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9.20 pm

Ms Hilary Armstrong (North-West Durham): We have had an interesting debate. It has certainly shown the difference between the two sides of the House. It was interesting that almost all the Conservative Members who contributed supported the Government's general case, but went on to plead special cases for their authorities and pointed to some unfairness in the way in which they were being treated. That hints at a slight problem for the Government, who are pleading with all the charm, or otherwise, that they have, that everything is fair and a watertight methodology is being used.

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The right hon. Member for Selby (Mr. Alison) made a particular plea and I hope that the Minister will be able to deliver the commitments that he gave to his authority because the problems caused by reorganisation there are problems that we want to be acknowledged. We want the Government to live up to those commitments.

We have been discussing a financial settlement that expresses the relationship between central and local government. An effective democracy depends on alternative and competing sources of power, yet the Government have centralised power and enfeebled local government in ways that many people believed would never happen in this country. It is small wonder that many councillors feel that they have become little more than an administrative outpost of central Government.

Time and again, hon. Members have said that the people have given their verdict. Much as Conservative Members complain about who is running councils, it is not the Opposition but the electorate who control that. They will be somewhat bemused that their wishes are so trounced by Tory Members.

Local government has the potential for being the engine of regeneration. It is local government, rather than central, that has a clear awareness of the needs, desires and aspirations of the local community. Local government is best placed to respond flexibly to changing circumstances in the locality. Local government, rather than central Government, works closely locally on a day-to-day basis with other public agencies, such as health authorities, but also with business and community groups.

The way in which some Conservative Members talk about relationships between business and local government shows that they do not know what has been happening. Extremely effective partnerships between Labour local government and business have been forged up and down the country. In Consett in my constituency, they are central to the town's recovery from the closure of the steelworks. The Government fail to understand the benefits to society from the development of a proper working relationship with local government.

One commentator, the former editor of The Times, Simon Jenkins, has said:

He now works for the Evening Standard. Neither The Times nor the Evening Standard is famed for its support of the Labour party, but we welcome his judgment.

Local government is now exceptionally reliant on central Government for its funding. That is why we have these debates. What can be spent in the localities is, in almost all aspects, determined by central Government. Therefore, it is to central Government that we must bring our complaints and concerns. That is no accident. It is not the result of things happening without anyone knowing but of deliberate decisions to disempower local government.

According to the Prime Minister's former trusted adviser, Sarah Hogg, Ministers and Margaret Thatcher were exasperated with local government in the late 1980s. She said that that was continued in 1990 and that

We have heard some of those Tory Members today.

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The Parliamentary Under-Secretary of State for the Environment (Sir Paul Beresford): What about Anthony Crosland? He was sick of it too.

Ms Armstrong: Does the hon. Gentleman want to intervene?

Sir Paul Beresford indicated dissent.

Ms Armstrong: The revenue support grant settlement this year gives councillors little ability to makes decisions that respond effectively to the needs and desires of their local communities. Instead, councillors, Labour, Liberal and even the odd rare specimen of a Tory, are placed in a straitjacket by central Government.

This month's Treasury Select Committee report--I congratulate my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) on his contribution on this--states that to fund an increase in the areas that the Government have recommended, including education,

Most local politicians do not have the choice of whether to cut services or hike up the council tax. As my hon. Friend the Member for Barnsley, West and Penistone(Mr. Clapham) said, too many councils are being forced both to cut services and raise the council tax as much as they can. Again, local communities will pay more tax and get less services.

Local government and local communities are having to pay the price of central Government economic incompetence and waste. Central Government still take no responsibility for that. They have not even bothered to apologise for the £4 billion poll tax fiasco. Indeed, they are now set on an another significant administrative waste in the shape of their dogmatic, ideological determination to introduce nursery vouchers.

The Government have not even followed the Environment Select Committee recommendation made in October 1995 that the Department of the Environment should attempt to quantify alleged efficiency savings possible in local government. It said that the Department

The Committee recommended that the

We have been urging the Government to do that for some time, but they singularly refuse to take it on board.

Several hon. Members have questioned the logic of the SSAs, notably my hon. Friend the Member for North-East Derbyshire, who gave a detailed critique of how the SSA affects his constituency and North East Derbyshire district council.

The Secretary of State claimed that he had always considered me a fair-minded woman. I try to be, but that is why I find the inequities in the current funding system objectionable. Neither I nor my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) is alone in

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objecting to the methodology used in the current funding system. No reasonable person could believe that a system that is meant truly to reflect economic and social need could place Westminster city council fourth in the league table of deprivation.

The Minister and I have had some correspondence about that matter. He may have noticed a recent article by the former local government correspondent of The Daily Telegraph, John Grigsby--again someone not noted for his support for the Labour party.

Mr. Curry: He has said some nice things about me.

Ms Armstrong: He has said some good things about the Minister, but not about the system. His article states that

he suggests to the Minister--

No Labour Member is naive about the difficulties of ensuring a fair system. As John Grigsby goes on the say, however:

He says that what is of

Clearly, justice is not being seen to be done.

Mr. Gummer: Will the hon. Lady simply explain to me why Westminster council did better under a Labour Government than under a Conservative Government if the system is unfair? If she says it is unfair, it was more unfair when Jack Straw drew up the rules.

Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order.

Mr. Gummer: I apologise. I should have said the hon. Member for Blackburn (Mr. Straw).

Ms Armstrong: I am tempted by the right hon. Gentleman's intervention. He has sought to intervene a number of times to lambast Labour Members. At least he resisted this time and did not try to abuse people. That his normal method of intervention is to abuse people says more about him than it says about us. My hon. Friend the Member for Blackburn (Mr. Straw) did not devise the system. My father was the Minister at the time and he certainly did not have my hon. Friend as an adviser. The Secretary of State forgets that I have a little knowledge of what was going on in the last Labour Government. He tries to use figures in his normal way: to confuse rather than elucidate. The figures that I have given are clear. They resulted, as he knows, in rates being levied in Westminster that were nothing compared with the council

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tax being levied today. There are anomalies. The Government know that, and they should do something about them.

Under the Government's "pay more, get less" policy, council tax payers will have to fork out more for the privilege of receiving fewer services. Council tax payers will have to pay the price of Tory economic incompetence. The gap is widening between what the Government acknowledge that councils should spend and the funding that local authorities receive from central Government. The Tories expect council tax payers to fill the gap.

The Secretary of State might try to con us by claiming that the Government are motivated by a desire to enable local government to raise a greater proportion of its funding, but the Minister said this afternoon--and it has been confirmed throughout the debate--that that is not their intention. Their intention is to hide another tax hike--this time, by trying to hide behind the coat-tails of Labour local government.

The Government have failed to take into account the fact that experience has taught the electorate to trust the word and explanation of local councils in preference to the statements of Tory Ministers.

The Government's original figures, produced at the time of the Budget statement, show that the Government expected council tax payers to fork out a 5.2 per cent. council tax increase next year and an extra £3.5 billion in the next three years--the equivalent of nearly 2p in the standard rate of income tax. The final tax hike is likely to be considerably greater, however, and hon. Members have mentioned the words of the Chief Secretary to the Treasury Select Committee.

The Government claim that they are generously giving new money for education. The figure that is floated by Ministers is the supposedly generous 4.4 per cent. increase in the education SSA. It is not only the British people who are more intelligent and sophisticated than to believe the Government--not even their colleagues believe them.

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