I beg to move,
That this House deplores Her Majesty's Government's policies which have forced local councils to increase council tax and charges while reducing services, so obliging local people to pay more and get less; notes that Her Majesty's Government intends to continue to do this year on year; and urges the people of England to bear this in mind when casting their votes in the forthcoming local elections.
At the last general election, the Conservative party warned people that there would be a tax bombshell if Labour were elected. The Tories were elected, and people received not just one tax bombshell; up to now, they have received 22. Twenty-two tax increases or new taxes have been imposed on them. All those taxes have been imposed nationally, at an average cost per family of £670 a year. The Chancellor of the Exchequer has himself acknowledged that the effect of the increases has been to add the equivalent of 7p to the standard rate of income tax.
The Government have now announced a 1p reduction in the standard rate of income tax, coming into effect around now. I suppose that everyone should welcome the sinner that repenteth, but it is worth reminding the House that the 1p reduction does not wipe out the 7p increase; 6p is still outstanding. There is also doubt about whether the Government have actually repented. At the same time as reducing the standard rate of income tax by 1p, they are knowingly and deliberately forcing up the council tax.
Giving evidence to the Treasury Select Committee, the Chief Secretary to the Treasury accepted that the Treasury was assuming an average council tax increase of 8 per cent. in making its plans. Had the average increase been 8 per cent., that would have been equal to about 0.5p back on the standard rate of income tax: it would have taken away half the 1p by which the Government claim to be reducing the rate. The Government are deliberately driving up the council tax and driving up charges for council services, while forcing cuts in services to local people. As a consequence, local people will be expected to pay more and will be given less in return.
As it turned out, the average increase was not as bad as the Treasury had planned for. It was not the 8 per cent. predicted by the Chief Secretary, but 6.2 or 6.3 per cent., depending on whose calculation we accept. That increase, however, masks many enormous variations in the changes. In Wellingborough, for instance, the council tax increase is no less than 58 per cent., whereas in Labour-controlled Middlesbrough there has been a reduction of nearly 16 per cent. Lest I be accused of political prejudice, I should add that, in the Prime Minister's constituency, there will not be an increase of 6.3 per cent.; his Tory council—he is almost unique among Tory Members in having one of the 13 Tory-controlled councils in his constituency—is raising its council tax by 10.1 per cent.
It is clear from the settlement that, as everyone has known all along, the main determinant of council tax levels and changes, whether up or down, is the level of the Government grant.
The hon. Gentleman says that the determining factor is the level of the Government grant, and suggests that that grant is inadequate. How much extra does he feel should be put into the coffers in the settlement?
It is not just the level of the grant; it is the distribution of it. [HON. MEMBERS: "How much?"] I will answer questions in the way in which I want to answer them. Everyone knows that there are two determinants: one is the overall level, and the other is the method of allocation.
I am answering one question; I am not prepared to answer two at once.
The hon. Member for Brentwood and Ongar (Mr. Pickles) may be satisfied with the present arrangements for the allocation of grant between one council and another, but I doubt whether his constituents are. He voted for a settlement that means that council tax payers in Westminster contribute only 4 per cent. to the council's total spending, while his constituents in Brentwood must contribute no less than 37 per cent. of the cost of services there. That clearly shows just how unfair and rigged is the distribution system.
Is the hon. Gentleman aware that, if Camden council received the same grant level as Tower Hamlets, this year the increase in the charge would be only £50, that, if Islington received the same grant level, the increase would be £53, but that, if Wandsworth council received that grant level, the council tax would go down? Why has he let down the people of Camden?
As everyone knows, Tower Hamlets is one of the most impoverished places in Britain and it is right and proper that it should receive a substantial grant from central Government. It does not, however—unlike Westminster—receive 96 per cent. of its spending from central Government; it receives a lower proportion than that. Everyone recognises that Tower Hamlets is impoverished and that, in identifying Westminster as the fourth most impoverished place in Britain, the Government are just a collection of swindlers looking after their friends.
If that were true, why is it that, under Labour Governments, advised by the hon. Member for Blackburn (Mr. Straw), Westminster council received proportionately a more favourable settlement than under Conservative Governments? If it is wrong for Conservative Governments to give the settlement that they have, why is it that Labour was more helpful to Westminster than the Tories? The hon. Gentleman should withdraw his last statement or apply it to himself.
We are advised by the House of Commons Library that no published figures justify what the Secretary of State says. If he believes that, under Labour, the system was more favourable to Westminster, will he publish the figures?
One of the things that is worth remembering, apart from all the percentages that show clearly that, over many years, the two so-called Tory flagship authorities have benefited as opposed to councils in Derbyshire and in other places, is that people who run the services are being impoverished. On Saturday, several of us met Derbyshire members of the Fire Brigades Union, who told us that, sadly, its firefighting budget is to be cut by about 7 per cent. Every time there is a calamity or a disaster, Ministers praise the work of firefighters, yet in Derbyshire, the FBU's budget is being cut by 7 per cent. and some stations are being closed. That is the reality of this lousy, rotten Tory Government, not all the banging on about looking after Westminster.
I agree with everything that my hon. Friend says and I shall refer to the cuts that the Government are forcing on the fire and emergency services throughout Britain.
In order that the hon. Gentleman should be helped, I will give him the figures. When the Labour party was in power, the Labour Government estimated Westminster's need per head as £486, whereas Liverpool's need per head was estimated at £327, a difference of 49 per cent. Westminster's standard spending assessment will be £1,265 per head compared with £944 for Liverpool, a difference of only 34 per cent. Under Labour, therefore, Westminster was favoured by 49 per cent. and, under the Conservatives, by 34 per cent. The hon. Gentleman should obtain those figures. They are in the public domain.
For a start, the Secretary of State is totally misleading the House. It is not just a question of the standard spending assessments. Let me make this clear—I am quoting figures that are used by Westminster's chief executive, or whatever he is called these days in that benighted plague ship of the Tory party. He says that Tory-controlled Westminster is receiving £20 million more than it is entitled to. The main reason for that is that it receives an enormous grant in respect of visitors to Westminster and between £20 million and £30 million a year from parking charges from those self-same visitors—that income from parking charges is added to the grant that it receives from the visitors, not subtracted from it. It is a racket conducted at the expense of everyone else. It is no good all these Tory Members shilly-shallying about it. They must explain to their constituents why, year in year out, they vote for that racket to benefit Westminster to the disadvantage of the people whom they are supposed to be representing.
May I advise my hon. Friend that recent performance indicators show that Wakefield's spending per head of population is the lowest among metropolitan district councils because of the way in which the rate support grant is allocated? As we have as much, or more, deprivation than Westminster, will he provoke the Secretary of State for the Environment to say why Wakefield should be worse off under the rate support grant order than Westminster?
I do not think that my hon. Friend will ever get the Secretary of State to admit even that Wakefield is worse off because, as he must, the Secretary of State proceeds under the theological assumption that Westminster is the fourth most deprived place in Britain. Let us all remember that, in the system that he is running, not only the resident population, but, for grant purposes, the visitors are regarded as the fourth most deprived people in Britain, so, as I have said before, tonight, 12 per cent. of the people staying at the Ritz hotel will be regarded, for Government grant purposes for Westminster, as living in grossly overcrowded conditions. That is how the Government arrive at such figures.
While on the subject of the use of car parking charges, to what does the hon. Gentleman's own London borough of Camden apply its car park charges and in what way does that differ from the practice in Westminster?
The practice in Camden does not vary from that in Westminster. It is just that the sum is enormously lower. I am suggesting not that the formula does not allow Bolsover council to take parking charges and to spend them, but that the Government have cobbled together a formula that gives parking charges to the borough that receives far more parking charges than probably the next 20 put together, with the veritable intention of ensuring that Westminster is all right and that Bolsover gets clobbered.
It is even worse than that. We have tourists in Bolsover. As many people know, we have Harwick hall and Bolsover castle and English Heritage has just been taken over by a French firm. The Government have allowed the French to invade Bolsover castle, so all the parking charges are going back to France.
Nothing surprises me. When we have the French taking over Northumbria Water and such companies, we can expect them to be taking over Bolsover castle as well.
Far be it from me to interfere in a spat between the hon. Gentleman and the Secretary of State for the Environment, but the Secretary of State might have been making an odd comparison in comparing the figures under Labour with the figures now because local councils' duties have changed since then. I would have thought that the extra duties imposed on them would be expected to be roughly the same per person in each council. Therefore, the absolute difference in grants to different councils between the time Labour was in power and now should be compared rather than the proportional difference.
Oddly enough, I had not even reached Westminster in my speech. I was going to demonstrate that, even without any political prejudice—which of course the Government are full of—their system of allocating grant is widely capricious. There is no better way in which to demonstrate—
No; I shall move on.
There is no better way in which to demonstrate the inherently capricious, unpredictable and rather weird nature of the Government's grant system than the council tax increases in the new unitary authorities. Those authorities, which used to be lower-tier district councils, have taken over from county councils—three of which have been abolished—and, in the case of York, taken over from North Yorkshire county council, the provision of extensive services and the control of enormous budgets for education and social services.
The size of those authorities' budgets is massively greater than it used to be. The councils have no track record on which anyone could base a real and sensible proposition for allocating funds in a way which militated against one council or in favour of another. However, the differences in council tax increases in the new unitary authorities are quite startling. The range is amazing: 31 per cent. in north-east Lincolnshire; 14 per cent. in Redcar, Cleveland; 13 per cent. in Bristol; 10 per cent. in Hartlepool; 9 per cent. in East Riding; and 8 per cent. in Stockton-on-Tees. Other Labour-controlled unitary authorities have council tax reductions: Middlesbrough—which is literally next door to Stockton-on-Tees—has a reduction of 5.8 per cent., and Hull has one of 10 per cent. There is no rational explanation for those differences.
The Government have absolutely refused to take on board any of the complaints that have been made about the inadequate and capricious nature of those arrangements.
I have heard the hon. Gentleman and many of his colleagues quote, with great praise, Rita Hale from the Chartered Institute of Public Finance and Accountancy, and Tony Travers from the London School of Economics. I think that most of us would accept that they know more about local government finance than anyone else in this country. They say that our grant system goes further to achieve equalisation than any other scheme in the world. That being the case, is not the hon. Gentleman just indulging in silly and stupid political banter?
I must say that I have never felt compelled to agree with experts. I think that some Ministers probably think that they should not have agreed too slavishly with experts about the safety of beef and about various other things. We are not here to parrot what experts say, we are here to make some judgments. Whatever experts say, the current system is unfair in making grants to many authorities and it is unfair in the amount of grant Westminster receives in comparison with practically every other authority.
My hon. Friend, being a prudent person—unlike the Secretary of State, the Ronald McDonald of the Tory Front Bench—said that no change could be expected in the early days of a Labour Government. She is quite right; it takes a long time to put right things that are as badly wrong as local government finance.
Quite frankly, I would rather take the word of my hon. Friend than the word of the Secretary of State—of that I have no doubt whatever.
The fact is that, considered nationally, the Government are driving up council taxes, and in his evidence to the Treasury Select Committee, the Chief Secretary to the Treasury made it quite clear that the Government are doing that intentionally. Council tax is being driven up because the Government grant does not meet the increased costs imposed by inflation, pay increases and increased demand for council services because of the extra 86,000 children, for example, who will be going to school in the coming year and the increasing number of old people who—having paid in tax of one sort or another and national insurance all their lives—rightly expect that they will be looked after properly by their local authorities.
The Government payment and the Government grant also do not meet the costs of implementing various legal changes, such as the introduction of the landfill tax and the requirement to instal seat belts on school buses. It is quite right that there should be a landfill tax. It is also quite right that seat belts should be installed in school buses—a cause for which I have campaigned for a dozen years or more, and I will not go back on it—but it will cost money. As a result of the shortfall in what councils must spend to maintain services, they must meet the difference by council tax increases, charge increases and service cuts.
Last year, council tax rose by 5.3 per cent. This year, it will rise by an average 6.3 per cent. We have also experienced increased charges. It is perhaps worth reminding the House that school meal prices are still going up. In many areas, they now exceed £1 per child per day. When the Government first came to power, the charge was 20p per child per day, far larger numbers of children were eligible for free meals and councils had more discretion in granting free meals to the most impoverished children.
It might also be worth reminding the House that this Government, at the same time as they got rid of a national price for school meals, got rid of national nutritional standards for school meals. One result of that action has been a massive increase in consumption of less-healthy foods at school and in the number of children eating burgers, day after day, causing whatever harm or otherwise to their health.
There have been massive cuts in services all over the country—reductions in the availability of luncheon clubs for old people, libraries closing and libraries opening for fewer hours and swimming baths closing. Aspects of schooling that I had regarded, when I was at school, as part and parcel of that experience and as one of the benefits of being a child—such as music, sport and swimming—have been eliminated from the curriculum because the money is not there to fund them. There are examples of such programmes being eliminated all over the country.
Local authorities are having to make difficult, awkward and unpleasant decisions, which have been forced on them by the Government. I shall give just a few examples. First, the great city of Birmingham—a credit to this country—built the international convention centre, a joint project which provided the city with a brilliant convention centre and the country with a state-of-the-art facility. Virtually every member of the Government, certainly including the Prime Minister, vilified the convention centre up hill and down dale—until they needed somewhere in England to go for the European Heads of Government conference.
Lo and behold, the Government chose the international convention centre in Birmingham for their conference because it was the best place for it and because the television pictures, broadcast around Europe, would be a credit to Britain. The communications were absolutely first rate. As soon as Ministers came away from the conference—this collection of bumbling hypocrites—they immediately started complaining and groaning about Birmingham having built an international convention centre. Birmingham has also led the way in introducing many education initiatives to the benefit of the city's children.
Birmingham city council has had to take many difficult decisions this year. The Government increased Birmingham's spending limit by £23 million, but the Government's grant to Birmingham, including the business rate, increased by only £6 million. The Government acknowledged that Birmingham needed to spend £23 million more but gave it only £6 million towards that sum—the other £17 million must therefore come from increased taxes. That, however, is not the end of the story.
Not yet; I shall finish this point.
The teachers' pay award, which the Government decide, was fixed at 3.1 per cent. This year, that will cost Birmingham an extra £9 million. Other pay and price increases will cost Birmingham an extra £21 million. Birmingham will have to find an extra £5.5 million to pay for the implementation of new legislation on pensions and waste disposal. Increases in the number of school children and elderly people in Birmingham will cost £5 million, yet the capital available for school buildings in Birmingham has been reduced by 40 per cent. The budget shortfall will cost 727 council jobs. Birmingham made savings of £20 million but still had to increase its council tax.
As far as I know, it appears to be the Government's policy. I understand that speakers at successive Tory local government conferences have said that setting capping limits and such like has had the effect, even in Tory areas, of encouraging councils to spend up to their limit, which they might not have done if such limits had not been set. That may or may not be true, but it was certainly said at Tory conferences. The hon. Gentleman might be a better judge of whether what is said at Tory conferences is true, as he attends them more frequently.
The Government's revenue support grant for Greenwich has been cut by £4.13 million, and the council has held its increases in expenditure to just 1 per cent. although inflation in its services is running at about 3 per cent. Total Government support for Hackney has been cut by £5.2 million, the bulk of which represents a reduction in the money available for education in that borough. Tamworth, despite facing a by-election, has seen a reduction of £141,000, and the great city of Newcastle upon Tyne has had its rate support grant cut by £1.3 million.
I could go on and on citing examples of cuts that have been made, but I do not want to trouble the House by listing them at enormous length. All hon. Members know from their constituency experience that there have been local tax increases, increased charges and cuts in services, but that is not the end of the story.
This year's increase in taxes is not the only increase that the Government have in mind. On the day of the Budget, the Department of the Environment published figures showing that the Government expected the total amount of money taken from council tax payers to increase by £3.5 billion over the coming three years. That equals an increase of almost 2p in the standard rate of income tax—that 2p increase would raise the same sum of money from ordinary people as the £3.5 billion that the Government expect, were they to stay in power, to raise from council tax payers in the next three years.
That, of course, is not the only sign of the Tory commitment to increase council taxes. The former head of local government finance at the Department of the Environment said:
Ministers want to increase the proportion of council tax spending from 21 to 26 per cent. by 1998–99 … The downside is that your taxes go up sharply".
That is certainly happening and was confirmed recently by the deputy secretary at the Department of the Environment in his evidence to a House of Lords Committee on relations between central and local government. He said of a 25 per cent. contribution on average from the council tax towards council services that it was
as much as I felt the council tax could properly bear".
Does the hon. Gentleman feel that the council tax in Camden would be lower if the council collected it and reached the average collection rate? Does he think that it would be lower in Haringey if it were collected there? Is the hon. Gentleman aware that most of the top 10 councils that collect the least taxes are Labour authorities and that they are responsible for £90 million of uncollected resources? Does he believe that the council tax could be reduced and services improved in such areas if the authorities collected the money?
There is certainly scope for improvement in council tax collection—[Interruption.] I am answering the question. There is scope for improvement in the rate of council tax collection—
And rent collection for that matter. If we are to bandy facts around, I have to say that the only reason why Brent does not feature in the lists of councils with massive council tax and rent arrears is that Brent has written them off to make the figures look better. As everyone knows—this of course applies to Brent—in areas where the people are predominantly poor, it is bound to follow that it will be harder to get rent and council tax out of them, as they find it hard to pay. There will always be some relationship between the standard of living and the level of income in an area and the council's capacity to collect taxes.
One line that the Government have been peddling—the Secretary of State has been doing the same—is that they would provide more money for schools. If more money is being provided for schools, it is no thanks to the Government. The Government have allowed councils to spend more of their own money on schools but have not provided any extra if we take into account inflation, the cost of pay increases and the increased number of pupils to which I have already referred.
Hold on a minute. It is worth remembering that the Government have acknowledged that there was not enough money to cover the pay increases. They have had to accept that the teachers' pay increase should be phased in because councils would not have enough to pay it outright. That is an admission by the Government that the funds would simply not be available.
I make it clear that if, in the coming year, education authorities were to spend on schools what the Government think ought to be spent on schools, there would be not an increase in spending but a reduction of, on average, £41 per pupil across the country compared with the year just finished. I repeat that if education authorities spent to the Government's target in the coming year, there would be not an increase but an average decrease of £41 per pupil.
Is the hon. Gentleman aware that Lancashire council scaremongered and said that this year there would be a further reduction on school spending of 8 per cent. on top of a cut of 5 per cent. last year? The Government have in fact given £26 million extra to Lancashire this year and, at long last, the chairman of the education committee has admitted that there will be a real increase in spending, which is quite different from the scare stories that he was spreading a few months ago.
Compared with Conservative Members, it beggars belief to refer to anybody in the Labour party as scandalous when it comes to scaremongering. I do not have at my fingertips figures on the circumstances prevailing in Lancashire. All I know is that, generally speaking, Lancashire county council has been trying hard to provide decent services to the people of Lancashire and has been making a pretty good fist of it. It is a pity that it has not had more help from the Government—or, from time to time, more help from Tory Members representing Lancashire constituencies in arguing with the Government to get some resources for the county.
Is it not a fact that Lancashire, like Derbyshire, has the largest primary classes of any English shire—an average of 27.9 pupils across the whole area? That is indicative of its financial problems as a result of the Government.
I freely admit that my hon. Friend, who is very familiar with Derbyshire and who has obviously been looking around for comparisons and spotted that Lancashire is in similar circumstances, displays more expertise on the matter than I. I congratulate him on pointing that out.
The hon. Gentleman should be aware that the reason why class numbers are high in some parts of Lancashire is that, unfortunately, the county council chooses to keep open surplus places in east and central Lancashire secondary schools, where the population is falling, thus depriving north Lancashire of teachers that it should have.
One of the problems that education authorities face these days in getting rid of surplus classes, or indeed surplus schools, is the possibility that when they try to take the sort of action for which the hon. Lady seems to be calling, the people in the schools concerned will go rushing to the Secretary of State to say, "Can we opt out?", and that there is a reasonable chance that, on base political grounds, the Secretary of State will agree. Virtually everybody connected with education, including some officials at the Department for Education and Employment, acknowledge that that is true. I suspect that even some officials at the Department of the Environment might think that it is true.
My hon. Friend the Member for Bolsover (Mr. Skinner) raised the question of Derbyshire's fire service settlement. I must repeat to Conservative Members that, unless they happened to be absent for the vote, they voted for the general local government settlement. It is worth reminding them what that settlement has provided for fire authorities around the country. The Tyne and Wear authority will have £2.3 million less to spend than it had last year on the fire service. In Wiltshire, although the deficit is just £260,000, it is not a large brigade and that is quite a lot of money. On Merseyside, the cuts contemplated range from £2 million to £6 million. In Cambridgeshire, the figure is £700,000. In Essex, Labour county councillors have proposed cuts of £1.5 million, but Conservatives and Liberals are still gnawing on the bone over whether to make much bigger cuts and reduce spending on the fire service by between £3 million and £4 million.
In the west midlands, councils are discussing how to reduce spending by £4.7 million. In Greater Manchester, £2 million is having to be found through cuts. In Nottinghamshire, fire service spending is being cut by £80,000. North Yorkshire is looking at a total reduction of £3 million over three years. Difficulties in Humberside have been exacerbated by the disappearance of the county and all the uncertainty surrounding it. In Derbyshire, as my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) pointed out, a reduction of £700,000 is being looked at. Surrey is considering a reduction of £2.5 million in fire service spending over three years. I have not got the figures for Buckinghamshire, but I know that it has decided to close three rescue units. In Hampshire, there is a reduction of £500,000, and in Greater London the cuts amount to £8 million.
