New Clause 31
Greater London Authority Bill
12:15 pm

Michael Gove (Shadow Minister (Housing), Communities and Local Government; Surrey Heath, Conservative)

I beg to move, That the clause be read a Second time.

Almost the best point in favour of new clause 31 was made in passing, but with some eloquence, by my hon. Friend the Member for Hammersmith and Fulham. He pointed out earlier that the London borough of Hammersmith and Fulham is about to extend to those wise enough to vote for its current administration—and to those who do not vote for it—a 3 per cent. reduction in the council tax. That is a remarkable achievement. However, any resident of the borough who anticipates paying less will be gravely disappointed when the total bill is presented to them. As we all know, the likely GLA precept is to be 5 per cent. above the current level that is being paid, so the savings of Hammersmith and Fulham will be wiped out by Mayor Ken’s extravagance.

We believe that the new clause would ensure that, for busy council tax payers, it was clear where responsibility lay when a local authority was lowering its council tax, but the Mayor is increasing the burden. It is understandable when a council tax bill comes in and we see at the top of the bill the crest of our respective local borough that we are inclined to think, “Bloody Westminster” or, “Dear me, Hounslow has been overspending again”, when in fact Westminster and Hounslow may have been keeping their own houses in order, but have to act, in effect, as tax gatherers for the Mayor.

Andy Slaughter (PPS (Dr Stephen Ladyman, Minister of State), Department for Transport; Ealing, Acton and Shepherd's Bush, Labour)

I can easily put the hon. Gentleman’s mind at rest. The extraordinary quantity of Pravda-like propaganda that comes out of a council in Hammersmith and Fulham leaves no opportunity not to inform residents in the most colourful language of exactly the point that the hon. Gentleman is putting forward. I wish that I had the time to point out the errors into which that council has fallen, but I fear that Hammersmith and Fulham has already taken up a lot our time already.

Michael Fabricant (Whip, Whips; Lichfield, Conservative)

On a point of order, Lady Winterton. It may be of interest to the Committee to know that Pravda is the Russian for truth.

Ann Winterton (Congleton, Conservative)

That is not a point of order for the Chair. I call Michael Gove.

Michael Gove (Shadow Minister (Housing), Communities and Local Government; Surrey Heath, Conservative)

Thank you, Lady Winterton. I am grateful to my hon. Friend for that point of order.

I must confess that I would have thought that reading publications similar to Pravda was an enjoyable recreation for the hon. Member for Ealing, Acton and Shepherd's Bush. It would have probably reminded him of his undergraduate days. Nevertheless, he has once again eloquently, but perhaps unwittingly, provided me with an argument to underwrite the new clause. The poor residents of Hammersmith and Fulham need to have pointed out to them where accountability lies. If the new clause were accepted, there would be no obligation on Hammersmith and Fulham council to inform its residents exactly where the division of responsibility lay because it would be there in the council tax bill.

Andrew Pelling (Croydon Central, Conservative)

I am very grateful to my hon. Friend for giving way so speedily. Is he aware that both the Mayor and the London councils are in favour of separate billing in such a fashion? Does he not think that the Government should endorse the proposal, since they are keen to promote maximum participation in local democracy? By making clear the direct lines of accountability, as he suggests, and allowing for separate billing, they would only encourage people to participate in local elections.

Michael Gove (Shadow Minister (Housing), Communities and Local Government; Surrey Heath, Conservative)

As ever, my hon. Friend makes an admirable point. Once again, it underlines two of the qualities that he has shown throughout our proceedings: his absolute commitment to improving the quality of local democracy and a keen understanding of the balance of opinion within London politics when it comes to the Bill and the new clauses. His argument could not be clearer or more effective.

Those people who might want to shield the Mayor from his own extravagance do not have an ally in him. This Mayor is proud of his extravagance. He is in the proud old Labour tradition of big spenders who consider their level of expenditure to be a virtue. In that respect, the widespread support for the new clause—given that it favours transparency, is supported by London councils and that the Mayor wishes to endorse it—should recommend itself to the Minister.

Karen Buck (Regent's Park and Kensington North, Labour)

Does the hon. Gentleman agree that, in the interests of transparency, there is the truth and there is the whole truth? Following his argument, does he support the fact that local authorities such as mine, Westminster, would also be required to advertise to their local population something that they strikingly do not? I draw attention to the fact that 86 per cent. of all funding for services delivered in the borough of Westminster is delivered through local government grants. A mere 14 per cent. is actually raised from the council tax. Does he agree that, if we want a well-informed electorate who can exercise the need for control over their local authorities, they should be supplied with all the information and advice about their local authority finance?

Michael Gove (Shadow Minister (Housing), Communities and Local Government; Surrey Heath, Conservative)

I do, indeed, agree with the hon. Lady; it is a pity that her Front-Bench colleague does not. Exactly that provision was contained in the Sustainable Communities Bill, which received its Second Reading on Friday. I take it from what the hon. Lady said that she will support that Bill when the opportunity arises, because it is certainly our wish to do so. It is a tragedy that the Department for Communities and Local Government is not doing so, and I suspect that it tells us something about its mixed priorities that last night in the House of Commons the Minister for Local Government made it clear that the Department regarded the Bill as overly bureaucratic and beside the point. To my mind, it was a tragic missed opportunity and a suggestion that the DCLG does not have at its heart the admirable commitment to localism displayed by the hon. Member for Regent's Park and Kensington, North.

