I beg to move,
That this House
notes that council tax has soared by 92 per cent. across England since 1997, with even higher increases in Wales due to the Government's council tax revaluation;
notes with concern proposals in the Chancellor's town hall finances report for regular council tax revaluations, higher council tax bands and new taxes for the collection of household rubbish;
observes that frontline services such as weekly rubbish collections, social services and libraries are under increasing pressure;
and calls for local people to be given a greater say in the provision of local public services through democratically elected local government rather than unaccountable regional government.
Just over a month has passed since Sir Michael Lyons published his report on local government finance. In the absence of Government time to debate its contents and implications for local government, I am pleased that we have that opportunity today.
I agree with this much of the Government amendment: there has been a
"transformation in local government since 1997".
I put that down to the rise in the number of Conservative councillors from 4,550 in 1997 to 8,529 in 2007 and to the rise in the number of Conservative-controlled councils from just 24 in 1997 to 167 today. Had the amendment finished there, I would have been tempted to support it.
I note that the motion condemns changes to rubbish collections. However, no doubt the hon. Lady is aware that 61 Conservative-controlled councils have introduced fortnightly rubbish collections, presumably as a worthy attempt to increase recycling. Is she condemning them?
I will come to that subject. However, I should share with the hon. Lady the fact that, unfortunately, we need to be careful about the information that the Government publish on that subject. A parliamentary answer that I received listing the councils that had moved to fortnightly collections cited a number of councils that have not done that, including King's Lynn and West Norfolk borough council and Ashford borough council, which have no plans to do so. She might like to talk to Government Departments about the accuracy of the information that they provide.
I commend Sir Michael for the tenacity and rigour with which he carried out the review. There are elements of the report with which we strongly disagree, which I shall come to shortly, but I shall start with those aspects that we welcome.
We welcome the recommendations for more transparency in the way in which Whitehall funds local government; that is something for which we have long been calling. Likewise, we have long supported giving communities the final say on the type of leadership structure that they have. It makes perfect sense to give local authorities greater involvement in health and well-being—indeed, some councils such as Kent county council already have that greater involvement.
The main focus of Sir Michael's work was the thorny issue of local government finance. One of the first things he did was dismiss local income tax as a viable alternative. For me, the most telling line in the report is the one in which he said that a local income tax
"might mean substantial increases in tax for the working population."
He also set out why a local income tax would not necessarily be a fairer tax: it is because income is not always the sole determinant of wealth. Those are failings that Members of all parties have acknowledged, including the Liberal Democrats.
It is a symptom of how controversial local government finance has become that the Government tried so hard for so long to bury the report. The review took nearly three years, had a wage bill of more than £300,000 and was subject to numerous changes in remit, but the final indignity was that the Chancellor tried to bury its publication on the day of the Budget. He wanted to bury the report because he knew that it would confirm people's worst fears about the tax-raising appetite of the Treasury.
Surely Ministers know that there is real, palpable fury out there about the level of the council tax. No matter what Ministers say publicly, they know that responsibility for a 92 per cent. rise lies firmly at the door of the Treasury. People who paid just £57 each month on a band D property in 1997 are now paying £110. Taxation in any form is never popular, but if council tax was a mild irritation in 1997, it has become a gaping sore today.
One of the local authorities controlled by the hon. Lady's party is Dudley metropolitan borough council, which serves part of the area that I represent. Dudley council has received record resources under the Labour Government and this year its settlement is above the average for metropolitan authorities, yet it is still increasing the council tax by 5 per cent. while cutting services. It is closing swimming baths and cutting services for the elderly; it is even cutting school transport for special needs schoolchildren. Is that what the Conservatives mean when they talk about the proceeds of growth? Will she condemn the record of Dudley council, which is receiving record resources and cutting services?
It was hardly worth giving way for that rather lengthy intervention. If the hon. Gentleman waits, perhaps he will come to understand better just how many burdens have been placed on councils such as Dudley council and how shortfalls in NHS funding have put huge pressure on local councils. I shall address those points further later in my speech.
It defies belief that the Government thought that the 92 per cent. rise in council tax would go unnoticed. Ironically, council tax is the most visible of all tax bills. It is not deducted automatically at the point of income or added automatically at the point of sale. It is worth noting that if council tax rises were commuted into income tax, it would be equivalent to a 4p rise.
We now know that there are plenty of people who are prepared not to pay, and plenty more who simply cannot pay. The only solution that the Government offer those who cannot pay is an application form for so-called benefits. The application form is 40 pages of intrusive questions that actively deter a proud generation of pensioners who find the term "benefits" an indignity. As Sir Michael Lyons himself says,
"The term benefit has a particular resonance, which may prevent some people from taking up their entitlements."
In the words of Age Concern,
"Council tax benefit is still the most unclaimed benefit of all, with up to 2.2 million older people missing out on up to £1.4bn each year".
I am not cynical, but I do wonder whether it suits the Treasury to have such a low uptake. What a way to treat pensioners. Not only is the Chancellor complicit in the collapse of people's pensions, but a third of the increase in the state pension is now clawed back by the Treasury through increased council tax, yet instead of finding ways of reducing the tax burden, the Government are considering recovering council tax after people have died. A typical pensioner drawn into that macabre "pay later" scheme could leave a debt of as much as £64,000 after 20 years.
Pensioners and people on fixed incomes are not the only ones suffering. Hard-working families all have to budget hard for a council tax bill that escalates every year. In fact, we are now so conditioned to accept inflation-busting rises that the Government congratulate themselves if rises of less than 5 per cent. are introduced.
Is the hon. Lady's main complaint that the Government have not changed the council tax benefit system sufficiently since her party introduced it at the beginning of the 1990s? If so, what specific proposals does she have to reform the council tax benefit system to remove all the problems that she is talking about?
I have been an MP for 10 years, and in all that time the hon. Gentleman's party has been in office. I have heard the Government say repeatedly that they want to improve council tax benefit and I have seen constant hand-wringing, yet I still see no real progress. The Age Concern figures confirm that. Sir Michael Lyons makes a good point: the very word "benefit" is off-putting. The hon. Gentleman's party, which is in government, commissioned that mighty report; it is for Government Ministers to answer the questions that he puts to me.
I am dismayed that the Government's attitude is to portray a 5 per cent. tax increase as an achievement. That tells me that there is real poverty of ambition on the Government's part. An increase of what the Government would term a "mere" 5 per cent. is still a massive hike when we consider that the overall level of council tax has virtually doubled since 1997. Ministers' constant refrain is that it is all the fault of local government, but nobody believes that. If Ministers honestly believe that 92 per cent. rises are simply the result of profligate town halls, they must be in cloud cuckoo land. However, some councils are more prudent than others, and the statistics show that Conservative councils cost people less. On an average band D property, they cost £55 less than Labour councils, and £84 less than Liberal Democrat councils.
The council tax has been abused, wasted and used to fill the Treasury's coffers. This year's Budget confirmed that receipts to the Treasury have risen by 114 per cent. since 1997, bringing the total tax take to £23.5 billion for 2007-08.
I had rather hoped that we might get an intelligent defence of Liberal Democrat tax plans from the hon. Gentleman. He clearly was not present on the occasions when we debated council tax and the aspects of it that need to be reformed. If he bides his time, he will find that I make a number of constructive suggestions later in my speech.
The remaining council tax that is not drawn into the Treasury is used to fund the Deputy Prime Minister's largesse towards the unwanted regional agenda, to bankroll an inspection regime that has grown like Topsy since 1997 and to make up the shortfalls from NHS cuts. Is it any surprise that Sir Michael Lyons commented at the launch of his report that
"council tax is not 'broken', but...has been put under too much pressure"?
Against that backdrop, the House will understand why we want to debate the matter.
I accepted an intervention from the hon. Lady at the beginning of my speech and, if she will bide her time, I shall come on to the question of refuse collection.
The report contains a series of additional ways of taxing people that the Government have refused to rule out. The only option ruled out so far is the bed tax on British holiday makers, which will certainly please my hon. Friends the Members for Brentwood and Ongar (Mr. Pickles) and for East Devon (Mr. Swire), who campaigned against the proposal in our seaside resorts. That brings me on to the proposals that the Government have not ruled out, including the call for additional tax bands at the upper end and for changes to the ratio between the bands. In particular, appendix C models changes from the present 3:1 ratio to 5:1 and even 10:1. To put that in layman's terms, on a band D property, the bill would go up by as much as £119. That is the tip of the iceberg. Rebanding cannot take place without revaluation, and revaluation will mean that bills go up. That is exactly what happened in Wales. Despite assurances from Ministers that the revaluation would be revenue-neutral, four times as many homes moved up a band as went down, and the average bill went up by 10 per cent. in the first year.
We fear that that would happen in England. No one is under any illusion about how expensive and intrusive revaluation is. [ Interruption. ] Regardless of whether people own their home or rent it, they will be taxed on home improvements and the quality of their neighbourhood. [ Interruption. ]
Thank you, Mr. Deputy Speaker. To make the situation worse, Sir Michael Lyons has recommended not just one revaluation but regular revaluations, so I wonder how many harassed husbands will have the perfect excuse never to do any DIY again. Every detail of people's homes is at risk of being photographed, catalogued and taxed. Anyone not complying with the inspections will face a fine of £500, which is totally unacceptable.
People are left asking where all the money is going. I hear the constant refrain, "How can it cost so much to empty my bins?" The irony is that the Government are heavy-handing local authorities into cutting rubbish collections. Let us be quite clear: the Government have created a situation in which council tax bills have doubled and rubbish collection services have halved. The reality is that council tax pays for a great deal more than refuse collection, but it is illustrative of people's sense of unfairness. Crucially, council tax helps, too, to pay for social care, but it is in social care that the biggest and most frightening crisis is under way.
"This isn't a crisis waiting to happen, this is a crisis already here".
The shortfall in social care this year is £1.8 billion. The impact of that shortfall is felt acutely by families caught between meeting the costs of bringing up children and paying the top-up fees for their parents' care. What a cruel position to put people in.
The hon. Lady has described a rising demand for local government services, which have been met in recent years partly by the increased grant from central Government and partly by council tax, which explains some of the numbers to which she referred. How would she meet the costs of additional demand for social care, given that the shadow Chancellor has talked about cutting funding for a range of services and sharing the proceeds of growth?
Apart from the fact that that shows a remarkable lack of understanding of the way in which many prudent Conservative councils have striven hard to maintain front-line services, notwithstanding central Government grant settlements which, in many cases, are inferior to those of councils controlled by other parties, the hon. Gentleman shows a marked lack of understanding about the kind of moral judgment that I have tried to make. I genuinely believe that the amount of money wasted on the whole unelected regional empire created by the Deputy Prime Minister would be much better spent on front-line services, particularly in adult social care.
In the face of the crisis in local government funding, I used to think that the Government were guilty of standing idly by, but in fact, that is not true. The Government are actively making the situation worse. Two in three councils report that NHS cuts have had a direct impact on social care provision. While councils strain every sinew to make efficiency savings at the Government's request, to the tune of £220 million last year, the Government simply load them with more cost burdens, form filling and money-draining bureaucracy. The latest example is the Government's decision to embark on a round of costly and unpopular restructuring. Have the Government become so detached from reality that they think that restructuring should be a priority? If that is the case, frankly, Ministers ought to get out a bit more. Sir Michael Lyons was right to say:
"Reorganisation is not, in most cases, likely to provide either a theoretical or practical solution to the challenges we face."
That is the view of the man whom the Government commissioned to look into the future of local government. When I was canvassing for the local elections, no one spontaneously asked me for the restructuring of their local council.
Is my hon. Friend aware that my constituents hope that the Government's crazy proposals to go for a unitary structure of Wiltshire will be proved illegal? What really makes them angry, however, is the fact that there has been no consultation, no referendum, and no boundary review, given that the Boundary Commission did not request the change. It is, in fact, taking democracy away from local people, which is exactly the opposite of our localisation agenda.
My hon. Friend makes a very good point indeed. He was a Member of Parliament when the Conservatives were in government, so he will remember that in marked contrast, there was a public consultation involving every household, which has not happened under the Government's proposals.