Everybody in the country knows that Tory Members of Parliament and Tory Governments play fast and loose with people's safety, but they are not entitled to play fast and loose with people's safety when it comes to the fire and emergency services. Nor are they are entitled to play fast and loose with the safety of firefighters who risk their lives daily for the rest of us. As my hon. Friend the Member for Bolsover also pointed out, when there is an emergency, Ministers leap to the Dispatch Box to pay tribute to the emergency services. Some of the people in the emergency services feel that it would not be too bad if they were paid some pay from time to time.
I compliment my hon. Friend on his points about the fire service. He did not mention West Yorkshire, but I am sure that he would have done if time had permitted. West Yorkshire has minimum fire cover, the reserves are all spent, and in Bradford, which has a population of 490,000, there is one high turntable ladder, which cannot assist in emergencies at high-rise flats.
I entirely agree with my hon. Friend's point. All the cuts may seem fine to people with clipboards and stop-watches—accountants and various other people—but they do not look too good to someone whose house, whose neighbour's house or whose place of work is burning down.
The other thing about which there is nothing new is how the Government have rigged the grant system. As I have said, they have rigged it in favour of Westminster. All that grant-rigging is still based on the assessment of deprivation. The Government, inspired, no doubt, and advised by experts, have concluded that Westminster is the fourth most deprived place in Britain. I know that not all Westminster comprises Mayfair and Belgravia; nevertheless, Mayfair and Belgravia form a substantial part of it. Nobody in their right mind believes that Westminster is more deprived than the constituency represented by my hon. Friend the Member for Easington (Mr. Cummings). In terms of wealth and income of the people who live in Easington, it is one of the least well-off places in Britain. [Interruption.] If Conservative buffoons do not realise that, given the effects of all the pit closures, they are not even fit to sit on the Conservative Benches.
According to the Government's scale of deprivation, Easington, after all the pit closures, comes 338th in the priority of deprivation, whereas Westminster comes fourth. While Westminster comes fourth, Warrington is 337th, Stockport is 295th, the Forest of Dean is 257th and Erewash in Derbyshire is 228th. According to the criteria laid down by the Government, Chorley in Lancashire, whose Member of Parliament has just been on his feet, is 194th—190 places behind Westminster in the scale of deprivation. The result of those infamous assessments is that Westminster coins it while other areas have to do without.
As I have done before, I shall give a list of the council taxes that other areas would have had to charge if they had received the same amount of help per head as Westminster. Let us take Tamworth. If Tamworth council had received the same amount of help per head as Westminster, it would not have needed to levy council tax at all. This year, it would have been able to give a rebate of £969 to every council tax payer. In Milton Keynes, the council would be able to pay out a rebate of £692. In Peterborough, represented by the chairman of the Tory party, the council would be able to pay out an £863 rebate. In Basildon, famed in Tory song and story, the council would be able to pay out a rebate of £615. In the borough of Trafford, the council would be able to pay out a rebate of £527. In Oldham, the council would be able to pay out a rebate of £145 and in Rochdale, the figure would be £303. In Cherwell, a good, solid Tory area, the council would be able to pay out a £925 rebate. The figure for Wyre Forest would be £855 and in the great city of Southampton, the figure would be £972. That is the amount that the council would be able to pay out, rather than having to take in any council tax, if it got the same level of help as Westminster does.
The same unfairness characterises education. With the massive amount that the Government allow Westminster for education per pupil, Staffordshire would be able to take on 4,895 extra teachers and it would not be contemplating job losses in schools this year. Bedfordshire would be able to take on an extra 2,000 teachers, Oldham an extra 1,000 teachers, Rochdale an extra 850 teachers, Essex an extra 5,300 teachers and Kent an extra 5,600 teachers if they got the same level of help per pupil as Tory Westminster gets. Those figures demonstrate the scale of the racket. All this is because the Government regard Westminster as the fourth most deprived place in Britain.
Four is a magic number for Westminster because the Audit Commission's most recent figures show that people living in Westminster pay only 4 per cent. towards the cost of the services provided by the council and that the Government divvy up the other 96 per cent. I suggest that Tory Members have a lot of explaining to do to their constituents.
The chairman of the Tory party represents Peterborough, although, as we all know, he is doing a bunk under the chicken run and going to somewhere safer. His constituents in Peterborough have to pay 25 per cent. of the cost of providing local services. People in Milton Keynes have to pay 35 per cent. and people in Basildon have to pay 42 per cent., 10 times the proportion that people living in Westminster have to pay towards council services. In Corby, the figure is 48 per cent.; almost half the cost of services has to be met by local people, whereas the figure for Westminster is just 4 per cent.
The hon. Gentleman is talking about percentages. Does he agree£I do not think that the figure is disputed£that compulsory competitive tendering has saved 7 per cent. of the costs of local government services? Does he know that his promise to get rid of compulsory competitive tendering is, in the words of The Guardian, a dangerous capitulation to the trade unions? Is that not what he is about? Is he not about destroying services and trying to mislead people rather than putting forward a policy?
The hon. Gentleman is up a gum tree if he thinks that I will be embarrassed by quotations from The Guardian. I will give a quotation from the Audit Commission. If we are talking about the value of compulsory competitive tendering, let us see how it performs in Westminster. Profligate Westminster, which gets all this money from central Government, which put poor families in asbestos-ridden blocks and which organised the misspending of £29 million of public money for party political advantage, is so badly mismanaged, even with compulsory competitive tendering, that refuse collection and disposal costs £55 per head of population and street cleaning costs £36.42 per head of population. That is the highest figure in the country by miles. Many of Westminster's other services are equally grotesquely expensive.
Let us compare the figures with those for the borough of Camden—part of which I am proud to represent. It is literally next door to Westminster, so it faces roughly the same cost conditions. In Westminster, refuse collection and disposal costs £55 per head whereas Camden's service costs £22. Westminster's street cleaning costs £36 whereas Camden's costs £14.83. That shows the better bargain and better value that Labour Camden gets compared with Westminster. All over the country, Labour local government provides good services and good value for money. Nothing the Tories say will shift people's opinion that they are better off with a Labour council and that is why we control 200 local authorities while the Tories control just 13; they may lose four of them in the local elections.
Before I call the next speaker, I have a brief announcement to make. Following today's business statement, I have been asked to notify the House that Members wishing to submit amendments to the Prevention of Terrorism (Additional Powers) Bill may do so tonight in the Public Bill Office. An informal list of amendments submitted in this way will be made available in the Vote Office before 10 pm this evening. A more formal marshalled list of amendments will be made available in the course of the Second Reading debate tomorrow.
I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
'congratulates the Government on the rigorous approach it is taking towards all public expenditure, including that of local government; commends the clarity of their approach towards taxation and the funding of local services; and urges local authorities to make the most efficient use of the resources available.'.
The speech by the hon. Member for Holborn and St. Pancras (Mr. Dobson) was entirely in keeping with April fools' day. He managed to choose the worst
possible ground on which to attack the Government and, as usual, he managed to make the worst possible case on that ground.
Before I respond to such points as one can remember from the speech, it is worth reflecting on why the Opposition chose this subject for debate. In one of his earliest pronouncements as leader of the Labour party, the right hon. Member for Sedgefield (Mr. Blair) asked the public to judge the Labour party on its achievements in office locally and not on its rhetoric. He said:
I don't think the character of any party becomes clear until you're in power.
Those words have now come back to haunt him.
The council tax bills and the Audit Commission's performance indicators, both published two weeks ago, show categorically that people pay more and get less under Labour councils. The right hon. Member for Sedgefield is, therefore, desperate to avoid being judged on that record and he has sent the hon. Member for Holborn and St. Pancras to defend him. That is why we are having this debate today, that is why the hon. Gentleman has come forward to explain all about the council tax and that is why the Labour party is so embarrassed. It is embarrassed not only by the record of Labour local government, but by the chasm between what Labour says in soundbites in the television studios and what happens when it is in power locally.
The fact is that Labour remains the party of high taxes and high spending. The hon. Member for Holborn and St. Pancras did not quote two figures. First, that Labour councils charge 50 per cent. more in council tax. Secondly, although pressed by my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles), the hon. Gentleman never said how much the Labour party would have given to local authorities. He told us that the figure was not high enough, but he never told us what the figure should have been.
We can all say how much more we would like to spend on this, that and the other, but in the end, we have to say, if we are to be believed by anybody, how much we would have spent. The hon. Gentleman did not tell us. We tried, some time ago, to find out. We pushed him and we asked him, and he finally said that he would not tell us because, if he did, we might pick the figure to pieces. We would do that because Labour has said that it would not spend any more. It is frightened that we might note that the reason why taxes are higher—
I said that the council tax increases have been knowingly brought about by the Government. They know that, and it is no use them trying to blame Labour councils or anybody else—the Government are responsible for the council tax increases.
I have given the hon. Gentleman a chance after his long speech to give the figure, but he has still not done so. That makes incredible any claim that he makes that not enough money has been given. Unless he can say how much he would give, he is not credible and no sensible person will be able to take what he says seriously. Even if they have not heard his speech, they could not take him seriously.
My right hon. Friend, who was concentrating on the hon. Member for Holborn and St. Pancras (Mr. Dobson), may not have noticed the hon. Gentleman's deputy, the hon. Member for North-West Durham (Ms Armstrong), screeching that we did not tell people in 1978 how much we would spend. May I suggest to my right hon. Friend that the hon. Lady is wrong? We made clear at the time that we would not be spending a single penny more, and that councils would have to use their money better. Labour is trying to bribe people into believing that they would get more money.
If it were in power, Labour would either provide more money—in which case it would have to take the money from somewhere else or push up all taxation significantly—or it would not, in which case it is misleading its own members in councils around the country.
I will in a moment, but I want to get through this part of my speech. It is important that the House listens carefully to what I am suggesting.
The Leader of the Opposition says that education is Labour's number one priority. Yet all around the country, Labour councillors are busy diverting the extra money that they have been given or have been allowed to spend from education into other areas. Having been allowed to spend the money, Labour councillors are spending it on the things that they want, and not on education that the public want. The Leader of the Opposition says one thing, but Labour councillors do another.
Will the Secretary of State move from his imaginary figures to the real ones in the Government's own Red Book? The Chief Secretary admitted to the Treasury Select Committee that council taxes would rise by about 8 per cent. as a result of the Government's own policies because the Government were cutting grants and throwing the burden on council taxes. Will he now confirm that there are similar figures for each of the next two years? Does that not amount—in the Government's own forecast—to an increase of 25 per cent. in council taxes in the next three years? Will that not result in councils having to bear 26 per cent. of total local authority funding, rather than 21 per cent. as at present?
I can confirm that the Labour party—in the presence of Sir Jeremy Beecham—suggested that council taxes would go up on average by 10 per cent. In fact, they have gone up on average by just over 6 per cent. The difference between the figures is very clear, and the increase does not tally with any of the figures given by the hon. Gentleman.
Will my right hon. Friend accept confirmation from Northamptonshire of the points that he is making? After making many representations to the Government, the council obtained a 6 per cent. increase in the amount of moneys available to be paid to school governors for the year just started. But the Labour-controlled Northamptonshire county council—after screaming for months about teachers losing their jobs and increasing class sizes—has not passed all the money on and has kept back something like £2 million.
I agree with my hon. Friend, but he is extremely lucky. In Labour and Liberal-controlled Suffolk, the local council could have spent £11.5 million but is spending £8.5 million. It has written one of the longest letters ever by a local authority to its head teachers and governors to explain why instead of spending the money on education—because it is spending the money, of course—it is spending it on things that it thinks are more important. The Leader of the Opposition—supported by the Liberal Democrats—talks about education as his great priority. Yet Labour councils around the country are not spending the money on education.
It costs someone living under a Labour council—whether it is this year, last year or the year before—50 per cent. more than someone living under a Conservative council. The Government do not set council tax bills—the local authorities do. Nobody forced Labour and Liberal Democrat councils to increase their council tax bills, and to increase them by more than Conservative councils. Nobody forced them to reduce services—they have chosen to do so. Why? Because they failed to use the methods by which they could get better value for money.
I will in a moment. I want to explain the methods so that the hon. Gentleman can take them back to Wakefield—a council that I am sure would like to know them.
For all the various budgets proposed by Labour councils—those are enormous in many cases—an alternative is proposed. Labour-controlled Birmingham—mentioned by the hon. Member for Holborn and St. Pancras—increased its band D council tax by £76. But the Conservatives' shadow budget proposed a zero increase. There is no need for the council tax to go up in Birmingham. The council tax could remain at the same level, and services could be improved by Birmingham being run more efficiently. The fault in Birmingham lies neither with the people nor with the Government, but with the Labour council. The tax increase of £76 is a Labour tax increase. One pays more and gets less under Labour.
The hon. Member for Holborn and St. Pancras had the effrontery to talk about Labour's education policy in Birmingham. But the Labour party had a putsch on its leadership in Birmingham because it had not spent the money on education, and had spent it on the very things for which the hon. Gentleman was lauding the council.
Does the right hon. Gentleman believe that it was or was not right for the city of Birmingham to build the international convention centre?
I am referring to comments by Councillor Theresa Stewart who, in seeking a change of policy, suggested that the priorities of Birmingham city council had been wrong and that the money ought to have been spent elsewhere. I stand by that. My point is not whether this or that particular decision was right, but that the Labour party in Birmingham is deeply divided about what should have been done. The Conservatives have offered a way in which Birmingham could have no rise in council tax under the Government's grant system. Birmingham's tax is therefore a Labour tax.
Enfield is putting up its tax, while the Conservatives would be able to cut £20 of band D council tax. In Kent, the Conservatives have proposed a council tax rise of 2.9 per cent., but the Labour and Liberal Democrat council had to put it up by 5.6 per cent. In all those places, the Conservatives have said what they would spend. They have given the figures, and are prepared to stand by them. The Labour party is a disgrace because it will not give any figures. It is afraid to do so. Labour could either give figures that show that it is fiscally sensible—in doing so, it would deny the hon. Member for Holborn and St. Pancras' whole case—or figures that would clearly demonstrate that Labour is the raising-tax and lowering-service party that we all know it to be.
I appreciate the opportunity to intervene in the Secretary of State's speech. If Wakefield had the same rate support grant distribution as Westminster, we could spend a further £600 per head on secondary school education. I am using the same performance indicator figures to which the Secretary of State referred. What does the Secretary of State say to those figures?
Why does the hon. Gentleman not do himself better than that? Why does he not compare Westminster and Wakefield under a Labour Government? He would make even better figures for himself. The Labour Government were even more helpful to Westminster proportionately. Or why does he not look at Tower Hamlets? Why does he not say to himself, "If only we had the money that Tower Hamlets has."? Then he would discover that he could spend even more money per secondary school pupil. The hon. Gentleman knows perfectly well that the figures that come out of the system are entirely independent. They are based upon need. He knows perfectly well that that is true because when Labour was in power it gave Westminster a higher proportion than we do.
My right hon. Friend mentioned the increase of 5.6 per cent. in the precept of Kent county council, which is now Labour-Liberal. As the Government gave a more than 4 per cent. increase in central Government finance, people in Kent object to the fact that the increase for the schools is very much less than either figure—only 3.4 per cent. That bears out the fact that Kent people under the Liberals and Labour are having to pay more to get less.
Before I respond, I should like to offer the House an idea. There is a kind of meter in the House. When the hon. Member for Holborn and St. Pancras, who sits for part of Camden, laughs or giggles, we know that he is on a weak point. If the House watches, it will notice that whenever he laughs it is because we are right and he is wrong. It is what I call the giggle factor for the hon. Gentleman and it is one well worth watching out for. It is almost infallible—not quite, but almost.
Kent is a very badly run council. It was a very well run council and I am sorry that Kent, with its particular system at the moment, should have made education so much less a priority than my hon. Friend the Member for Gravesham (Mr. Arnold) would want and that the Government have sought to give it the means to do.
Of course, one has to remember that the views that I am putting forward are not only my own. They are independently supported. I was interested to see the article by Dido Sandler in yesterday's Independent on Sunday. She concluded, rather interestingly, on the question of the difference between a Labour and a Conservative council, that:
one of the best ways of saving money on your council tax is to move. If you tot up what Band H taxpayers in the London borough of Lambeth have contributed over the past six years, compared with their peers in neighbouring Wandsworth, the difference is enough to buy a car.".
That is the difference. In Lambeth under Labour the council tax went on and on going up, even though the council received more money from the taxpayer than Wandsworth.
There is not even a scintilla of truth in the nonsense that the hon. Member for Holborn and St. Pancras has been talking. If one compares Lambeth and Wandsworth, one discovers that Lambeth, with more money from the taxpayer, pushed its council tax up time after time while Labour was in control. Now that no one is in control, the council has been able to cut the council tax as it was never able to do when Labour ran it. So not only is Labour more expensive than Conservative, it is more expensive than having no one in control. It is more expensive to have a Labour council than to let it rip and let anyone run it—to let whatever collection of people turn up for a meeting run the council. It is a wonderful situation. Labour is worse than any coalition of anyone who happens to turn up on any day.
The Liberal Democrats are not as bad as Labour. People pay only 30 per cent. more on average with them. People pay 50 per cent. more with Labour. The gap between Conservative and Lib-Lab local government has been widening. It has got worse, not better. The only excuse that there could be is that the services are better for the higher price. That is the only argument and that is what Labour has said.
So I have looked carefully at the wealth of information produced by the Audit Commission comparing the performances of councils. Indicator after indicator shows that Labour councils provide a poorer service. People are less likely to get their housing benefit, council tax benefit or rent allowance paid on time if they live under a Labour council; less likely to have planning decisions made on time; and twice as likely to find a street light not working. They wait longer for vital equipment after a social services assessment. Labour councils have a higher proportion of their homes empty and available for letting, they take longer to re-let dwellings and they have a greater proportion of tenants in rent arrears.
So why do Labour councils cost so much more? First of all, they have to make up for the taxes that they fail to collect. My hon. Friend the Member for Brentwood and Ongar (Mr. Pickles), who interrupted the hon. Member for Holborn and St. Pancras, was right. In 1994–95, Labour councils failed to collect more than £250 million in council tax. That money could have been spent on teachers and new equipment in schools, on extra home helps or on other local services. It could even have been used to cut the council tax. But none of those things was done.
I should like to give the second reason and give an example, and then I will give way.
Secondly, Labour councils do everything that they can to stifle competition and keep local services under the control of their trade union paymasters. As a result, they end up paying more for inadequate services run by trade unions that bankroll the Labour party. I shall give two examples of that. The first is from Brent.
Under Labour, Brent was a byword for shoddy services and high taxes. Even the hon. Member for Brent, East (Mr. Livingstone) accused Labour-run Brent of being "monumentally incompetent". He had all the experience of the Greater London council so he knew what incompetence was. If he said something was incompetent, he meant it, and monumentally incompetent must mean something absolutely unbelievable.
Under the Conservatives, Brent has the fourth lowest council tax in London. It is the only authority in England to have cut its taxes in each of the past six years. MORI polls show that overall customer satisfaction in that borough has increased by 18 per cent. since Labour was removed from office. The council has won a record seven charter marks. These remarkable achievements are not matched by any Labour council in the land. That is what happens under the same grant system when a council changes from Labour to Conservative.
In one moment. I promised the hon. Member for Bradford, South (Mr. Sutcliffe) that I would give way to him and then I will certainly give way to the hon. Gentleman.
I ought to be perfectly fair and have a look at a council neighbouring Brent. Islington, the Leader of the Opposition's own authority, exemplifies the record of Labour local government. Islington spends the third highest per head of population in the country yet its results are appalling. It is the slowest council in London, and the second slowest nationally, in deciding planning applications; it is the third worst council for the average time taken to re-let properties; it has just set the sixth highest council tax in the land.
There is a problem here because Islington does not quite know how it did it. The Audit Commission confirms what we already knew from the recent district auditor's report—that Islington cannot even measure how bad it is. Time and again the Commission expresses "doubts" about
the council's arrangements for producing the required information".
Islington does not know the percentage of items of equipment provided within three weeks for those in desperate need. It cannot tell the percentage of over-75s helped to live at home. It is not sure of the percentage of adults going into residential care who are offered single rooms. It does not have the figures for the percentage of household waste recycled. No one is certain of the percentage of householder planning applications decided in eight weeks. It does not know, it cannot tell and it does not care. As long as the unions in Islington are happy, it does not care. That is the problem with Labour councils that charge people more and provide them less.
That is something that will soon be remedied as people realise just what it is like to have a Labour council. I have no difficulties about that. We shall soon see.
The right hon. Gentleman claimed that it was simply to Brent council's credit that it had managed to reduce its council tax. Does he think that its ability to reduce that tax was enhanced by the letters that the leader of the council sent to the special Tory adviser at the Treasury, the local government desk officer at Tory central office and the special adviser at the Department of the Environment in July 1994, saying that he had had discussions with them and asking them to ensure that there would be
no swingeing increases in the level of Council Tax set by the borough next year which could then lose us control of the borough
and expressing the hope that the Treasury would agree to provide enough funding. Does he think that that might have had a little to do with what the council tax turned out to be in Brent?
As the Treasury does not decide, the figures are done on exactly the same basis for each of the London boroughs and there was no change whatsoever in the way in which Brent was dealt with, the hon. Gentleman can answer his own question without any difficulty. The trouble with the hon. Gentleman is that he is keen on trying to spread any rumour he likes in any way in likes because he is trying to imply something that is manifestly not true and he ought to be a little more careful.
This year's settlement struck a fair balance between the needs of local government and of the economy as a whole. The total standard spending for England will be £44.93 billion—a huge amount and an increase of £1.42 billion or 3.3 per cent. That shows the importance that we attach to local government services. We have provided a 4.5 per cent. increase in provision for education and 6.9 per cent. for personal social services, including £418 million in transitional community care special grants.
