Kirklees Council has been left to “hang out to dry“ amid eight years of austerity, the Shadow Chancellor has said.
John McDonnell MP has spoken exclusively to the Examiner after giving a speech in Huddersfield earlier today.
Mr McDonnell outlined his vision for the economy at the Colne Valley Business Conference, hosted by Thelma Walker, who he recently appointed as his personal aide.
Other speakers at the event at Huddersfield University’s 3M Buckley Innovation Centre, included former Bank of England economist and Labour MP for Leeds West, Rachel Reeves; university research expert, Professor Liz Towns-Andrews and Michael Hartig, Head of High Growth and Entrepreneurs at Barclays Bank.
Colne Valley MP Mrs Walker said her conference had been a great success with about 80 business chiefs turning up to hear Mr McDonnell’s ideas.
She said: “It was linked to my maiden speech where I talked about us having a Colne Valley powerhouse.
“There’s been big conversations today and networking, about how we move forward, how businesses can support each other.
“The feedback I’ve had so far is it’s been really successful.
“I’m very grateful to the university and to Barclays for the sponsorship.”
Speaking to the Examiner after his speech, Mr McDonnell revealed that Labour was prepared for another General Election and promised they would pump billions back into the public sector to allow councils like Kirklees to rebuild their crumbling infrastructure.
He said the underfunding of the NHS, schools, the police and local authorities would be tackled, and dubbed the government’s policy of stripping councils of support but allowing them to raise higher taxes, as a “clever tactic.”
He branded the current tax system as “unfair” and the state of social services and children’s services as “scandalous.”
Below is a full transcript of every word Mr McDonnell said to the Examiner on a host of local and national issues.
Q – What have you been saying to the businesses who attended this event at Huddersfield University today?
A – How do we grow the economy, how do we target local businesses, small business in particular.
What do they need in terms of infrastructure in the local area – that’s not just roads and rail, it’s digital infrastructure.
What Thelma’s doing is listening to people in terms of what they want for the economy and feeding that back into how we develop national and local policy.
What’s coming back is, access to finance, particularly for small businesses.
We want to set up a national investment bank, with a regional arm specifically for the North.
The mandate of the bank will be designed on the basis of these consultations.
We’re also looking at public procurement – NHS, council and police – so that small and micro-businesses can get preferential treatment to develop them on.
We’re doing this now as an election could come at any time.
Every policy, we’re developing it into an implementation manual, even getting to the point where we’re drafting legislation so it’s all ready on the shelf for when we take over.
It’s all about making sure we can grow the economy but the key thing is that prosperity is shared by everyone.
One of the issues raised time and time again is there’s a regional disparity in the way infrastructure is invested.
For every £12 in London, it’s only £1 here – that can’t be right.
It’s holding people back, it’s holding local economies back.
We can address that through the national investment bank.
What I said to the conference is the North has had a bad deal and now we’ve got advocates like Thelma saying there needs to be a fair deal for the North.
But also, it isn’t just about a fair deal for cities, it’s about a fair deal for smaller towns as well.
Q) What’s your view on the situation Kirklees Council is in?
It’s one of the many councils in the North that have been hit hard.
We’re now into our eighth year of austerity, so what the government has done, and it’s been a clever tactic, is cut support for local government so it’s the local councils that are forced into those cuts and they can walk away from it as though they’ve got clean hands.
All this has come from central government.
That’s not just me saying that, it’s Conservative councils now saying it.
Northamptonshire is bankrupt and having to say to government that they need more resources.
Surrey County Council is £100m in deficit – who represents Surrey – Phillip Hammond, the Chancellor of the Exchequer.
So Kirklees has had a rough deal, but so have most of the local authorities in the North – what they need is a proper deal.
We put in our budget £2bn extra for local government so we can start tackling some of those problems.
We also said we’d have an investment fund that we’d build up to £150bn over ten years and we’d give priority to those areas that have been neglected in the past.
Areas like Kirklees would have the opportunity then to rebuild their infrastructure, invest in the local economy, skills and training, digital access, and then you can create a prosperous local economy.
On that basis you would be able to fund local government on a fair taxation system.
What we haven’t got now is a fair taxation system.
Q) Kirklees Council’s bid to raise council tax by 6% has been deeply unpopular. Do you think they should step away from the policy?
I don’t think the council does want to increase council tax, no one wants to increase it, they’re being forced into it by government that’s withdrawn all support.
The history of this country is on the basis where local government was supported by local rates and central government support.
That central support has now been withdrawn on a scale we’ve never seen before in this country, and so councils are now being left to hang out to dry.
They’re being forced to do these increases, no one wants to increase the council tax in that way.
Until we get a fair local government settlement, local councils, particularly in the North, will be hit in this way.
But local government is now in crisis right the way across the piece; they started with us in the North and now, even in the South, it’s hitting them.