The Secretary of State proposes to restructure local councils, and where that has taken place, I see very few attempts at genuine consultation. Should the Secretary of State not hold referendums? Is that not the most effective way of gauging public opinion, as was demonstrated by the referendums held in Shropshire? May I ask her whether she is confident of the legality of abolishing those councils? If the restructuring is found to be legal, which is a big "if", given the pending legal challenge in Shropshire, has she given any thought to the cost implications for council tax payers? Based on research by leading academics, the additional cost of restructuring could be as much as £345 per council tax-paying household.
The hon. Lady is making a case against the restructuring of local government. If it is indeed as mistaken as she suggests, will she explain why almost half the councils seeking restructuring are Conservative-controlled?
The hon. Gentleman ignores the point that three years after beginning a review of local government finance, the reviewer concluded that restructuring was an impractical way of dealing with the challenges faced by local government. I suggest that the hon. Gentleman wait for the Secretary of State to respond on the question of why she is at odds with the view of Sir Michael Lyons in his review of the future of local government finance.
The Minister may argue that the measure was taken at the request of Conservative councils, but he fails to point out that if those councils do not comply with Government proposals, they have been threatened that they will have to find savings, which will be imposed on them by the Government. Does my hon. Friend agree that Government Ministers will not have any power to single out individual councils to make the cuts that they have identified in that process?
My hon. Friend is owed an answer by the Government. On previous occasions we have had no answer to the question of where in legislation there is the power to enable the Government to force the recovery of costs on councils that refuse to comply with the Government's model of restructuring.
Even more astonishing to all of us watching the way in which the Government have imposed their will on local authorities is the fact that in Shropshire, of all places, the referendum produced a quantifiable result showing that there was no broad measure of support for restructuring, yet flying in the face of that opposition to restructuring, the Government allowed the unitary bid to proceed. That is difficult for us to understand and accept.
People are being asked to pay more in taxation for less representation, without being properly consulted in the first place. Making that sound appealing must be the ultimate in political alchemy. How on earth does that square with localism? If we are serious about getting decision making closer to the people, surely we should be strengthening local councils, rather than abolishing them. Restructuring is about taking decision-making further away from local communities, just like that other great folly in local government, regionalism.
Is the Secretary of State content with her Department's legacy being one of forcing unwanted and unelected regional government on people against their will, abolishing people's local council against their will, and then charging them a 92 per cent. premium on their council tax bill for the pleasure?
Labour has played fast and loose with local government. The Deputy Prime Minister sold it down the river for the sake of his unelected regional empire, the Environment Secretary spent his time entreating chief executives to join him in abolishing one another's councils, and the Chancellor has spent a decade reducing councils to mere tax collection agencies, rather like a latter-day sheriff of Nottingham. I do not want our country to be governed like that.
Does my hon. Friend accept that in my constituency, Guildford, the thing that makes people most angry is not only the exorbitant council taxes that they are now paying, but the feeling that they have no impact on what happens in local communities, that decision making is being taken further and further away, and that the Government are dictating to local councils and neatly hiding behind local decision-making when they choose to?
My hon. Friend is right to highlight the fact that the Government have made the council tax the ultimate stealth tax and they are reaping the result of that decision. Shortly, at the local elections, we shall see the very strong public response to that.
I am in an odd seat tonight, but none the less I am on the Conservative Benches, and I hope that after my intervention my hon. Friend will still think I am a Conservative. Will she indicate whether our party will be prepared to return to individual local authorities the total income from the business rate? Local authorities have a huge responsibility to respond to the needs of local commerce and industry. At present the distribution of the business rate is anything but transparent, and Sir Michael Lyons believes it should be more transparent.
My hon. Friend has a longer political history than I do, so he will well remember the original reasons why the Conservative Government took the business rate to the centre. Businesses were exposed to increases in rates which made it virtually impossible for them to carry on their businesses. The relationship of trust was damaged by profligate, often Labour, councils. For that reason, a decision was taken to introduce a uniform business rate. The relationship of trust between local government, central Government and the business community still needs to be rebuilt.
That subject was addressed in the Lyons review, but the Government have already made it clear that at present they have no intention of repatriating the business rate to local government. That was their response to their own review. Rebuilding that relationship of trust between local government and business is of the utmost importance, because the business community is one group in our society that faces the dilemma of having taxation levied at the centre without one-for-one representation.
I am grateful to my hon. Friend, who is making a powerful case against the waste and unnecessary spending forced on local government by central Government. Will she confirm that there is over £1 billion a year of unnecessary expenditure on conforming with the performance targets and monitoring requirements of central Government, which shows how little they trust their own councils, let alone good Conservative ones? Would not one way of restoring trust be to strip that away so that the money can be returned to taxpayers or put into services? If people have a badly performing Liberal or Labour council, they can get rid of it on
I thank my right hon. Friend for his intervention. He points out clearly that a whole industry of inspection that did not exist before 1997 has been imposed on local government from the centre and has cost council tax payers £1 billion in hard- earned money. That money would be much better spent, as I suggested earlier when the question of social care came up, by being returned to the front line, where it is much needed. For the avoidance of doubt, we have said on many occasions, and I will repeat it again, that we would scrap the comprehensive performance assessment and best value, because we believe that that money could be better used elsewhere.
I want local government to be the real engine room of local decision making, not a mere agent of Whitehall. I want town halls to have freedom and discretion to spend taxpayers' money in a way that reflects the needs of local communities. That is why we have proposed the Sustainable Communities Bill, a Bill which the Government rather complacently see as unnecessary. Giving local communities the right to decide the spending priorities for their area is necessary. It is also necessary to give planning decisions back to town halls, rather than regional quangos and Whitehall Departments. Crucially, it is necessary to get council tax back down to sustainable levels. When it was first introduced, people were not protesting on the streets and pensioners were not going to prison.
Through their abuse, the Government have made the council tax a stealth tax that is extremely unpopular. It is not an unreasonable aspiration to return the council tax to sustainable levels, and there are significant savings in wasteful bureaucracy that could be directed to the front line. What we need is a change in the culture of government, from one that sees local government as an obstacle to one that sees local government as a solution.
I fear we may have an intervention from a party that does not understand how local government, rather than regional government, is a solution offering the localism that is much needed in this country.
I know all about local government. My Teignbridge district council, led by the Liberal Democrats, has managed only a 2 per cent. council tax rise during the past four years compared with the Tory's 32 per cent. over the previous years. The hon. Lady has just said that she wants to see the council tax cut to a reasonable level. We would all agree with that. Where will the money come from?
The hon. Gentleman clearly has not been listening to the debate because I have explained that on at least three occasions, and most explicitly I quantified the savings that would accrue from scrapping the comprehensive performance assessment and best value. That currently costs taxpayers £1 billion a year—£1 billion that could be used much more effectively and is urgently needed in areas such as adult social care.
It is clear to me that after 10 years of the Government eroding local decision making and fleecing council tax payers, the only way of creating that change in local government is through a change in national Government. That is why I invite voters to use
I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
"notes the transformation in local government since 1997 and the dramatic improvements in performance across a wide range of front-line services;
recognises the achievements of local authorities and their staff with a record number of authorities awarded three or four stars for their performance by the Audit Commission in 2006;
contrasts this with the under-investment and poor morale that the Government inherited in 1997;
applauds the Government's radical and devolutionary local government White Paper as the next stage in the reform of local public services, strengthening local leadership and partnership working and empowering local communities;
believes that the measures set out in the Local Government and Public Involvement in Health Bill will strongly promote sustainable communities, improving local environmental quality and the quality of life of local residents;
congratulates the Government on the way in which it is providing stable funding for local government, increasing overall grants to councils by 39 per cent. in real terms since 1997 with the average council tax increase in England at 4.2 per cent. for 2007-08;
and therefore supports the Government in implementing the White Paper and the Bill."
Life in communities across England has improved enormously over the last 10 years. There are more jobs, our streets are cleaner and greener, and vital public services have improved. Those are real achievements, and the Government are proud of them. Local government should be proud of the role that it has played, too, leading the way in many areas. So I welcome today's debate on the future of local government.
In a moment.
But I am surprised that the Tories have launched this debate with so little to say. I had hoped that Mrs. Spelman would take this opportunity to enlighten the House on the Conservative vision for the future of local government. Sadly, we are none the wiser on several key issues. I should like to ask three simple yet vital questions.
First, what exactly is the Opposition's policy on council tax? Keep it? Scrap it? Reform it? We are none the wiser. Secondly, the Opposition claim to be in favour of devolution. So why did the hon. Lady, her colleagues and the Front-Bench team direct all Conservative councillors to oppose any restructuring, no matter what the council tax benefits to people who live in those areas? Should not those decisions be left to local councillors themselves?
In one moment.
Thirdly, the hon. Lady's party claims to want to give people more control over what happens in their local areas, so why does it not support the Government's devolutionary local government Bill? The hon. Lady seems to suggest that the answer to local government finance lies in scrapping regional assemblies, which have an administration cost of £21 million a year, and scrapping the comprehensive performance assessment, which is being replaced in the local government Bill. I am afraid that without the answers to the questions that I have set, the Opposition simply do not have a clear vision for the future, and in the absence of that, we should judge them on their past and present record, which I shall come to in a moment.
Will my right hon. Friend ask Mrs. Spelman a fourth question, which is: in a debate where we should be celebrating local democracy and local decision making, did she really just say that the public should vote in a national referendum on the performance of the Government in local elections? That is what I heard her say, and that to me is a complete contradiction of the whole essence of local democracy and its purpose.
My hon. Friend, who has a strong track record in these areas, makes an absolutely vital point. The Opposition need to decide whether or not they trust local councils.
But we should look for a moment at what the Opposition did to local government when they were in power. Perhaps Conservative Members would like to intervene on that point.
I should like to intervene on the question of trusting the people and believing that individuals have a right to say how they want their local government to be run. Where they take a ballot, the Government completely ignore it. Does the Secretary of State believe in local democracy or not?
I know that the hon. Gentleman is very concerned about the issues in Shropshire, but I remind him that it is the Tory-controlled council there that has proposed to Government that it should be able to run a unitary council. It is the Tory-controlled council in Shrewsbury that has decided that it will not go down that route. Perhaps it should pick up the phone and call Dave, rather than have these arguments in the House. Somewhere, someone needs to sort these things out.
The Tories' record on local government when they were in power speaks for itself. Yesterday, Mr. Cameron acknowledged that the 1980s had brought centralisation of power and control. But he did not take the opportunity to mention the under-investment, the neglect, or the sheer arrogance that characterised the Tory years. He certainly did not mention the devastating impact on all our communities. The Opposition may not care to remember, but millions of people throughout the country do. They remember the years of diktat and demoralisation. They remember the funding cuts. Even in their last four years, the Tory Government slashed funding by 7 per cent. in real terms. Millions of people remember schools with leaking roofs and outside toilets. They remember the contempt for local democracy. They remember Nicholas Ridley's maxim on councils: "The more they squeal, the more I know I'm right." They remember Tory Ministers' disdain for the local government work force. They remember the thousands of committed workers who had to fight for their pensions and holidays as a result of compulsory competitive tendering. We all remember the low point of the poll tax, with councils and Government locked in bitter opposition and people rioting on the streets. That is the history. Those are the facts of what the Conservative party did to local government when it was in power.
I remind the hon. Gentleman that according to the figures of the hon. Member for Meriden, the Conservative party now controls 167 councils out of a total of more than 450. I suggest that local people sometimes have some common sense.
If it is true that the general public believe that the Conservative years were so catastrophic and the Labour years so uplifting, how many gains does the right hon. Lady expect to make for Labour councils in 10 days' time?
May I just remind the right hon. Gentleman, whom I hold in great admiration, that in areas such as Manchester and Sheffield there is still not one single Conservative council, for the very good reason that Labour has revitalised the towns and cities in the north in a way that has never been managed before.
The right hon. Member for Witney tries to convince us that things have changed. But we need only look down the river to Hammersmith and Fulham to see the Thatcherite flame still burning bright today. The local Conservatives are proud of their first budget; proud of cutting essential services to support a tax cut; proud of making meals on wheels £200 a year more expensive for some of society's poorest and most vulnerable people; proud of making it harder for the elderly and sick to get home help.
I actually went to that council meeting and I have to tell the right hon. Lady that the Labour group did not vote against that budget cut. I also have to tell the right hon. Lady that I heard the Labour leader of Hammersmith and Fulham say that they would have produced a lower council tax and they would have cut deeper.