The hon. Member for Holborn and St. Pancras believes that this year's settlement is inadequate, but he never tells us by how much or what he would do. He never says what a Labour Government might do, could do, think of doing or might have to put off doing. The real and the only conclusion—after the hon. Gentleman's speech it is a simple conclusion—is that he neither understands the system nor knows what he would do if we were ever so stupid as to put him in power.
The hon. Member for Holborn and St. Pancras believes that the settlement is wrong because local taxpayers are meeting slightly more of the cost of local services. I am surprised that he should say so because the Labour party's local government policy document, "Renewing Democracy, Rebuilding Communities" says that Labour
believe that it would be better for local people and make for a healthier democracy if councils were responsible for raising locally a much higher proportion of the money they invest and spend".
I emphasise the words "much higher proportion". It is not some small amount. That is what Labour wants.
I have heard Opposition Members mention the business rate. Oh yes, they would like to have that again because it does not make them responsible at all. The policy document cannot mean that, however, because it states that
it would be better for local … democracy",
but the business rate means that one can charge anyone anything one likes without it having an effect on local democracy.
Indeed, when local authorities administered the business rate, what happened? It meant that the John Lewis Partnership paid three times as much per square foot in Newcastle as it did in Westminster. That was under a Labour Government. Why did the centre of Newcastle almost close down? It was because Newcastle city council taxed people out of existence. When the friends of the hon. Member for Sheffield, Attercliffe (Mr. Betts) were in power in Sheffield, why could one not find a business that would not have moved out of the city if only it could have found someone to buy its premises?
That is what happened under the business rate, so it was not surprising that when the Royal Institution of Chartered Surveyors brought together business men of all kinds, including the Confederation of British Industry and all the other organisations, the one thing that they were all agreed about was that the business rate should continue to be centrally organised and protected so that it could not rise above the rise in the cost of living. Why? Because the Labour party can never be trusted not to put its hands into other people's pockets and the business people of Britain know that. They also know that the north of England has benefited enormously.
The hon. Member for North-West Durham (Ms Armstrong) had better listen. The £800 million that was levied by Labour councils in the north was no longer levied once the universal business rate was put into operation. She fought for the retention of Cleveland. We know about her—
I am sorry. The hon. Lady jumps to the defence of her hon. Friend, who was on the other side over Cleveland. I know which side the people of Cleveland were on—they were universally against Cleveland. I am pleased to say that one of the most popular measures I have ever taken was to confirm the demise and removal of Cleveland.
I was amazed to discover that the hon. Member for Holborn and St. Pancras dared to stand up and tell me that Labour-controlled Middlesbrough had reduced its council tax. Hon. Members may wonder why. It was because there is no Cleveland any more. Without the incubus of Cleveland, the council has been able to be more sensible. Not sensible enough, however. People would be much better off if the council were Conservative-controlled because they would be paying 50 per cent. less.
Most unusually, I am almost at a loss for words. The Secretary of State says that the abolition of Cleveland has led to a reduction in the council tax in Middlesbrough, which is Labour-controlled. How does he account, therefore, for the increase in council tax in Redcar and Stockton, which are also Labour-controlled and also in Cleveland?
If I lived in any of those places, that is the first question that I would ask. Why is that Labour council even more incompetent than that in Middlesbrough? I would be banging at the council's door for an answer. I hope that the hon. Gentleman would be in the lead, asking the council, "How is it that even the loonies next door can do better than you?" That is what I would be asking.
The hon. Member for Holborn and St. Pancras went on about the money that Westminster gets for daily visitors. I was interested to hear that because Westminster gets 5 per cent., but Labour-controlled Norwich gets 7 per cent., Labour-controlled Cambridge gets 8 per cent., as does Labour-controlled Great Yarmouth, and the independently controlled—just to be absolutely independent—West Somerset gets 10 per cent. I wonder why the hon. Gentleman did not mention any of those and why they did not come high up his list. I wonder whether he has visited Cambridge recently to say anything about the parking charges. It is noticeably one of the worst councils in Britain and it has the smelliest car parks in Britain. It also has one of the most dangerous car parks in Britain. The fact of the matter is, however, that it raises a lot of money in car parking charges and yet it gets a percentage that is significantly higher than that received by Westminster. Why did the hon. Gentleman not mention Cambridge? Did he not know about it, or is it because those other councils are Labour-controlled and Westminster happens to be a Conservative-controlled council?
The hon. Member for Holborn and St. Pancras knows that the system under which we work is fair and honourable. We worked it out with all the local authority organisations. What the hon. Gentleman said about Westminster is totally countered, first, by the fact that it did proportionately better under Labour than it has under the Conservatives and, secondly, by the fact that no one in local government believes him. None of the experts believes him. But, he never listens to experts. That gives me a grave problem because I listened to his speech extremely carefully and I cannot imagine to whom he listened when he wrote it. No Front Bench spokesman could have written such a speech. It was wrong from beginning to end. He has not checked any of his facts and has not been to the councils. Even the charming comments by the hon. Member for North-West Durham will not cover the fact that the speech was unworthy of the Opposition's local government spokesman. Local government deserves better than it gets from him.
I want to remind the hon. Member for Holborn and St. Pancras of one that he did not run—perhaps he did not remember it—this time: the old line that it was not true that Labour councils cost more than Conservative councils because that was true only if like was compared with like. If one compared like with unlike, it could be proved that Labour charged less. To that Mr. Peter Kellner rightly said:
I dissected Labour's assertion that its councils charged householders £40 less tax. I showed that this figure had nothing to do with the financial prudence of Labour councils, and everything to do with the tendency of Labour voters to live in the less affluent parts of Britain: as a result, homes in Labour areas tended to fall into lower Council Tax bands and this was why average Council Tax was lower. I went on to show that the proper way to judge the figures was to compare like with like—say Band D figures, council by council … [Labour's] claim is as misleading as it ever was … On this issue, Labour is wrong and Tories are right.
The fact is that not only on this but on every issue that he raised, the hon. Member for Holborn and St. Pancras has been wrong.
My hon. Friend the Member for Cardiff, North (Mr. Jones) will deal at the end of the debate with the matters that have not been covered so far and with matters relating to Wales. Many of us wonder how we can discuss council tax without the Labour party raising anything to do with Wales. Could it be that it is afraid to field the shadow spokesman for Wales who, of course, is not being allowed out at the moment? He is not being allowed to say anything on anything lest he should do what he normally does and say the wrong things on everything.
To get back to proper comparisons, will the Secretary of State confirm that when the Government began to compare council tax in different authorities, they used the average value as the fair one? Only when they found that that favoured Labour authorities, which were costing people less, did they change the figures. Will he further confirm that the use of band D is misleading because if two authorities collect the same amount of money from the same number of properties but one has lower value properties, that council will have a higher band D council tax than a similar authority with more higher value properties? That is a mathematical point. The Secretary of State should learn some maths before he quotes figures.
The hon. Gentleman and I are biased on this so I will quote Peter Kellner, a well-known Labour supporter. He said:
Gummer is right and Straw is wrong.
He is right. Gummer is right on this and Straw and the hon. Member for Holborn and St. Pancras, who follows him with rather less certainty, are wrong.
I thank the right hon. Member for Sedgefield (Mr. Blair) for tabling this motion. Without his kind intervention, we would not have had the opportunity of hearing what amounts to the Labour party's lack of a policy on council tax and council spending. The hon. Member for Holborn and St. Pancras has shown what we always suspected but now know to be true. He neither understands the system nor knows what he would do if he were ever in a position to do something. He has proved that Labour councils cost more and give less; that Labour puts taxes up and puts services down; that Labour's interest is that of the trade unions who work for councils not of the people who pay for local services; that Labour does not know what it would do but that its only answer on any issue is to yah-boo and to laugh. He would not be sitting in his place if he took local government seriously.
My hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) made a typically sharp, robust and revealing speech. He put the inhuman algebra of revenue support grant and its formulae into the context of the poorest communities, and he was surely right to do so. His opposite number, however, delivered a tirade: the Secretary of State for the Environment made a typically combative and hectoring speech but forgot to say that his party has held the reins of power for 17 years. He forgot to say that his Government proposed and supported the iniquitous poll tax and other unpleasant legislation that was imposed during the 1980s. He then had the effrontery to accuse my party of effrontery. He raises posturing, wriggling, dodging and whingeing to the status of high parliamentary art and one has to admire his cheerful cynicism and aggressive bombast.
The record of Conservative Administrations on local government is abysmal. Intolerant, repressive and aggressive legislation has robbed Britain's councils of their free status and councils are in danger of becoming the poodles of central Government. The Government, and their predecessors under Mrs. Thatcher, have undermined and all but taken away the independence of our local government, and in so doing they have gone against the grain of Britain's local government history. Legislative attacks on local government hurt our body politic. Her Majesty's Government now dictate and control all but 11 per cent. of council spending. That cannot be right.
Local government is part of Britain's basic democratic foundations. It is currently fashionable to say that the Executive—that is, the Cabinet—is overmighty, that it dominates and dwarfs the House of Commons. That is often argued in the newspapers and sometimes in the Chamber. Certainly, since 1979 measures have been taken to downgrade local government in Britain and in Wales. Our councillors, who work very hard, feel that they are elected to carry the blame for policies imposed upon them and their local authorities by the Government.
The poll tax was the high point of the attack on local government by Conservative Administrations, but central Government are still throwing their weight about and we are caught short by inadequate central Government funding for our local councils. That is what the debate is about and we are all witness to the real difficulties that our councils face. All paths in this debate lead to the Cabinet room.
Central Government are clearly determined to cut Treasury taxes with the general election in mind. Council tax bills have gone up by around 6.2 per cent. for band D in England, but in Wales they have gone up by an astronomical 18 per cent. People in Wales are aghast and astounded at the severity of the increases, which represent a serious hike in the private domestic budgets of Welsh taxpayers. I must report to the House the resentment and apprehension felt in Wales at those increases. Our councillors are left with the difficult task of explaining the iniquities and machinations of central Government. It is their lot to explain why those increases have been forced on every taxpayer.
Wales is at the top of the league for low wages. That is a great problem. Local government finance policies therefore have serious implications and are a key factor in domestic budgets.
I am listening carefully to the hon. Gentleman. He referred to low wages, which prompted me to remember that he claimed that councillors are being downgraded. He pursued the theme that the Government are taking power away from local government, which leaves councillors less to do. If they have so little to do, does he approve of them paying themselves salaries of up to £24,000? Does he approve of the latest wheeze of setting up working parties to consider redundancy packages for defeated councillors?
Many of us suspect that the council tax allocation in Wales has been subject to foul play. We know that this is an election year and that there are precious few Conservative councils in Wales or, indeed, in Britain—so unpopular are the Government. The Conservative Government are therefore evading some of the responsibility for the increases in the council tax because they are not represented on the ground and do not have to answer for them. Although those increases have been imposed by the Conservatives, the Opposition parties are all too frequently expected to take the blame for them. In a general election year, I predict that the Conservative party chairman and others will blame luckless councils for those increases, which would be a travesty of the truth because the increases are the consequence of Government policy.
My hon. Friend the Member for Holborn and St. Pancras referred to the difficulties of the fire service. The North Wales fire service, which began its life today, is in great difficulties because it is desperately short of money. Everyone would agree, however, that it offers a life-or-death service. The leaders of the North Wales fire service have sought an urgent meeting with the Home Secretary. Should the Under-Secretary of State for Wales catch your eye, Madam Deputy Speaker, I hope that he will be able to tell us that that deputation will be received by the Home Secretary.
I, too, represent north Wales. On Wednesday and Thursday last week I rang the Home Office to ask when that meeting would take place. The authority has not even received any written response from the Home Office. I was promised today that I would be told when the meeting would take place, but I have yet to receive a telephone call. That is disgraceful.
I made the same approach to the Home Office last week. As that brand-new, first-day fire service in North Wales faces major difficulties not of its own making, but of the Government's making, will the Home Secretary receive a deputation from the leadership of that authority? I emphasise that the personnel of the North Wales fire service, whom I know, are brave, dedicated and well qualified officers. I also declare an interest because Clwyd fire service made me an honorary fire chief. I can say with great sincerity that the Government have given that new, first-day fire authority a wretched allocation, and something must be done urgently if public confidence is to be maintained.
This year's council tax allocation in north Wales has also caused severe difficulties for the nationally famous Theatr Clwyd. The new Flintshire county council, in office just from today, has not been given enough money to keep open one of Britain's finest theatres—a theatre of excellence, with a national reputation and national support. When Clwyd county council died at midnight, the new unitary authority of Flintshire county council faced a colossal problem, because it has been forced to increase its council tax by 27 per cent. The neighbouring Welsh unitary authorities face the same predicament in terms of their council tax and the implications for Theatr Clwyd. Nevertheless, they have stumped up cash for the theatre as best they can. Yet the neighbouring English local authorities—Flintshire shares a border with Cheshire and other English authorities—have not contributed to its funding, although 50 per cent. of the theatre's audience are taxpayers from England.
The people of Flintshire and throughout Wales believe that the Secretary of State for Wales should introduce urgent measures to avert the risk of that theatre closing, and that he should release the £1.3 million that he has been considering using to write off its debt. If he fails to do so, the future of that excellent theatre is extremely bleak. Flintshire county council and the other unitary authorities in north-east Wales have made clear their commitment to the theatre, but it is now up to the Secretary of State to rescue that fine establishment.
We believe that our Secretary of State has given way unnecessarily to the Treasury on the council tax and local government finance. As a consequence, council taxes for Wales are significantly higher this year. Until now, successive Governments of all parties and the Treasury have always acknowledged the difficulties that Wales has faced as a result of the incredibly harsh consequences of the industrial revolution. That is not the case any more. To many of us in Wales, particularly Labour Members, it seems as though the Welsh Office has volunteered to receive less local government funding, even though most people would agree that Wales still suffers from social and economic problems.
Since 1979, there have been massive, titanic redundancies in Wales as a result of the decline in the steel and coal industries, followed by the textile, cement, brick and slate industries. The valleys in the south-east of my country are still haunted by the consequences of the coal mine closures. The region's social and economic problems are arguably the worst in Britain. The quarry communities of north-west Wales still suffer from a dearth of manufacturing jobs since the closure of the many quarries which produced the world-famous slate. In the steel towns of north-east Wales, we still feel the lash of the huge steel industry redundancies. In 1980, Alyn and Deeside suffered western Europe's biggest ever redundancy: between Christmas and Easter there were at least 8,000 direct steel redundancies and thousands of other redundancies.
When manufacturing redundancies occur in the steel, coal, slate, cement and textile industries, local authorities need to generate policies to regenerate their economies. The local authorities that I have been able to represent in the House over the years have always had first-rate policies and first-rate records and have delivered some real jobs. Our communities have been grateful. That will be difficult from now on, however, with revenue support grant falling so hopelessly short. The settlement for 1996–97 was seriously defective and the immediate outlook for regeneration—making real jobs and giving hope to communities stricken by redundancies in manufacturing—is poor.
My constituency labours under a total of 2,400 jobless citizens. In the area of the new Flintshire council, more than 4,000 people are out of work. In what until yesterday was the old county of Clwyd, more than 13,000 people were seeking work. School leavers do not get a fair deal where real jobs are concerned. The long-term unemployed lose heart. The young unemployed, in their tens of thousands throughout our nation, also lose heart. Why, then, are we surprised when we encounter increasing crime or witness drug and solvent abuse? Why are we surprised at vandalism and graffiti and attacks on elderly persons in their homes? Why are we surprised by those things when there is an absence of work for so many of our fellow citizens, especially those who are young?
A reasonable council tax settlement in Wales would have enabled the new unitary local authorities to make meaningful inroads on those problems. I want our local authorities to be able to tackle those problems, not to be restricted by a serious shortage of central Government cash and grants. Britain's councils have been let down by the Government, and ordinary people are having to take the strain. The budget of every household is under attack as a result of these deficient settlements, but the general election will surely put matters right.
Local government is always important. I believe that a healthy local government administration throughout the country is part of the spread of liberties and power.
I remember when we had much smaller local authorities than we have now. My first local authority, in Lancashire, covered only 13,000 people and was very well run. In the reorganisations of 20 or 30 years ago, it was brought into a large mass of other villages and towns and it has never been the same as it was. I am not saying that small is beautiful in every way, but it is especially important, where possible, to have small authorities that know exactly what is happening in their area and do not rely on knowledge gained at second hand.
This is an Opposition debate and there does not seem much enthusiasm on the Opposition Benches for it. The hon. Member for Alyn and Deeside (Mr. Jones), for whom I have great respect, has recently spoken, but he is an individual with a life-belt and no one else is around. There is no sign of anyone else concerned about the subject. It seems as though the Labour party has deserted local government—a fact that we should bring to the country's notice.
I lived through and talked through the issue of the community charge—the poll tax as it came to be called, and which it is being called by history. In theory, we were perfectly all right until one compared the rateable values of the small houses in the north with the big house at the end of the street. I prefer the new council tax system to the old rating system and I especially believe that it is good that we have a 25 per cent. discount for the single householder, which has helped many people, especially pensioners, to keep their independence.
My borough of Brent is always in the news, as some authorities always are. On the council tax, Brent's is a story almost unequalled in the country—one that I am delighted to tell, especially on behalf of the Conservative councillors instead of the Labour people, who are horrified by the great advances that are being made in Brent because they know that there is no way that they will be able to regain control.
Order. I am sorry to interrupt the right hon. Gentleman, but there seems to be an increasing tendency for Front Bench Members to conduct what one might call a running commentary. Those on the Front Bench or anywhere else should either seek to rise in the normal way and make an intervention or keep quiet.
I welcome the defence of the Deputy Speaker. As a quiet man, I welcome the defence so that I can take my speech consecutively, paragraph by paragraph.
Brent is the only local authority in England that has reduced its council tax in every one of the past six years. In the first year, the council tax was reduced because a Conservative Government saved us when there was a Labour-Liberal administration in Brent, but in the other five it was done by the council cutting back.
Similarly, when the Conservatives came to power in Brent, four or five years ago, the council tax was the fourth highest in England and the fourth or the second highest in London, depending on whether one subtracted the discount. Now it is the second lowest in London if one subtracts the discount of 8 per cent. for paying in the first few weeks, which most people do.
Brent has moved from the top to the bottom of the expenditure league. It is a remarkable achievement, especially bearing in mind the fact that Conservative councillors in Brent inherited a debt of as much as £61 million from the sale and leaseback policy of the previous Labour administrations.
I congratulate my right hon. Friend on Brent's achievements. As Member of Parliament for Brentford and Isleworth, which is in the borough of Hounslow, I ask my right hon. Friend whether he agrees that it is horrifying that council tax in Hounslow has increased by 7.4 per cent.—double the rate of inflation?
I sympathise with my honourable colleague on this matter, because it is the people who have to pay—not we in the House, apart from our own payment—for the mistakes of a Labour or a Liberal administration that spends so much money. We can compare those administrations. As I have said, this year there has been another reduction in Brent. Band D has been reduced by just over 2 per cent., by £10, and to a pensioner that is a lot of money. I shall compare that with the record in some other authorities. The rate in Labour-controlled Camden is up by 13.2 per cent. this year, and in Liberal Democrat-Labour Barnet it is up by 6 per cent. Labour-controlled Greenwich is up by 17 per cent. Brent has had a reduction of 2.2 per cent.
I do not want to embarrass the hon. Members for the other Brent constituencies, but as my hon. Friend has drawn them to my attention perhaps I may be permitted to say that they are absent because they could not attack Brent council. The hon. Member for Brent, South (Mr. Boateng) is an Opposition Front-Bench spokesman, but it would be difficult for any hon. Member representing a Brent seat to attack a council which has reduced its expenditure to such an extent while maintaining its services. I shall come to those in a moment. I have no wish to upset anyone else in the House although there is a temptation to do that. I shall try not to tempt the hon. Member for North-West Durham (Ms Armstrong) into interrupting again.
I am delighted that the right hon. Gentleman is taking part in the debate and I shall reply to him in my speech. I shall give not only my view but that of many other hon. Members, including my hon. Friends from Brent. As I think the right hon. Gentleman knows, there are allegations of corruption in relation to how matters are proceeding in Brent.
I am speaking about the administration in Brent and about how much it has improved services and cut costs. Obviously, the hon. Lady has nothing to say about that. My people have good services at reduced cost and the more that better services and reduced taxation are drawn to the attention of the public the better.
I am informed that Brent is the only council in this country to have gained seven charter marks in recent years. If any hon. Member knows of a council that has received eight charter marks he should say so. Among the awards were charter marks for libraries and arts and for the registration of births, marriages and deaths. With low taxes it is obvious that births will go up. Most of the parents are registering as Conservatives. Is it any wonder with such low taxation?
Another charter mark was for one-stop shops. There are such shops all over the borough and the staff in them have to solve problems in a short time. Whatever the problem, the caller has to receive an answer, and that is good: I like to see people having to provide answers, and I am told that they are good answers. They must have been, or the shops would not have got a charter mark.
There was a charter mark for student grants and awards. When Labour was in power in Brent, I had sackfuls of post every morning from people at university who had not got their grants. Perhaps the council had to pay for extra staff, but whatever it was that Labour-controlled council could not get the grants out. Sometimes it was the grant for one term and sometimes it was for two, but some of the students had graduated and grown beards before they got the grants. Last year, I did not receive one letter about delays in grants.
How many complaints to the ombudsman were found to be right? Will he confirm that it was, I think, 57—I shall check that—and that no other council in the country comes anywhere near that?
I shall have to have a look. Although the House is interested in what I am saying, I do not want to delay matters by going into these 57 issues. Some of them must be very small and some people must have triumphed. I was out in Brent yesterday and knocked the doors of 85 families. I had cards in my pocket which I handed out so I know how many people I met. None of those people mentioned what the hon. Lady has raised. They all said, "It is marvellous to live in a borough with good services and low taxation." Most of the people wanted me to come in, so if any Opposition Member would like to join me on a Sunday we can call on the burghers of Brent. [HON. MEMBERS: "Beefburgers."] I am still eating beef at every opportunity.
