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9.32 pm
Ms Hilary Armstrong (North-West Durham): Conservative Members have tried to suggest that people will pay more and get less. People do pay more and get less under the Conservative Government. The Government have a history, certainly since the previous election, of extracting from the taxpayer more and more in tax. This month, with the increase in council tax, people across Britain will face their 23rd Tory tax hike. Council tax bills will go up. Services will be cut. Taxpayers will pay more but get less. Ordinary families throughout the land are paying the price of Tory economic mismanagement and incompetence.
As if it was not bad enough that the Government have introduced 22 new taxes since 1992, costing the typical family an extra £670 a year, residents will now face hefty increases in their council tax bills.
Sir Paul Beresford:
By how much will Labour load central taxpayers, to give to local government?
Ms Armstrong:
I shall deal with the Minister's sedentary intervention in a moment.
Government figures produced during the Budget, and subsequent statements from civil servants and politicians, show that the Government have a clear policy of forcing the council tax up, not just this year, but next year and the year after that. Council tax payers will have to fork out an extra £3.5 billion over the next three years--equivalent to almost 2p on the basic rate of income tax.
Since the general election, we have experienced three years of Tory-driven national tax increases, which are to be followed by three years of Tory-planned local tax increases.
During the previous election, unsurprisingly, so busy were they scaremongering about what a Labour Government would do, that Tory politicians appeared to forget--I am always generous in my interpretation of history--to tell the electorate that under a John Major Government taxes would go up and up. In fact, Tory politicians appear to have got so muddled that they told the electorate that taxes would not go up. The 1992 Conservative party manifesto, for example, stated clearly:
What happened? The Conservatives cut mortgage tax relief two years running.
On 28 January 1992, the Prime Minister told the Leader of the Opposition in the House:
In 1993, what did the Conservatives do? They raised the rate of national insurance contributions from 9 per cent. to 10 per cent.
On 27 March 1992, John Major told the electorate:
Madam Deputy Speaker:
Order. I think that the hon. Lady has forgotten the convention that hon. Members do not use names, but use only titles.
Ms Armstrong:
I am sorry, Madam Deputy Speaker. The Prime Minister--even better--told the electorate:
What did the Conservatives do? In the very first Budget following that election, the Government extended VAT to home energy and fuel. Now, no more than 12 months away from a general election, Ministers are scurrying around trying to pretend that they really have not been putting up taxes--oh no. The problem is that public finances are in such a mess that their options were restricted. I wonder who got the public finances into such a mess.
Accordingly, the Government resorted to their twin magic tricks. The first is the sleight-of-hand trick: having put up taxes every year, they are trying to claim maximum credit for a 1p cut in income tax while denying responsibility for grabbing the money back by forcing council taxes up. The second trick is entitled "pass the buck", and involves central Government cutting support for local government and then blaming councils for the fact that they have had to raise the council tax to pay for essential services.
The problem that the Government and Conservative Members face is that the electorate are becoming tired of these old Tory tricks. They can see through them; they know what is going on, and where the blame truly lies. What the electorate want is honesty. They do not expect miracles, but they do not expect tricks either. They want
us to be honest and straight with them. Unfortunately, they have not had such treatment from the Government, and they have not had it from some Tory councils either.
Mr. Tracey:
Will the hon. Lady give way?
Ms Armstrong:
I have already given way to other hon. Members, and I want to ensure that the Minister has time to reply.
I also want to respond to what the right hon. Member for Brent, North (Sir R. Boyson) had to say. I thought it very brave of him to defend Brent council this evening. The House has not just heard and considered Westminster's problems in past weeks; there is also the real problem in Brent. Before the elections in May 1994, Brent electors were told that the Tories were committed to cutting the council tax. The right hon. Gentleman is right: they did cut it. However, they appeared to be suffering from amnesia when it came to telling the electorate, or even the council, where the necessary funds were to be found.
A Conservative Political Centre pamphlet launched this weekend, co-written by--[Interruption.] I am sorry, Madam Deputy Speaker; I am trying to listen to the sedentary interventions.
Madam Deputy Speaker:
I think that the House knows my views on sedentary interruptions. I am afraid that they apply to hon. Members on both sides of the House.
Ms Armstrong:
The pamphlet tells us:
So we have that model of Tory best practice.
