| Previous Section | Index | Home Page |
Sir Norman Fowler (Sutton Coldfield): Government Back Benchers cheer, but I doubt that very many will cheer once the implications of the statement have been understood. Whatever else he has done, has not the Secretary of State opened the way for major over-inflation increases in council tax next year, which will affect millions of ordinary council tax payers throughout the country? Does he accept that the net result of what he has announced today will be that council tax bills could rise by as much as 10 per cent. next year? Does he realise that, for many elderly people, that wipes out at a stroke any advantage that they might have had from the winter payment scheme?
The Secretary of State says that he has inherited our Red Book figures, but can he confirm that, since May, local authorities have been burdened with a wide range of new costs? The increase in inflation since May will add more than half a billion pounds to local authority costs; there have been no fewer than five increases in interest rates since May, also adding to costs; and the £5 billion-a-year pension tax in the Budget has a direct impact on local authorities of £300 million a year.
Moreover, can the Secretary of State confirm that the £800 million for education in England, which was announced in the July Budget and has now been announced again by the right hon. Gentleman, comes from the contingency reserve provided by the previous Government? It was in the previous Government's spending plans. Is he aware that many Labour local authorities--not Conservative; Labour authorities--are saying that this settlement could have a dire effect on personal social services, especially those for children and the elderly?
Does the right hon. Gentleman remember that last year the then Opposition spokesman, the right hon. Member for Holborn and St. Pancras (Mr. Dobson), said that the 1996 figures
As for debt, will the right hon. Gentleman confirm that he got it right the first time he attempted to make the announcement to the House? Will he confirm that his changes to standard spending assessments will mean rewarding councils that have run up large debts and penalising councils that have been thrifty? Will he further confirm that his changes to the damping mechanism will cause acute problems for many councils, which can be solved only by sharp council tax increases?
Does the right hon. Gentleman recall that in September last year, the Prime Minister, then the Leader of the Opposition, said:
I have admitted to a 7 per cent. band D increase in council tax--
Sir Norman Fowler
indicated dissent.
Mr. Prescott:
That is exactly the same increase as the Tories allowed for--
Sir Norman Fowler
indicated dissent.
Mr. Prescott:
Is the right hon. Gentleman suggesting that it was more than that? I say that it is precisely the same amount as the Opposition allowed for when they were in government. The facts are easily checked in the Library. Despite considerable criticism, we have accepted the public expenditure plans of the previous Chancellor of the Exchequer.
We have also made it clear that we are giving more money than is necessitated by inflation. The figures amount to a 1 per cent. real increase.
It is all very well saying that the money for education comes from the contingency fund, but of course the previous Government did not commit themselves to spending that amount on education. The previous Chancellor did not mention any extra resources for education. The fact that we choose to make education a priority is a reflection of our priorities, not those of the Opposition.
As the right hon. Gentleman knows, the effects on pensions cannot be calculated until the revaluation of pensions is carried out; pensions in this financial year are unaffected. The Chancellor has made it clear that if extra costs are eventually involved, he will take them into account at the appropriate time. The fact remains that local authority pensions in this financial year are unaffected.
In answer to the implied claim that local authorities were better off under the Tories, I remind the right hon. Gentleman of the electorate's view: the Conservatives had 240 councils in 1979; they now have about 30. That clearly shows what the electorate thought of the Conservatives' administration of councils and services.
The right hon. Gentleman claims that there is no extra money for children's social services, yet I have announced £70 million in that context. Nothing at all was provided in the previous three years--the right hon. Gentleman's colleagues could not find the money for desperately needy children and social services.
Our assessment of the social needs of local authorities is a good deal sounder than the assessments used by the Conservative Government, under whose rule people staying in the Ritz and in the Westminster area benefited from resources that should have gone to authorities with
far greater needs. Our standard spending assessment system represents a fairer approach, of working with local government in partnership to improve local government services. We are justly proud of that.
Mr. Stephen Timms (East Ham):
I particularly welcome the new emphasis on fairness in my right hon. Friend's announcement, and the change to the treatment of capital financing charges in the formula. Will he join me in paying tribute to the long fight by the Newham Needs campaign for the abolition of the concept of notional debt, which played such a significant part of the formula used by the Conservatives?
Will my right hon. Friend confirm that the beneficiaries of the change that he has announced are not profligate authorities, but several of the hardest-pressed authorities in the country, including Sunderland, Barnsley and Tower Hamlets, as well as my own authority in Newham?
Mr. Prescott:
Yes, I agree with my hon. Friend. The reassessment shows that Newham is in desperate need. It did not have a very high ranking under the assessment that I am changing. We make it clear that we are adjusting the programme so that Newham gets more resources. The present assessment is better than the previous one and is based on the greater needs in Newham. It is a good example of the way in which our fair assessment of the principles has applied.
Mr. Paul Burstow (Sutton and Cheam):
We on the Liberal Democrat Benches welcome the Secretary of State's announcement on the local government finance review. Liberal Democrats want a more accountable system, which raises tax on the basis of ability to pay and guarantees greater freedom of action for local councils.
Is it not the case, however, that today's settlement is one of the tightest ever? Council tax bills are set to soar, and council services are set to suffer. People will pay more and get less. Will the Secretary of State confirm that the figures published only last week by his colleague, the Chancellor, show that council tax bills are set to rise by more than 10 per cent. this year--the biggest increase since council tax was introduced by the previous Government?
Does the right hon. Gentleman accept that the settlement fails to tackle the cash crisis in our schools? Does he accept House of Commons Library figures which show that, even after the extra money that is to be put in, this year there will be a 0 per cent. real-terms increase in funding for local authorities? Does he accept, therefore, that for every £1 that a school gets, there will be £1 off care for the elderly, as a consequence?
Is the Secretary of State aware that more than 476,900 children aged five, six and seven are in classes of more than 30? Where in his statement today is the extra money that will pay for his pledge on class size reduction? Where is the extra money to pay for the 55,000 additional pupils coming into our schools next year? Can he tell us whether class sizes will go up or down next year?
Does the Secretary of State accept that the previous Government underfunded community care, and forced social services into the business of rationing care for the elderly and disabled people? Will not the settlement mean longer waits for care assessment and provision,
tighter eligibility criteria and increased charges for home helps and meals on wheels? Are not the real losers from the settlement the most vulnerable pensioners?
"make no allowance for inflation, the cost of pay increases or the cost of providing extra services for the growing number of old people and of children at school"?--[Official Report, 27 November 1996; Vol. 286, c. 343.]
Is it not that very settlement that the right hon. Gentleman has just announced to the House?
"We have no plans to increase tax at all"?
2 Dec 1997 : Column 165
Will not these major council tax rises that the Secretary of State has just announced hit the very people who relied on those promises at the election?
Mr. Prescott:
We will take no lectures from the Opposition spokesman on taxation, assessments of need, relationships with local authorities or the benefits that council tax payers got for their money under the previous Administration.
| Next Section
| Index | Home Page |