On the issue of the ombudsman, is my right hon. Friend aware that Labour authorities are three times more likely than Conservative authorities to be found guilty of maladministration?
I welcome that intervention. I did not know that. It is nice to learn as one speaks.
I shall continue with the list of charter marks. They were awarded to revenue and benefits and area planning and trading. When I was out yesterday afternoon I had 12 or 13 people with me. So many wanted to come that I had to limit the number. One could almost charge for knocking on doors, and that would help further to reduce charges in Brent. All the people I met said that they were happy with the services and they were also pleased that there had been another reduction this year. There is good news in Brent and I welcome this opportunity to speak about it.
Three Brent councillors have been adopted as Conservative candidates in other areas so that they can see what is going on. That might frighten Labour Members because it is dangerous for them. The deputy chairman of my constituency party has also been adopted. The signs are good all over Brent.
I must not get carried away or you will call me to order, Madam Deputy Speaker. It is a pleasure to represent a borough that is doing so well under a Conservative administration. As I have said, it has gained seven charter marks—more than any other authority—and the reductions that it has made are almost unequalled. It gives me great pleasure to represent Brent, North and it will give me equal pleasure to represent it in the next Parliament.
The annual debate at about this time of the year about council tax is a familiar story that becomes more familiar every year. In the run-up to the local elections, the Conservative party and the Labour party seek to use council tax changes for short-term electioneering. That is a pity: there are better ways to deal with the council tax.
Each year, the Government promise to boost investment in Britain's essential infrastructure while at the same time promising to cut local taxation. This year, the Government have succeeded in breaking both those promises. Their policy towards local government is to force local taxes up, which has led to cuts in vital services. The increases that have been made in investment have been paid for by local authorities—on the one hand, by making well-nigh miraculous savings yet again and, on the other hand, by increasing council tax.
The rise in the council tax is, of course, an outcome that the Government fully intended to happen—they meant it to happen and they said that it would happen. The Secretary of State acknowledged that this year council tax would increase above the rate of inflation, and the Chief Secretary to the Treasury expected council tax to increase by as much 8 per cent. In fact, as we have heard already, on average, council taxes have risen by just over 6 per cent in England.
Do we hear Conservative Members congratulating local authorities on holding the increase in council tax below the Government estimate? No, we do not. Why? Because Conservative Members seem interested only in damning all local authorities—and they do so purely because the Conservative party has lost control of almost all the councils that once formed the bedrock of Tory support.
Presumably the hon. Gentleman will admit that, where councils are controlled by the Liberal Democrats, Conservative councillors in opposition have produced alternative budgets showing lower figures—which surely proves that they have more efficient ideas than the Liberal Democrats who are in control.
I do not know, because I did not attend all the budget meetings. However, I know that, in my authority at Newbury, that is not the case—the Conservatives failed to produce any alternatives to the budget produced by the Liberal Democrats.
I was saying that a number of councils that once formed the bedrock of Tory support are now no longer governed by the Conservatives. Those councils, very often, now form the bedrock of Liberal Democrat support. Local people like what they have seen of the Liberal Democrats and they continue to pass control of their local councils to Liberal Democrat councillors. Only last month, the Liberal Democrats gained control of yet another district council—Craven district council—while, in another by-election, Labour notably failed to gain control of Cheshire county council. In the light of that, the constant carping of Conservative Members looks petty, vindictive and self-indulgent. It is time that Conservative Members accepted their loss of power and started to campaign for their local communities.
As has already been mentioned, particularly in relation to Wales, there is a particular problem this year for Wales and Scotland, because council tax increases have not been 6 per cent. on average but, in most cases, more than 15 per cent. That has come about because of a complete failure by the Government to make proper allowance for the setting-up costs of the new unitary authorities that came into being today. A poll over the weekend showed that most people blame the Government for those increases—and they are right.
It is important to note that it is not always the cheapest services that give the best value for money. The Audit Commission has found that Liberal Democrat authorities offer high-quality services in a very efficient manner—however, they may not always have the lowest council tax rates. Much more often than not, local people believe that they provide the best value for money. In particular, Liberal Democrat authorities have very high rates of collection of council tax—no doubt, in part due to the efforts to which our councils have gone to consult the public about how their money should be spent. The top four recycling authorities are Liberal Democrat councils—a success of which the Liberal Democrats are justifiably proud.
This year's financial settlement for local government has been not only a broken promise but an outright con trick. It is now well established that when the Chancellor pledged more money for investment in education, he simply was not telling the truth. Local government has had no more money, in real terms, this year than it did last year. However, bizarrely, some Ministers continue to peddle the lie that local education authorities have more money, and they have already begun to attack local councils for not delivering it to schools, as we saw earlier this afternoon.
If that is the hon. Gentleman's view, will he now advise Essex county council—which is run on a Lib-Lab pact—to release its war chest of reserves of more than £100 million and give it to schools? Will he instruct the council to do that, as it is holding money back from schools?
That is an interesting indication of the difference between the Conservative party and the Liberal Democrats: the hon. Gentleman appears to think that I have the power to instruct local councils what to do with their money. I certainly do not have that power—perhaps he does.
I know that the hon. Gentleman is a Liberal Democrat, but he should have some views. Does he think that it is sensible for a county the size of Essex to hold more than £100 million in a slush fund and to withhold it from schools? Or does he think that it would be sensible to see that the schools get that money, so that there are no redundancies and they can get school books? Is that a good idea or not? I am sure that no one is paying any attention to the hon. Gentleman, so he should feel quite free to express his view.
At this moment, I do not pretend that I know everything about all the funds held in all local authorities. Therefore, I cannot possibly answer a question about an individual local authority in the terms put by the hon. Gentleman without looking into the greater detail.
The £100 million that the hon. Member for Brentwood and Ongar (Mr. Pickles) speaks of is almost certainly totally committed against liabilities, either on capital or on revenue, over the next 12 to 18 months. Furthermore, in any county there is a considerable budget and it is likely that the real level of reserves available—the term "slush fund" is an insult to local government—is below 2 or 3 per cent. How would the hon. Member for Brentwood and Ongar answer that?
I shall not get involved in an argument between the hon. Members for Brentwood and Ongar (Mr. Pickles) and for Wolverhampton, North-East (Mr. Purchase), but I shall get on with my speech.
Local government is at the mercy of the short-term electioneering of Conservative central Government. The sad fact is that the Tories have shown no mercy when it comes to local services, local people and local democracy. The Prime Minister's amendment to today's motion states:
congratulates the Government on the rigorous approach it is taking towards all public expenditure".
Most Ministers constantly boast about how much extra their Departments have spent in real terms. For example, one needs only to look at the constant boast coming from
the Department of Health about how much more is being spent on the national health service. How can the Government claim, as they do in their amendment, that there is a rigorous approach towards all public expenditure, including local government expenditure?
Sadly, the one Minister who cannot make a boast of increased spending in his Department is the Minister for Local Government, Housing and Urban Regeneration. The Government have been punishing local communities for not voting Conservative. The political capital that Conservative Members seek to make from the problems experienced by local authorities, at the expense of local government, is evidence enough.
The Prime Minister's amendment continues:
commends the clarity of their approach towards taxation and the funding of local services".
What are the Government talking about? They seem to be losing all grip on reality. The system of funding local government services could not possibly be more complicated. Only 24 hours before the final debate on the settlement, the Department of the Environment still had not got its figures right. It could not even tell me the correct total for England's revenue support grant—it could have been £31 billion or perhaps £32 billion; it simply did not know. The formulae are so complex that even the Government's computers got it wrong—and that is the basis for the Prime Minister commending the clarity of the Government's approach.
The Prime Minister proceeds to urge local authorities to make the most efficient use of the resources available. I have no doubt that most councils are already doing that, although their priorities may be rather different from those of the Conservative party. For example, most local authorities—unlike the City of Westminster—would not consider spending £20 million to £30 million on outrageous schemes to gerrymander local elections. But as the Conservatives in central Government squander tax revenue on election bribes, perhaps we should not be surprised to see Conservatives in local government indulging in similar practices.
The answer to the problems of local government and to the chaos of the funding system is not just a change of personnel at Downing street—it has to be said that the Labour party is no better friend to local democracy than the Conservatives. Its latest policy proposals suggest that it will seek to increase the imposition on local government of the priorities and political philosophy of the Government of the day, as long, of course, as it is a Labour Government.
Criticising the funding settlement is all very well, but what is Labour's alternative? Would it provide a penny of extra money for education and local services? Would it cap local authorities more tightly even than present capping, to keep council tax down, and force yet greater cuts in services? The Labour party has not answered any of those questions. It has become an empty vessel, with no commitments and precious few policies. What we do know is that the Labour party failed to vote against the Budget's tax cuts, so it must accept its share of the blame for this year's financial settlement.
Local councils will not forget that the Labour party shamefully failed to vote against the 1p cut in income tax last November. It may claim that it will provide local government with the resources that local government needs, but its actions belie its words. So long as it continues to play the Tory game of promising to honour tax cuts, but also to build better services, it will have no credibility.
We Liberal Democrats made it clear that there were investment priorities that were more important than delivering a cut in income tax. That is still our belief, and we stand by our commitment to make the badly needed investment in education. If it is necessary to put a penny on income tax to meet that pledge, so be it.
I am most grateful to the hon. Gentleman for his courtesy in giving way, but is not it true that his hon. Friend the Member for Bath (Mr. Foster) conceded that the Liberals' published proposals on education would cost not 1p on income tax but 2.5p?
We have constantly said that the proposals that we shall make in the first year of any new Government, or at any time when we have power, will add 1p to income tax, and we have stuck to that.
There are major faults in the whole system of local government finance that must also be addressed, regardless of which party rules in Whitehall. The council tax itself has many problems. After all, it was introduced only as an expedient to quell the uproar against the poll tax. If it is to be retained, at least for a year or two longer, surely we can agree on some of the worst aspects that should be amended.
One problem on which we could all surely agree is that there are too few property bands. Band A is simply too high. Tens of thousands of people living in low-value accommodation are paying more than their fair share. Owners of mobile or park homes are the best example of the need for a lower starting band. Many mobile home owners survive on very low incomes and will be particularly hard hit by increases in council tax.
There is also a problem with the higher council tax bands. Band G, running from £160,000 to £320,000, is as wide as all the bands from A to F put together. The difference in implied disposable income between people living in houses valued at £160,000 and those living in houses worth £320,000 is immense. The width of band G makes it too much of a catch-all for so much of suburban and rural Britain. The result is that a large number of people on a wide variety of incomes are paying exactly the same council tax.
Furthermore, band H provides a rather arbitrary cut-off point, covering all properties valued above £320,000. It draws no distinction between a large, listed family house and a massive country mansion with dozens of rooms, valued in the millions.
The problems that I have described relate to the central principle of taxation. People should generally pay according to their means. Council tax bands, just like the old rates, imply that everybody living in a large house has a large income, and that everybody living in a flat has a small income. The reality, of course, is rather different. People have different priorities in deciding how much of their money they will plough into buying or renting their home. More important, their personal income changes quite a lot throughout their life cycle. Pensioners are the most obvious group of people who may have acquired comparatively expensive homes, but who no longer have large disposable incomes. The same applies to a great many people who have suffered redundancy or unemployment, or, indeed, re-employment, and to those who have simply chosen to change their career or to reduce their working hours: mothers or fathers staying at home to look after children are an obvious example.
The council tax is a bad tax. It is inherently unfair and is unsuitable for bearing an increased burden of taxation. As the Government continue to shift tax from central Government to local authorities, the problems and disparities will only grow. It is right that a larger proportion of local authorities' revenue should be raised locally, but it must also be raised fairly. If local authorities are to have real independence from Whitehall, and real freedom to adapt to the differing needs of local people, they must have greater control over their own revenue. That means that, over time, more money should be raised locally, with corresponding reductions in national taxation.
With that in mind, the Liberal Democrat answer is the replacement of the council tax with local income tax. A local income tax has many virtues: it is relatively easy to collect, it is fair, and it can take a much larger burden than other forms of local taxation. Records of current income tax payments already exist with the Inland Revenue, and computerisation has made local authority income tax all the more feasible.
The obvious fairness of the tax is one of its main selling points. Its fairness helps to make it easier to collect, as people are more willing to pay. It is its fairness that makes it so suitable for taking the burden of tax transferred from national taxation. It is fair because it meets the principle that taxpayers pay what they can afford to pay. Yes, some people on high incomes will pay more, but very many people on middle or lower incomes, including many pensioners, will pay less.
Labour and Conservative Members may shy away from local income tax simply because it has been so vigorously promoted by the Liberal Democrats, but it is worth remembering that local income tax was backed by the Layfield report in 1976. Indeed, the report concluded that the tax is the only suitable means for raising additional significant revenue from local communities. That view has been wholly endorsed by Sir Charles Carter in his recent report for the Joseph Rowntree Foundation. The local income tax is not some wild scheme that was never intended to be put into practice. It is the only realistic route forward for local government, if, that is, we really want the rebirth of local democracy. That is what the Liberal Democrats are aiming for. I doubt, however, whether Labour and Conservative Members share the same goal.
At least the Conservative Government have made their intentions clear. National contributions to local services will be cut in 1997–98 and in 1998–99, just as they have been over the past two years. The Government plan to shift the burden ever more heavily on to councils, so either services will be cut or local tax will rise. Frankly, it will probably be both. Under the current plans, the argument over the council tax is set to intensify over the next three years. As it does, it will become obvious that only the Liberal Democrats seek to reform local government in a way that suits local people rather than in a way that suits central Government.
The council tax is unjust. It is useful only as a political football between self-indulgent politicians. It must be scrapped, and the sooner that we set about replacing it with a local income tax, the better.
I hope that the hon. Member for Newbury (Mr. Rendel) will excuse me if I do not follow his arguments. My problem is that his fellow Liberal Democrats in my constituency are so persuasive that we do not have a single Liberal councillor either at county or at local level.
The hon. Gentleman omitted to say where he stood on the capping level of a local income tax. I believe that if one was to hand back to local authorities a big say in the way in which they got their money in, perhaps it would be better not to have any kind of cap, so that we could see which councils were spending well and which were being extravagant.
The debate should not really have been described as a debate on the council tax; it should have been described as a debate on hypocrisy. I hope to demonstrate the way in which Opposition Members say one thing and do another. It is clear that the Labour party cannot be pinned down at local level, and that will teach the voters a good lesson when they must make up their minds at the next general election. I admit that Wellingborough's council tax increased by a large amount—some 57 per cent.—this year. That increase was, of course, greeted by the Labour party as news that Conservative local government does not work, but it is not as simple as that: it never is. What is the history of the council, once Conservative and now Conservative and Independent?
For several years, the council has given a £200 rebate to everyone paying band D council tax in the area. In other words, no one in Wellingborough has paid a penny towards the services that have been provided by the borough council—and it is not a low spender: the level of services is high, and has not been cut. Even this year, there is still a £45-per-head subsidy of the band D rate of the county council's precept.
I could understand it if Wellingborough's tax had gone through the roof in comparison with that of other councils. However, only four London councils—Conservative-controlled—and the Isles of Scilly are asking for less money. It is a pity that ours is no longer the lowest council tax in the country. Why is that? The reason is pretty straightforward. First, much of the council's money was invested, and because interest rates have fallen—which we welcome—the increase in the reserves was less than it had been in previous years. Secondly, the council was faced with the possibility of local government reorganisation. The chairman of a neighbouring Labour authority said, "Wait until we merge: we cannot wait to get our hands on your money." Realistically, the leaders of Wellingborough council decided to invest in the future of the town. They spent more than £3 million on a new theatre, and over £1 million on redeveloping the town centre.
I should have thought that such policies were reasonable, given that we still had one of the lowest council taxes in the country. Moreover, we are still subsidising the county precept. In the eyes of the local Labour party, however, this is a Tory tax disaster. The party tells us that the Wellingborough Tories were squandering our hard-won reserves, and that the good times were coming to an end. It has said:
The prudent management Wellingborough pronounces was thrown to the winds as reserves were plundered.
But what are the facts? When the issue of spending £3 million on the Castle theatre arose, did the Labour group vote against it? No: all its members were in favour. When the council had to decide whether between £1 million and £2 million should be spent on the town centre, did the Labour group vote against it? No: again, it was in favour. What it did vote against was the budget proposed for this year. Why was that? Because it thought that more money should have been given to certain voluntary organisations. Now, the Labour group has the nerve—the gall and hypocrisy—to produce a leaflet criticising the present level of the council tax. That is why I think that we should have had a debate about hypocrisy.
The Labour group brought the prospective parliamentary candidate into the argument. He says—using his own delightful phraseology—
Labour has consistently warned that the Tories are the party of high taxation, and this is now shown to be true in Wellingborough.
I have news for the prospective parliamentary candidate. If he knew anything about Northamptonshire and the finances of local authorities there, he would be aware that neighbouring Northampton—Labour-controlled—neighbouring East Northamptonshire—Labour-controlled—neighbouring Corby—Labour-controlled—and neighbouring Kettering—Labour-controlled—are demanding roughly £100 per band more than is being levied in Wellingborough. Be it through the mouths of its councillors or through the mouth of its prospective parliamentary candidate, the local Labour party is talking pure hypocrisy.
The Labour party often tells us that local government is used cynically as a form of electioneering. Wellingborough borough council can be accused of only one thing: giving their own money back to the people of Wellingborough. The only inference that can be drawn from the Labour party's leaflet is that it would not have given that money back. It would have sat on it, just as it is sitting on money in Essex. Members of the Labour party think that they know best; they do not believe in giving back money that people have paid in, which has increased their investments. I accuse the local Labour party of total hypocrisy, and what I have said underlines what we heard this afternoon from my right hon. Friend the Secretary of State.
It does not even end there, however. Unfortunately, we also have a Labour-controlled county council. For the past two years, my colleagues and I have worked with the Labour leadership to try to secure a better deal for Northamptonshire in terms of the revenue support grant. This year, after a long battle, we obtained some £12 million more for the county. The biggest increase was the increase in funds to go directly to the school governors, to enable school budgets to cope with the teachers' pay increase.
What did the county council do? Since it has been in power, it has spent virtually every minute deploring the fact that it has not enough money to spend on education, the fact that teachers are liable to be made redundant and the fact that class sizes will have to increase; but what did it do? It drew a smokescreen over the issue, transferring some money from capital expenditure and trying to pretend that that was the revenue expenditure that it was putting into schools. It has been calculated that we received an increase of some 6 per cent. in the funds that our schools are entitled to have, and that the county council passed on only some 4.8 per cent., leaving a considerable deficit.
Why would a county council that was so concerned about teachers, class sizes and the possible anxieties of parents act in that way? Could it possibly be that the council knows that if a few teachers lose their jobs as a result of its policies, and if class sizes increase and parents are upset for the same reason, the people concerned will be angry with the Government rather than the council? I regard that as one of the most hypocritical and cynical attitudes that I have ever seen in local government.
I am grateful to my hon. Friend and neighbour for giving way.
Surely the cynicism goes a step further. Each year, we have been told that there will be swingeing reductions in the number of schoolteachers; but we now know from a parliamentary answer that the number of teachers in Northamptonshire schools has risen each year since 1991. Labour says one thing in order to frighten the voters, while concealing the truth.
I am grateful to my hon. Friend. I can also enlighten him. The number of teachers who have lost their jobs—the total last year was seven—has been much less than the number who have been given jobs in my constituency. That is a long way short of the hundreds of redundancies that the Labour party was claiming would take place.
I have tried to make the point that, whether it be at local district council or at county level, we have been fed the wrong information. We have seen twisting of the truth, cynicism and hypocrisy, which we had come to know in the old Labour party. Of course, however, it is not the old Labour party any more—it is the new Labour party. The only problem is that I see the same old tired faces in Wellingborough, Corby, Northampton and Kettering. The Labour party has not really changed and the things that I have specified show that it has no intention of changing.
Given the things that I have been proving this evening and that my right hon. Friend the Secretary of State told the hon. Member for Holborn and St. Pancras (Mr. Dobson), who leads for the Opposition, I am astonished that the latter had the cheek to table his motion and to choose this issue for debate. His party is keen to ensure that his proposals are implemented. That is why the Opposition Benches have been so crowded today.
There is methodology in the Government's madness. In determining standard spending assessments, they use a system that is manipulated to achieve certain results. On 31 January, when we debated the local government finance report, I tried to spell out the methodology's effect on North East Derbyshire district council and how the system hit and hammered that region. Tonight, I want to talk about how the methodology hits Derbyshire county council in as serious a way.
When Lady Thatcher was Prime Minister, I asked her whether she would compliment Derbyshire county council because it had the smallest class sizes of any shire county. Her response was that I must be pleased with the Government's record, presumably because the Government's policies had had some impact on what Derbyshire county council had been able to do.
The position now is that Derbyshire county council has the worst record in terms of primary school classes with more than 36 pupils: 7.6 per cent. of its pupils are in such classes. As I mentioned in an intervention, the average primary class size is 27.9. Derbyshire is joint worst with Lancashire, which is hit equally by the arrangements on standard spending assessment and by the move that has taken place. If the Conservatives wished to gain some kudos from Derbyshire having small class sizes in 1988–89, they must take considerable blame for class sizes in Derbyshire at present and the crisis in education.
The argument is often produced about Labour authorities that, somehow, they hold too much money back centrally and do not provide enough to schools out of SSAs. That does not operate in relation to Derbyshire. In the list of English shire counties, only four have lower central expenditure per pupil than Derbyshire and only four provide a lower percentage amount. Derbyshire, therefore, has had to be careful about the moneys that it spends because of the pressures on it.
