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Mr. Frank Dobson (Holborn and St. Pancras): Today's statement shows that the Government are determined to force local councils to increase council tax and reduce the services that they provide for local people. Next year, as this year, local people will have to pay more and get less. [Interruption.] Madam Speaker, we kept quiet for 25 minutes. It would not be a bad idea if Conservative Members could keep quiet for five.
Madam Speaker: The hon. Gentleman makes a good point. He will be heard in good order.
Mr. Dobson: On the basis of the Government's figures, council taxes could rise by as much as this year's average increase of 5.2 per cent. That council tax increase, combined with higher charges for local services like school meals, meals on wheels and home helps, and the cost of service reductions, will cost an average household £108 next year.
The Government's figures also show that they expect council tax payers to cough up an extra £3.5 billion over the next three years, which is about equal to an extra tuppence on the standard rate of income tax. That is just another example of the Government furtively taking away with one hand the highly publicised cuts that they have been making with the other.
The Secretary of State and the Prime Minister today, like the Chancellor of the Exchequer on Tuesday, claimed that the Government will provide more money for education next year. That is simply not true. According to their own figures, councils will spend less on education next year than they are spending on it this year. An extra 86,000 children will be at school next year. It they are taken into account and councils fall into line with the Government's published spending plans, the amount spent per pupil next year in our schools, far from rising, will fall by £40 per pupil.
Let us compare the Government's world of fantasy finance with what is happening in the real world. In the real world, there are more schoolchildren; hard-working schoolteachers expect a pay increase next year; inflation
drives up the price of books and other school equipment; and councils or schools will have to meet the extra costs of measures like installing seat belts in school coaches.
A landfill tax will be levied on councils, costing them £77 million next year. That is a straight transfer from council tax payers to the Treasury. This morning the Secretary of State said on the radio that councils could save more money by putting services out to tender. As he well knew when he said it, councils are already obliged by law to put their services out to tender and, if a contract does not go to the Tories' friends in the private sector, it can be only because a council's own work force put in a lower and better bid. He also suggested that councils can increase charges to help keep up their current level of spending. Which charges does he want to see increased?
Does he want parents to have to pay more for school dinners or pensioners to pay more for meals on wheels or home helps?
This mean-minded settlement will increase council taxes, push up charges for vital local services and cut those services for local people. It means that next year, like this year, the Government will force local people to pay more and get less.
Mr. Gummer:
The hon. Gentleman is saying, on the one hand, that the settlement is inadequate and on the other that we are putting taxes up to pay for it. The curious thing is that those two ideas do not hang together. How much would he think was adequate? How much more tax would a Labour Government impose to pay for an adequate settlement? They cannot have it both ways. He wants more money without anybody paying it. That is the traditional Labour attitude.
When the hon. Gentleman works out how much the council tax, as he says, will go up, he is saying that every Labour council will put up its tax to the highest level that it can manage within TSS and therefore take that tax off its local taxpayers. In other words, he is proving what we have always said: that Labour councils tax people more, and that immediately they are given the chance to tax more, they take that chance. Yet what did the local authority associations, which are all run by the Labour party, say? They said that if we gave them more freedom they would deal with it responsibly, but Sir Jeremy Beecham has now told us that they will use every corner of that freedom to put up the council tax by 10 per cent.
Already the Labour party has halved that increase to 5 per cent. because it does not accord with the Blair rule, which was circulated around the Opposition Front Bench and was very clear. First, before the Budget was announced, Labour Members had to say that any settlement, whatever it was, was inadequate. Secondly, they could not promise any more money.
The questions of the hon. Member for Holborn and St. Pancras (Mr. Dobson) beg the question: how can people have more money to spend without any increase in taxation? The answer is that one cannot spend money one does not have. It is a simple answer, but it is one that Labour--new, old or indifferent--has never learned. We have heard today that the Labour party has not learned anything. Wherever it is in power, it intends to spend right up to the limit that it is allowed.
The hon. Member for Holborn and St. Pancras went on to say that it was fantasy finance. How interesting. The hon. Gentleman was comparing what councils are
spending this year with what their allowance from the Government is for next year instead of comparing like with like.
Mr. Gummer:
The hon. Gentleman did. I suggest that he looks at Hansard to see it. He knows that councils will have 4.5 per cent. more, on average, to spend on education and if that money does not get through to the schools, it will be the Labour and Liberal councils that have stopped it. The Government have given 4.5 per cent. to the schools. The only people who can stop it getting there are the Labour party and its local councils.
Lastly, we will be watching carefully the argument about going out to tender. The metropolitan authorities have gone out to tender and in well over 80 per cent. of cases, the in-house team has won but in the shire districts, only 40 per cent. of in-house teams have won. Does that mean that Labour in-house teams in metropolitan authorities are much more efficient than Labour in-house teams in shire districts or does it mean that it is almost impossible to win a contract in a Labour metropolitan district because the local council trade unionists make sure that they are the paymasters and that those local authorities therefore pay them with the council tax payers' money?
Sir David Madel (South-West Bedfordshire):
My right hon. Friend will be aware of the difficulty that Bedfordshire county council has had this year in relation to its school budgets. Can he confirm that his announcement will make it perfectly possible for Bedfordshire county council to put more money into school budgets in Bedfordshire next year?
Mr. Gummer:
My hon. Friend is perfectly right. If Bedfordshire county council does not increase significantly the money going to its schools--it has a permitted budget increase of 3 per cent., and more in terms of its education budget--it will be because the council has pinched the money to spend on something it wants more.
Mr. David Rendel (Newbury):
Will the Secretary of State confirm that if there is to be extra real spending by local councils next year in education and other spheres, which he has tried to pretend there ought to be, that money will have to come from an increase in council tax?
According to the Department of the Environment's own figures, which were contained in a press release issued on Tuesday, the Government's central subsidy to local councils will be precisely the same in real terms next year as it is this year. There are no extra real resources from the Government. Moreover, is it not the case that a large proportion of the extra resources come from business rates, which are simply a transfer from businesses to the local community, while the amount coming from other taxation is actually falling considerably?
Mr. Gummer:
First, it would be more helpful if the hon. Gentleman, when looking at the Red Book, could distinguish between British figures and English figures; otherwise we do not get the comparison right. His comparison is wrong. Secondly, I do not know whether the hon. Gentleman has run a business, but most business men do not start off by saying that the only way to save
Sir Timothy Sainsbury (Hove):
Will my right hon. Friend accept that the priority that he has given to education in the form of a 4.5 per cent. increase and the recognition of that in the capping formula will be very widely welcomed? Will he join me in condemning the irresponsible party political scaremongering in which East Sussex county council and a number of others led by Labour and the Liberal Democrats have indulged, frightening parents, teachers and governors by saying that their education budgets are going to be cut instead of increased?
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