If the hon. Gentleman is right, why is it that the Labour party in Hammersmith and Fulham is reporting the Tory-controlled council to the Audit Commission for the changes that it is making? I take it from the hon. Gentleman's response and from the resounding silence from the hon. Lady that this is the Tory future vision for local government—charges and cuts.
One of the reasons why it was a Tory gain might be that in their manifesto last year the Conservatives said that a Conservative council would not reintroduce home care charging, yet last week they proposed an £11 a week charge for the most vulnerable people who need home help. In other words: "Say something when you want to be elected, and when you get elected do exactly the opposite." Perhaps that is what we can expect on
Thank you, Mr. Deputy Speaker. I must make some progress with my speech.
It is clear that the Opposition do not like to talk about their record in power or when they were last in government. I can tell the House that we are proud of our record. In 10 years, Labour has transformed local government. We inherited services that were run-down, demoralised and starved of cash. Since 1997, we have increased funding to local councils by 39 per cent. in real terms. Our massive investment, together with the commitment of local government workers, has turned things around. Today, local government is not just up to the job: in many areas, it is leading public service reform. It is delivering results on the issues that really matter. Rates of recycling have more than tripled in the past eight years, antisocial behaviour is falling, 3,500 neighbourhood wardens are helping to cut crime on our estates, and the streets are getting cleaner. The Audit Commission shows councils improving year in, year out.
I remind my right hon. Friend of the appalling failure of Mrs. Spelman to condemn the activities of Dudley council, which, despite having received an above-average settlement this year, is increasing council tax by 5 per cent., cutting services for the elderly and special needs children, and even closing swimming baths. Will my right hon. Friend, on behalf of the House, condemn what Dudley's Conservative-controlled council is doing? Will she look at her diary to try to find an urgent opportunity to come to Dudley and see for herself the reality of Conservatives in power in Britain today?
In relation to my right hon. Friend's remarks about recycling, can she try to explain how the Conservatives square the circle whereby they wish to be environmentally friendly in encouraging recycling, yet, in their motion, cite weekly rubbish collections as a bad thing although that can be the most sensible way of encouraging people to recycle more and to have lower amounts of residual waste?
My hon. Friend makes an excellent point. I do not think that the hon. Member for Meriden can square the circle. On the one hand she talks about devolving real power to local councils and local people; on the other, she still seems to believe in central diktat from Whitehall. She cannot have it both ways.
I will make some progress.
Under this Government, we have had 10 years of local government going from strength to strength. That has paved the way for devolution to the town hall and from the town hall. Those are the principles behind the ambitious reforms set out in the White Paper that I published last year and in the Bill that is currently before the House. Our proposals are the culmination of many months' work and extensive consultation.
Now that local government has raised its game, the next stage is to give it greater freedom, greater discretion about how it meets its goals, and the opportunity to build places that people are proud to call their home. It is time for local government to empower its citizens and to give them a greater say over the services they want and how they are delivered. This is what our proposals achieve. That is why they have cross-party support in the Tory-led Local Government Association.
Let me remind the House of some of the measures that we are introducing. We are introducing the community call for action. Where people have concerns about a local issue, the call for action will help them to get a response from their council. It could be graffiti; it could be youth facilities: whatever the issue, local people will have a new way of getting things done. We are freeing local government to get on with the job by slashing red tape. We are strengthening local area agreements, which set out what councils and key partners will deliver for local people, and how. I believe that in the future they will be one of the great success stories of local government. We are trusting councils to understand the needs of local people, and giving them greater freedom to meet them.
Not at the moment.
Indeed, last week Mr. Pickles described local area agreements as "the future". I welcome his support. Does the hon. Member for Meriden agree with her hon. Friend, or does she still believe in the central diktat of the olden days?
The proposals in the White Paper and the Bill will make a real difference. They will help local government to take on the challenges of the 21st century. If the Conservatives support localism, as they say, why have they consistently opposed our Bill? Is it because they prefer rhetoric and photo shoots to the tough policy decisions that government is all about?
I thank the right hon. Lady for her generosity. I am a patient man.
Chris Mole made the sensible point that local elections are about local people making a local choice. If everything is so wonderful in the land of milk and honey under this Labour Government, why is the Labour party failing to contest 40 per cent. of all the council seats at the elections on
I do not recognise that figure, but I would ask the hon. Gentleman why the Conservatives have made no inroads whatsoever into any of the cities in the north.
I saw that the right hon. Member for Witney was in Dartford last week gathering rubbish; I read the report of his performance in The Times. The council leader explained how that event was set up:
"I can tell you 100 per cent. that the rubbish was on that site and was not brought in. In fact, we left it there a day longer than it should have been because we knew Cameron was coming."
That sums up the right hon. Gentleman's contribution to local services.
Does my right hon. Friend agree that part of the difficulty that the Conservatives have in getting people elected in the north, particularly in cities such as Manchester, might be the example of Tory-led Trafford council? Perhaps it is time to condemn that council, which is not prudent. It has not only increased its council tax by the largest amount in Greater Manchester—4.9 per cent.—but is making its citizens pay the council tax every month on days earlier than they are used to paying it, and has wasted money on the new council logo and £400,000 on consultants at the same time as closing two day care centres and an elderly people's home.
I certainly condemn the Tory councillors on Trafford council. It is worth reminding the House that those in Labour-controlled councils are seeing their council tax go up by much less than those in Tory-controlled councils throughout the country.
I must turn to the interest that the hon. Member for Meriden expressed in our council tax policy, as she made so much of the Lyons report in her speech. That gives me a chance to set the record straight. We have no plans to revalue properties in this Parliament. We have no plans to introduce new higher and lower council tax bands in this Parliament. We have no plans to replace bands altogether with a system based on the individual value of each home. The Tory policy on council tax seems to consist of tabling endless parliamentary questions about patios and bathrooms while dreaming up stories to scare people about spies in the sky and inspectors who are going to kick the door down. If one were to believe them, one would think that every home has a helicopter hovering above it taking pictures of patios and every bed has a home inspector lurking beneath it. One of my favourite parliamentary questions is the one tabled by the hon. Member for Meriden that asks what is the Valuation Office Agency's definition of a bathroom and whether a room with a shower but not a bath is classified as a bathroom.
People could be forgiven for having expected the hon. Member for Meriden to set out the Conservatives' policy on council tax today: would they keep it, would they scrap it, or would they reform it?
The Secretary of State is struggling, so I shall help her. Does she agree that any council candidate who supports a local income tax and implies that it will be cheaper is guilty of two sins of deception? The first is that council elections do not settle the introduction of a local income tax. The second is that it will not be cheaper.
I would not have drawn the House's attention to the hundreds of parliamentary questions that the hon. Lady tables if she had anything else to say about the council tax, but I am afraid that she has not. I waited for tonight's debate with great anticipation, but yet again I am none the wiser.
"an out-of-date tax base will mean that the credibility of council tax as a property tax will gradually be eroded"?
He says that he understands the Government's reasons for delaying the decision until after the general election. What are they?
The hon. Gentleman could not have expected me to be any clearer than I have been. We have no plans for revaluation in this Parliament. Michael Lyons is welcome to his view—after all, he prepared an independent report for the Government—but we will not revalue in this Parliament.
Local government plays a vital role in our communities. The Labour party has a clear, ambitious and workable vision for councils to thrive in future and a strong record on which to build. Political parties will ultimately be judged on results, not rhetoric, and on policies, not posturing. The warm words of Conservative Members count for nothing with those who remember the cold comfort that a Tory Government brought to councils.
Perhaps that is why the Conservative party is so poorly represented not only in major cities such as Liverpool, Manchester and Newcastle but in Scotland and much of Wales. If the Conservative party is serious about localism, it needs to match its words with action. If it is serious about making local services more responsive, Conservative councillors need to show it. If Conservative Members want to make a genuine difference, surely it is time they stopped scaremongering and supported the Local Government and Public Involvement in Health Bill. I invite them to do that now. There is no response.
The Secretary of State has ignored a major issue in the Bill about which we have had no comfort from the Government. She is willing to grant herself the power to direct councils to restructure. That is a draconian power, to which we strongly object. She knows that that forms the basis of strong opposition to the measure.
The hon. Lady considers that to be an incredibly important issue—so important that she did not raise it in her speech. She did not note the fact that the Tory-controlled Local Government Association understands the reason for the power, which is temporary, so that if local councils make unitary proposals, we can ensure that they are workable and coherent across the piece. If the inclusion of the power was the reason for her lack of support for the Bill, perhaps she will change her mind. I made a commitment at the time to table an amendment to restrict the power of restructuring and, together with the Local Government Association, we have now made clear our intention.
Soon, many people throughout the country will have a clear choice. For those who believe in investment over cuts, a clear vision for Britain's communities and a party that puts its money where its mouth is, there is only one choice—Labour on
Liberal Democrats greatly welcome the time that has been set aside for the subject of the debate. If we want a healthy democracy and a responsive and participative society, with effective and efficient services, we must have strong democratic institutions at every level, especially in local government. There could hardly be a better time to debate the future of local democracy and local government than 10 days before the biggest round of local government elections in England for four years, and on the eve of some historic local government elections in Scotland, for which a proportional voting system will be used for the first time.
This evening we have a chance to examine the competing plans of the political parties for strengthening and enhancing democracy and for better participation in our society. It is an opportunity to consider parties' plans for delivering effective local services and improving the well-being of our local communities.
It was therefore a genuine disappointment to be presented with the Conservative motion. The shadow Minister, Mrs. Spelman, did her best, but even her best could not disguise the fact that the motion contains only half an analysis of the problem, no diagnosis and no effective remedies. For long sections of her speech I thought that she was reading a succession of Conservative election leaflets. She paid little attention to the severe and serious problems that we should be addressing when we discuss the future of local government.
The Conservatives' first motion today took up only 18 lines on the Order Paper, and their second only nine lines. It is a pity that they did not find another few lines to add to their second motion to give us a clue, a faint hint or even the ghost of an inkling of what they believe should be done to ensure a secure future for local government.
It is interesting that Liberal Democrat Front Benchers oppose the Conservatives. In my constituency, the Liberal Democrats are in power on the council for the second time. The first time, they went into coalition with us when we temporarily lost control in 2002. Now, strangely enough, they are in coalition with the Conservatives after we temporarily lost power last year. Where do the Liberal Democrats stand?
The Liberal Democrats stand on our policies of fair local government services properly provided and service to the community. I am proud to say that we implement them in every part of local government where we have the power and opportunity to do that.
The hon. Member for Meriden, despite her best efforts, could not say what the Conservatives intended to do and we are therefore left with having to examine the Conservative party's record. That raises an important question. How on earth have the Conservatives got the cheek to table a motion on the future of local government given the huge part that they played in bringing it to its current plight? The hon. Lady is right that local government is over-centralised and prescriptive. In many ways, local government services and local democracy are diminished compared with 10 years ago, and especially 20 years ago. What exactly does she plan to do about that? What does she believe is wrong now?
We heard some of the things that the hon. Lady believes are wrong. Some were amusing. Apparently, revaluation is wrong. Let us consider what will happen in this place after the next general election. We believe that we know what the Labour party will do—it will revalue and change the council tax; we know what the Liberal Democrats will do—introduce a local income tax; but we have not the slightest idea what the Conservatives will introduce. They are against revaluation and rolling revaluation; they are against changing the bands; they want council tax to be cut; they want local government and local democracy to walk on water. The hon. Lady has evidently forgotten that the Conservatives were responsible for the Act of Parliament that introduced council tax, after they had abolished—after introducing—the failed poll tax. That very Act includes the provision for revaluation that she seems to be so against.
I am a bit surprised that the hon. Lady did not make the entirely different point that she rather doubted whether the Government could find enough inspectors to carry out all these revaluations of which she speaks. I have observed that a number of Conservative Members want to intervene. Who shall we take? I will take the hon. Gentleman at the back of the Chamber.
The hon. Gentleman has made it quite clear that it is his party's policy to have a local income tax. The flaw with it, apart from the cost, is that it needs a redistributive mechanism, because the tax base is not conveniently where one wants the funds to be distributed. What discussion has he had with the Inland Revenue and what does he believe the compliance cost of a local income tax would be? What confidence does he have in the Inland Revenue in respect of the redistributive element in the light of the mess that it made of the working families tax credit?