If we contrast the budget level in 1989–90 with the 1996–97 capping limits for the SSA, Derbyshire's increase in that period is the smallest of any shire county. The budget of some shire counties—including West Sussex, Kent and East Sussex—has increased by more than twice that of Derbyshire. All told, the budget of 21 counties increased by 50 per cent. or more in that period. If we compare grant-related expenditure with the SSA over that period, Derbyshire comes out fifth worst.
If Derbyshire county council had received the average provision for shire counties, there would have been no cuts in its programmes, instead of cuts that have totalled £196 million. Its band D council tax is £529, but the average is £463. The argument in relation to council tax is used against Labour councils by the Government and it needs turning round. Derbyshire's band D council tax is high and above average because of the problems that the methodology that determines the amounts of money available imposes on the council. Pressure on the council has led it into those problems.
Likewise, Derbyshire county council spends £575 per head on services, but the average in shire counties is £636—those are Audit Commission figures. That is not to the detriment of Derbyshire county council. It is due to the circumstances in which the council finds itself.
Let us compare Derbyshire with Hertfordshire county council, which had similar grant-related expenditure just before the move to SSAs. At present, Hertfordshire has £80 million more available. Over the period, its SSA has increased by more than 48 per cent., whereas Derbyshire's has increased by only 28 per cent. In Hertfordshire, £163 more is spent on each primary school pupil than in Derbyshire; for secondary school students, £199 more is spent.
If Derbyshire had the same SSA as Hertfordshire, it would have available another £11.2 million for primary school expenditure and another £10.8 million for secondary school expenditure. That is an argument not against the position in Hertfordshire, but against the imbalance in the SSA structure. I mention other comparable authorities—West Sussex, Kent and East Sussex and Hertfordshire—to ask why they receive resources that are not available for an authority such as Derbyshire.
The major answer is the area cost adjustment. The 11 counties that, over the period of the SSA, have been the top gainers in relation to education have all received area cost adjustment moneys, which are not available for counties at the lower end. There is always a method by which the Government manipulate the moneys that are available for councils. In district councils, there are problems because of the enhanced population and movements in population. In North East Derbyshire district council, there is a smaller daytime than nighttime population. That is used against the council when calculating the area cost adjustment.
Similarly, the area cost adjustment is continually used in calculations. Education has a number of blocks under which matters are determined, initially based on student numbers: primary, secondary, post-16, under-fives and other blocks. The area cost adjustment factor applies to each block and has been a growing factor in standard spending assessments. Between 1988–89 and 1995–96, the amount allocated to the area cost adjustment has increased from £418 million to £1,1658 million, but that money has been made available to some authorities but not to others.
Furthermore, in 1990–91, the area cost adjustment was extended to the entire south-east region. False comparisons are made between Labour-controlled authorities, Conservative-controlled authorities and other authorities as a result of Labour's triumphs in the past few elections. The true comparison is between Conservative parliamentary seats and Labour parliamentary seats, but the formula is used to manipulate the figures against Labour areas.
The area cost adjustment was extended—at one time it applied only to education—and had to cover all services. Once the Government discovered a method that they could use to manipulate figures, they considerably advanced and extended it. Between 1988–89 and 1995–96, the total amount of the standard spending assessment being determined by the area cost adjustment has increased from 1.7 per cent. to 4.3 per cent. If an authority is unable to claim the area cost adjustment, that will have very serious effects on its finances. It is vital, therefore, that a proper assessment is made. It must take into account labour costs in different authorities such as Derbyshire when equations are being calculated. The methodological fix for shire counties is similar to the methodological fix for enhanced population in relation to district councils.
Provision is made for additional educational needs. For children of lone parents, for children born outside the United Kingdom or when the head of the family was outside the United Kingdom—we are now discussing ethnic minorities—old census figures are used rather than up-to-date figures.
The sparsity and density factors tell not only against district councils but against counties. It is reasonable to assume that Derbyshire should do relatively well on the sparsity indicator. The hon. Member for West Derbyshire (Mr. McLoughlin) was in the Chamber earlier. He has a massive constituency, much of which is thinly populated. The Peak district is also in the county. However, that indicator measures only super sparsity, and counties such as Oxfordshire, Buckinghamshire and Bedfordshire are deemed to be sparser in provision per population than Derbyshire. Derbyshire has the great peculiarity of being able to score below average in terms of sparsity, and density, of population. There is great nonsense, therefore, about the provision in that area. The sparsity factor, for instance, counts for 1.3 per cent. of education expenditure in the standard spending assessments.
The problem is not only service provision—there are also problems in capital expenditure and capital money that is available to shire counties. Derbyshire's capital problems are, in many ways, even worse than its budget difficulties. Since 1991–92, there has been a steady annual decline in the money authorised in basic credit approvals—from £30.1 million in 1991–92 to £5.8 million in 1996–97.
A measure of Derbyshire's need is that it must maintain 1,000 properties, including 506 schools, 56 libraries, 31 fire stations and 200 social services establishments. The county has no money available for new projects, but 450 temporary buildings—many of which are classrooms older than 40 years—need urgent repair and replacement. Some buildings have already been taken out of use, and many more will have to close in the next two years. Derbyshire needs £8 million to tackle the most urgent cases, and the total cost of replacing all 450 temporary buildings will be about £50 million. Another £8 million is needed for residential homes for children and older people and for essential road repairs.
Derbyshire's finances are tremendously affected by those arrangements, which have created pressures on the council tax that must be charged and in service cuts. Any reasonable person, studying all the indicators, would not think of Derbyshire as a profligate authority, as the Government keep pretending when making arguments against it.
Derbyshire has a particular problem with fire services. The formula for fire services has always contained a peculiarity whereby coast lines receive exaggerated resources. Derbyshire, being tucked in the middle of the country, has no coast line. I do not deny that some money needs to be spent in coastal areas, but I question the weight that is given to such factors in determining allocations. The Government always have an argument that is plausible on paper, but they then push it to the Nth degree so that the situation becomes completely reversed.
The Fire Brigades Union is balloting its members on strike action. That strike will be directed towards the county council. That county council must makes cuts to staff, appliances and other provisions. A crisis is being created that is not of the council's own making because it is a matter of balancing the books. Arguments may be advanced about this year's settlement—for example, what its percentage was and whether it made acceptable provision for the fire brigade—but we must always base our comparison on the whole period during which the standard spending assessment has applied. There has been an annual deterioration, and once the council has used up all its reserves, it must try to provide whatever it can under the capping rules. Authorities should not be placed in the situation in which Derbyshire county council and North East Derbyshire district council have found themselves.
A ready way out of the problem of deciding how much money has to be spent through the rate support grant and what the total is to be for the counties would be to have a fair and reasonable methodology to determine what resources are available in various areas. I once spoke to a group of teachers and others and explained Derbyshire's SSA as well as I could. One person said that she was astonished that there was a formula. She thought that a figure was plucked from the air and that it was decided arbitrarily to give Derbyshire only a small sum of money. I had to explain that that was not the case because we still had the remnants of a democratic system. If the Government acted as that person thought, they would be taken to court on judicial review. I explained that they had to have a system and a formula but that they fiddled the formula. They pushed their proposals through Parliament, thanks to their majority, and the system had to be examined all the time and unpicked.
At last, the area cost adjustment is being examined by an independent body this year. Things could be different in future—they will be different because that lot over there are on their way out and we shall have to put the mess right.
I have been making speeches on standard spending assessments and local authority grants for eight or nine years. I have led deputations, written letters and done all sorts of things to try to get more money for North East Derbyshire and for Derbyshire as a whole, but not one ha'penny has been gained—not for any lack of effort on my part or on the part of many others but simply because of the Government's refusal to accept a reasonable and decent formula. They come up with the same sophistry time and time again to defend the indefensible—the system that they operate.
I am pleased to follow the hon. Member for North-East Derbyshire (Mr. Barnes), but I cannot help but feel that Derbyshire would be in a much better position had it not spent the 1980s attacking the Government and demanding to spend extra money, especially the sums that it spent subsidising school meals with the result that primary school children now face the obscenity of having only three quarters of an apple at lunch time.
My right hon. Friend the Member for Brent, North (Sir R. Boyson) was right to castigate hon. Members for the fact that the Chamber has been so empty. This is an important debate, and we have witnessed history being made this evening. We have heard expounded a doctrine that explains Labour's stance on council tax increases.
There were times when the hon. Member for Holborn and St. Pancras (Mr. Dobson) sounded like a social worker making excuses for a particularly recalcitrant and violent client: "He doesn't mean to do it, your Honour. He's basically a good man but whenever he sees a possibility to put up taxes and increase services, he just can't help himself." I suppose that we should call the new doctrine "Dobson's doctrine". It is right to call it Dobson's doctrine of irresistible impulse because the Labour party cannot avoid putting up taxes and increasing services.
I have known a few Labour councillors in my time—indeed, I can see an ex-colleague across the Chamber. They are perfectly charming as individuals once one gets over the look of their sharp suits and the whiff of cheap champagne, but collectively they engage in a form of mass hysteria which means that they have to put up taxes and increase services.
A Labour council is basically a high-spend, high-tax council. It is therefore not surprising that the gap between Conservative and Labour councils has increased—the difference on a band D council tax is now £225.
I recently spoke to an ordinary working-class couple from Liverpool. The average council tax payer there faces a bill of £1,006. The couple rightly asked how they were supposed to pay that as it is equivalent to a month's wage being taken out of good people's pockets. Time and again, Labour has increased the council tax—council tax payers pay more but get less. When the Government are putting more money back into people's pockets, the Labour party is taking it out.
At the time of the standard spending assessment announcement last year, the leader of the new joint authority, Sir Jeremy Beecham, said that the settlement does not match what councils are spending as if that were some criterion. It is a potty idea. Nowhere else in the world, and nowhere else in the private sector or the public sector in Britain, would an organisation say that, having overspent last year, it must have compensation this year.
There is an alternative way to secure extra resources. The problem with the Labour party is that it can find extra resources only by taxing people. Last year, the Audit Commission examined how councils managed their work forces. After all, 60 per cent. of a council's budget is spent on the work force. The commission's study of non-manual staff found that few authorities had a consistent and coherent approach to three crucial questions: how many staff do they need, how much should they be paid, and how can they get the best from their staff?
The argument that a redistribution of the share of grant means extra taxes and fewer services is the philosophy of despair. We heard earlier from the hon. Member for Holborn and St. Pancras. I have sight of his press release, which was issued today. It states:
The Government are deliberately driving up Council Tax and charges for council services at the same time that they are forcing councils to cut services for local people … And they intend this process to continue.
That does not seem to square with the attitude of a political party that is also committed to increasing the share that is raised locally.
My right hon. Friend the Secretary of State spoke today about Labour's document entitled, "Renewing Democracies, Rebuilding Communities", which states:
We believe that it would be better for local people and make for a healthier democracy if councils were responsible for raising locally a much higher proportion of the money they invest and spend".
The hon. Member for North-West Durham (Ms Armstrong) says that that relates to a return to the uniform business rate. The hon. Member for Bradford, South (Mr. Sutcliffe) seemed to be rubbing his hands together with glee at the prospect of getting hold of that money. We recall the times when such people had the opportunity to deal with the business rate—businesses went under because of the way that the rate was skewed against them.
If Labour Members are looking for extra resources, let Labour authorities collect the council tax. The hon. Member for Holborn and St. Pancras conceded that more money should be collected but, for the record, let me list some collection figures. Lambeth collects 55 per cent. of the total due, Hackney collects 69 per cent., Newham 72 per cent., Lewisham 79 per cent., Southwark 79 per cent., Liverpool 81 per cent., Haringey 82 per cent., Islington 82 per cent., Camden 82 per cent., and Manchester 83 per cent. That represents £90 million of extra resources to those councils. No doubt Labour Members would say that Lambeth takes care of most of that £90 million, but even if one excludes Lambeth from the list, there are still £70 million worth of extra resources available.
Are not those figures comparable with the money collected under the old rating system? The increase in the amount not collected came with the poll tax—that much vaunted tax that everybody hated. The figures that the hon. Gentleman is quoting are comparable to those under the old rating system.
If we were to include figures for the community charge, the figures that I have quoted would be much worse. We would be talking about a much lower percentage of collection. That is the problem that the hon. Gentleman has to face. The hon. Member for Holborn and St. Pancras said that the figures were because of deprived areas that cannot collect as much. In volume 2 of the Audit Commission's report, page 47 says that areas such as Coventry, Rotherham, Doncaster, Wakefield, Leeds, and—I must say to the hon. Member for Bradford, South—even Bradford is managing to do better than the councils that I have mentioned. So it is possible to collect in deprived areas.
The Audit Commission says:
Only about a quarter of metropolitan councils and London boroughs met this target.
This is a serious problem affecting councils' ability to provide services. Improving performance by even 1 per cent. can bring in significant extra income. For example, some metropolitan councils are due £35 million in council tax. Every 1 per cent. extra they collect in council tax would enable them to provide an extra 8,000 people with five hours of home help work per week or to reduce the level of council tax.
The money exists in local councils' budgets, and we know that the settlement was in line with inflation, yet the Labour party would make the position much worse. It would abolish capping, introduce the minimum wage and reduce competitive tendering. Councils can easily manage within budgets under the capping level, as has been demonstrated by the few that have been capped this year.
The important thing is what councils do with the services. As I said earlier, in my area of Essex, to the eternal shame of that county council, the Labour and Liberal councillors decided to parade the old and vulnerable to speak for the council. Yet what do we find? We find that the council underspent on social services last year by £2 million. None of that underspend was necessary, and no one should have come to my surgeries crying because their home helps had been taken away. [Interruption.] The hon. Member for Coventry, North-East (Mr. Ainsworth) wants to call time. I must tell him that if his friends on Essex council had cared for the elderly, none of my speech would have been necessary. The council also intends to take another £2 million out of resources for the elderly.
I have discovered that the highest increase in the council's spending in the south-east comes from Brentwood. There has been a 17 per cent. increase there. That is the council that made a mess of the local government review, cabling, council finances and has allowed precious manufacturing jobs to slip through its fingers. What did that Liberal-controlled council debate instead? Last week it debated the possibility of joining Charter 88. I must say to the members of Brentwood council that if people in Brentwood wanted to drink champagne with socialists, they would go and live in Islington. Such action is singularly inappropriate for a local council.
The Labour party is completely out of control. It brings out the old arguments over Westminster, yet we have conclusively shown that if one bases figures on the amount of money that goes to Tower Hamlets, a similar list can be produced.
The hon. Lady's list is completely bogus, it is a waste of everyone's time and is completely meaningless. [Interruption.] We know from that that the Labour party's reaction to abolish capping and introduce the minimum wage and the social chapter would add to the problems.
I should like to quote from Hansard because the following two lines seem to sum up the Labour party's inability to give us a figure. When challenged with how much extra the Labour party would provide, the hon. Member for Holborn and St. Pancras said:
I do not endorse anyone's numbers but my own, and the hon. Gentleman is not getting one from me."—[Official Report, 31 January 1996; Vol. 270, c. 1032.]
That seems to undermine Labour's position completely. If Labour Members believe that the settlement is inadequate, they should say so—[Interruption.]
I am most grateful for your protection, Madam Deputy Speaker. The noise from the Front Benches is beginning to sound like air conditioning. The Labour party's pure dilemma is that if it believes that the settlement is underfunded, it should say so and show some courage in its convictions. If it does not, it should display a little honesty to local government.
It is a basic tenet of democratic government that it should be fully accountable the electorate for its actions. I suggest that accountability can be reinforced through taxation. It is important for the electorate to understand the financial effects of the Government's decisions. At a local government level, that clearly means that communities should be able to vote for increased or decreased public spending and to feel the effects of that decision in local tax levels. It is interesting to note that one of the primary aims of the United Kingdom community charge was to increase local accountability, but concerns about equity, administrative problems and too high a level of grant meant that such an increase was not achieved in practice.
Local discretion on taxation is severely limited in the UK. Other countries in Europe have a broader tax base and more local discretion, thus increasing accountability. That very accountability is further weakened by non-elected bodies with responsibility for service provision. There are many examples of such bodies. We have seen the creation of independent hospital trusts, housing associations, school governing bodies, and so on. There is no doubt that local authorities, as bodies representing local government and local democracy, are under threat. To a very large extent the degree of financial independence that local authorities enjoyed has been removed. I referred to certain quangos earlier.
When a democratically elected central Government have decided on a macro-economic policy that is based on an attack on inflation through control of the money supply in one way, we find that they eye local authorities with a great deal of concern. The Government believe that local authorities are inherently profligate, which is absolute nonsense.
In practice, that perceived threat is definitely exaggerated. It assumes that all local authorities would pursue an united policy of high expenditure. It ignores the constraints imposed by the fact that the larger share of local authority expenditure is determined by central Government grant policies. Above all, it assumes that a local electorate would tolerate high local taxation policies without wreaking electoral vengeance on their perpetrators. Nevertheless, there is an element of truth in the belief that local authorities pose a degree of threat to a tightly controlled central economic policy.
A vital prerequisite is that local authorities should enjoy some financial autonomy. In addition to the element of central funding by formula, there should be an element of local revenue-raising on an equitable basis which local authorities would determine and control. Thus local authorities, answerable to their electorates, would determine local priorities and the extent to which they were prepared to resource them.
Currently, local authorities are being choked by central Government. The Government emphasise the need for good budgeting and cuts in expenditure. This is the fifth year of basic cuts. There is simply nothing left to cut and that is why we now face the appalling prospect of dismissing teachers, cutting community care services and cutting items such as meals for the needy in the community and in schools.
Does my hon. Friend agree that while local government has been under threat from central Government in terms of the lack of resources to which he refers, new responsibilities have frequently been imposed on local authorities, particularly care in the community services? Although such services are supposed to be fully funded, they often are not, which imposes an even greater burden on the local exchequer.
That point is well made. There is an increasing burden, although I do not like to use the word "burden" in connection with community care because it is valuable. However, it costs a lot of money and there is a shortfall in the funding for it. Local government is being dismantled by central Government because they control the purse strings. Let us consider the new authority of Gwynedd, which comprises Caernarfonshire and Merionethshire. The authority has had to cut services quite substantially this year because of the terms of the Welsh Office local government revenue settlement for 1996–97. The settlement implies an expenditure cut of 1.3 per cent. compared with the council's budget for 1995–96. When the transfer of funds for year four of care in the community is added, the cut becomes 0.2 per cent. As a result of the lack of Exchequer funding next year, coupled with shifts of grant due to the deficiencies in the distribution formula, many new councils, including Gwynedd, will face massive council tax increases in 1996–97.
To alleviate the problem, the Welsh Office has made available a council tax reduction grant of £45 million which is payable to certain councils only. It ensures, at least in theory, that no council will need to increase its council tax for the coming year by more than 25 per cent. Gwynedd's share is £1.991 million, which is equivalent to a band D council tax subsidy of £47. As part of the settlement, the Welsh Office announced expenditure capping criteria for 1996–97, which will allow councils to increase spending over 1995–96 levels by 3 per cent. The cap for Gwynedd is £112.003 million.
I know that it is not always useful to bandy figures in the Chamber, but I want to make one or two points. Gwynedd council is having to struggle as best it can after five years of consistently deep cuts. The conclusion that can be drawn from the figures I have given—the Welsh Office figures—is that the Welsh Office may seek to narrow the 4.4 per cent. gap between budgets and spending norms in 1997–98. That will mean substantial cuts in service levels.
Where will the new cuts come, after five years of cuts? The finance committee of the new council has looked frantically in every direction. The additional temporary reorganisation-related costs of £755,000 will be financed from the funds inherited from surpluses. Some £500,000 of major items of repair and maintenance of roads and buildings will be transferred from the revenue budget to the capital budget. I am told that there will be immediate cuts of 0.75 per cent. in the schools and social services budgets and 1 per cent. in other budgets, saving £709,000. The balance of the gap will be met by general balances, so all in all, it is a short-term strategy just to keep heads above water. Heaven alone knows what will happen next year. Apart from the surpluses on collection funds of £1.7 million, there will undoubtedly be cuts in valuable services. They are totally unjustified and will bite deeply in Gwynedd, which serves a large rural expanse.
The leader of the new authority recently explained the 25 per cent. council tax rise. In a letter, he says:
The simple reason for the increase is that the grant from the Welsh Office is insufficient to meet the effects of inflation and the added burden wholly created by central Government.
William Hague, the Welsh Secretary of State, stated in Parliament that the Council Tax in Wales this year would have to increase on average by about 17 per cent.
Why? Well, in the last budget the Tories cut 1p off income tax.
That is the immorality of the situation. That cut has to be paid for in some way and the burden will fall on householders. That is an unfair means of taxation, as the hon. Member for Newbury (Mr. Rendel) made clear. It is a regressive form of taxation in any event.
I cannot understand why, under the formula, some councils are badly dealt with while others seem to come out well. If Gwynedd council was treated the same as Westminster council, it would be possible to hand back money to the taxpayer and still provide services.
We have heard a lot today about fire authorities. They are very important and other hon. Members have rightly referred to the bravery of the firemen and women on whom we rely so heavily. They devote themselves entirely to their public duties, always with the greatest valour. However, they do not seem to qualify for money to run the service.
The North Wales fire authority was thrust on the people of Wales. against the wishes of the people of Gwynedd and Clwyd. There we are, we have got the new authority. The Government said that part of the reason for the reorganisation was increased efficiency. However, the new authority is not just disappointed but is scared rigid by the level of funding. I remind hon. Members that north Wales has a huge coastline which is one of the important criteria for funding. I also remind hon. Members that under the present basic capital allowance, £296,000 will be allowed under that heading compared with the previous combined total for Gwynedd fire authority and Clwyd fire authority in the previous year of £1.2 million. How can anyone run such a crucial service on such a budget? The decision is utterly indefensible and disgraceful.
