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Ms Keeble: Can the hon. Gentleman relate figures for finances to the services provided? People are extremely interested in what they get for their money. In particular, could he say what his county council is doing about some of the services that are most important to local people, for example, nurseries?

Mr. Robertson: The hon. Lady may recall that I asked a question of the Secretary of State for Education and Employment about Gloucestershire county council. Mistakenly, the right hon. Gentleman assumed that it was under Conservative control and condemned it for its nursery policy. In fact, for many years, it was controlled by the Liberal Democrats, so he got that wrong. He also got another aspect wrong, as the Labour group on the council has tried to deny passported money going to schools, and it is going to the schools only because of the Conservative group on the council. Therefore, perhaps the hon. Lady ought to look a little more closely at the matter than the Secretary of State did on that occasion.

To return to the reply that the Under-Secretary was kind enough to give me, it seems that the reduction in total of revenue support grant and redistributed non-domestic rates in Tewkesbury exceeds the reduction in the SSA. The hon. Gentleman informed me that that follows changes to the SSA system and, crucially--this will come across to council tax payers in the near future--one of the causes of the change has been a shift in the cost of local authority services from central Government to council tax payers. With the new change, it seems that the cost has been shifted only to certain council tax payers--in other

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words, those in prudent authorities and not those who live in the sort of authorities that my hon. Friend the Member for Altrincham and Sale, West so eloquently described.

10.1 am

Mr. Tim Yeo (South Suffolk): I am grateful to you, Mr. Deputy Speaker, for calling me rather earlier than I had expected. That gives me the chance first to congratulate my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) on what everyone present would recognise as a speech impressive in its command of a complex subject, eloquent in its trenchant denunciation of the extraordinary change that the Government have made in the capital financing adjustment this year and powerful in its conclusions, to which I will return.

The debate is important because we are just beginning to see the consequences of the changes to the capital financing adjustment and timely because those changes will become apparent to council tax payers throughout the country in the next few weeks as demands hit mats. Although change in the capital financing adjustment is a complex issue, the consequences of that change are fairly simple and I shall concentrate on them. The effects of that change, and a number of other changes in the way in which SSAs are calculated, are beginning to be revealed in a series of record increases in council tax. In the next five or six weeks, council tax increases in a large number of authorities will be higher than any increase since the system was introduced.

Mr. White: In the 1996 Conservative Government's Budget, it was stated that council taxes for last year and this would be raised far higher than inflation, to shift the balance back to local tax payers. That was the your Government's policy, but you seem to have forgotten that.

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I must remind the hon. Member that I was not a part of any Government.

Mr. Yeo: I am glad that the hon. Member for Milton Keynes, North-East (Mr. White) raised that point, as I intend to come directly to it. The Secretary of State for the Environment, Transport and the Regions has confirmed that, had the Conservative party remained in power, the average rise in council tax would have been significantly less than the rise that results directly from the Labour Government's decisions. We have him on record in the House saying so, and I shall quote the relevant section of Hansard in a moment. This year will be notable for record increases in council tax and, unfortunately, for reasons that I shall explain, it may not be the last year in which we have such increases.

I was surprised by the speech of the hon. Member for Northampton, North (Ms Keeble), who spoke of her experience in Southwark. Given the record of that borough, frankly, I would rather have kept quiet in the House about my involvement.

Ms Keeble: As I said, all of us have made mistakes. However, is the hon. Gentleman aware that Southwark was the only council that froze the poll tax for the whole three years that it was in existence?

Mr. Yeo: I am afraid that we are not debating the poll tax and it was not even directly the cause of the

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Conservative defeat at the election last year, since it was abolished before the previous election, which the Conservative party won. It is difficult to see how one can relate that tax to the change in the capital financing adjustment, which is the subject under debate. The hon. Lady referred to Southwark at some length and, given the borough's record, I should have thought it wiser to keep quiet about any connection with it, had I had any such connection--I am glad to say that I do not.

If the hon. Lady had troubled to inquire about the subject that we are debating, she would have found that Southwark has lost £862,000 of SSA directly as a result of the change. Like many other inner London boroughs, it has suffered badly in the SSA calculations this year because the Government and the Labour party are so consumed with envy at the outstanding success of Westminster and Wandsworth they have deliberately fiddled the formula to attack Westminster and, unfortunately, have swept up a lot of other inner London boroughs as well. I hope that, after they have seen enormous rises in council tax in London, that point will not be lost on voters in inner London on 7 May.

Mr. Adrian Sanders (Torbay): It is not merely the London borough of Westminster that has lost out in the settlement. One of the other changes in the formula has been the adjustment to the bed nights, which has cost many coastal resort local authorities and areas that receive visitors a great deal in their SSA this year--something which the Minister, in a recent debate, agreed to reconsider for next year. I hope that the hon. Gentleman will re-emphasise that. The restoration of the special recognition of the extra costs of being a tourist area, such as providing more public conveniences, car parks and leisure facilities, would be welcome. The loss of that recognition has also cost council tax payers dear.

Mr. Yeo: The hon. Gentleman is right to draw attention to that matter. I confess to having some sneaking sympathy for the Minister. Dividing up the cake among the local authorities is a problem for any Government. They will never produce a formula that will satisfy every local authority or even every group of authorities, because they have directly competing interests in this matter. Whatever the size of the overall cake, some will be disappointed.

As my hon. Friend the Member for Altrincham and Sale, West rightly pointed out, the problem about those changes is that they seem to have been motivated by a desire to penalise authorities that have been acting responsibly. Southwark has lost out, and I hope that the former voters in Southwark of the hon. Member for Northampton, North will be aware of that. Northamptonshire county council has also lost badly as a result of the change, and I am sure that her voters will be interested in the enthusiasm with which she supported the Government's decision to make the change when it has clearly penalised them so directly.

The consequence of the changes is a huge rise in council tax. Throughout the country, council tax payers and service users are starting to learn exactly what it means to have a Labour Government at Westminster. It is clear, even before next week's Budget, that Britain cannot afford a Labour Government.

The capital finance adjustment and the other changes to the calculation of SSAs will result in an increasein council tax in Devonshire of 19 per cent.,

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in Northumberland of just under 18 per cent., in Cheshire of 17 per cent. and in Norfolk of nearly 16 per cent. I could name several other councils that face equally formidable increases. For example, Gloucestershire, which includes the constituency of my hon. Friend the Member for Tewkesbury (Mr. Robertson), faces an increase of almost 11 per cent.

Mr. Andrew Reed (Loughborough): Does the hon. Gentleman accept that the standard spending assessment is a complex issue? Last year, under a Conservative Government, my local authority of Charnwood--of which I was then a member--faced a 12 per cent. increase because of the changes in the SSA, despite the fact that it raised its spending only in line with inflation. Does he accept that, because the SSA is so complex, there will always be such variances?

Mr. Yeo: As I said in response to an earlier intervention, I recognise that any change in the SSA formula is likely to produce losers as well as winners, which is a matter of concern to those authorities and residents that are affected. Our concern is whether the capital financing adjustment is justified, why it was made and what its consequences will be.

The effects of the change are by no means confined to the shire counties that I mentioned. In Wakefield, for example, the increase in council tax will be nearly 12 per cent. and in South Tyneside it will be nearly 10 per cent. Even in London, where there will be elections on 7 May, there will be substantial increases--Hillingdon, for example, faces an increase of 12 per cent.


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