I am not sure whether the hon. Gentleman got right the way down the Conservative briefing on that point, but he certainly asked a number of interesting questions— [Interruption.] Let us be absolutely clear. The nature of the questions strongly suggests to me that he has not taken the opportunity of reading what Sir Michael Lyons said about local income tax: it is a thoroughly practical tax with many advantages, but will take some time to introduce. It is rather like the reform of the council tax that the Labour Government are talking about and very different from the fossilised, "stay as you are" solution that the hon. Gentleman's party is currently recommending.
Let us deal with the issues that the hon. Member for Meriden said were at the heart of the problems facing local government. Unitary authorities seem to be the problem. Well, the Conservatives thought of unitaries first. They introduced them in Wales and Scotland and they have introduced them in Avon and Berkshire. Indeed, four Conservative county councils are currently bidding for unitary status. Unitaries have their place, especially where there is clear local support and validation. I fully understand that— [Interruption.] I am expecting an intervention any second from Mr. Dunne to the effect that what I am saying does not apply in Shropshire. Let people sort out their grief locally, as those matters should be decided at local level.
The hon. Gentleman seems about to move on to forms of local government, but I have not quite finished with council tax. I am not sure what gimmick the Liberal Democrats will propose from year to year. They have a policy one year, and if it does not work they change it. I remember that one year in Newcastle-under-Lyme the Liberal Democrats promised everyone £100 back from their council tax bills. The cheque was inconveniently dated
That has obviously come from the Labour party briefing and is, of course, completely mistaken. We have supported local income tax to my certain knowledge for 22 years and the policy may go back even further than that. What we definitely need for our local democratic institutions to function properly is a secure source of locally determined income. The flaw in the existing council tax and, to an even greater extent, in the fossilisation of it proposed by the Conservatives is that such a secure source would be restricted. Indeed, they would mean a cutting back of the opportunities for local democracy to flourish. I believe that I promised the hon. Member for Ludlow that I would give way to him.
The hon. Gentleman seeks to characterise the past 10 years of Conservative action over council tax, so I draw to his attention the fact that residents in South Shropshire, which has been Liberal Democrat-administered for the past four years and partially so for the whole of that period, have had to suffer the second largest increase in council tax in the country—beaten only, I believe, by Kingston upon Thames, which is another Liberal Democrat-controlled council. The reason why the hon. Gentleman wishes to deflect attention from council tax to local income tax is that Liberal Democrats cannot manage council tax efficiently for their residents.
If the hon. Gentleman looked at the record of Liverpool city council or, indeed, that of my colleagues in Islington in north London, he would see a very different picture. He should take a look at the percentage increases as compared with cash increases. I would not mind betting that the council tax in South Shropshire is currently lower than it is in some of the flagship authorities that the hon. Gentleman is so proud of.
The original legislation that brought in the council tax made provision for revaluations, but under certain circumstances where there was a disparity between regional house prices and the ratios prescribed between the different regions of the country. The fact remains that the ratio between the regions is the same today as it was when council tax was introduced, so there is no need at present for a revaluation.
I find the hon. Lady's argument rather tenuous. If that is the case and it is the core of what she is arguing, it is surprising that she did not make the point in her speech. If she is arguing that we need some sort of regional variation to council tax plans based on property prices, she could well have said it in her speech and perhaps we could have examined the proposition.
Does my hon. Friend agree that the Conservatives are demonstrating that they have not really read the Lyons report at all, which is quite clear that revaluation should have taken place? Sir Michael Lyons also clearly said:
"I am satisfied that a local income tax could be feasible in England and could viably replace all or part of council tax" and that it would be more progressive and more popular.
I certainly agree with Sir Michael on that, if not on every other proposition that he has put forward, and I am very grateful to my hon. Friend for drawing that to the House's attention.
A number of other factors handicap local democracy and local councils and it is interesting to reflect on things that the hon. Member for Meriden did not mention. She did not mention capping. Of course, the Conservatives thought of it first. She did not mention the arbitrary abolition of local authorities, because the Conservatives did that as well. She did not mention explicitly charges for council services, though she did mention rubbish collections. What she did mention was the pressure on social care for local authorities. Of course, she is right about that, but what she did not say was that it was her Government who introduced charging for social care at local level in the first place. That charging is creating some of the difficulties that have already been illustrated in the debate. I make the point in passing that if we had the same policy for free nursing care south of the border as they do north of the border there would be a very different set of pressures on people.
The hon. Lady is right that there has been excessive centralisation, but it was certainly triggered and, in some ways, masterminded by the Government whom she supported. I remember as a member of a county council 20 years ago how responsibility for the police, magistrates and probation were taken away and how the district council had buses confiscated. That was centralisation of a different order indeed.
I see Sir Paul Beresford in his place. He has probably forgotten—indeed, he probably never registered the fact in the first place—that he and I were in the same room together in the dim and distant past, sitting on the so-called Consultative Council for Local Government Finance. It was not very consultative. The hon. Gentleman was one of the Ministers sitting on one side of the room; I was one of the local government representatives sitting on the other. I had been on a deputation to see the hon. Gentleman to discuss council funding and to seek help from the then Department of the Environment. Going as a representative of a local authority to ask for better treatment from a Government Department certainly gives one a worm's eye view of how democracy works in this country. That was not a devolutionary experience.
The hon. Member for Meriden is asking us to believe that something has happened, that the hon. Member for Mole Valley has had an event on the way to Damascus, and that St. Paul is now going to be lowered in a basket from the Marsham street towers to get away from all those centralists.
The hon. Gentleman seems to be railing against centralisation rather than local decision making. Will he explain his party's policy towards regional government? If he does not like regional government, does he acknowledge that it is being used as an excuse to rescue the Liberal Democrats from badly run Liberal councils?
What I like about the hon. Gentleman is his capacity to read his Tory brief. What I do not like is his incapacity to understand Liberal Democrat policy, which is to take powers from central Government Departments and bring them back to the regions and local authorities, where they can better be exercised. I am astonished that he has not grasped that. Given that he has not grasped it, I wonder how he can support those on his Front Bench who say that they want more devolution. He does not seem to understand what devolution is or how it works.
I can assure the hon. Gentleman that this is all my own work, because the one omission from my brief is that there is no mention of the Liberal Democrats. I hope that the Secretary of State will look into that for next time. I am still grappling with all that I have heard about the proposed local income tax. The hon. Gentleman and I come from the west midlands, which is a region. Will he please tell me what the upper percentage limit for local income tax would be in that region? If he cannot give an answer, presumably it is because the Liberal Democrats have not worked it out yet, or because there will be no upper limit.
We supplied figures to Sir Michael Lyons. Assuming that the income tax rate includes the upper income tax band, it would be 4.5 per cent. I hope that that satisfies the hon. Gentleman. A great deal of practical detail and information is available on that subject.
It is probably time for me to make some progress, if I may. [Hon. Members: "Give way!"] Well, okay, let us take another one.
I am grateful to the hon. Gentleman for his courtesy. He will know that the Secretary of State's policy is to impose large numbers of houses on local authorities through national and regional housing targets, irrespective of whether they have sufficient infrastructure to accommodate them. She is doing that even though she frequently objects to planning applications in her own constituency. What is the Liberal Democrats' policy on regional housing targets? Are they in favour of them, even when local authorities resist?
We clearly need more homes, and there needs to be a way of allocating them. We have said clearly that there needs to be a partnership in that decision-making process. It is just as absurd to have regions attempting to impose more houses on their local authorities as it is to have regions restricting local authorities that want to see growth, yet both of those situations exist—
Thank you, Madam Deputy Speaker. I am more than happy to explore the intricacies of housing policy and national allocations, but I suspect that we are probably straying from the broad themes of the debate. It is certainly the Liberal Democrat view that decisions should be taken at the lowest practical level, and that relates to planning decisions just as much as to financial and service decisions on health care, highways and public transport. Any diligent listener to our debates in this place should be well aware of that.
It is disappointing that, when the official Opposition create an opportunity to talk about the future of local government, they fail to take it. The motion has offered us nine lines of nothing to debate, and it is hard to believe that their conversion, as announced from their Front Bench, is genuine. I looked for a local government policy in the Conservative party's previous manifesto, which I understand was drawn up under the supervision of their current leader, Mr. Cameron. I found a policy with a hard figure on it: a £500 council tax rebate for pensioners over the age of 65. No doubt that seemed an attractive vote-winner somewhat analogous to the £100 that has been mentioned. What it is, however, is another step in centralising local government finance and reducing the independence of local government, which is exactly the opposite direction to that mentioned by the hon. Member for Meriden. Perhaps that is a good reason for not mentioning any policies whatever: the only one that seems to be extant goes in the opposite direction to the philosophy outlined.
In the years since the Conservatives left power, the Government have taken many steps in the wrong direction. During the passage of the Local Government and Public Involvement in Health Bill and at other times, my party has spelled out its concerns. As a Liberal Democrat, I am proud that we could table an amendment that set out clearly our prescription for the difficulties faced by local government. First, we need a proper proportional voting system for the election of local councillors, which will ensure much more representative and responsible local government. Secondly, we want a secure financial base for local government, which means returning the business rate to local control and introducing local income tax. Thirdly, we want a partnership of equals between local and national Government. I am only sorry that we will not have the opportunity to test those propositions in the Lobby tonight.
Liberal Democrats in local government have a proud record of service to their local communities in every part of the country, from the deepest rural areas to suburban and inner-city areas. The people of our country are happy and ready to support Liberal Democrats in those situations, but until the House has the guts and determination to change the balance of power fundamentally between local and central Government, Whitehall and town hall, our country and our democracy will lose out.
Whenever the future of local government is debated, it inevitably becomes a discussion about the need for greater localism. Few Members would dispute that when localism means greater local management and devolving more power to front-line management, it is highly desirable. Local accountability and control, however, raise more difficult questions. I will discuss that in relation to my constituency in Swindon.
Funding lies at the heart of accountability, and as long as national Government are responsible for allocating some proportion of local authority funding, local accountability and control will be limited. National Government remain accountable to national taxpayers for the money that they spend, and therefore need to retain some measure of control over how effectively it is spent. It is important that local authorities are not required to raise all the funds that they need locally, because the uneven distribution of resources across the country would inevitably result in an inequitable meeting of needs. Moreover, in my experience in Swindon, the Government's ring-fencing of funding to ensure that the greatest needs are met first, whatever the competence or bias of the local authority, has protected some of the most vulnerable people.
In my constituency, the Conservative council has demonstrated repeatedly that the poorest and most vulnerable people in the borough are not among its priorities. Cuts made by the council have always tended to fall most heavily on the most vulnerable. For example, it has butchered the Parks advice service, which served the most disadvantaged people in Swindon. Its grandiose launch of a vision for Swindon in 2010 contained 50 promises, not one of which mentioned tackling poverty, deprivation or disadvantage. Despite the fact that Seven Fields primary school, in the most disadvantaged ward in my constituency, was falling down, it took months of public campaigning to persuade Swindon borough council—even after it had received unprecedented capital funding from the Government that would more than cover the cost—that it should allocate funding to rebuild it.
What matters to the individuals who depend on public services is not an ideological fixation with localism, however it is defined, but the construction of the most appropriate partnership between local authorities and national Government to ensure that need is met equitably everywhere. Of course, such partnerships will vary according to the circumstances of each local authority, and earned autonomy has its place alongside direct intervention from the centre, but advocating pluralist partnership of this kind does not constitute an argument for the status quo.
We have heard a few stray remarks from Members on both sides of the House about the importance of transparency in the relationship between local government and national Government, and I associate myself with those remarks. The current relationship needs to change. It is not that I think transferring power from one bunch of politicians to another bunch of politicians will necessarily improve the position. The key at all levels of power is accountability, and at both local and national level politicians clearly need to become more accountable. My primary concern is that the relationship is opaque and does not encourage leadership at local level. The experience of Swindon exemplifies that. A recognition of the role of partnership and of the part played by other partners is a crucial requirement for all leadership, but Swindon borough council is currently failing in that regard.
Since it became a unitary authority in 1997, the council has struggled to deliver the services that Swindonians deserve. The problem is simply that it is too small to be a unitary authority and has struggled to find the capacity that would enable it to do all that it needs to do. That, coupled with a cynical division of resources by Wiltshire county council in 1997, left the Labour group, which ran the council until 2001, struggling. It failed to deliver what was necessary, as its members recognise.