The electorate, however, were not told of the gaping hole in the council's finances or that the cut had to be financed through a quick sale of Alperton lane depot to Onyx, a deal that was conditional on the company being given the profit-making council contract to manage trade waste collection and skip services. The deal was never even reported to a council committee. It cost taxpayers £1 million. The truth has only now come out and been reported to the district auditor. That deal, which appears to be ultra vires, went ahead because Conservative councillors were more interested in cutting the council tax than in protecting the public interest and probity in local government.
This year, the Tory budget in Brent is again in a shambles. The council was clear that the minimum prudent reserves were about £2.5 million. All parties in Brent proposed budgets that set aside £2.5 million in reserves, but, unlike Labour and the Liberals, whose budgets were driven by a commitment to quality, efficient services and a sustainable public financial regime, the Tories were more obsessed with cutting the council tax and so they misled the council and council tax payers.
In the past couple of days, therefore, those Tories have had to announce that they forgot to include expenditure of £1.1 million for statutory special education and for the funding for recycling initiatives, so, surprise surprise,
once the budget had been agreed, the Tories admitted the oversight and had to raise those balances by £1 million. We shall ensure that the auditor has a chance to say something about that.
It is of course possible to cut budgets if councillors are not going to take any notice of the district auditor and of probity. I know the right hon. Member for Brent, North well and that, above all, he expects and demands honesty, so I hope that he will ask his councillors some questions about how they managed to cut the council tax last year and this year.
Other authorities have been trumpeted today. We have heard about Wandsworth council. We seem to have forgotten that, this year, it issued a press release bemoaning the end of the bonanza last year, when 35 per cent. of all transitional relief money went to one council: Wandsworth. Because this year the Government wanted the level in Brent to be lower than in Wandsworth, they removed the bonanza and changed the basis of the arrangements. Wandsworth councillors are not happy.
The Government have a responsibility to protect the public interest, but instead they collude with councillors in Brent who want to avoid the honest budget process. My hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) has already read the letter which, following the 1994 budget, Brent council's leader wrote to officers in the Department of the Environment--I trust political officers.
The activities in Brent contrast sharply with those in many other authorities, where councillors are working hard properly to meet aims and aspirations.
Ms Armstrong:
I am amazed that the Secretary of State dares say that it is well run. I have already given the figure on the cases in Brent that have been proved by the ombudsman, which number 43--I got the number wrong earlier. The nearest other London council had 17 cases. The ombudsman does not, therefore, seem to agree with the Secretary of State.
Time and again, the Tory Government are hitting taxpayers where it hurts. In the same way as it was not an accident that there were tax cuts before the previous general election and huge tax rises after that election, it is not an accident that, in the year before the next general election, income tax is cut by 1p and the Government are grabbing the money back through the council tax.
Several of my hon. Friends pointed out the problems with the way in which the Government calculate the standard spending assessment. My hon. Friend the Member for North-East Derbyshire (Mr. Barnes) has long given great service by raising the matter year after year. My hon. Friend the Member for Alyn and Deeside(Mr. Jones) mentioned the importance of what is happening in Wales today, when Wales is having new authorities forced on it because of the Government's gerrymandering.
Authorities across the country are desperately trying to provide fire services and other services to meet the aspirations of local people, but are having to cut those services while increasing the money that they raise.
Despite the Secretary of State's attempts to pass the buck on taxation, the truth is clear from the Department of the Environment's annual report, which states:
That is what it is about--because the Government cannot manage their finances, they are putting the onus on council tax payers.
It is a tribute to the hard work and efficiency of local government--[Interruption.] The Under-Secretary of State for the Environment, the hon. Member for Croydon, Central (Sir P. Beresford), continues to tries to laud the 13 councils that the Tories still run. Why are there only 13 of them? It is because of democracy. The Government hate the fact that democracy works.
"We will maintain mortgage tax relief".
"So that the right hon. Gentleman is in no doubt, I tell him that I have no plans to raise the top rate of tax or the level of national insurance contributions."--[Official Report, 28 January 1992; Vol. 202, c. 808.]
"I have made it clear, we have no plans"--
"I have made it clear, we have no plans and indeed no need to extend the scope of VAT".
"Brent Conservatives . . . were even in a position to tell voters the amount by which taxes would be cut by the Conservatives in their first year of office; clearly this did a great deal to help them win the election."
"This reflects the Government's view that council tax payers should contribute a slightly increased proportion of the costs of local government".
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