New Clause 19 — Abolition of Capping Powers

Part of Local Government Bill — [1st Allotted Day] – in the House of Commons at 6:15 pm on 5 March 2003.

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Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Shadow Spokesperson (Communities and Local Government) 6:15, 5 March 2003

The debate has been interesting and I listened with care. I fully accept that Conservative Governments in the 1980s used capping powers against some of the most profligate authorities—mostly Labour controlled—that were wasting taxpayers' money outrageously. There was, and is, another problem—in some authorities, the majority of council tax payers do not pay the full amount of council tax, so they have an interest in their council providing ever more subsidised services. One could argue that those who pay the council tax in full need the protection of capping. On the other hand, the Conservatives strongly support the principle of devolving as much power as possible to the lowest possible local level. Provided that the ratio of the highest to the lowest band of 3:1 is maintained so that council tax cannot be unfairly skewed to the top band or two, the Government have plenty of powers to force poorly performing authorities to restore their services to a reasonable and cost-effective level. Many more powers, for example, have been given to the Secretary of State in the Bill.

We have complained about the Bill's centralising tendency, but one consequence is that the Secretary of State has many more powers to deal with councils that overstep the mark, waste money and provide poor services to local people. The Government have powers, including one involving the Audit Commission, over the comprehensive performance assessment and star rating that have been introduced, and ultimately they can send in officials to run council functions or, indeed, the council in cases of grossly incompetent management. Such powers have been exercised over Walsall council. On the other hand, it will be interesting to see what the Government will do about one of the top-performing councils—Wandsworth. It would be nonsense if a top-rated council in the Government's new comprehensive performance assessment and star rating were capped because it tried to maintain local services.

While we fully support the Liberals' aspiration and aim of getting rid of capping, it is difficult to see how they can do so under the Government's unfair and skewed mechanism for funding local authorities. We are keeping an open mind, and I must tell the Liberal Democrat spokesman that although I have considerable sympathy with his new clause, regrettably I cannot support it tonight as we need to consider the matter in greater detail. With those few remarks, I wait with interest to hear what the Minister has to say.