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Council Tax

Part of the debate – in the House of Commons at 6:53 pm on 15th June 1995.

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Photo of David Curry David Curry , Skipton and Ripon 6:53 pm, 15th June 1995

It is no good the hon. Gentleman shaking his head. It is at the heart of the debate.

If local authorities say, "The present situation is unacceptable because we are capped and cannot raise our money locally," they must be confident that if the circumstances change and they can raise what they need locally—we can argue about the way in which local consent could be obtained for that—they do not immediately start using the Government as an alibi and say, "Of course, all this is happening not because it is what we positively want but because we have not been getting enough grant." There is no point in pretending. Those issues will arise, and there should be a mature and reflective debate on the whole subject.

Of course the area cost adjustment is a difficult issue, but it is not good enough simply to say, "Abolish it." There are differentials in the total cost of employing people, which have to be addressed across the spectrum of local government. The simple abolition of the adjustment would lead to utterly unmanageable changes in grant allocation throughout the system, not least in many of the local authorities run by the Opposition parties.

I believe that the hon. Member for Holborn and St. Pancras (Mr. Dobson) is being shortsighted and foolish in his constant derogatory commentary about the methods of distribution of Government grant. Whether he likes it or not, the method that delivers grant to Westminster is identical with that which delivers grant to many other local authorities, including Tower Hamlets and Hackney, which get more per capita than Westminster.

If the hon. Gentleman seeks to re-engineer that system specifically to do Westminster down, he will find himself in treacherous waters, defending to his leaders the consequences of the changes for some inner-city authorities. If he wants to take the charges for on-street parking away from Westminster, will he take from Bristol, Coventry and Plymouth the substantial revenues from their investments in city-centre property? There may be an argument for doing that, but he must be consistent and explain how he would do it. That, too, is at the heart of the debate.

Shropshire's standard spending assessment is £573 per head, and I must tell my hon. Friend the Member for Ludlow that 20 counties have lower SSAs, including Hampshire, Surrey, Oxfordshire, East Sussex and West Sussex, all of which receive the area cost adjustment. So there is a complexity in the system, and one must be careful not to make too rapid a judgment on it.

I recall that we had the same passage of arms with the hon. Member for Sheffield, Attercliffe (Mr. Betts) last year, and I must tell him that the figure of £20 million that we specified for refinancing is in the budget because Sheffield told us that it was sufficiently likely for the arrangement to be incorporated in its budget. We had to operate on the budget that Sheffield put before us.

The settlement is tough; we do not deny that. I hope that, in this rapid winding-up, I have acknowledged that it raises fundamental issues. The debate on it must take place, but I appeal to the House to recognise that the settlement cannot be debated in simplistic terms, and that wider issues connected with the management of the economy, as well as with local democracy, are involved. If we address those, we shall do a service to our electors.

It being Seven o'clock, the Deputy Speker put the Question, pursuant to Order [9 June].

The House divided: Ayes 270, Noes 242.