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Local Taxation

Part of the debate – in the House of Commons at 6:48 pm on 4th July 2005.

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Photo of Phil Woolas Phil Woolas Minister of State (Local Government), Office of the Deputy Prime Minister 6:48 pm, 4th July 2005

The hon. Gentleman has had his chance to put his point of view. My right hon. Friend the Minister of Communities and Local Government quoted the then shadow Chancellor on this point, and that remains on the record.

I should like to answer some of the points raised in today's debate. I hope hon. Members across the Chamber will join the Government in our campaign to improve the take-up of council tax benefit. I do not doubt that many of the problems that have been mentioned are real ones for Member's constituents—I recognise their credibility in that regard—but they could in many cases be addressed by better take-up of that benefit. My right hon. Friend the Secretary of State for Work and Pensions is working very hard on a comprehensive programme to improve that take-up, particularly among pensioners.

The policy of Sarah Teather, who spoke on behalf of the Liberal Democrats, was teased out, not least by Sir John Butterfill, the Chairman of the pension trustees. I can see that he retains that position—at least, I hope he does because his grasp of finance has clearly not diminished since the election. Frankly, he demolished the Liberal Democrats' case for a comprehensive local income tax, and he addressed very well the questions of how the tax would be assessed, how resource equalisation should be met, how the area cost adjustment should be taken forward, and how the council tax collection rates could be matched with equal collection rates for local income tax.

The hon. Member for Brent, East did clarify one point. Perhaps inadvertently, she said that she hoped that the balance of funding would shift from 30 per cent. local and 70 per cent. national, as it is now, to 70 per cent. local and 30 per cent. national. My research has quickly shown that that would result in an increase of 10.6p on income tax. That figure is winging its way to the Labour committee rooms in Cheadle even as we speak. The good work force of the Woodford BAE Systems plant in Stockport will now know that not only could they be paying more income tax depending on who they were working alongside, but that it could go up by 10.6 per cent. That is an amazing figure.

I am delighted to pay tribute to my right hon. Friend Mr. Raynsford who, with typical politeness, has passed me a note apologising for the fact that he cannot be here for the end of the debate. I think it was Mr. Pickles who urged Members to read my right hon. Friend's articles in the "Municipal Journal". I can tell the hon. Gentleman that, however hard he has been reading them, he has not been reading them half as hard as I have. I congratulate my right hon. Friend on them.

On a serious point, my right hon. Friend said that the goals of local government finance policy were greater certainty, greater equalisation, incentives for high-quality delivery of local government services, and the sustainability of long-term funding with equal, if not greater, emphasis on expenditure control, both through the Gershonefficiencies—the successes of which my right hon. Friend the Minister of Communities and Local Government has already reported to the House—and through macro-expenditure decisions. In the coming Session, we will debate the three-year settlement that we intend to fulfil to bring about that greater certainty and stability.

I should like briefly to reply to some of the constituency points raised. I congratulate Mr. Turner on his new appointment as Conservative spokesperson on voluntary affairs. He had great fun attacking the Liberal Democrats on the Isle of Wight—an easy target, but he had great fun none the less. I must point out to him, however, that his own council has recently received a 5.8 per cent. increase in its grant from central Government, and above-inflation increases for the past eight years running. I invite him to give the money back if he does not want it, but I suspect that there will not be a cheque in the post to my right hon. Friend the Minister of Communities and Local Government.