The fire authority recognises that point and wrote many weeks ago to the Home Office asking for an urgent meeting with the Home Secretary. It has not yet received a reply. As the hon. Member for Alyn and Deeside (Mr. Jones) mentioned, he and I have asked for some progress on the matter and I am sure that other north Wales Members have done the same. I rang the Home Office last Wednesday and last Thursday. I was promised faithfully that I would be told today over the telephone when we could meet, but I am still waiting for that call. It is simply not good enough. Fire authorities often have to deal with life-or-death situations. It is simply not good enough to give Members of Parliament and fire authorities the runaround. I ask the Under-Secretary of State for Wales, because he too has responsibility in the matter, to give me an answer. If he is not careful, there will be blood on his hands. I ask him respectfully to make it known to the Home Office that we in north Wales want an urgent meeting and we want it now before there is a disaster. I ask him to respond to that point.
Central Government' s constraints have forced upon the people of Caernarfonshire and Meirionnydd, or the new Gwynedd, a couple of choices—to uphold the standards of service provided by the authority or to cut them yet further to an unacceptable level. Logically, the first choice is the only one. Given that, and central Government's chronic and serious underfunding, there will have to be a substantial council tax rise. But central Government should realise that the council tax payer is a far more sophisticated person that they imagine. He or she can see through this fiasco by central Government and, in a few months' time, they will have an opportunity to show this Administration what they feel. There is no doubt that the Conservative Administration will pay for decimating local government, and the price will be high.
One thing is certain—someone with a Labour council will have a council tax bill that is 50 per cent. higher than someone with a Conservative council. There is no doubt about that. If one looks down the chart of council tax bills for this year, one sees a long list of Labour authorities heading the list, starting with the iniquitous £1,006 for a band D property—presumably a semi-detached house—in Liverpool. At the other end, not surprisingly, one sees the low levels of council tax charged by Conservative authorities.
In light of that fact, I thought that it was a brazen gesture by Labour to have an Opposition motion today on the council tax. My right hon. Friend the Secretary of State pointed out that it is 1 April and said that the motion might be an April fool's joke, but it is getting late in the day for that. The Opposition motion uses the old line of blaming the Government for the high council tax levels in Labour-controlled areas. Labour is not alone in that. While council tax bills are 50 per cent. higher in Labour councils, the figure for the three or four councils controlled by the Liberal Democrats in London is 42 per cent.
One would have thought that when Labour tabled the motion, it would first have given us some idea of what extra money it would provide. If Labour claims that councils are hard pressed because of the Government, it should give a figure. But as with everything else, the hon. Member for Dunfermline, East (Mr. Brown)—the shadow Chancellor—has told Labour Members not to say a word on the matter because the Government might start costing the figures and detailing the total tax to be presented to the nation by Labour at the general election.
Labour has hinted in its rather vacuous presentation of policy that it would probably lift capping. There is a warning for the people of this nation—the council tax in Labour councils would go through the roof if the cap came off. Labour has also hinted on a number of occasions that it would like the business rate to be back in, as they put it, "democratic local control".
The hon. Member for Bradford, South (Mr. Sutcliffe) is obviously not speaking on behalf of the Opposition Front Bench. That is obviously the common view, however, in the Labour party. That is where Labour will find the extra money—from lifting the cap, so that local domestic council taxpayers will pay, and from local businesses, which will be well and truly soaked.
Conservative councils have come out extremely well in this year's chart—there is no question about that. As I have said, Labour-controlled Liverpool—where a band D council taxpayer has to find £1,006—is at one end of the scale. At the other end, the bill in Westminster—endlessly maligned this afternoon by Labour Front Benchers—is £295 for a band D property. In Wandsworth, the figure is £434, and in Brent it is £456. My right hon. Friend the Member for Brent, North (Sir R. Boyson), with all his experience in local government, paid a well-deserved tribute to the Conservative councillors in Brent.
Those figures are on the record for Conservative-controlled councils, but we must look also at the shadow budgets produced by Conservative oppositions around the country. At this point I shall move away from talking about London in broad terms, as I wish to refer to my own local authority—the royal borough of Kingston upon Thames, controlled currently by a Liberal Democrat authority. There, the Conservatives produced a shadow budget that convincingly undercut the Liberal Democrats' budget by £26 for a band D property.
It is interesting that, in the oldest royal borough in the country, the council was planning to do away with its heritage officer—the person who pulls together all the historical records and puts across the truly historic message of the ancient royal borough. That job was going to be axed because of the Liberal Democrats' budget. The Liberal Democrats have created seven "neighbourhood councils" in the borough to which money is devolved. Amazingly, the money to pay for the heritage officer was found by the three Conservative-controlled neighbourhoods and—interestingly enough—by the Labour-controlled neighbourhood. The Liberal Democrats were determined to wipe out the heritage officer of our oldest royal borough, but fortunately she has been saved because of the good management of other neighbourhoods.
In many areas, the shadow budget proves that the Conservatives could manage things better. It is a pity that the hon. Member for Holborn and St. Pancras (Mr. Dobson) is not here. He might be interested to know that Camden council—his local authority—is planning a 13 per cent. increase in council tax from £688 to £779 for band D. The Conservatives, however, produced a shadow budget that would keep the figure down to £635. That assumes—among other things—that the collection rates for the council tax were improved from 93 per cent. to 98 per cent. We have heard a number of times in the debate that the efficiency of Conservative councils produces those excellent levels of council tax.
We have also heard about total external support. My hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) said that if all councils in London received the same kind of external grant as Tower Hamlets, some amazing figures would be produced. Wandsworth, for example, could have handed back £1,250 to council taxpayers, and even Lambeth would have made savings, with the bill being £785 better than it turned out to be. I accept that there is need in Tower Hamlets, but there is also need in North Westminster, North Kensington and Hackney, and all those areas would have done far better if they had had the level of support that the Government have given to Tower Hamlets. So let us not hear any more of this talk about some sort of preferential treatment by the Government delivering the extremely efficient levels of council tax for Westminster, Kensington and Chelsea and Wandsworth.
The other point that has been made—I make no apology for repeating it once more—is about the level of efficiency that the Audit Commission has found in Conservative councils compared with that in Labour councils. One would think that Islington, with the right hon. Member for Sedgefield (Mr. Blair), the Leader of the Opposition, as one of its residents, would do better. In the Audit Commission's view, Islington is the most inefficient, useless and incompetent council certainly in London and probably in the whole country. It spends the third highest per head of population, yet its results are appalling. It has the worst exam results and it is the slowest in London at dealing with planning applications. Of course, there are other incompetent Labour councils in London. Labour Hackney is poor; it collects less than 70 per cent. of its council tax. Newham is little better.
Islington has the Leader of the Opposition as a resident—the man who claims that his new Labour party will be so efficient at running the country. Yet there on his doorstep is a classic example of what Labour is like when it is administering anything.
The yah-boo style of the Opposition tonight—or the Government, soon to be the Opposition—has not impressed me one little bit. I do not think that it would have impressed the thousands of Labour, Tory and Liberal councillors throughout the country. If they had heard the debate tonight they would have been appalled at the lack of respect for the way in which they had operated their councils during the past 10 or 12 years.
I start off by defending my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson). Earlier, the hon. Member for Brentwood and Ongar (Mr. Pickles) only partially quoted Hansard. My hon. Friend said:
I do not endorse anyone's numbers but my own, and the hon. Gentleman is not getting one from me.
He went on to say, but the hon. Member for Brentwood and Ongar did not quote this:
I explained that earlier. In case the Conservative simpletons did not notice, that was what one of my earlier responses meant."—[Official Report, 31 January 1996; Vol. 270, c. 1032.]
I have to say that the word "simpletons" comes to mind when I consider the quality of the debate that we are having this evening.
The hon. Member for Brentwood and Ongar was for a brief period leader of Bradford council. It was a very brief period from 1988 to 1990. I congratulate him on the efforts that he made on our behalf. The council was then controlled by the casting vote of the Lord Mayor. It is now controlled by a Labour majority of more than 16. That is due in many respects to the hon. Gentleman's efforts.
I should have thought that the debate tonight would centre on the good work of local authorities across the spectrum of politics. This country relies on the work of local councillors. They know that the make-up of the council tax does not reflect their needs. They would rather not be frustrated by the Government. They would prefer to develop a tax system in local government that met local needs.
We have a Tory Government who are paranoid about local authorities to the extent that in every other policy they are deregulating and loosening the ropes, but in local government they are not doing so. More than 150 pieces of legislation have been passed to tighten the restrictions on local authorities. In many local authorities up to 85 per cent. of the budget is predetermined by central Government. That is not the way forward. Local accountability and democracy is what we want to see.
Despite what the Government have said, Labour local government works. We have the facts to prove it. The facts that we are interested in are the number of people who vote for us. That is why there are more than 200 Labour authorities and only 13, soon to be fewer, Tory authorities. Whatever methods the Government try to use to detract from Labour local government, it makes no difference. The other week we had the Audit Commission performance indicators. A Minister went along to the Audit Commission to argue that the figures were not correct and argue a different case. The Audit Commission said no.
Conservative Members refer to the top 10 and the bottom 10 authorities in terms of performance. They are likely to be Labour authorities when the majority of authorities are Labour. The sad fact is that the Government do not want to see local government, of whatever political shade, develop. We have seen 16 years of this. The Government have taken away the powers of local government and put them in the hands of quangos. A fifth of public spending is now in the hands of non-accountable, undemocratic bodies. There are now more than 170,000 quangocrats, as compared with 30,000 councillors.
Authorities had have to increase the council tax this year as a result of the unfairness of the system, knowing that they will have to cut services. In areas such as mine, cuts in services hit hardest those who can least afford to be hit. We must have a Government who understand.
I have been along with colleagues from local authorities in my area to see Ministers. We get sympathy. Ministers say that they understand the problems and how, in Bradford's case, the formula does not accommodate the uniqueness of our city, with its rising population and school rolls. We get tea and sympathy, but no extra resources or any promises that Ministers will examine different methods of calculation.
There must be a different approach under which people are consulted and involved rather than frustrated. Bradford people will face a tax increase of 9.2 per cent. Again, they are the ones who can least afford it. A third of the population of 490,000 is on some form of income supplement. As I said earlier, it is a growing population.
To digress a little on to the education capital programme, an all-party delegation from Bradford went to see the Minister to say that Bradford needed £40 million to £60 million for education capital spending. The delegation was of local people who knew the local problems in each of the constituencies. The Minister said that the Government were happy to hear about Bradford's problems and understood that the local authority was doing all that it could. Bradford has even tried to implement the private finance initiative—an idea that came from Labour and has been suggested by Tories as the way forward. The response to Bradford's all-party request for £40 million to £60 million was a measly £4 million. So it is obvious that the funding is not there.
Bradford's council has had to cut £12 million from its budget this year, even with the increase of 9.2 per cent. Bradford's cuts in the past three years have been more than £50 million. It cannot deliver services to the standard that is required when it is having to make cuts to that extent.
For the first time, charges have been introduced in our galleries and museums. The people of Bradford have always been proud of their cultural heritage. The council did not want to put museums and galleries out of the reach of those who could not afford to pay those charges. Under the present system it will have to do so. We are also going to have to increase charges for the elderly, for example for social service provision in day centres. Local democracy should be about being voted out if one does not do what local people want.
Although it is Labour party policy to bring back the business rate, the business community wants it as well because they have seen the benefits of being involved in partnership schemes and discussions. Bradford chamber of commerce is more than willing to support bringing the business rate back to the local authority because it wants to play its part within the local community. As an interesting aside, the business rate would have increased by 40 per cent. on revaluation, so the Government had to bring in a transitional relief. Local business must be encouraged to be part of the community—and they want to be a part.
Powers have been taken away from local government and given to unaccountable bodies such as the local training and enterprise councils and colleges. We need to bring those powers back.
It is appalling that Ministers attack Labour-controlled local authorities in the Chamber and yet go to them for photo calls on good practice, as they did in Bradford recently. In Bradford and other cities, Ministers have wanted to be a part of the publicity for good council practices, for example on closed circuit television, crime initiatives and road safety.
We should be looking into council finances. What about this nonsense of year-on-year spend? When the Budget was changed from April to November, local authorities had only four or five months to determine how to spend their moneys. They did not get the final figures for the spend for the year starting in April until the December of the previous year.
Perhaps we should be considering three-year plans for spending, which would give councils the opportunity for development and the chance to plan for the future. Instead, we are seeing political dogma—if it is anything to do with a Labour local authority, it is not good.
What of the paragons of virtue that have been put before us today? Westminster would damage people's health by putting them in flats full of asbestos. Brent is full of corruption and it is not the Labour party, but the Audit Commission that has said so, among others. So where are the paragons of virtue among Tory-controlled authorities?
That is not to say that there are no good Tory councillors. We have good Tory councillors in Bradford. When they see that the district has a need, they put the district and not their party politics first. They are doing so in the all-party bids that have been put to the Government. The sad thing about it is that the Government do not listen to them.
What do we get when we speak to Ministers? They say, "Why don't you sell it off?" and, "Why don't you privatise it?" They said that about old people's homes, children's playgrounds that are not in use and school playing fields. That is always their approach.
When the hon. Member for Brentwood and Ongar led Bradford council, he had what he called the sale of the century. He was prepared to sell any of his city's assets, cultural or otherwise, for short-term gain at the expense of the long-term future of the district.
In education, things are so bad in Bradford that many children have corridors as classrooms. We have more temporary classrooms than anywhere else in the country. I see the hon. Member for Brentwood and Ongar returning to the Chamber, smiling. He talks about local need but he seems to have forgotten that, in 1985, under the old rating system, his group put the rates up by 36 per cent. when it was in control. I think that he was right to do so because he was meeting local needs. How interesting that he has changed his mind now.
I am grateful to the hon. Gentleman for his customary courtesy in giving way and I apologise for missing the earlier part of his speech. I remember that when Bradford council was Conservative-controlled, it used to put extra resources into education and extra teachers. When the Labour party took control, it made cuts. I also remember that when the council tried to renovate old people's homes, the Labour party opposed it and sold the same homes off to Labour councillors.
Yes, too many beefburgers. Had the hon. Member for Brentwood and Ongar been here for the earlier part of my speech he would have heard about the cuts that Bradford has suffered over the years. He knows the true situation, but he is off and away—unfortunately, the people of Essex have him now.
Many Ministers saw compulsory competitive tendering as the way forward—the way to make council services more efficient and effective. The reality is this: wages and concern for conditions have dramatically reduced and job losses have affected people who could not afford to lose their jobs. Had the rules on competitive tendering been fair, one would have accepted that, but Bradford seems to have been singled out by the Government again. Bradmet, the organisation for direct works that the hon. Member for Brentwood and Ongar was involved in setting up, has been barred from two contracts by the Government because of what they say are anti-competitive policies.
The Minister is welcome to intervene, but not from a sedentary position. As he is interested, I hope that he will consider investigating the company that has won the highways contract. The relationship between senior civil servants and private sector company directors has been mentioned in the House before. I understand that Tarmac has won the contract. Will he examine the activities of a Mr. J Hobson, who is a senior civil servant in his Department and also a director of Tarmac? Is that not a conflict of interest?
I understand that such situations are being looked into, but where has the £1.9 million that has disappeared from Bradmet gone?
The Minister knows that there is an inquiry and that auditors and the Audit Commission have been heavily involved. If he has any problems about that, I am sure that he will let us know. He talks about the £1.9 million, but what about the disclosure that a senior civil servant is on the board of a company that is interested in a contract? I hope that he will examine that.
Perhaps the hon. Gentleman could assist the auditor by helping to find some of the papers that seem to have disappeared and the head of services who has suddenly gone ill?
If the Minister wants to pursue that, he can do it outside this debate. I would be only too willing to meet him at any time to discuss Bradford's problems. The trouble is that when we talk to him about them, he does not listen.
We need to make sure that local government gets its rightful place. After 17 years of Tory central Government when local government has not been appreciated, the next Labour Government—and that is not far off—will recognise the successes of Labour local government in adverse circumstances. When we have the resources, and the support of a central Government who understand how we need to develop local government, councillors will realise their worth. It is unfortunate that we cannot have a sensible debate on local government. We understand why; the Tories have given up on local government.
It is extraordinary that this debate would be taking place on a day when 1,500 GP practices become fundholders and the majority of the population are being better cared for as a result. On the day when a new environment agency comes on stream and key European issues are to the fore, we get an April fools day debate with a motion worthy of a failed GCSE politics student. No doubt the hon. Member for Holborn and St. Pancras (Mr. Dobson) would merely declare that it seemed a good idea at the time, but his speech was unworthy of the House of Commons and in marked contrast to that of my right hon. Friend the Secretary of State for the Environment.
The motion suggests that the disgraceful Labour council tax increases are somehow the Government's fault. Time after time, Labour spokesmen come to the Dispatch Box to say that they are ready for office, but when they make a shambles of the many councils that they control it is the Government's fault, not that of their party's administrations.
I shall confine most of my speech to local government and the council tax in the fair county of Kent. I start with Kent county council, which has had the misfortune of being run by a coalition of the Labour and Liberal Democrat parties since 1993. This year, we in Kent were immensely grateful to the Government for increasing their funding of Kent county council by 4.2 per cent. With inflation running at 2.8 per cent., that gives the lie to Labour's repeated claims about underfunding. The increased funding for Kent and most other authorities, which is ahead of inflation, speaks for itself.
Government funding for education in Kent has increased by 4 per cent., which means an extra £22.5 million for Kent schools. We have had the highest award in the country for school buildings—up by 7.5 per cent. Among the shire counties, we have received the highest amount from the Government for new roads and our road programme—£81 million. All the nonsense about inadequate Government funding just does not add up when one looks at the facts.
Despite the increase of 4.2 per cent. in funding from the Government for Kent county council, which is way ahead of inflation, the Lib-Lab pact running the county council has had the nerve to go to the council tax payers for an increase of 5.6 per cent. That might be thought worth while if it was to be spent on services, but school budgets in our county will increase this year by just 3.4 per cent.—a much lower figure than the increase in Government funding to the county council, and a much lower figure than the increase in the council tax. That follows on from last year when, despite an extra 2.4 per cent. in funding from the Government, the schools just got 1 per cent. extra—and that was after a monumental row which left the Labour party cowering under the school desks.
One has to ask whether such funding is due to incompetence on the part of the Labour and Liberal Democrat parties or political malice. Let us consider incompetence on the part of Labour and Liberal Democrats on Kent county council. More than 50 per cent. of our secondary schools are now grant maintained and more than 50 per cent. of secondary school students are now in grant-maintained schools; yet the central education administration of Kent county council has not been reduced by anything like 50 per cent. The proof of the pudding is in the figures. The council keeps back £81 per child from schools throughout the county to be spent by the bureaucrats at county hall. That figure is the highest of any shire county in England. Our answer to that is that it should do better.
The council has spent a vast amount of money and has had its officers and lawyers working overtime to try to sabotage the grant-maintained schools. It tried to introduce a new system, which it botched up, for the selection process for youngsters aged 11 who have applied to the grammar schools. It has spent a vast amount of money, estimated to be in excess of £1 million in terms of officers' time and other costs, trying to bamboozle the Local Government Commission about local government reform. As for its scatter-gun approach to the roads programme, the result has been a disgraceful shambles. Many major road projects have seized up, notably in the Medway towns.
So on the charge of incompetence, yes, the council is guilty. But what about malice? I would say that it is certainly guilty of this, too. The Conservative opposition on Kent county council proposed a detailed budget for the coming year, which demonstrated better value for money and would have resulted in a council tax increase restricted to the rate of inflation at 2.9 per cent., but what did the Labour and Liberal-Democrat councillors do? They voted it down.
It is also extremely interesting to look at what has happened to the district and borough councils of Kent. Sadly, none of them is under Conservative control. Last year, far too many voters did not go along to vote—for reasons that we do not need to discuss now—and thus saddled themselves with Labour and Liberal Democrat councils. The Opposition spokesman has said that we should look at Labour in government. Indeed, let us look at it. Let us look at three councils—Sevenoaks, Tonbridge and Malling, and Ashford—which had been Conservative since time immemorial. Thanks to the election last year, they are now under Labour and Liberal Democrat coalitions. What did those great political party councillors do? They threw off management controls and had bright spending ideas. And what has been the result? The bills going out to the residents of those three districts have gone up. In Ashford, they have increased by 12.4 per cent.; in Tonbridge and Malting, they have increased by 24.8 per cent.; and in Sevenoaks, the district precept levied by the Liberal Democrat and Labour parties has increased by no less than 89 per cent. So much for Labour and Liberal Democrat control. Perhaps the electors of those boroughs will make sure that they vote next time. In those boroughs there is new Blairite co-operation between Labour and Liberal Democrats. What happens when one or other of those parties runs a council alone? Gillingham has been in the hands of the Liberal Democrats for some years. Its council tax increase is 8.7 per cent. this year.
As this is a Labour debate, however, let us consider Labour councils. Dartford went Labour last year. What thanks did the poor council tax payers get? They got an increase of 15 per cent. in the levy from the borough council. Rochester went Labour in 1991. Under the Conservatives, the city council subsidised the greater part of the Kent county council precept and levied the lowest shire district council tax in England. It was able to do so because of careful Conservative husbandry of the finances and the management of capital funds. Now it has been under Labour control for five years, and what has happened? Labour has blown the funds to such an extent that this year there is no subsidy to Kent county council and the people of the city of Rochester are feeling the full weight of the county level like the rest of us. And where is the highest council tax in Kent? It is in Labour Thanet.
