Local Taxation
6:39 pm
Mr Matthew Green (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Ludlow, Liberal Democrat)
This debate has shown that if the arguments used by Conservative and Government Members are the best that they can throw at us, we are on fairly firm ground. As to the comments by the Under-Secretary about the date of this debate, that was not in the gift of Liberal Democrats. I am sorry that the Minister for Local Government, Regional Governance and Fire could not be present for the start of the debate because he was in Committee. Originally, our Opposition day was Wednesday, but, quite rightly, it was moved because of the Hutton report. The Minister can make cheap jibes, but this debate was originally intended for the day on which the Hutton report was published.
Mr. Pickles and others used as a theme how much a working couple would pay under our proposals and those of the Conservatives. Two weeks ago, one of my excellent local newspapers, the Ludlow Journal, published an article about a young couple named Charlotte and Scott Downes from Burford. Charlotte is 24 and Scott is 30. They both work and have a four-year-old daughter. They went to the press from choice—that was not down to me. The paper reported:
"Mrs. Downes said she and her husband were a couple who worked to pay their own way and didn't expect others to do it for them. 'We support ourselves but I can work only 20 hours a week and get £4.50 an hour. Scott works full time and gets just £5 an hour'."
Such wage levels are common in my constituency. Charlotte Downes went on to say:
"We have to pay around £3,500 a year in rent and we have to clothe and feed themselves. We don't get 10 and 20 per cent. increases in what we earn but that is the sort of increases we have been getting in Council Tax over recent years. We are already paying over £1,200 a year in Council Tax"—
presumably under band D—
"and now it's set to go up yet again."
As well as asking their permission to quote them, I did some calculations. On the basis of those figures, that couple's joint income is just over £16,000 a year, which is quite common in my constituency and puts them above council tax benefit levels. Currently, they pay £1,200—a hell of a chunk out of £16,000, on top of the other taxes that couple have to pay and their cost of living.
If we scrapped council tax and implemented our proposed local income tax bands with a national average of 3.75 per cent., that couple's local income tax bill as a household would be £260. They would be £900 a year better off than under the current proposals that are being defended. According to the information revealed by Mr. Letwin, under the Conservatives, the Downeses would pay £2,400 council tax. On the assumption that that was done by cutting national income tax—I will not claim that the Tories would increase the burden of taxation nationally—by 3.75 per cent across the bands, that would save the Downeses £260. Overall, they would be £900 a year worse off under the Conservative proposals—unless the Tories have another policy that they have not yet revealed. We would love to know.
At the other end of the scale, the local Member of Parliament—myself—earns £55,000 a year.