When the Conservatives took over in 2001, the electorate expected them to do better; but the electorate were disappointed because they were not able to do any better. Social services continued to receive zero stars and the local education authority remained in special measures. Today, however, Swindon borough council is improving. I pay tribute to the officers—now ably led by a new chief executive—for all the work that they have done, but the crucial turning point was intervention by the Government. The Department for Education and Skills drove through a new structure for education, and the Office of the Deputy Prime Minister, as it then was, worked tirelessly to teach Swindon borough council how to transform the delivery of services. Thousands of pounds were spent on teaching Conservative councillors how to do their jobs properly. Since 2001, funding from national Government has increased by well over 30 per cent., supplemented by one-off additional funding such as £1 million for building capacity. National Government have enabled the borough council to take part in a local area agreement that is innovative and will make a huge difference to the people whom I represent.
Of course, councillors from all parties deserve credit for their willingness to embrace the agenda for change, and I pay tribute to the current Conservative leader for his determination to improve the town. The fact remains, however, that the improvements would not have been possible without all that funding and support from the Government, and—crucially—we have never heard a word of acknowledgement or thanks from any Conservative councillor. Reading Conservative councillors' election literature, one would think that they had personally raised the money to build all the new schools for which they are now claiming credit, not to mention the libraries and other community services on the basis of which they are trying to persuade people to vote for them. That is no way to provide decisive and visionary leadership. Any consistently visionary and successful local leadership must be based on coherent and consistent policy positions, which is not the case in Swindon.
Swindon is a growth area, and it is expected that 35,000 new houses will be built there. Privately, Swindon borough council wants that to happen, subject to the provision of proper infrastructure; publicly, it says that it is a threat being imposed on them. To say one thing privately and another publicly—to say one thing in Swindon and a different thing in London—does not provide leadership for the people of Swindon; nor does it provide any basis for the relationship between all the strategic partners who need to work together to secure Swindon's future.
All partnerships depend on trust. Trust and partnership cannot exist together when one partner persists in saying contradictory things to different audiences depending on a narrow and sectarian view of what they think will maximise their vote. We must have greater clarity about mutual responsibilities. If there is greater clarity about the relationship between local and central Government, that will stop this kind of dodging and diving and encourage local authorities to show more leadership.
I shall now heed your strictures, Madam Deputy Speaker, by concluding. I hope that in his reply my hon. Friend the Minister will take note of the need to provide greater transparency, so that all the partners in delivering services to people who depend on them will acknowledge their role in a mutually supportive partnership.
I shall be succinct. I wish to make only two points, which I am delighted that the Minister is present to hear as they are aimed predominantly at him.
First, I recommend that the Minister change the system of listening to local government following the distribution process. My right hon. Friend Mr. Curry and I regularly did that, and Andrew Stunell mentioned it. Some councils have good causes and it is possible to change things to help them. In respect of others, revealing information can be discovered, especially if one does a bit of work beforehand. I found a few Labour councils to be difficult in terms of some of the positions that they took, and I found that some Liberal Democrats' positions were extraordinary.
I cannot remember if it was the Liberal Democrat group that came with the Minister for Hazel Grove, or rather the hon. Member for Hazel Grove—that might have been a Freudian slip, although I hope that we never have a Minister from the Liberal party. The Liberal Democrat council members came after having worked all night—or so I was told—on a project, and they were determined to put their case, which they did. We listened carefully to them. Their case was demonstrated with graphs, until it was pointed out by me and one or two of the officials that if the axis of the graphs were changed slightly exactly the reverse argument to that they were making applied. That is an entertainment that I suggest the Minister tries. He will find that the position of the hon. Member for Hazel Grove is often pretty fraudulent.
What a shame—I could have gone on a little further, but I do not have the time.
My second point is that the Secretary of State and Ministers have in the past gone on at some length about the fact that they were removing some of the ties and burdens on local government. That was a little fraudulent because the burdens referred to had been imposed on local government by this Government. It is a bit like someone having an arm handcuffed to a wall for a number of years and then the people responsible saying, "We are now going to release you," and then asking him whether he feels better—when at the same time another Department has nailed his other arm to the wall.
Some of the effects can be followed. The best value system was introduced—that title is a misnomer if ever there was one—as was the comparative performance assessment, which brought with it myriads of targets and books of prescriptive guidance, and other Departments joined in. The best example I can give involves Mole Valley district council. It is a tiny council with a budget of £10 million. The last comparative performance assessment cost it £250,000, plus weeks of getting ready and dealings with auditors and so forth. The Audit Commission has been mentioned—I understand that it is five times greater than when we left power and Labour came to office—and it is merely hounding local government. When that £250,000 was geared—it is geared, as it moves on to council tax—it added £1 million to local tax for that little council with a budget of £10 million. That is outrageous. The Minister has said—and the Secretary of State has said it too—"Well, we are taking it away," but other things have been added, not only by his Department but by other Departments.
The Secretary of State spoke with some glee about the local area agreement. It has been hyped as a new way of streamlining funding and reporting. I invited the Minister to come with me to a certain well-known Conservative council that he likes very much and that endears local government to him, and to listen to it independently on what this means to it. It means excess bureaucracy and time-consuming work. There are hundreds of pages of prescriptive guidance on process, on format—on all the agreements. It means minute scrutiny.
I rang the council and spoke to the chief executive and some of his senior staff to ask whether the situation got better after my attempts to get the Minister to take notice and to reduce bureaucracy. The chief executive said, "No, it's worse. There are more mandatory indicators, all of which are based on national priorities and all of which effectively remove the so-called local aspects. Moreover, there are more than just the six-monthly reviews."
The chief executive also said that he was looking forward to September, when the local government section of the Department will descend on him and his council. Little boys and girls just out of university and with no real understanding of life will descend on the council to tick it off and to tick various boxes. Rather than looking at actual outputs, they will be looking at process. That will cost the council a lot of money, and the situation will then be exacerbated by the gearing. An horrendous amount of time will be wasted, the costs will be ghastly and the gearing will exaggerate the process. If the Minister actually believed what he has been saying and got off local government's back, there would be a reduction in costs and a reverse gearing effect on council tax.
This has already proved to be a highly emotive debate, which is indicative of just how important local government is to Members. Sadly, it has also been very predictable. It has clearly been a simple mechanism to enable the Opposition to run scaremongering stories, in the final week of the local election campaign, that have no foundation in fact. As chair of the all-party group on local government, that saddens me enormously. I would therefore like to focus on the positive aspects of the all-party group's work and on some specifics of the future of local government.
The all-party group, supported by the Local Government Information Unit, is reviewing the possibility of enhancing the role of the councillor and of encouraging more people from diverse backgrounds to step up to the plate and seek election, thereby bringing with them a wealth of experience. We hope to feed our findings into the Roberts review being undertaken for the Department for Communities and Local Government. The future of local government depends in part on the quality of the people whom we attract as councillors. The stream of negativity from the Opposition today is hardly a good advert for the job.
The all-party group heard from a range of witnesses—from councillors from all the main parties, from experts such as Professor Steve Leach, from Paul Wheeler of the political skills forum, from Dr. Stuart Wilks-Heeg of the university of Liverpool, and from those representing minority groupings. We also asked the media to participate. There is an enormous amount of enthusiasm from elected representatives who have submitted evidence on the role that they have undertaken, and for the innovative work going on within existing parameters to engage the public more widely, and to assist them in understanding the service that their council and councillors can offer.
Interestingly and in contrast with today's debate, the all-party group meetings have been productive. It has been largely agreed on a cross-party basis that some of the problems flagged up tonight can be resolved only if we move forward in a more consensual and positive way. The view has also been expressed that the best authorities already make good use of existing powers to reach out to their residents and electorates. There is some excellent practice out there, and the Government's beacon council scheme certainly does an excellent job in highlighting best practice and disseminating information more widely.
A number of Members have, through various early-day motions and private Members' Bills, supported the extension of local authority power and the wider empowerment of individuals in their relationship with their local council. The Local Government and Participation in Health Bill takes forward most of the key strands of the ideas being put forward and further enhances arrangements through local area agreements, for example, without some of the drawbacks of the measures proposed by others. The Opposition pamphlet setting out their position on sustainable communities raised concerns from experienced Members in all parts of the House. It suggested that local authorities should be given greater powers to set targets and to establish programmes directed at local needs, but quite how that fits in with proposals that would require Whitehall to deliver an action plan to achieve them I cannot imagine. Full cognisance does not appear to have been taken of the fact that local decision making means decision making within the locality.
It is unclear how the Opposition's proposals would be achieved—how the mechanisms and the administration of their proposed scheme would be handled. Given their dislike for all things regional—and, by default, for regional offices—would they move this power and responsibility towards the centre? They have come up with few genuine proposals for the future of local government that stand up to scrutiny, and we have heard nothing new from them today. However, the Local Government and Public Involvement in Health Bill has managed to obtain broad support, and its passage through Committee was notable for the positive and often consensual debates that were held.
That approach has been mirrored elsewhere. Lord Bruce-Lockhart, the Conservative chairman of the Local Government Association, welcomed the White Paper that preceded the Bill, saying that it reflected the growing confidence in, and competence of, local government, as well as the belief that the best way to deliver the best services to local people is at a local level. Front-line services should be focused on the needs of those who use them. Lord Bruce-Lockhart also acknowledged that the proposals would help to free up elected councillors to put local people first in the delivery of the right services at the right time and in the right place. Many of the witnesses to the all-party group have supported the view that the Local Government and Public Involvement in Health Bill is a real step in the right direction and that the challenge is there for authorities and individual councillors to grasp the opportunities presented to them.
The Leader of the Opposition talks about taking responsibility and the avoidance of Government interference in other areas. He should, therefore, support what the Government are trying to achieve with local government. The Government want to release some of the central controls and to enable far greater control over decision making to be devolved to councillors and citizens.
In his report, Sir Michael Lyons reaffirms the importance of local decision making and sees a positive future role for local government in fostering a new public confidence in our local governance arrangements. It is an incredibly detailed and thorough piece of work, as one would expect from Sir Michael. Although he dwells at length on a number of matters outside the question of taxation, Sir Michael does tackle the thorny issue of trying to find a solution to the perennial problem of local taxation.
It would be in all our interests to resolve that problem once and for all and to accept that, at least in part, local taxation needs to be property based. No tax is popular, but every party in this House that aspires to being in government should want that problem sorted out in a way that at least enables local government to operate on a sound footing, plan long term and offer clarity to the taxpayer. The approach that I have suggested would also promote a greater sense of fairness and justice than currently exists.
The Opposition have tried to imply that the Government want to introduce a waste tax in addition to the council tax, but that is merely further scaremongering. That proposal was simply one of the many options put forward by Sir Michael Lyons for consideration. Local authorities of all parties are looking at mechanisms that would enable the better management of waste. Some are using sticks and others carrots: for example, Conservative Barnet council has been targeting residents in respect of waste, and fining them. Which council can say that it would not want to use such a power in the future?
When I sit through our debates on local government, I am always saddened to hear the unremittingly negative comments from the Opposition. They have yet to come to this House and offer any serious positive proposals that will help local government move forward. Hon. Members on the Opposition Front Bench could take lessons from those of their colleagues on the Back Benches who attend the all-party group. They contribute in a positive way, and understand the important contribution that local government and local councillors make to their communities.
It may be that the Opposition's attitude to local government is still shaped by the 1980s and early 1990s, when local government was seen as a nuisance. It was the subject of swingeing cuts that caused morale among councillors to plummet, but the mood now is very different. Yes, councillors have been subject to inspection—but what a difference that has made. There has been an impressive turnaround in the number of authorities ranked as good or excellent—
I thank the hon. Lady. I am the deputy chairman of the all-party group, and she has gone out of her way to thank me for my contribution. Will she therefore withdraw her remarks about the Opposition Front Bench? Or would she prefer to withdraw what she said about my contribution? She has to do one or the other.
I shall be gracious to the hon. Gentleman, as his participation in the all-party group has been generally positive. In all fairness, I must say that he has made some useful suggestion and has enhanced the discussion.
Local authorities have learned how to be self-critical, and how to seek out best practice elsewhere. They have gone from saying, "What can central Government, or indeed the public, possibly know about running a council? We know what we are doing," to saying, "Perhaps we can learn from others. Could we do a little better? Can you help us to improve our services?"
