead of sharing the proceeds of growth more fairly, this Government are presiding over growing inequality. Instead of handing decision-making to local communities, this Government are centralising power in their own hands. Instead of shaping a fairer Britain, this Chancellor has thrown a financial bung to his wealthy mates and thrown the rest of the country to the dogs.
Steven Reed is Labour MP for Croydon North and Shadow Minister for Children and Families. In 2018 his private member’s bill on reducing violent mental health restraint became law. In June 2019 he launched Labour’s civil society strategy outlining radical plans to empower citizens and communities.
Steve chairs the Cooperative Councils Innovation Network, co-chairs the All-Party Parliamentary Group for London, was Leader of Lambeth Council 2006-12 where he led the council’s children’s services to become best-rated in the country and pioneered the public-health approach to tackling violent youth crime. He worked in publishing for 16 years and was an elected trade union branch secretary.