What of my borough of Gravesham? This year, our council tax increased by a modest 2.9 per cent.—that is only £40,000 from the electorate—but why was that increase levied when the Labour borough council proposes to put £697,000 into reserves, taking those reserves to £4 million? Why increase the load on the backs of my constituents? The Conservative group on the council recommended no increase, but the Labour party voted it down. It is worth bearing in mind the fact that only a few years ago, when Gravesham borough council was Conservative, it had the third lowest council tax among the shire districts—after Rochester city, which was then Conservative, and Wellingborough, which due to the wisdom of its residents is still controlled by the Conservatives with their independent allies.
I hope that the good management of councils in Kent by the Conservatives for many decades will not fade too fast before we regain control of those councils. The people of Kent should take as a warning the record of councils that have had Labour control in the long term. They must weigh up the facts for themselves. The highest council tax in Kent—currently in Labour Thanet—is £640 at band D. That council has only just become Labour-controlled. The people of Kent should compare that with the band D council tax of Labour Liverpool at £1,006, or of Labour North Lincolnshire, which is not dissimilar to some of the Kent districts, at £887. Of the 20 councils with the highest council tax, 18 are Labour; of the eight with the lowest council tax, even with the small number of Conservative councils today, six are Conservative while the other two are the City of London and the Isles of Scilly, which do not carry out politics locally.
The lesson for the people of Kent is clear: Labour councils cost you more.
Disappointingly, part of the debate has been marked by an attack on public servants in local government. It is surprising to hear former leaders of local authorities going to town about slush funds. Earlier, we heard of a county which allegedly had very high reserves that were referred to as a "slush fund". That council, which I understand is a coalition of interests, has nothing to fear and nothing to hide when compared with the Conservative sleaze that we more properly associate with the term "slush fund". It is more appropriate for Conservative Members to apply that term to themselves than to any other party in the House.
I wish to defend people who have worked for a long time in local government. I hear talk, not about council members, but about some professional officers who have served in local authorities for many years. They certainly are professional officers, no matter how much Conservative Members shake their heads. Those officers are properly qualified in their professions and they give a proper, good, efficient and effective service to their communities.
The House has heard complaints that rate increases vary from district to district, from borough to borough and from county to county. Of course they do: that is local government reflecting the needs of each area. People have been blamed for voting for people other than Conservatives, but that is the nature of local democracy—words which do not frequently pass the lips of Conservative Members, and when they do they are usually employed as marks of hypocrisy and cant.
It is unfortunate that we have had to listen to an attack on the integrity of local government which, by and large, has a proud record of serving the interests of its communities. In so doing it will almost certainly continue, as long as it is allowed, to have rate demands set at different levels for different purposes for different services serving different communities. And long may those arrangements continue, for they are entirely admirable.
Many of us who served in local government remember when an uptight grocer's daughter stamped her foot and decided to put an end to the rating system. She charged several of her Ministers to find ways in which the powers of local government and hence its spending could be curbed. My hon. Friend the Member for North-East Derbyshire (Mr. Barnes) mentioned the methodology. The first method employed by the Government was simple, straightforward and crude: it was to ensure that
Labour-controlled authorities would be punished. The Deputy Prime Minister, who at that time was Secretary of State for the Environment, contrived a formula so complex in its application that no computer installation in western Europe could cope with the calculation: it had to be sent to Texas in the USA where the calculation was worked out authority by authority. As Robert Burns said,
O what a tangled web we weave, When first we practise to deceive.
I apologise to Burns if I did not quite get that right, but I am sure that hon. Members know exactly what I mean.
That exercise by the then Secretary of State for the Environment was followed by what was probably the greatest debacle in the history of local government: the poll tax. That was the uptight grocer girl's next attempt, and it was a total, miserable and utter failure. By golly, there was a price to be paid and it is still being paid. My hon. Friends have referred to the difficulty of collecting huge unpaid poll tax bills going back many years simply because people did not have the money to pay an outrageous tax which was levied on them to satisfy political incompetence on the back of political malevolence, for that is the only way in which it can be described.
Now we have a council tax system which relies on banding. The hon. Member for Newbury (Mr. Rendel) spoke of the awfulness of the present system and, of course, he is right. Eventually, the Conservatives may hit on a big idea for local government. They might think about calling it the rating system under which there is a rateable value for every property and those who can afford it will pay and those who cannot afford to do so will get help by way of a rebate. That would be a revolution. People would be grateful to get back to those happy, far-off days.
Under an exceedingly high gearing, 80 per cent. of local government finance is not collected by local government. That means that only 20 per cent. is collected, but in those far-off happy days we provided over 33 per cent. of locally funded schemes and paid far less for our services. My borough now has £30 million less to spend in real terms than it spent in those far-off happy days when there was a rating system and the method of disbursing central Government grant was fair and reasonable. Those are the differences.
In the early 1980s, when the late Sir Keith Joseph was Secretary of State for Education, my borough brought forward a plan to reduce school places. It is expensive to keep school places empty and we intended to reduce them to the level suggested by the then Department of Education. What happened? Sir Keith could not see his way clear to agree to our plan. We asked whether we could bring forward a modified plan. We were told that we could, but that we would have to go through exactly the same procedure to come to the table with the Secretary of State with a plan. We have been implored to reduce places in schools, but when authorities have come forward with viable plans which have not suited the Tories, they have been turned down—thus adding to the overall burden of local government expenditure.
My authority is a good example of what is happening now. This year, my authority has a growth figure of 1 per cent. in real terms in education, which seems to me to be a considerable achievement; in fact, it is exemplary in my borough, considering that under a Conservative ideology it delegates 90 per cent. of the entire budget to schools. In that sense, my borough does everything that has been asked. However, over the years the cuts have been very hurtful—many teachers have had to leave the service by one route or another and the pupil-teacher ratio has increased.
My borough experiences severe deprivation; yet this year the social services budget has been cut by £250,000 in relation to services for the disabled—and many other cuts have been made in the social services area. The economic development function has been diminished in a borough with an unemployment rate well above average—there is up to 30 per cent. unemployment among young people in some areas. It is incumbent on the Government to recognise what is being done in local government, to recognise the varying conditions which exist and to fund their part of it properly.
Unfortunately, the council tax in Wolverhampton has increased by 15 per cent. this year—despite sending 90 per cent. down to schools and despite making major cuts in some of the services. We are a good example of having to pay more but getting less—that is what has been happening in Wolverhampton. It is a good authority, and it has been recognised as such for 30 years or more, under both Labour and Conservative control.
We have taken it on the chin in Wolverhampton when Labour has lost control of the council—we have recognised that the local population has said, "Labour, you are not doing the job that we want you to do", and it has voted us out and put in Conservatives—often in coalition with the Liberals, which is a bit of a change-around. However, they have then voted Labour back in again.
Hon. Members must accept that local democracy is an important and cherished bloom among those who value local government, local democracy and all that it means to local populations. Local democracy can work when it is properly and reasonably funded, both from central Government resources and from its own resources.
Tonight the Labour party has referred to something that it thinks will wash with the electorate until the next election—that if only the formula could be got right, we could have more money to spend in our areas. I have listened to Labour Members and I am worried because I think that some of them actually believe it. It is not true and it does not mean anything. A number of Labour Members have said, "If the formula were different, there would be more to spend in my constituency and my council would have more". They forget that they would merely be robbing other councils—often Labour controlled—in a system which simply would not work.
If one wants more money for services—as, no doubt, the Labour party will pretend that it will provide—one has to increase the amount of money produced in taxation. What must be most worrying, certainly for my constituents and, indeed, for people throughout the country, is what the Labour party would do with the return to business rates. We all remember—certainly those of us who served in local government remember—that the Labour party in local government regarded business rates as a mulch cow. Businesses did not have a vote, so Labour went through the process of consulting them and then ignored them. The result, certainly in London, was that people moved their businesses. They voted with their feet and moved out of Labour-controlled areas into Conservative-controlled areas.
It is all very well for the hon. Member for Holborn and St. Pancras (Mr. Dobson) to swear, using unparliamentary language to describe what I said, but I represented Croydon on the Greater London council until 10 years yesterday, and businesses were moving out of Lambeth and into Croydon to avoid Lambeth's business rates.
On top of that, there were spending promises from every Labour councillor one could name. Labour supporters in the unions demanded that compulsory competitive tendering be abolished, which meant that the cost of providing services would go up. There was the cost of a return to regional authorities and those who hold the blank cheques of nods and winks from the Labour party, demanding that more money be spent on every service that one could name.
In conclusion—I have only two minutes to speak in the debate if, unlike some hon. Members, I am to stick to the agreement that I made—if the Labour party were to hold to what it promises the people every time it opens its mouth, it would have to increase taxes both locally and nationally. The hon. Member for Holborn and St. Pancras says that he never listens to experts: anyone who has ever listened to his speeches will know what he means and will not be at all surprised.
Conservative Members have tried to suggest that people will pay more and get less. People do pay more and get less under the Conservative Government. The Government have a history, certainly since the previous election, of extracting from the taxpayer more and more in tax. This month, with the increase in council tax, people across Britain will face their 23zrd Tory tax hike. Council tax bills will go up. Services will be cut. Taxpayers will pay more but get less. Ordinary families throughout the land are paying the price of Tory economic mismanagement and incompetence.
As if it was not bad enough that the Government have introduced 22 new taxes since 1992, costing the typical family an extra £670 a year, residents will now face hefty increases in their council tax bills.
Government figures produced during the Budget, and subsequent statements from civil servants and politicians, show that the Government have a clear policy of forcing the council tax up, not just this year, but next year and the year after that. Council tax payers will have to fork out an extra £3.5 billion over the next three years—equivalent to almost 2p on the basic rate of income tax. Since the general election, we have experienced three years of Tory-driven national tax increases, which are to be followed by three years of Tory-planned local tax increases.
During the previous election, unsurprisingly, so busy were they scaremongering about what a Labour Government would do, that Tory politicians appeared to forget—I am always generous in my interpretation of history—to tell the electorate that under a John Major Government taxes would go up and up. In fact, Tory politicians appear to have got so muddled that they told the electorate that taxes would not go up. The 1992 Conservative party manifesto, for example, stated clearly:
We will maintain mortgage tax relief'.
What happened? The Conservatives cut mortgage tax relief two years running.
On 28 January 1992, the Prime Minister told the Leader of the Opposition in the House:
So that the right hon. Gentleman is in no doubt, I tell him that I have no plans to raise the top rate of tax or the level of national insurance contributions."—[Official Report, 28 January 1992; Vol. 202, c. 808.]
In 1993, what did the Conservatives do? They raised the rate of national insurance contributions from 9 per cent. to 10 per cent.
On 27 March 1992, John Major told the electorate:
I have made it clear, we have no plans"—
I am sorry, Madam Deputy Speaker. The Prime Minister—even better—told the electorate:
I have made it clear, we have no plans and indeed no need to extend the scope of VAT".
What did the Conservatives do? In the very first Budget following that election, the Government extended VAT to home energy and fuel. Now, no more than 12 months away from a general election, Ministers are scurrying around trying to pretend that they really have not been putting up taxes—oh no. The problem is that public finances are in such a mess that their options were restricted. I wonder who got the public finances into such a mess.
Accordingly, the Government resorted to their twin magic tricks. The first is the sleight-of-hand trick: having put up taxes every year, they are trying to claim maximum credit for a 1p cut in income tax while denying responsibility for grabbing the money back by forcing council taxes up. The second trick is entitled "pass the buck", and involves central Government cutting support for local government and then blaming councils for the fact that they have had to raise the council tax to pay for essential services.
The problem that the Government and Conservative Members face is that the electorate are becoming tired of these old Tory tricks. They can see through them; they know what is going on, and where the blame truly lies. What the electorate want is honesty. They do not expect miracles, but they do not expect tricks either. They want us to be honest and straight with them. Unfortunately, they have not had such treatment from the Government, and they have not had it from some Tory councils either.
I also want to respond to what the right hon. Member for Brent, North (Sir R. Boyson) had to say. I thought it very brave of him to defend Brent council this evening. The House has not just heard and considered Westminster's problems in past weeks; there is also the real problem in Brent. Before the elections in May 1994, Brent electors were told that the Tories were committed to cutting the council tax. The right hon. Gentleman is right: they did cut it. However, they appeared to be suffering from amnesia when it came to telling the electorate, or even the council, where the necessary funds were to be found.
The pamphlet tells us:
Brent Conservatives … were even in a position to tell voters the amount by which taxes would be cut by the Conservatives in their first year of office; clearly this did a great deal to help them win the election.
So we have that model of Tory best practice.
The electorate, however, were not told of the gaping hole in the council's finances or that the cut had to be financed through a quick sale of Alperton lane depot to Onyx, a deal that was conditional on the company being given the profit-making council contract to manage trade waste collection and skip services. The deal was never even reported to a council committee. It cost taxpayers £1 million. The truth has only now come out and been reported to the district auditor. That deal, which appears to be ultra vires, went ahead because Conservative councillors were more interested in cutting the council tax than in protecting the public interest and probity in local government.
This year, the Tory budget in Brent is again in a shambles. The council was clear that the minimum prudent reserves were about £2.5 million. All parties in Brent proposed budgets that set aside £2.5 million in reserves, but, unlike Labour and the Liberals, whose budgets were driven by a commitment to quality, efficient services and a sustainable public financial regime, the Tories were more obsessed with cutting the council tax and so they misled the council and council tax payers.
In the past couple of days, therefore, those Tories have had to announce that they forgot to include expenditure of £1.1 million for statutory special education and for the funding for recycling initiatives, so, surprise surprise, once the budget had been agreed, the Tories admitted the oversight and had to raise those balances by £1 million. We shall ensure that the auditor has a chance to say something about that.
It is of course possible to cut budgets if councillors are not going to take any notice of the district auditor and of probity. I know the right hon. Member for Brent, North well and that, above all, he expects and demands honesty, so I hope that he will ask his councillors some questions about how they managed to cut the council tax last year and this year.
Other authorities have been trumpeted today. We have heard about Wandsworth council. We seem to have forgotten that, this year, it issued a press release bemoaning the end of the bonanza last year, when 35 per cent. of all transitional relief money went to one council: Wandsworth. Because this year the Government wanted the level in Brent to be lower than in Wandsworth, they removed the bonanza and changed the basis of the arrangements. Wandsworth councillors are not happy.
The Government have a responsibility to protect the public interest, but instead they collude with councillors in Brent who want to avoid the honest budget process. My hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) has already read the letter which, following the 1994 budget, Brent council's leader wrote to officers in the Department of the Environment—I trust political officers.
The activities in Brent contrast sharply with those in many other authorities, where councillors are working hard properly to meet aims and aspirations.
I am amazed that the Secretary of State dares say that it is well run. I have already given the figure on the cases in Brent that have been proved by the ombudsman, which number 43—I got the number wrong earlier. The nearest other London council had 17 cases. The ombudsman does not, therefore, seem to agree with the Secretary of State.
Time and again, the Tory Government are hitting taxpayers where it hurts. In the same way as it was not an accident that there were tax cuts before the previous general election and huge tax rises after that election, it is not an accident that, in the year before the next general election, income tax is cut by 1p and the Government are grabbing the money back through the council tax.
Several of my hon. Friends pointed out the problems with the way in which the Government calculate the standard spending assessment. My hon. Friend the Member for North-East Derbyshire (Mr. Barnes) has long given great service by raising the matter year after year. My hon. Friend the Member for Alyn and Deeside (Mr. Jones) mentioned the importance of what is happening in Wales today, when Wales is having new authorities forced on it because of the Government's gerrymandering.
Authorities across the country are desperately trying to provide fire services and other services to meet the aspirations of local people, but are having to cut those services while increasing the money that they raise.
Despite the Secretary of State's attempts to pass the buck on taxation, the truth is clear from the Department of the Environment's annual report, which states:
This reflects the Government's view that council tax payers should contribute a slightly increased proportion of the costs of local government".
That is what it is about—because the Government cannot manage their finances, they are putting the onus on council tax payers.
It is a tribute to the hard work and efficiency of local government—[Interruption.] The Under-Secretary of State for the Environment, the hon. Member for Croydon, Central (Sir P. Beresford), continues to tries to laud the 13 councils that the Tories still run. Why are there only 13 of them? It is because of democracy. The Government hate the fact that democracy works.
Tribute must be paid to the hard-working councillors for having managed to keep the council tax increase below the 8 per cent. that the Tories expected. The Government said that the increase would be 8 per cent., but the average increase is lower. Instead of indulging in complacent attacks on local government, it is time that the Government admitted the truth which, I know, is hard for them. The truth is that local people are having to pay more but get less because of the Government's incompetence and mismanagement.
The people will know what to do when they experience the 23rd tax increase since 1992. They will know how to vote. I look forward to seeing the Government suffer the results of what the electorate say.
We thank the hon. Member for North-West Durham (Ms Armstrong) for her cure for insomnia. The positive approach to local government was most appropriately set out by right hon. Friend the Secretary of State when he began the Government's response to the motion. He drove home the differences between Labour and Conservative councils in practice and between what Labour says and what Labour does. That point was well echoed by my right hon. Friend the Member for Brent, North (Sir R. Boyson) and my hon. Friends the Members for Wellingborough (Sir P. Fry), for Surbiton (Mr. Tracey), for Brentwood and Ongar (Mr. Pickles), for Gravesham (Mr. Arnold) and for Harrow, West (Mr. Hughes). I am grateful to my right hon. Friend the Secretary of State for the opportunity to ensure that this debate on local government is fully rounded and includes Wales and England. I intend to make proper mention of Wales shortly.
This is an Opposition debate, but what a lacklustre, uninspiring performance we saw from Opposition Members, despite the fact that it was their choice of subject. The only enlivenment provided by the hon. Member for Holborn and St. Pancras (Mr. Dobson) came when he displayed his giggle factor. He also displayed an almost maniacal twitch as he looked around desperately for supporters on the Benches behind him. The hon. Gentleman really knows how to pack them in—at the height of his oratory, he had nine Back Benchers to support him. It is no wonder, as he had nothing new to offer and there was no substance to his speech, which was merely a collection of incoherent points. In addition, his figures did not add up. Even he admitted that he refuses to listen to experts—I have to say that that came over very clearly. We know that he has maintained his amateur status, or, perhaps it would be more accurate to say that, along with the hon. Members for Peckham (Ms Harman) and for Edinburgh, East (Dr. Strang), he has displayed that the Labour party is unfit to govern.
The hon. Members for Newbury (Mr. Rendel) and for Meirionnydd Nant Conwy (Mr. Llwyd), in line with the hon. Member for Holborn and St. Pancras, called for more spending and more accountability. The hon. Member for Newbury wanted local income tax. I can imagine how that would be welcomed. None of them would quantify what he had in mind or put figures on the bills that would be presented. Perversely, they complained that the Government should give more to local government, but again, they would not quantify it. I must ask how such demands square with the abolition of capping and the provision of greater accountability. They simply cannot make up their minds.
Over and over, it came across this evening that new Labour equals new taxation. It would impose a minimum wage. That would have to be paid for. It would abolish compulsory competitive tendering. My right hon. Friend the Secretary of State dared to offer the advice in The Guardian that such a plan would be a dangerous capitulation to the unions, and yet another expert was brushed aside by the hon. Member for Holborn and St. Pancras. Labour would want to put business taxes under local-authority control. I defy the hon. Member for Bradford, South (Mr. Sutcliffe) to come up with any credible authority in the business world which would prefer to return to what was previously inflicted on it.
All that is as well as abolishing capping. It is incredible to think of the total that would be created as a result. I honestly believe that, in their heart of hearts, the last thing that Labour Members want the Government to do is abolish capping and let their Labour supporters loose in local government. Have they ever stopped to think about the effect? That point was well brought home by my hon. Friend the Member for Wellingborough. It brings us back to the Labour party saying one thing and doing another. It is proof of the prophecy that my right hon. Friend the Secretary of State quoted earlier. The Leader of the Opposition said in The Spectator:
I don't think the character of any party becomes clear until you're in power.
It is exactly as my hon. Friend the Member for Wellingborough said when he referred to the way in which his Labour-controlled county council has not passed on all the money that it has been given for education to the schools; it is saying one thing, doing another.
New Labour is certainly the party of new taxation. If the list that I have read out is not enough, I remind the House about the tartan tax that Labour would impose in Scotland and the taffia tax that it would impose in Wales to pay the price of a Welsh Assembly that would be brought in without giving the people of Wales any opportunity to comment on it.
I fear that time is too short.
As has been mentioned, 1 April should be a great day for local government in Wales. We have had fireworks to celebrate the end of such unloved councils as South Glamorgan. Today is the completion of a process that was begun in 1974. We have ended the two-tier system and the confusion apparent in so many people's minds about which council did what. Such confusion certainly existed among the councils themselves.
Now we have 22 new unitary authorities in Wales. They are much more closer to the people whom they are meant to serve. What will those new councils do? The people of Wales will rush to say that clearly they must do better than their predecessors.
The Minister will be very well aware that among the new authorities assuming power in Wales today there is a massive variation in increases in council tax. His own council of Cardiff, Rhondda, Cynon, Taff, and Gwynedd have increased their council tax by up to 25 per cent., whereas neighbouring authorities, carrying on the policies that they inherited from their predecessors, have needed only to increase their council tax by 3 or 4 per cent. Will he give an undertaking that during the year the Welsh Office will consider the distribution of grants in order to find the anomalies that have led to today's position so that it can be put right for next year?
We shall certainly look at the SSAs for Wales, beginning with community care and education. The hon. Gentleman would have to agree that in Wales we have been caned this year by the level of council tax increases. There is a simple explanation why: there are no elections in Wales this year. We had elections in every council last year, and there were far lower increases, but now the accountability has been removed.