There’s a spring statement coming up in March where the Chancellor has the chance to address some of these issues.
Q) Children’s services have hit the headlines in Kirklees, are you concerned?
The Local Government Association and national children’s charities said that on children’s services the cut is so bad that this could turn from a crisis into a catastrophe.
We’ve had record numbers of children being brought into care – why? Because of the cuts, early interventions have not been funded.
So we’re now in this ridiculous situation where cuts from central government mean children are coming into care when early intervention could have kept them with their families.
It’s now going to cost more, consequently, as well.
It’s just scandalous, and it’s not just children, it’s adult social care as well.
Eight years of austerity – we told them what the results would be and now it’s coming home to roost.
Q) West Yorkshire still hasn’t got a devolution deal. Do you back the concept?
We’re looking at a constitutional convention where we bring everyone together to look at how we can do devolution in a real way.
They have been devolving powers without the resources.
We want proper devolution, determined locally of course, but that has to come not just with the powers but with the resources, and that will be left to local people.
Why would you want devolution if you’re not going to get the resources?
Q) You recently recruited Thelma Walker as your Parliamentary Private Secretary. Was it an easy decision to pick her?
There’s not many people who come straight into Parliament and make their mark – that’s what Thelma’s done.
What she reflects is an ardent advocate on behalf of her constituency and she’s a hard worker.
She brings real world experience to Parliament in ways more than some younger MPs would.
She’s been given the job as my Parliamentary secretary, it’s a tough job, increasingly arduous as it involves a lot of Parliamentary work, but it also gives her a voice in some of the key decision making that we’ll be making about what a future Labour government does.
It will give her the opportunity then to take the first step into ministerial office.
It was an easy decision (to pick her). I needed someone with sound common sense, and a good sense of judgement who could keep me out of trouble!
Do you seriously believe another General Election is looming?
Never under-estimate the Tories’ ability to cling onto office.
They’re not in power – they’re in office.
Power has gone from them because Parliament now is almost in paralysis apart from Brexit issues.
Even on Brexit, they can’t decide which way they’re going to go.
So we’re in this impossible position now where a government has run out of steam within six months of a General Election.
I think they’ll cling on for as long as possible, but we’ve got to work on the basis of preparing for government whether it’s in the short term or for the long haul.
We’re ready for the long haul if we have to, but it might come sooner than that.
Because of their own internal political contradictions they might well collapse.
Q) Brexit has divided this community, like many. Do you think Brexit would be good for Kirklees?
I wanted to Remain, I campaigned for it but my consitutency voted Leave.
I respect the referendum result and I’ve got to get the best deal I can for Kirklees and the rest of the country.
Our primary objective is to protect the economy and protect jobs, access to the single market, we’ve got all the options on the table including a custom’s union if necessary.
We think we could negotiate a deal.
We’ve said we don’t think the government will be able to do so in the timescale available.
We need a proper transition period of two years, while we remain in the customs union and single market.
My view is we just want the government to move aside and let us do the negotiations.
Q) Why didn’t Labour win the last General Election?
We were 24 points behind six weeks before the election, so we had an absolutely startling result.
I think if the campaign had gone on another couple of weeks we’d most likely be in government.
We weren’t, it’s disappointing.
We got 40% of the vote and we had the biggest increase in Labour votes since the Second World War, but we need that additional five or six per cent to get us into government whenever that chance comes.
So we’re working really hard, we’re trying to learn the lessons of that election, what worked and what didn’t, why people supported us and why they didn’t.
Meetings are going on all round the country.
But what it comes down to is that old Clinton thing – ‘it’s the economy stupid’ – and that’s why we’ve got to make sure when we go into the next election that our economic policies don’t just resonate nationally but at every local level.
Q) You must be familiar with the plan to all but close Huddersfield Royal Infirmary? Can Labour really do anything to stop it?
Before the last budget we had conversations with the Kings Fund and virtually every independent think tank to do with the NHS and they told us how much money was needed.
That’s what we put into our budget.
When it came to the budget the Chancellor gave them less than half of what they need, and that’s why we’re in crisis.
There’s a refusal to recognise the needs of the NHS but also just as importantly, social care.
There was nothing in the budget on social care, so now we’re in a crisis on that as well.
This is a political decision.
We’ve said all the way along that austerity was a political decision not an economic necessity, and that’s what’s happened.
As a result of that it isn’t just the NHS, we’ve got all our public services in crisis.
The first per capita cuts for the schools budgets since the 1970s, we’ve got our probation service in crisis after a privatisation, the rail service is collapsing and had to be brought back into public ownership.
Wherever this government has introduced policies around privatisation we’ve now got a crisis in the public service.
The solution – a Labour government.
We will keep the pressure up and will continue to push for additional funding for the NHS and social care.