The Government should be congratulated, as should the councillors and officers who have put so much effort into this transformation. My local authority, Plymouth city council, was close to being placed on special measures while it was under the control of the Conservatives. In order to get elected, they made rash spending pledges that took money away from core services, such as transport and waste disposal. On election, they frittered money away and made no attempt to put the authority on a sound financial footing. They still oppose green transport plans and only this week abstained on the urban strategy.
The Labour administration, led by Tudor Evans, took the bull by the horns, dug deep to understand the true nature of the problems and took difficult decisions, showing real leadership. Plymouth is back on track and it has the lowest council tax in the south-west. Across the country there is clear evidence that local government is at last coming out its shell—under a Labour Government.
I draw the attention of the House to my entry in the Register of Members' Interests.
After listening to the speeches from the Front Benches, I realise that we are obviously all devolutionists now. However, if we are to be devolutionists there are two preconditions—a fixed idea of the direction of travel for local government on structure and on revenue. Until those two basic frameworks are in place, we cannot have an orderly, sensible and sustained process of devolution.
We are in the middle of a new round of negotiations about unitaries. The Government seem to have stumbled into those negotiations and they need to make up their mind what structures for local government are available—I use that word deliberately. The truth is that we live in a centralised state at the moment and because we are trying to move towards a more relaxed system, devolution—or localism—will by definition be a managed process, so how we manage it is important.
It is a question not just of local government structures but also of the configuration of all the other bodies whose responsibilities touch local government: the regional development agencies, the learning and skills councils, planning bodies and Government offices. The implications of devolution are huge in terms of the whole geometry of regional governance.
The Government have been a bit all over the place. There was a period of enthusiasm for elected mayors, but then it was realised that impregnable Labour cities which it might take us several elections to have a go at in the normal course of events could fall at a single blow in a mayoral election when an outsider entered the race. Then there was the period of enthusiasm for universal unitaries, when the present Secretary of State for Environment, Food and Rural Affairs made a brief stopover at the Office of the Deputy Prime Minister as Minister of Communities and Local Government.
We are now in the period of unitaries à la carte, so I am interested in where the debate on city regions will go. Representing my part of the world, I am a supporter of city regions and can see the logic in planning and skills terms of trying to treat as a whole not only metropolitan areas that abut one another but also the districts that supply that travel-to-work area.
We want to know which direction the next regime will take. We have heard the contributions of the Chancellor's Yorkshire outriders, the Financial Secretary to the Treasury, John Healey, and the Economic Secretary to the Treasury, Ed Balls—I suppose they might be described as two of the horsemen of the Apocalypse.
Capacity and accountability are important. Mr. Wills said that Swindon did not have the capacity to be a unitary. There is a real dilemma. The Government have insisted that we need more capacity in a number of sectors, so the health service has been reorganised to create more capacity. We were embarked on the creation of more capacity in police services, but the Government have withdrawn from that process. The dilemma is: to what extent do we trade off capacity for accountability? We are all legitimately concerned about the responsiveness of our institutions to the general public and about people's disengagement from the political process. However, if we unremittingly seek capacity as the sole good, the cost will be paid in terms of identity and accountability.
I am sympathetic to the notion of the small unitary, because I want councils whose leaders can be recognised and accosted in the street, as happens in many French areas—it is well known that I have some sympathies for the way the French do these things. We recognise that accountability has a cost, but if we are to move through local authorities to devolve to the citizen, we must make sure that there are accountability structures. Whether we call it civil society or the third sector, the bodies in it may be very admirable but they are not necessarily representative. They are there to pursue a particular aim and we have to make sure that people speak for the wider community and not for particular interests exclusively.
Far be it for me to suggest that the right hon. Gentleman is again showing up those on the Opposition Front Bench, but I genuinely believe that he puts his finger on one of the dynamics of public service—whether it be in local government or elsewhere—which is the trade-off between neighbourhoods and local accountability and the strategic capacity, efficiency and effectiveness of organisations. Given his wisdom and expertise in government, I would be really interested if he could give us his thoughts on how we might take the debate forward to ensure that we best resolve the problem without the usual yah-boo that seems to get in the way of addressing some of the challenges in local government.
I am grateful to the hon. Gentleman for those remarks. I agree with him about the importance of the issue and I will certainly look for occasions to develop it if we are to put substance on our localism agenda. Meanwhile, if he is kind enough to pay attention to them, I will do my best in my columns.
The second issue that is of concern to us tonight is funding. The present situation is not sustainable. Business rates are frankly off the agenda; I do not see anybody introducing them against opposition. I regret that, because they should be returned to local authorities. The circumstances that led to their nationalisation are past and there is a huge history now of working between business and local authorities. In fact, incorporating mechanisms that safeguard against abuse does not require a PhD. Relatively simple mechanisms can be deployed and I hope that we will move back to recognising that.
Revaluation is also probably off the agenda. I rather regret the fact that the Government backed off that; they have rather backed themselves into a corner in doing so. I note the Secretary of State's little words "in this Parliament" and I look forward to the manifesto that says that if Labour is re-elected, it will reband and revalue in the next Parliament. I suspect that I will scan for some time before I identify that.
The problem with charging is that people now find the council tax so highly objectionable that their tolerance for adding additional charges on top of that is not what it might have been a number of years ago. The council tax is more than ever centre stage, because nobody tonight has mentioned the fact that schools funding now goes directly to the schools. If one abstracts schools funding from the formula, one sees that council tax is getting on for half the revenue of some local authorities. It is a much more high-profile tax than it was. Redistributive business rates and council tax now form a huge element of the tax resources of local authorities.
Of course, we need to explore the implications of the Lyons report. Even though Sir Michael has now gone to his earthly reward—although I am not sure that the BBC should be described as all that earthly—there are some substantial points in his report. The problem is that for years the Government said that they were waiting for Lyons, but he now says, "Sorry, the time is not ripe." It is a pity that we have an outstandingly good intellectual thesis that has not rescued us from some of our immediate dilemmas in the way that some of us hoped it might.
I am listening with interest to my right hon. Friend, but does he not agree that the accountability that he mentioned and financing are clearly linked? Because of gearing and the Government's paranoid desire for control, the difficulty with the current system is that neither of those two things are in balance. We cannot have accountability because the Government dictate, and the accountability has gone from the council tax because the gearing has exaggerated the cost of local services.
I am sure that that is the case. On top of that, the Government, for reasons that we understand, wish to restrain the increases in council tax. Even if we do not have capping, the threat of capping has done that job and that has been used by both parties. I welcome the movement to two-year funding, and longer-term funding is clearly a sensible way to go.
There is a problem for this Government and there will be a problem for an incoming Government. I would not want my party to come to office and then spend ages agonising over the same fruitless search for the north-west passage, which is the way through local government finance, that has preoccupied so much of this Government's time and no doubt would have preoccupied previous Governments' time. The fact of the matter is that there is no north-west passage—that is the problem. There is no pathway through the ice that is blocking the way. The return of business rates is not a panacea, given that the money is not a new source of funding, but it represents a more devolutionary way of applying the tax that creates more initiative.
We should explore the idea of establishing a neutral agency for the distribution of grant. Such agencies are increasingly coming into fashion in other sectors of the public services. While we should explore the idea, rather than necessarily endorse it, both parties have an interest in finding a settled way to deal with the matter.
If the hon. Gentleman will excuse me, I have given way twice already and I am trying to finish my speech within my allocation of time.
On structure and finance, local government needs some quality and stability, and at least predictable and defined directions of travel. Until we have that, the cries for devolution and localism will lack substance. If I may come back to my Francophile tendencies, I am bound to note that
During our debate on the future of local government, I thought that it might be helpful to consider a warning from history, albeit recent history. My local authority changed hands from Labour to the Conservatives just a year ago. I have suggested why that might have happened: partly through a deliberate deception—saying one thing and doing another—and partly owing simply to the absence of information. I do not remember seeing anything at all in the Conservative manifesto, which I have re-read, about the £34 million in cuts that the council is introducing across the board over the next few years. There are a few salutary lessons to be learned by anyone who is thinking about voting Conservative on
The first thing that one gets is school closures of an especially perverse kind. Hurlingham and Chelsea school, which is a much loved and much improving school in Fulham, was told out of the blue last autumn that it would close. The council then set out to rubbish the school systematically by writing to prospective parents to tell them that they should not send their children there. The head teacher, who is a very mild-mannered man, wrote to the leader of the council last week to say:
"the persistent misrepresentation of data has been a major fact in hiding the real context since your administration came to power".
Despite marches and hundreds of representations, the council persisted with the closure.
Not at the moment.
The fact that the council persisted with the closure meant that the matter had to go to the supposedly independent school organisation committee, but the council replaced members of that committee with people who they thought would vote in its favour. However, the council's presentation to the committee was so lamentable that even the people whom it had deliberately put on to the committee could not vote for the proposal. As a result, the proposal should have gone to the independent adjudicator today, but yesterday the council withdrew its proposal for closure. Although it gave no reason for that whatsoever, the reason is clear: there was no basis for the closure except for the fact that the site was valuable and the council wished to sell it off for capital gain. Despite all the hurt and distress that has been caused to children, parents and teachers, the council has made no apology. It has instead said that it will set up an independent commission, which will be an ill-thought-out body with no remit, chaired by a Tory peeress.
When I attended the annual meeting at which the council tax was set, I had the opportunity to speak to several Labour councillors, who blamed the hon. Gentleman for sowing the seed of these problems. Let me ask the hon. Gentleman a simple question: does he think that the Labour group was unwise to suggest that it would have delivered a lower council tax and cut the council budget deeper?
It is surprising that I know more about what was said at a meeting that I did not attend than the hon. Gentleman does about a meeting that he did attend. The only point that was being made is that it was not necessary to make £34 million-worth of cuts to front-line services in order to achieve a very small council tax cut; efficiency savings could have been made, instead. I can tell him that I do not meet anyone in the borough who does not think that they have had a raw deal.
I visited the council's website the other day, on which nine people had allegedly said that they supported the council tax cut. I queried that, because the letters looked rather staged, and I got this response from the borough's chief executive:
"Of the nine views posted on the 'Share your Views' area on council tax, all but two came from a vox pop done by press office staff on the streets of the borough, so there are no 'original' letters...The first two entries on the site were from emails forwarded to the council from"— the letter then names Mr. Hands. The letter continues:
"At the time of posting, there were no other comments received".
So it appears that nobody supports the hon. Gentleman's position in the borough, and I am not surprised.
To return to my brief, the second thing that happens under a Tory council is cuts to the voluntary sector. I have a separate Adjournment debate on that subject on Monday, so I will not dwell on it, but the thick end of £1 million is being cut from voluntary sector organisations, which include one of the best law centres in the country, organisations that support older people who are trying to get back into work, and organisations that provide for the single homeless. Opposition Members have supported many of those organisations in the past, and have sat on their management committees, but now the funding for all those groups is being cut by the Tory council.
Thirdly, I should mention social care. Mrs. Spelman, who spoke for the Opposition, shed crocodile tears on that subject, and I have alluded to the increase in charging that the Conservatives in Hammersmith and Fulham had promised in their manifesto not to introduce. Hammersmith and Fulham Action on Disability, one of the voluntary organisations under threat, said:
"Before the election when seeking votes, Conservative councillors undertook to sustain the no charging policy—but now they have found a way to erode it."
Some 1,400 people described as having moderate care needs are at risk of losing all home care services because of the changing criteria. Kevin Caulfield, the chair of the coalition against charging, said:
"We expect our council to lead on policy and practice that improves the quality of life of older and disabled residents—not introduce policies with poor consultation that will only result in increased poverty and isolation."
The fourth result of a Conservative council is increased charging that far outweighs any cut in taxation. There has been a 25 per cent. increase in meals on wheels charges and there is a £6 charge for refuse sacks for recycling. The borough does not meet its recycling targets, but it will now charge people for the sacks that they need in order to recycle. When challenged on that, the council said that people had been misusing the sacks. They had been keeping them at home and not using them, and the charge was the solution to that problem. The council is looking to increase parking charges by 50 per cent., to £2.40 an hour. It has increased burial charges by 52 per cent. and it has even proposed to charge school governors for the police checks made on them.