My constituents would name education and community care as obvious priorities for spending. However, we were reminded again recently by the Audit Commission of the bad reputation of South Glamorgan council. It is the second lowest county council in England and Wales for spending on education. It does not have the excuse that it is a low-spending authority because we know from the Audit Commission that it is the sixth highest spender in England and Wales. We have excellent schools across Cardiff; I think of Whitchurch, Llanishen and Cardiff high. What they achieve is despite the Labour-controlled education authority and not because of it. Labour's meanness comes through so clearly in South Glamorgan, in Wales and elsewhere in the United Kingdom. It has been proved over and again that education is not safe in the hands of the Labour party.
Opposition Members have made it clear that they think that the level of resources for local government spending should be increased. It should be a simple matter for them to tell us by how much, but they do not. We should keep on asking the questions. I ask these questions at every available opportunity, but it is just as well that I am a patient man because I do not receive answers. I have not given up hope of receiving an answer and I shall give way now to the hon. Member for North-West Durham if she wants to give me one.
If we are to believe that local authorities are unable to manage effectively within the resources available to them, what are we to make of an article in the Western Mail on 19 March? I will enlighten hon. Members who may not have had an opportunity to read the article. It was headlined, "Local authorities in last spending spree" and it went on to report:
The year of the big spend is almost at an end but local authority treasurers are still scouring town hall coffers. Many councils in Wales beefed up their spending programmes before they are abolished".
One local authority is reported to have found an extra £2.6 million in the past 12 months and the treasurer is quoted as saying:
This year will be remembered as the year of the great spend. My creative accounting abilities and pulling out of the finance hat have been pushed to the limit.
Such reports give no credence to the laments of Opposition Members. In my view, it would have been much better for those authorities to contain their enthusiasm for breakneck spending and to provide their successor authorities with a sensible level of reserves.
Central Government support for local government spending in England and Wales for 1996–97 has increased by about 2.8 per cent. It has certainly not been cut as some reports suggest. It accounts for about 80 per cent. of English and Welsh total standard spending. Local government in both England and Wales argue that central Government support represents too high a proportion of spending, and that it fetters their discretion and diminishes local accountability. That can be remedied only by increasing the amount that local authorities can raise locally through the council tax.
The hon. Member for Alyn and Deeside (Mr. Jones) is concerned about Theatr Clwyd. The problems of Theatr Clwyd have not been caused by local government reorganisation; the decision was taken by Flintshire county council. It has the spending power, but it has chosen not to put money into the theatre. My right hon. Friend the Secretary of State and I have been most concerned about the theatre's future so we have offered £1.3 million to write off its debts. I must tell the hon. Member for Alyn and Deeside that the offer is conditional on a solution being found for the long-term future. We do not want Flintshire to create the problem each year. I cannot tell the hon. Gentleman the outcome because we received a reply from Flintshire county council only last Friday. The reply is being studied urgently and I can tell the hon. Gentleman that it is my hope that, as he wants, we shall reach a conclusion that secures the theatre's future.
All I can say tonight is that I hope that it does.
The hon. Gentleman and the hon. Member for Meirionnydd Nant Conwy were concerned about the new fire authorities. They should know that the financing of the new fire authorities has essentially not changed. It is the responsibility of each unitary authority to set a budget, including provision for the fire service, in accordance with the resources available to it and its own assessment of needs and priorities. All the new fire authorities in Wales will spend more in the coming year than they did last year. The increases range from 2.2 per cent. for north Wales and 5.3 per cent. for south Wales to 10.5 for mid and west Wales. I have noted what hon. Members have said about a meeting with the North Wales fire authority, and I will ensure that the point is conveyed to my right hon. Friend the Secretary of State for Wales.
In conclusion, we have had a mean and whingeing debate from the Opposition this evening. Local government has the resources and the opportunities, and we certainly have the way forward in Wales with the new reorganised councils that are closer to the people they are meant to serve. That is the way forward, and I commend it to the House.
|Division No. 91]||[21.59 pm|
|Abbott, Ms Diane||Coffey, Ann|
|Adams, Mrs Irene||Cohen, Harry|
|Ainger, Nick||Connarty, Michael|
|Ainsworth, Robert (Cov'try NE)||Cook, Frank (Stockton N)|
|Allen, Graham||Cook, Robin (Livingston)|
|Alton, David||Corbett, Robin|
|Anderson, Donald (Swansea E)||Corbyn, Jeremy|
|Anderson, Ms Janet (Ros'dale)||Cousins, Jim|
|Armstrong, Hilary||Cummings, John|
|Ashdown, Rt Hon Paddy||Cunliffe, Lawrence|
|Ashton, Joe||Cunningham, Jim (Covy SE)|
|Banks, Tony (Newham NW)||Cunningham, Rt Hon Dr John|
|Barnes, Harry||Dafis, Cynog|
|Barron, Kevin||Darling, Alistair|
|Battle, John||Davidson, Ian|
|Bayley, Hugh||Davies, Bryan (Oldham C'tral)|
|Beckett, Rt Hon Margaret||Davies, Chris (L'Boro & S'worth)|
|Beith, Rt Hon A J||Davies, Rt Hon Denzil (Llanelli)|
|Bell, Stuart||Davies, Ron (Caerphilly)|
|Benn, Rt Hon Tony||Davis, Terry (B'ham, H'dge H'l)|
|Bennett, Andrew F||Denham, John|
|Benton, Joe||Dewar, Donald|
|Bermingham, Gerald||Dixon, Don|
|Berry, Roger||Dobson, Frank|
|Betts, Clive||Donohoe, Brian H|
|Boateng, Paul||Dowd, Jim|
|Bray, Dr Jeremy||Eagle, Ms Angela|
|Brown, Gordon (Dunfermline E)||Eastham, Ken|
|Brown, N (N'c'tle upon Tyne E)||Etherington, Bill|
|Bruce, Malcolm (Gordon)||Evans, John (St Helens N)|
|Burden, Richard||Fatchett, Derek|
|Byers, Stephen||Field, Frank (Birkenhead)|
|Callaghan, Jim||Fisher, Mark|
|Campbell, Mrs Anne (C'bridge)||Flynn, Paul|
|Campbell, Ronnie (Blyth V)||Foulkes, George|
|Campbell-Savours, D N||Fyfe, Maria|
|Canavan, Dennis||Galbraith, Sam|
|Cann, Jamie||Galloway, George|
|Chidgey, David||Gapes, Mike|
|Chisholm, Malcolm||George, Bruce|
|Church, Judith||Gerrard, Neil|
|Clapham, Michael||Gilbert, Rt Hon Dr John|
|Clark, Dr David (South Shields)||Godman, Dr Norman A|
|Clarke, Eric (Midlothian)||Godsiff, Roger|
|Clarke, Tom (Monklands W)||Golding, Mrs Llin|
|Clelland, David||Gordon, Mildred|
|Clwyd, Mrs Ann||Grant, Bernie (Tottenham)|
|Griffiths, Nigel (Edinburgh S)||Morgan, Rhodri|
|Griffiths, Win (Bridgend)||Morris, Estelle (B'ham Yardley)|
|Gunnell, John||Morris, Rt Hon John (Aberavon)|
|Hain, Peter||Mowlam, Marjorie|
|Hall, Mike||Mudie, George|
|Hanson, David||Nicholson, Emma (Devon West)|
|Harman, Ms Harriet||O'Brien, Mike (N W'kshire)|
|Hattersley, Rt Hon Roy||O'Brien, William (Normanton)|
|Henderson, Doug||O'Hara, Edward|
|Heppell, John||Olner, Bill|
|Hill, Keith (Streatham)||O'Neill, Martin|
|Hinchliffe, David||Orme, Rt Hon Stanley|
|Hodge, Margaret||Pendry, Tom|
|Hoey, Kate||Pickthall, Colin|
|Hogg, Norman (Cumbernauld)||Pike, Peter L|
|Home Robertson, John||Powell, Ray (Ogmore)|
|Hood, Jimmy||Prentice, Bridget (Lew'm E)|
|Hoon, Geoffrey||Prentice, Gordon (Pendle)|
|Howarth, Alan (Strat'rd-on-A)||Primarolo, Dawn|
|Howarth, George (Knowsley North)||Purchase, Ken|
|Howells, Dr Kim (Pontypridd)||Quin, Ms Joyce|
|Hoyle, Doug||Radice, Giles|
|Hughes, Kevin (Doncaster N)||Raynsford, Nick|
|Hughes, Robert (Aberdeen N)||Rendel, David|
|Hughes, Roy (Newport E)||Robertson, George (Hamilton)|
|Hughes, Simon (Southwark)||Robinson, Geoffrey (Co'try NW)|
|Illsley, Eric||Roche, Mrs Barbara|
|Jackson, Glenda (H'stead)||Rogers, Allan|
|Jackson, Helen (Shef'ld, H)||Rooney, Terry|
|Jamieson, David||Ross, Ernie (Dundee W)|
|Jones, Barry (Alyn and D'side)||Rowlands, Ted|
|Jones, Ieuan Wyn (Ynys Môn)||Ruddock, Joan|
|Jones, Jon Owen (Cardiff C)||Sedgemore, Brian|
|Jones, Lynne (B'ham S O)||Sheerman, Barry|
|Jones, Martyn (Clwyd, SW)||Sheldon, Rt Hon Robert|
|Jones, Nigel (Cheltenham)||Shore, Rt Hon Peter|
|Kaufman, Rt Hon Gerald||Short, Clare|
|Keen, Alan||Skinner, Dennis|
|Kennedy, Charles (Ross, C&S)||Smith, Andrew (Oxford E)|
|Kennedy, Jane (L'pool Br'dg'n)||Smith, Chris (lsl'ton S & F'sbury)|
|Khabra, Piara S||Smith, Llew (Blaenau Gwent)|
|Kilfoyle, Peter||Soley, Clive|
|Lestor, Joan (Eccles)||Spearing, Nigel|
|Liddell, Mrs Helen||Spellar, John|
|Litherland, Robert||Squire, Rachel (Dunfermline W)|
|Livingstone, Ken||Steel, Rt Hon Sir David|
|Lloyd, Tony (Stretford)||Steinberg, Gerry|
|Llwyd, Elfyn||Stevenson, George|
|Loyden, Eddie||Stott, Roger|
|Lynne, Ms Liz||Strang, Dr. Gavin|
|McAllion, John||Straw, Jack|
|McAvoy, Thomas||Sutcliffe, Gerry|
|McCartney, Ian||Taylor, Mrs Ann (Dewsbury)|
|Macdonald, Calum||Taylor, Matthew (Truro)|
|McFall, John||Timms, Stephen|
|McKelvey, William||Tipping, Paddy|
|Mackinlay, Andrew||Touhig, Don|
|McLeish, Henry||Trickett, Jon|
|McMaster, Gordon||Turner, Dennis|
|McNamara, Kevin||Tyler, Paul|
|McWilliam, John||Vaz, Keith|
|Madden, Max||Walker, Rt Hon Sir Harold|
|Maddock, Diana||Walley, Joan|
|Mahon, Alice||Wardell, Gareth (Gower)|
|Mandelson, Peter||Wareing, Robert N|
|Marshall, David (Shettleston)||Watson, Mike|
|Marshall, Jim (Leicester, S)||Wicks, Malcolm|
|Martin, Michael J (Springburn)||Wigley, Dafydd|
|Maxton, John||Williams, Rt Hon Alan (Sw'n W)|
|Meacher, Michael||Williams, Alan W (Carmarthen)|
|Meale, Alan||Wise, Audrey|
|Michael, Alun||Worthington, Tony|
|Michie, Bill (Sheffield Heeley)||Wray, Jimmy|
|Milburn, Alan||Wright, Dr Tony|
|Miller, Andrew||Young, David (Bolton SE)|
|Mitchell, Austin (Gt Grimsby)|
|Tellers for the Ayes:|
|Mr. Greg Pope and|
|Mr. Eric Martlew.|
|Ainsworth, Peter(East Surrrey)||Dorrell, Rt Hon Stephen|
|Aitken, Rt Hon Jonathan||Douglas-Hamilton, Lord James|
|Alexander, Richard||Dover, Den|
|Allason, Rupert (Torbay)||Duncan-Smith, Iain|
|Amess, David||Dunn, Bob|
|Arbuthnot, James||Durant, Sir Anthony|
|Arnold, Jacques (Gravesham)||Dykes, Hugh|
|Arnold, Sir Thomas (Hazel Grv)||Eggar, Rt Hon Tim|
|Ashby, David||Elletson, Harold|
|Atkins, Rt Hon Robert||Emery, Rt Hon Sir Peter|
|Atkinson, Peter (Hexham)||Evans, David (Welwyn Hatfield)|
|Baker, Rt Hon Kenneth (Mole V)||Evans, Jonathan (Brecon)|
|Baldry, Tony||Evans, Nigel (Ribble Valley)|
|Banks, Matthew (Southport)||Evans, Roger (Monmouth)|
|Banks, Robert (Harrogate)||Faber, David|
|Bates, Michael||Fabricant, Michael|
|Batiste, Spencer||Fenner, Dame Peggy|
|Bellingham, Henry||Field, Barry (Isle of Wight)|
|Bendall, Vivian||Fishburn, Dudley|
|Beresford, Sir Paul||Forman, Nigel|
|Biffen, Rt Hon John||Forsyth, Rt Hon Michael (Stirling)|
|Body, Sir Richard||Forsythe, Clifford (S Antrim)|
|Bonsor, Sir Nicholas||Forth, Eric|
|Booth, Hartley||Fowler, Rt Hon Sir Norman|
|Boswell, Tim||Fox, Rt Hon Sir Marcus (Shipley)|
|Bottomley, Peter (Eltham)||Freeman, Rt Hon Roger|
|Bottomley, Rt Hon Virginia||French, Douglas|
|Bowden, Sir Andrew||Fry, Sir peter|
|Bowis, John||Gale, Roger|
|Boyson, Rt Hon Sir Rhodes||Gallie, Phil|
|Brazier, Julian||Gardiner, Sir George|
|Bright, Sir Graham||Garnier, Edward|
|Brooke, Rt Hon Peter||Gillan, Cheryl|
|Brown, M (Brigg & Cl'thorpes)||Goodlad, Rt Hon Alastair|
|Browning, Mrs Angela||Goodson-Wickes, Dr Charles|
|Bruce, Ian (South Dorset)||Gorman, Mrs Teresa|
|Budgen, Nicholas||Gorst, Sir John|
|Burns, Simon||Grant, Sir A (SW Cambs)|
|Burt, Alistair||Greenway, Harry (Ealing N)|
|Butcher, John||Greenway, John (Ryedale)|
|Butler, Peter||Griffiths, Peter (Portsmouth, N)|
|Butterfill, John||Grylls, Sir Michael|
|Carlisle, John (Luton North)||Grylls, Sir Michael|
|Carlisle, Sir Kenneth (Lincoln)||Gummer, Rt Hon John Selwyn|
|Carrington, Matthew||Hague, Rt Hon William|
|Carttiss, Michael||Hamilton, Rt Hon Sir Archibald|
|Cash, William||Hamilton, Neil (Tatton)|
|Channon, Rt Hon Paul||Hampson, Dr Keith|
|Chapman, Sir Sydney||Hanley, Rt Hon Jeremy|
|Churchill, Mr||Hannam, Sir John|
|Clappison, James||Hargreaves, Andrew|
|Clark, Dr Michael (Rochford)||Harris, David|
|Clarke, Rt Hon Kenneth (Ru'clif)||Haselhurst, Sir Alan|
|Clifton-Brown, Geoffrey||Hawksley, Warren|
|Coe, Sebastian||Hawksley, Warren|
|Colvin, Michael||Hayes, Jerry|
|Congdon, David||Heald, Oliver|
|Conway, Derek||Heath, Rt Hon Sir Edward|
|Coombs, Anthonoy (Wyre For'st)||Heathcoat-Amory, Rt Hon David|
|Coombs, Simon (Swindon)||Hendry, Charles|
|Cope, Rt Hon Sir John||Hicks, Robert|
|Cormack, Sir Patrick||Higgins, Rt Hon Sir Terence|
|Couchman, James||Hill, James (Southampton Test)|
|Cran, James||Horam, John|
|Currie, Mrs Edwina (S D'by'ire)||Howard, Rt Hon Michael|
|Curry, David (Skipton & Ripon)||Howell, Rt Hon David (G'dford)|
|Davies, Quentin (Stamford)||Howell, Sir Ralph (N Norfolk)|
|Davis, David (Boothferry)||Hughes, Robert G (Harrow W)|
|Day, Stephen||Hunt, Rt Hon David (Wirral W)|
|Deva, Nirj Joseph||Hunt, Sir John (Ravensbourne)|
|Devlin, Tim||Hunter, Andrew|
|Hurd, Rt Hon Douglas|
|Jack, Michael||Richards, Rod|
|Jackson, Robert (Wantage)||Riddick, Graham|
|Jenkin, Bernard||Robathan, Andrew|
|Jessel, Toby||Roberts, Rt Hon Sir Wyn|
|Johnson, Smith, Sir Geoffrey||Robertson, Raymond (Ab'd'n S)|
|Jones, Gwilym (Cardiff N)||Robinson, Mark (Somerton)|
|Jones, Robert B (W Hertfdshr)||Roe, Mrs Marion (Broxbourne)|
|Jopling, Rt Hon Michael||Rumbold, Rt Hon Dame Angela|
|Kellett-Bowman, Dame Elaine||Sainsbury, Rt Hon Sir Timothy|
|Key, Robert||Scott, Rt Hon Sir Nicholas|
|King, Rt Hon Torn||Shaw, David (Dover)|
|Kirkhope, Timothy||Shaw, Sir Giles (Pudsey)|
|Knapman, Roger||Shepherd, Sir Colin (Hereford)|
|Knight, Mrs Angela (Erewash)||Shersby, Sir Michael|
|Knight, Rt Hon Greg (Derby N)||Sims, Roger|
|Knight, Dame Jill (Bir'm E'st'n)||Skeet, Sir Trevor|
|Kynoch, George (Kincardine)||Smith, Tim (Beaconsfield)|
|Lait, Mrs Jacqui||Soames, Nicholas|
|Lang, Rt Hon Ian||Spencer, Sir Derek|
|Lawrence, Sir Ivan||Spicer, Sir James (W Dorset)|
|Legg, Barry||Spicer, Sir Michael|
|Leigh, Edward||Spink, Dr Robert|
|Lennox-Boyd, Sir Mark||Spring, Richard|
|Lester, Sir James (Broxtowe)||Sproat, Iain|
|Lidington, David||Squire, Robin (Hornchurch)|
|Lilley, Rt Hon Peter||Stanley, Rt Hon Sir John|
|Lloyd, Rt Hon Sir Peter (Fareham)||Steen, Anthony|
|Lord, Michael||Stephen, Michael|
|Luff, Peter||Stern, Michael|
|Lyell, Rt Hon Sir Nicholas||Stewart, Allan|
|MacGregor, Rt Hon John||Streeter, Gary|
|Mackay, Andrew||Sumberg, David|
|Maclean, Rt Hon David||Sweeney, Walter|
|Mcloughlin, Patrick||Sykes, John|
|McNair-Wilson, Sir Patrick||Tapsell, Sir Petr|
|Madel, Sir David||Taylor, Ian (Esher)|
|Maitland, Lady Olga||Taylor, John M (Solihull)|
|Malone, Gerald||Taylor, Sir Teddy (Southend, E)|
|Mans, Keith||Temple-Morris, Peter|
|Marland, Paul||Thomason, Roy|
|Marlow, Tony||Thompson, Sir Donald (C'er V)|
|Marshall, John (Hendon S)||Thompson, Patrick (Norwich N)|
|Martin, David (Portsmouth S)||Thornton, Sir Malcolm|
|Mawhinney, Rt Hon Dr Brian||Thurnham, Peter|
|Mellor, Rt Hon David||Townend, John (Bridlington)|
|Merchant, Piers||Townend, Cyril D (Bexl'yh'th)|
|Mills, Iain||Tracey, Richard|
|Mitchell, Andrew (Gedling)||Trend, Michael|
|Mitchell, Sir David (NW Hants)||Trotter, Neville|
|Moate, Sir Roger||Twinn, Dr Ian|
|Monro, Rt Hon Sir Hector||Vaughan, Sir Gerard|
|Needham, Rt Hon Richard||Viggers, Peter|
|Nelson, Anthony||Walden, George|
|Neubert, Sir Michael||Walker, Bill (N Tayside)|
|Newton, Rt Hon Tony||Waller, Gary|
|Nicholson, David (Taunton)||Ward, John|
|Norris, Steve||Wardle, Charles (Bexhill)|
|Onslow, RT Hon Sir Cranley||Watts, John|
|Oppenheim, Phillip||Wells, Bowen|
|Ottaway, Richard||Whitney, Ray|
|Page, Richard||Whittingdale, John|
|Paice, James||Widdecombe, Ann|
|Patnick, Sir Irvine||Widdecombe, Ann|
|Patten, Rt Hon John||Wiggin, Sir Jerry|
|Pattie, Rt Hon Sir Geoffrey||Wilkinson, John|
|Pawsey, James||Willetts, David|
|Peacock, Mrs Elizabeth||Wilshire, David|
|Pickles, Eric||Winterton, Mrs Ann (Congleton)|
|Porter, Barry (Wirral S)||Wolfson, Mark|
|Porter, David (Waveney)||Yeo, Tim|
|Portillo, Rt Hon Michael||Young, Rt Hon Sir George|
|Powell, William (Corby)|
|Rathbone, Tim||Tellers for the Noes:|
|Redwood, Rt Hon John||Mr. Timothy Wood and|
|Renton, Rt Hon Tim||Mr. Gyles Brandreth.|
That this House congratulates the Government on the rigorous approach it is taking towards all public expenditure, including that of local government; commends the clarity of their approach towards taxation and the funding of local services; and urges local authorities to make the most efficient use of the resources available.