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6.50 pm
Mr. Yeo: I shall comment briefly on what has been an excellent debate about a crucial subject. The debate featured two maiden speeches of high quality. The first was from the hon. Member for Rugby and Kenilworth (Mr. King), who gave an eloquent description of his constituency and an interesting account of his work in removing surplus school places. Unfortunately, he did not give a great place in his speech to the achievements of
Rugby school in inventing an important new British export, but I am sure that the House looks forward to hearing again from him.
The second maiden speech was from the hon. Member for Bolton, North-East (Mr. Crausby), who spoke enthusiastically about the role of manufacturing in his constituency and the achievements of Bolton Wanderers. I share his hopes about job prospects for his constituents in the future and I am sure that the House also looks forward to hearing from him on other occasions.
My right hon. Friend the Member for Bridgwater (Mr. King) relentlessly exposed the failings of the Liberal Democrat-controlled Somerset county council. He also renewed his credentials as an independent and powerful defender of his constituents' interests and, importantly, of the rural community as a whole. He rightly pointed out that the countryside is less well represented in this Parliament than in previous ones, at least those in which I have served.
The hon. Member for Warwick and Leamington (Mr. Plaskitt) convincingly demolished the case for capping Oxfordshire county council, of which he is a former member. With the assistance of an intervention from the hon. Member for Birmingham, Selly Oak (Dr. Jones), he underlined the importance of early notice from the Government of their intentions on the replacement for capping.
The hon. Member for Taunton (Mrs. Ballard) pointed out that much of what the Government have said on capping today and in the past few days has been meant as a warning to Labour-controlled councils that might have been deluded enough to believe that the Labour party election manifesto meant what it said when it referred to the abolition of capping. My hon. Friend the Member for Banbury (Mr. Baldry), who has temporarily left his place, underlined the illogicality of the Minister's arguments. He also emphasised the additional burdens that Oxfordshire county council now faces and which I mentioned earlier.
The hon. Member for Hayes and Harlington (Mr. McDonnell) pointed out that, two years ago, even the Prime Minister gave an unequivocal pledge on capping. I salute the hon. Gentleman's intention to vote against the Government tonight. That is a brave gesture and I hope that I will not put him off by saying that when I did the same myself, as a new Member, it took me a long time to recover from the damage to my career in the eyes of the Whips. Nevertheless, I applaud his stance on such an important issue of principle.
Two clear conclusions have emerged from the debate. First, the Government must clarify their intentions on the timetable for ending capping and on its replacement. They must tell us what the new regime will mean at an early date if damaging uncertainty and confusion are not to plague the important decisions that councils have to take when they set council tax levels next year and the year after.
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Nick Raynsford):
We have had an interesting debate which has ranged widely. The hon. Member for South Suffolk (Mr. Yeo) has spoken twice. On the second occasion, the level of support for him on the Conservative Benches was significantly lower than on the first. Being charitable, I hope that that was not a reflection on his colleagues' view of his oratory or the force of his argument. In his first attempt, the case he put was relatively weak, but he compensated for that by the force with which he expressed it. He reminded me of the advice given to a young politician who was nervous about the force of his argument. He was told, "If you have a weak case, shout loudly."
The hon. Member for South Suffolk made a number of points and I shall seek to address them. He asked about the changes to advance corporation tax, although he was stretching it, in a debate on council tax caps in 1997-98, to drag in that measure, which will not come into effect until 1999-2000. The impact of Budget changes on local authority pension funds cannot be known until after the revaluation that is due after March 1998. That revaluation will decide any changes that authorities must make to their contributions to the funds. Those changes will necessarily take account of all factors affecting funds, including, for example, early retirement. The new level of contributions will not affect local authority budgets until 1999-2000.
Mr. Yeo:
Will the Minister confirm that the income received by local authority pension funds will be lower, from the date of the Budget, because of the change in the tax treatment of dividends received by all pension funds and that, therefore, the income of those funds will be substantially reduced?
Mr. Raynsford:
No, a number of different factors will affect the income that pension funds receive and, until the revaluation is made after March 1998, local authorities will not know what deficit--if any--they will have to cover. Therefore, it is not possible for them to make any provision currently as the hon. Gentleman suggests. That is not a relevant factor to the order.
The second issue that the hon. Gentleman raised was the review of standard spending assessments. He asked for an indication of the changes that the Government might make. He is an experienced Member of Parliament and he knows very well that Governments review the options until they reach a conclusion, at which point they share their thinking with the House. We are considering with local government representatives the range of possible changes that have been suggested. We will reach a preliminary view in the autumn about which changes should be made, we will consult local government in the autumn and we will then bring a report before the House in the new year to implement any changes that we propose. That is the timetable that has been followed in previous years, as the hon. Gentleman will know.
Finally, the hon. Gentleman asked about the implementation of our manifesto pledge to end crude and universal capping. As my hon. Friend the Minister of State made only too clear at the outset, we shall make those changes at the same time as we introduce the replacement scheme, based on best value and local performance plans.
My right hon. Friend the Chancellor of the Exchequer said in his Budget statement that we would review future arrangements for local authority finance, but that we would retain capping for 1998-99, while putting in place measures to improve local accountability that will allow us to fulfil the manifesto commitment. It was right for us to take an early opportunity to let local authorities know the position, so that they could plan accordingly.
My hon. Friend the Member for Rugby and Kenilworth (Mr. King), in an impressive maiden speech, paid tribute to his predecessors and to his constituency. Appropriately, he referred to education reorganisation in Warwickshire, which he described as painful but right. I appreciate his kind words about the handling by my hon. Friend the Minister of State of the case put to her by Warwickshire for the relaxation of the cap.
The right hon. Member for Bridgwater (Mr. King) made the fair point that there was no doubt about the new Government's commitment, made clear in opposition before the election and made clear again after the election, to stick to the inherited local government settlement this year.
Mr. Raynsford:
I was talking about the speech by the right hon. Member for Bridgwater. I trust that the hon. Member for Somerton and Frome (Mr. Heath) will have the courtesy to listen to my response to what was said by another Member from his part of the country.
The right hon. Member for Bridgwater made that valid point, and recognised the fact that there was no prospect of Somerset county council's being immune from the impact of the cap. He then became involved in a private altercation with Liberal Democrat Members from that county, into which I do not feel that I should intrude, so I shall pass on to the comments of my hon. Friend--
Mr. Heath:
Will the Minister give way?
Mr. Raynsford:
No, I will not give way to the hon. Gentleman.
My hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt) expressed appreciation of the Minister of State's decision in respect of Warwickshire, but expressed concern about the position in Oxfordshire, an authority with which he has had considerable involvement. Indeed, I believe that he was leader of the county council for a time.
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