The fifth result of a Conservative council is an end to social housing programmes across the borough. There is also a change in housing allocation policies, and families are now being put into one-bedroom flats. As for those who happen to be made homeless, the council has even cut the grant that provides for the storage of people's furniture while they are looking for another property, so that furniture has to go, and there is very little chance of getting it back. Sixthly, there are cuts relating to environmental policy. Almost £1 million has been cut from refuse and street cleaning services. I have mentioned recycling; today I received a letter from someone who had asked the council why they could not recycle their kitchen waste. The council's response was that Government regulations meant that it could not take that waste. The person found that perplexing, as they live only 50 yd from Ealing, which does recycle kitchen waste, but I have already alluded to the honesty with which the local authority acts.
Seventhly, I notice that there is a reference to library services in the Opposition motion, but those services are not free from attack either. The mobile library and the housebound readers' service have gone. The main reference library is being closed, and its specialist book collections are being dispersed and sold off. The council is also phasing out qualified librarians, because it does not think that it needs them at all.
Policing is the eighth thing that suffers. The previous Labour council invested in extra officers and safer neighbourhood teams. The Conservatives have promised—another promise—24/7 neighbourhood teams, but the first thing they have done is cut three additional officers, which represents a 25 per cent. cut, from Hammersmith Broadway, the ward with the highest crime in the borough, which was the scene of a tragic murder only a month ago.
I am not suggesting that all councils are like Hammersmith and Fulham, or that they are all quite as crackpot and doctrinaire in their behaviour. However, I make a plea to anyone who is thinking of voting for a Conservative council in May to heed the lessons of what the Conservatives do in office, rather than what they say they will do when they are trying to get into office. We have heard some erudite speeches about principles, but I suspect that when people go to vote on
The other thing people get with a Conservative council is a council that is re-elected with a bigger majority every time, because people are happy with the services that it provides.
I want to focus on two issues: the raw deal that councils in East Sussex are getting under the Government's funding formula, and the erosion of powers that has prevented local councils from being able to make decisions on some of the most important issues that affect the people who live within their boundaries. First, there is a deep imbalance in funding for councils. I am often told that money is taken from the south-east and is given to Labour's marginal seats in the north, and there is clear evidence of that imbalance. We now have the facts. Of East Sussex councils, Wealden has the highest proportion of elderly people—certainly of the over-80s and over-85s—in the country, and that is partly why we have roughly the third lowest gross domestic product in the country. However, the grant per head that Wealden receives from the Government comes in at £54.03. The maximum level in the country is £133 per head, and even the average is £92 per head. If Wealden were funded at the average level for district councils, it would have a further £5.5 million a year that it could spend on local services or use to reduce council tax. It would increase its grant level by well over half.
Another way of looking at it is to consider the proportion of council spending that has to come from council tax. If we look at the country overall, the average is 46.1 per cent., but the lowest proportion is in Exeter, where it is 21.6 per cent.—I am not sure what Exeter has done to be so special, apart from being a marginal seat—but in Wealden, it is 63 per cent. That is why council tax has been driven up so much: my councils do not receive the same level of grant as other authorities.
I trust that my hon. Friend will forgive me if I do not give way, as I am keen that other colleagues should be able to make a contribution.
If we look at the overall picture in East Sussex, the figures become even starker. If councils in East Sussex were funded at the average levels for metropolitan boroughs across the country, the county would have a further £113 million a year to spend on vital local services or to reduce council tax. There is tremendous anger about the fact that we are getting a bad deal, and my right hon. Friend Mr. Curry is absolutely right that it is an issue that must be dealt with. The greatest frustration experienced by my local councillors stems from the fact that, every year, they are required to provide more services to the Government, but are not given the means of paying for them, so they have to find those funds from their own resources.
Secondly, the Government have increasingly eroded local councils' ability to make decisions that they believe are right for local people. Housing was mentioned earlier, and it exemplifies the problem better than anything else. The current system is top-down. There is enormous anger in Wealden that hundreds of houses are imposed on us every year by people who do not know the geography of the area. That happens because of the way in which the process works. The anger is as much against the process as against the number of houses to be built.
First, the Department for Communities and Local Government decides in consultation with the deeply unloved regional assemblies how many houses there should be in each county council area. The county councils then require the district councils to build a certain number. If the district council refuses to build that number, the decisions will be made by Ministers and their officials in Whitehall. The only thing that local authorities have to do is decide where they will find space for those houses. They cannot decide how many houses there should be, what type of houses they should be or, in many cases, their location.
Even when local authorities say that there should not be more housing without investment in the infrastructure, they discover that they cannot get the funding for that. In Uckfield, for example, we have just one national health service dentist. We are facing the closure of the accident and emergency unit and the maternity unit at the hospital in Haywards Heath, which provides services to the town of Uckfield, yet we are still expected to build hundreds of houses in that town because of the formula.
What we need is a new approach whereby local councillors, elected directly by the people whom they serve, are able to make decisions on how many new houses there should be, where they should be built and what type. It is the Government who will not allow them to make those decisions, and who are forcing them to follow the existing procedures against their will.
I have deliberately kept my comments brief as I know that other colleagues wish to speak in the debate. In her opening comments the Secretary of State said that the Government should be judged on their results, not their rhetoric. We will indeed judge them on their results. They have fiddled the system of funding local authorities, which has made matters infinitely more difficult than they should be. They have undermined local decision-making, and they will be truly judged on
I, too, shall try to be brief. The House will note my interest as a member of the London assembly.
I shall deal with two issues. I was grateful to hear the observations of my right hon. Friend Mr. Curry and I agree with every word. In particular, he touched on the issue which neither Lyons nor much of the debate has yet touched on—the need for us to consider the balance not just in funding, but in competencies, between central and local government.
Like my right hon. Friend, I have some knowledge of local government in France. The turnout figure is a point at issue, and that applies at local level as well. It is not insignificant that if one takes the average for all local authorities in the United Kingdom, 60 to 70 per cent. of total budgets come from central Government, whereas in France about 25 per cent. on average comes from central Government and about 45 per cent. is raised locally.
One thing that Lyons got right was to identify a weakness under our current arrangements whereby local authorities are unduly dependent on one single variable source of taxation in the council tax. It is right that there should be a significant element of property taxation in the portfolio, but having identified that, Lyons ducked the issue of what other areas of discretionary spend we could put in the local government armoury. That is my second point.
One of the great frustrations associated with local government is the difficulty of attracting people—
Time is very short. I hope that the hon. Gentleman will forgive me if I make a little progress.
One of the reasons why people do not get involved in local government or vote at local council elections is the belief that local government has very little discretion. That has been made worse under the current financing regime by the extent of ring-fencing. The evidence demonstrates that about 50 per cent. of the funds that come from the centre to local government are ring-fenced. Back in 1997-98 that was 4.5 per cent. Steps could be taken immediately to reduce the amount of ring-fencing, in the same way as we should be reducing, as has already been said, the level of controls and the targets culture, which impose a considerable burden.
I would go further. I take the view, as my right hon. Friend the Member for Skipton and Ripon said, that the time has come when we should consider, with certain safeguards, returning the business rate to local authorities, not least because there is a need to encourage them to broaden their tax base. When I was a local councillor, there was almost some positive competition among London boroughs to encourage business to have more commercial development in the local authority because we gained benefit to our tax base. It would be healthy for us to look at that once again. In the same way, if we follow that localist path, perhaps we must accept that we should think again about capping.
Those are the big points that we need to look at, and a lot more work needs to be done on that. I come now to a specific point—
The hon. Gentleman said that Sir Michael Lyons did not suggest any alternatives, but he quite clearly did. At paragraph 7.239 he suggested that local income tax was a perfectly viable alternative.
We all know what Sir Michael Lyons said on that. I note that the hon. Gentleman did not quote his own spokesman, Dr. Cable, who said that double income earners, of whom there are a particularly large number in my constituency, will be worse off under that, and that people would start getting hit at about £30,000 plus per annum.
I give the hon. Gentleman credit for a little more wit from the Labour Benches than we have had from those below the Gangway today. It does not make him right, but at least it is amusing.
I leave the Minister with one specific problem that we find in Bromley. The Minister knows that he has at least achieved one part of the Government's amendment in relation to Bromley—he has brought it stable funding. It has been at the floor in terms of grant settlement for the past six years and it has consistently had the second lowest level of formula grant support in London for the past six years. That is not a stability that we would welcome, but a peculiar circumstance arises from it. Because it is a floor authority but has considerable demands for capital expenditure for education purposes, it is denied access to the supported capital expenditure revenue element of funding that comes from the Department for Education and Skills. So we are in the peculiar situation that, even if we could borrow under the prudential regime, there would not be any central Government funding to pick up the borrowing costs and we would then have to dip into revenue costs to cover that, which would push us even tighter against our settlement because of being at the floor. I suspect that that is an anomaly, and unless the Minister can come up with some explanation, people in Bromley will feel greatly aggrieved about that.
I have deliberately cut my remarks short. I hope that I have dealt with both a matter of principle and a local issue, and that the Minister will be able to assist on both those points.
I will keep my comments short as I know that another Back-Bench Member wishes to speak.
The upcoming local elections represent the 25th anniversary of my holding elective office, most of which time has been in local government. But perhaps the debate has not changed very much during those years. In many ways, I wonder whether the Lyons report will end up adding much more than the Layfield report did in terms of changing local government finance.
In many ways, much of this debate could have been repeated 25 years ago, and I am not sure whether we add much to debate when we get involved in ritual condemnatory remarks about one particular local authority or another. [Interruption.] I do wonder whether Mr. Slaughter, who speaks so often about Hammersmith and Fulham, ever debates any other subject in the Chamber.
I shall speak for only a very short time.
Such is the diffusion of power away from local government that there is little value in trying to pin blame on one local authority or another in terms of performance, bearing in mind the fact that so few powers are given to local government in any case.
It is welcome that the number of targets for local authorities have been reduced from 1,200 to 200, but that is still far too high a number if we are to believe that there is real discretion for local authorities.
There must come a time for some change in local government finance. With all the nationalisation that has taken place in local government provision, the quick and dirty approach will be to take much of those funding flows that in reality are national expenditures and to leave far more of the overall budget left for local authorities in the control of local authorities so that there will be much greater accountability.
Thank you, Mr. Speaker, for allowing me to speak, albeit rather briefly, at the end of the debate.
I was not intending to contribute, but three elements of the speech by Mrs. Spelman prompted me to do so. First, she failed to explain precisely what is Conservative policy with regard to the funding of local government. She told us very eloquently what she and her party are against, but did not explain what they are in favour of or what they want to replace the council tax of which she was so critical.
Secondly, the hon. Lady failed to explain why revaluation would of itself lead to higher council taxes or how the total amount paid could somehow be increased by the process of revaluation. It would of course inevitably lead to some paying more, but, equally, to some paying less.
Thirdly—this element most prompted me to get to my feet—the hon. Lady accused the Government of making local councils mere agents of central Government. As somebody who was a council leader for a considerable proportion of the Thatcher and Major years, that accusation seemed pretty rich coming from the Conservative Benches. During those years as council leaders, my colleagues and I did our best to protect the most vulnerable in our communities from the devastation that the Tories caused to the services that we were providing on their behalf. I was well aware of the reality behind the Conservative commitment to local democracy. The reality was savage cuts in services, massive job losses and the devastation of the morale of members and officers in local government—and, of course, the poll tax.
The Government have much more to do to repair the damage that was done during those years. I wanted them to go further and faster, but I recognise that they have at least begun the process of rebuilding local leadership, of rebuilding the investment in local people, and of re-empowering locally elected representatives. I welcome the steps that have been taken. Local government and the political parties, at local and national level, need to respond to the challenge and to play their part, particularly in encouraging and enabling good-calibre candidates to stand for local government.
We must not forget that local government and local democracy are too important to the well-being of our society to be allowed to wither, and certainly too important to return to the denigration and devastation of the Tory years.
We have had a good debate that has ranged widely from reorganisation to ring-fencing. We heard a particularly elegant speech by my right hon. Friend Mr. Curry about the balance between capacity and accountability. I seek some clarification from the Minister on the "à la carte" nature of the restructuring.
The Government are conducting a review of local government in several English counties, but I am not clear what authority they have to do that. Last Wednesday in a Westminster Hall debate, I had an opportunity to ask the Under-Secretary of State, Angela E. Smith, that very question. I said:
"I have a simple question. What powers is the Minister relying on to make these deliberations?"
"Powers in the Local Government and Public Involvement in Health Bill that is going through Parliament."—[ Hansard, Westminster Hall, 18 April 2007; Vol. 459, c. 94WH.]
She then suggested that I was well aware of that.