Transparency in billing would serve the interests of accountability by ensuring that those Mayors who believe that high expenditure is the route to re-election would have the opportunity to campaign on that basis, and other Mayors—perhaps such as the Conservative Mayor, who is likely to triumph at the next poll—would have an opportunity to advertise their prudence and their value-for-money programme through a separately billed precept, and as a result would be able to win the election in 2012 and preside over our successful Olympics.

Tom Brake (Shadow Minister, Department for Communities and Local Government; Carshalton and Wallington, Liberal Democrat)

I support new clause 31. It is straightforward and simple. It is about transparency in billing, which is something that we must all support and recommend. Most local authorities do that well through the leaflets that come with the council tax bill, certainly in Sutton, which explain what portion of the pie comes from grants and council tax and so on. I hope that Labour Members will also be willing to support the initiative. The fact that it has the support of the Mayor and London councils is significant. It would also give the Minister an opportunity to show that the Committee stage is meaningful and that the Government are willing to take on board sensible proposals that receive support from all quarters and are about making the important issue of the precept much clearer to our constituents.

Our constituents are very exercised indeed about by council tax increases above the rate of inflation, but often the arguments about a mayoral precept that has increased by 100 per cent. over four years are lost. The focus is on what the local authority is doing, and the Mayor is fortunate to be let off the hook. This is a sensible proposal. I cannot for the life of me think why the Minister would possibly want to reject the new clause, and so I look forward to hearing his message in support of it.

Jim Fitzpatrick (Parliamentary Under-Secretary, Department of Trade and Industry; Poplar and Canning Town, Labour)

The Government accept that it is important for local taxpayers in London to understand to whom they are paying their council tax and the contribution that the GLA as a major precepting authority makes to council tax bills issued by the boroughs in London. Local taxpayers rightly need to understand where their council tax is going and what services it funds. Clear information is a vital prerequisite for that.

However, the Government cannot accept the new clause, which would require the GLA to print its own bill and explanatory notes dedicated solely to the GLA precept. Such a requirement on the GLA would be costly and potentially more confusing to council tax payers than the present arrangements. First, it is not clear how the new system would work in practice, as the boroughs would still remain legally responsible for the collection of the precept. If the intention is for the borough as the collecting authority to continue to issue the demand for payment, and for the GLA to issue an additional bill that would not actually be a demand for payment, we would be creating a recipe for potential confusion for the taxpayer. If, instead, the intention is for Londoners to receive two separate demands for payment, one in respect of the GLA and one in respect of the borough, but pay both to the latter, that seems even more confusing for taxpayers.

Secondly, the GLA has indicated that the additional costs of separate billing could be up to £10 million a year, depending on how the new duty was implemented, given that there are more than 3 million eligible households in London. That additional cost would have to be funded by either higher taxes or cuts to services, which nobody wants. My advice is that the Mayor does not support the provision in the new clause, which is contrary to what Opposition Members have said. I apologise for the confusion, but that is the information that I have been given. There is clearly disagreement on that.

Thirdly, it is not clear whether requiring the GLA to produce its own billing notice would improve local taxpayers’ understanding of their council tax bills. The GLA precept is already clearly identified on the current bills issued by boroughs.

Andrew Pelling (Croydon Central, Conservative)

I do not want to argue with the Minister, but the Mayor of London has said openly in assembly meetings that he would be happy for the precepts to be produced separately. I was not trying to mislead the Committee.

Jim Fitzpatrick (Parliamentary Under-Secretary, Department of Trade and Industry; Poplar and Canning Town, Labour)

I was not suggesting for a second that the hon. Gentleman was trying to mislead the Committee. Indeed, his explanation could well be consistent with the Mayor not supporting the new clause. He could be happy if it were passed without supporting it. There is no intention to mislead on either side. There have been occasions when Conservative Members have supported the Mayor’s view and we have opposed it, and vice versa. There is no inconsistency in saying that, whether or not the Mayor supports the new clause, we sadly do not.

As I was saying, the GLA precept is already clearly identified on the current bill issued by each borough. There is also a statutory requirement for information about the GLA’s budget, expenditure and the impact of changes in the amount of council tax charged to be included in the explanatory material that accompanies bills.

Finally, the new clause would set a precedent for separate billing for other major precepting authorities—county councils, police and fire authorities—which would  be costly and unnecessary. For those reasons the Government consider that it would be best to continue with the well established and generally efficient arrangements for collecting council tax in London whereby boroughs bill and collect the GLA precept on behalf of the GLA as part of their council tax billing notices. I therefore urge the hon. Member for Surrey Heath to withdraw the motion.

Michael Gove (Shadow Minister (Housing), Communities and Local Government; Surrey Heath, Conservative)

I am disappointed to hear the Minister’s response. It was intriguing that he spent most of it aiming at his straw man, which was that under the new clause the GLA would be responsible for separate billing arrangements. I hope that I and the hon. Member for Carshalton and Wallington made it clear that we wanted greater transparency within one bill, to be sent by the borough. We wanted greater detail about how the GLA disposes of public money through the precept.

It is clear that the Minister does not wish to accept the new clause. However, the hon. Member for Regent's Park and Kensington, North seemed to indicate in her intervention that she could see the logic in it, so we have hope and shall press the new clause to a Division.