I believed that procedures already existed to change the structure of local government. Indeed, they do. The authority for annual review of local government is set out in the Local Government Act 1992. Section 13 states that the Secretary of State may request the Electoral Commission to undertake a review, which in this context means
"the replacement in any non-metropolitan area, of the two principal tiers of local government in a single-tier".
Section 17(1) states that structural changes can be effected by order of the Secretary of State on the recommendations of the Electoral Commission. In the case that we are considering, no request has been made to the Electoral Commission and, consequently, no recommendation to consider the structural changes.
I am not aware of any other powers that the Secretary of State has to initiate such a massive task. I know that, after the Budget, we passed special resolutions that any change in tax, rates or duties would have immediate effect. I cannot recall the House passing any special resolutions to enable the Secretary of State to introduce the review. I am confident that the Under-Secretary would have mentioned them had that been the case.
We are not considering an academic question, because local authorities have spent hundreds of thousands—perhaps millions—of pounds preparing for the review. They are responsible to their residents, who will look to them for the authority for expending that money. To have lawful authority, both Houses of Parliament and Her Majesty must agree. A draft law and a law in progress is not enough. Will the Minister for Local Government clearly set out the authority so that we can all understand it?
I am delighted to see the Secretary of State in her place. She suggested that she sought to pull back the powers to restructure. I respectfully remind her that the Local Government and Public Involvement in Health Bill has not returned to the House. Is she giving an undertaking to table an amendment on Report?
That is fantastic; I would call that a result. We look forward to the measure's return to the Floor of the House. If the information is correct, we may well look out for it.
My hon. Friend Mrs. Spelman made a moving speech about the sub-class of pensioners that is being created and the reduction in take-up of council tax benefit. She also emphasised that two thirds of councils report losses in NHS funding and have to make up the shortfall.
My hon. Friend Sir Paul Beresford spoke with great eloquence about the impact of the comprehensive performance assessment on his small local authority. He also referred to a visit by Andrew Stunell. As a councillor, I also appeared before my hon. Friend and I always found him to be charming and most courteous.
I hope that the hon. Gentleman will not say that my hon. Friend the Member for Mole Valley is not a charming person.
Oh, I did—I always found that my hon. Friend delivered.
My hon. Friend Mr. Pelling spoke about greater accountability and wondered whether Lyons and Lichfield would end up as the same thing. At least there is a possibility of a BBC documentary about the Lyons report.
Sir Peter Soulsby asked what evidence we had that revaluation would increase the council tax. The answer is Wales, where 33 per cent. of households went up a band and only 8 per cent. went down. He criticised the suggestion that the local authorities have become the agents of Government, but Mr. Clarke originally made it. If the hon. Gentleman has problems with that, he should take it up with his party.
The hon. Member for Hazel Grove was a little disingenuous. At least his predecessor admitted that the redistribution effect of equalisation—having a slightly higher local income tax in one part of the country to pay for another—could be a problem. The hon. Gentleman appeared to suggest that that was not the case. With only a week to go before the local elections, I thank him for making it clear that the Liberal Democrats oppose offering special help to pensioners. I will ensure that that appears in our last-minute leaflets to make it clear that the Liberal Democrats have abandoned elderly people.
Mr. Wills was very kind about Conservative control in his area, suggesting that everything was right in respect of ring-fencing and central control, but his argument was eloquently demolished by my hon. Friend Robert Neill.
Alison Seabeck was too nice about me for me to criticise a single thing that she said, but I have to say to Mr. Slaughter that every time he speaks about Hammersmith council I know exactly what the wedding guest felt like in "The Rime of the Ancient Mariner".
The Secretary of State made an interesting point but was rather unkind about Trafford. I took the opportunity to look into all the metropolitan district councils surrounding Trafford—and guess which authority had the lowest council tax? [Hon. Members: "Trafford."] Yes, Trafford, and guess which party controls Trafford? [Hon. Members: "The Conservatives."] Yes, and all the others have levied vastly higher council tax bills.
The Secretary of State went on at some length about all the questions that we have been asking, suggesting that we were scaremongering about a new way of raising council tax and revaluation. Indeed, the Minister for Local Government got rather upset about it all. Yes, we have tabled a number of parliamentary questions and we have taken the opportunity to use freedom of information legislation. We know that the Government are looking into computer-assisted mass appraisal and automated valuation models and that they have spent the best part of £500,000 buying in bulk cameras for their inspectors to have a look at various things.
We also know—the House may be interested in this—that the council tax inspectors in the Valuation Office Agency have been holding high-level talks with local tax inspectors in Hong Kong. That gives a whole new dimension to a Chinese takeaway. The talks included a summit at Hong Kong's new Disney resort on the logistics of holding annual council tax revaluations.
As my hon. Friends will testify, I have always been of a romantic disposition, dreaming in my youth of far distant places. In my early years, I was much taken with the book "Beau Geste", and felt that to see the world, a period of recruitment into the French foreign legion was the thing to do. I see now that I was wrong and that the Valuation Office Agency is the place for exotic travel, taking in Disneyworld and Hong Kong. Admittedly, unlike in the foreign legion, in the Valuation Office Agency one is unlikely to be shot at by Tuaregs or the Vietcong, but there are other discomforts. The air conditioning in some of the five-star hotels can be a little tricky after one has spent the day talking to Mickey Mouse. There is surely no distance that the Government will fail to travel in order to rob pensioners of their savings.
There is one sure test that shows how proud Government supporters are and how much they want to win in May. Are they prepared to be associated with Labour policies? Are they prepared to put their names on the ballot paper? Are they prepared to wear the party's colours? We all know where the Conservative party stands. We are standing in a record number of seats—90 per cent. of all the contests have a Conservative party candidate standing, and it is even higher in some regions. The Liberal Democrats are just treading water, but the Labour party has gone backwards, contesting not far short of half the seats in the election. That is the lowest number of seats contested by any Government party at a local election. It is the clearest indication that no one trusts this Government. Nobody believes that their policies are working and their closest supporters are too ashamed of Labour's record in local government to wear a red rosette.
I congratulate Mr. Pickles on the flourish at the end, which has done for local government policy what George Best did for the soft drinks industry—not much at all. I congratulate him on the flourish, but what is clear from the debate is that the traditional stance of the Conservatives in opposition is not to have a policy. We know that they do not have a policy, because they have not said anything positive in debates over the last two years. We know that it is the job of Her Majesty's loyal Opposition to oppose Government policy, and we expect them to do that, but if I were Her Majesty, I would want my money back, because they have failed to do it effectively.
The Conservatives are not stopping at opposing our policy, however. They are engaging in a rather dangerous and disingenuous campaign of misrepresenting the Government's policy. They are misrepresenting the Government's policy, and they know that they are doing so. The comments made by the Government in debates in Committee on the Local Government and Public Involvement in Health Bill—which my hon. Friend Alison Seabeck rightly observed was a consensual Bill—have not been passed to the Conservative Front-Bench spokespersons who have been speaking tonight.
On restructuring, the Government asked councils whether they wanted to put forward proposals to move to unitary structures. It has already been pointed out that half the councils that have put forward proposals are controlled by the Conservatives. These are not proposals from the Government. They are the result of a devolutionary approach to restructuring, which stands in stark contrast to the approach taken by the previous Conservative Government, who imposed unitaries on Scotland and Wales without so much as a proper consultation, and who introduced changes following the Banham review, after a helicopter flight by the then Secretary of State, Michael Heseltine, with an Ordnance Survey map and a felt tip pen—his words, not mine. The idea that the Government are putting a gun to the head of councils and threatening to withdraw resources is a scandalous accusation, and it is not true. I understand that there are local elections going on, but I wish that the Conservative party would keep the arguments at local level and not pretend that the proposals are those of the Government.
The power to direct has been agreed with the Conservative-led Local Government Association on a cross-party consensual basis. The commitment has been given to the Committee considering the Local Government and Public Involvement in Health Bill and to the House by the Secretary of State that that will be the case, yet the myth that it is not the case is perpetuated.
The revaluation issue is the entirety of the Conservatives' policy. Again, it is based on what is frankly a misrepresentation, and they know it. They say that the Government are proposing new powers for inspectors; we are not. The powers of inspection were laid out in 1991 by the then Conservative Government who introduced the council tax. The law does not allow an inspector to enter someone's home without the permission of the householder. There are no plans to change that, and the Conservatives know it.
The Conservatives no longer have a policy to engage in a constructive debate about the future of local government. Instead, they opportunistically attack the Government on the basis of misrepresentations. At least Mr. Curry took us into a proper policy debate, because he understands local government finance, as I suspect some of his colleagues do not.
I shall apply myself in a moment to some of the serious policy points that have been made, but before I move off my criticism of the Conservatives' attack, their strategy and their tactics, let me issue a warning to them. It is a warning that was sounded by my hon. Friend Mr. Slaughter. In the 1980s, the Thatcherite councils in Wandsworth and Westminster were seen as flagships—
And Bradford, as I am being reminded. How could I forget? I tend to keep my criticisms of Bradford less public.
In that period, there were two flagship Thatcherite authorities which the leadership of that Government—particularly under Kenneth Baker, now Lord Baker—used to drive policy changes through the Conservative party. People now face not a flagship but a U-boat, because Hammersmith and Fulham council is the true face of the Conservative party at local level. Let me give some succour to my hon. Friend the Member for Ealing, Acton and Shepherd's Bush: the arguments from Hammersmith and Fulham council and Mr. Hands for extra resources cut no ice against the background and the eight policy measures explained to us.
No, I will not.
The accusation repeated tonight that the Government distribute formula grant on the basis of party political bias is scurrilous and a misrepresentation. It is not backed up by the facts, by the figures provided independently by the House of Commons Library, or by the Local Government Association's policy. I give the warning about the U-boat of the Conservative party at local level, because millions of voters on
At least Andrew Stunell has a policy that we can debate. I disagree with that policy, because local income taxes, as my hon. Friend Mr. Wills said, would require a redistributive amount that would diminish the local discretion sought. The idea of localisation of business rates ignores the reality of the direct support grant, the changes made in the past 10 years and the £1 billion extra provided through the local authority business growth initiative scheme, which is welcomed by councils across the political spectrum.
The Liberal Democrats claim that their policies are original and sound, but the problem, as a predecessor said, is that when they are original they are not sound, and when they are sound they are not original. [Interruption.] It might be old but it is still true; at least the hon. Member for Hazel Grove knows the origin of the quote, which is more than can be said for some other Opposition Members, who should know it.
My hon. Friend the Member for Plymouth, Devonport, as chair of the all-party local government group, made a thoughtful speech. She praised the direction of travel through local area agreements and the duties to co-operate in the Local Government and Public Involvement in Health Bill.
My hon. Friend Sir Peter Soulsby, who brings huge experience to the debate, said that he welcomed the direction of travel and would like to go further.
My hon. Friend the Member for North Swindon brought to our attention some important points about what has been happening in Swindon. I give him the assurance that he requested: the improvement that has taken place in Swindon council has in significant part been as a result of the strategy of council improvement backed up by real money from central Government. I hope to make that point in Swindon next week.
Sir Paul Beresford gave me some good advice on twisting the Liberal Democrat graph, and I shall examine his points. I disagree with him, however, on his criticisms of local area agreements. There is broad and deep consensus on the idea of joining up funding at local level, and of changing the performance regime. The Government have put huge extra resources into local councils, which have seen improvements in services, and are creating a regime of devolution.
Question accordingly agreed to.
Mr. Speaker forthwith declared the main Question , as amended, to be agreed to.
That this House notes the transformation in local government since 1997 and the dramatic improvements in performance across a wide range of front-line services; recognises the achievements of local authorities and their staff with a record number of authorities awarded three or four stars for their performance by the Audit Commission in 2006; contrasts this with the underinvestment and poor morale that the Government inherited in 1997; applauds the Government's radical and devolutionary local government White Paper as the next stage in the reform of local public services, strengthening local leadership and partnership working and empowering local communities; believes that the measures set out in the Local Government and Public Involvement in Health Bill will strongly promote sustainable communities, improving local environmental quality and the quality of life of local residents; congratulates the Government on the way in which it is providing stable funding for local government, increasing overall grants to councils by 39 per cent. in real terms since 1997 with the average council tax increase in England at 4.2 per cent. for 2007-08; and therefore supports the Government in implementing the White Paper and the Bill.