| Previous Section | Index | Home Page |
Mr. Burstow: While I understand that the Minister and the Government do not want high-spending councils, surely that must be a matter for the local electorate. Capping, whether it be crude and universal capping of the sort that the previous Government imposed or the so-called sophisticated capping to be introduced by the Bill, blurs accountability and denies the electorate the opportunity properly to judge their council.
Ms Armstrong: I suspect that the hon. Gentleman does not understand what tax-and-spend councils mean. Such councils throw money at a problem rather than trying to sort it out and achieve the best outcome. We want to ensure that councils tackle their problems in that way. We are determined that the national interest, about which I shall speak later, is taken into account in the settlement; that has never been possible. It is not honest to say that national Government have no interest in what local government does. We have to work as partners. The Bill spells out the framework within which that partnership will work.
Mr. Patrick McLoughlin (West Derbyshire): In the Minister's opinion, have the Government, during their term of office, capped only authorities that have been irresponsible spenders?
Ms Armstrong: We are at present using the legislation introduced by the previous Government. It does not give me the flexibility or the terms that the Bill will give me.
We are not a tax-and-spend Government. Councils know that, if they budget responsibly, they will not be affected, but if they fail to deliver responsible budgets or if their efficiency and economy fall short of the standard that we expect, we will use these powers to protect the council tax payer.
The new powers contained in clause 23 and schedule 1 are much more flexible than the current capping powers. They will enable the Secretary of State in England or the National Assembly in Wales to look back over several years in deciding whether a council's budget is excessive and allow factors such as demonstrable support for spending plans among the local electorate and the delivery of best value to be taken into account.
The Bill provides for new and more flexible ways to regulate budget levels and allows for a more managed approach by councils that have to reduce their budgets if
the Secretary of State or the Assembly determines that a council's budget requirement is excessive. As we announced in the White Paper and at the time of the local government settlement, we are implementing a scheme under existing powers that will limit the amount of subsidy paid to local authorities which increase council taxes above a guideline that we shall set annually. Individual benefit recipients will not be affected. Where a council does not exceed the guideline, it will receive subsidy as now. If a council increases its council tax above the guideline, it will have to make a contribution to the council tax benefit costs arising from that increase.
The technical provision in clause 24 provides that, where the authority making increases above the guideline is a major precepting authority, such as an English county council, it will make the contributions to the billing authority. In order to ensure fairness, no local area where a higher-than-average proportion of council tax is met from benefit will be affected more than the average.
The Government believe that it is right that, where councils make increases above the guideline, costs should fall in whole or in part locally rather than nationally. The scheme is currently out to consultation and we shall report back to the House on it at the time of the settlement debate.
Mr. David Curry (Skipton and Ripon):
Despite the rules on averaging, does not the scheme mean that a local authority with a large number of properties in, say, band A or B--presumably housing poorer people--will none the less pay more than an authority in, say, Surrey or North Yorkshire as a contribution to council tax spending?
Ms Armstrong:
The Bill allows us to bring down to the average. However, it would be difficult to ask people who are below the average to make a larger contribution to take them up to the average. At present, the national taxpayer picks up the benefit bill. We believe that there should be some local accountability regarding the effect of local decisions. The burden should not be passed completely to the national taxpayer.
Ms Armstrong:
I have already answered the right hon. Gentleman's question.
The scheme, as I have described it, is out to consultation. It is not part of the Bill, but part of the consultation that is currently taking place. The results of that consultation will come before the House in a regulation that hon. Members must debate. The details are part of the consultation process, not part of the legislation. Existing legislation enables us to do that.
Mr. Curry:
Is it not true, none the less, that the relative burden on council tax payers in Liverpool will be greater than that on council tax payers in Surrey or North Yorkshire?
Ms Armstrong:
I have already answered that question. If they do not make the average in Surrey, they will not contribute up to the average. If they have well above the
Dr. Lynne Jones:
My hon. Friend refers to accountability, but surely local governments are accountable through the ballot box. That is where accountability lies. The waters have been muddied in the past 20 years or so by the complexities of local government finance and the fact that so much money is raised centrally rather than locally. These measures will make local government finance even more complex. The right hon. Member for Skipton and Ripon (Mr. Curry) pointed out that the poor will subsidise the poorest. That is surely not a system that a Labour Government should be comfortable about introducing.
Ms Armstrong:
My hon. Friend seems to forget that, at present, the national taxpayer pays for local council policies through council tax benefit subsidies. That does not help local accountability. We want to share accountability between local and national taxpayers, and that is what this measure will ensure. I remind the House that no council needs to see council tax benefit subsidy limitations if it sets its council tax at a level below the guideline. Taken together, the changes will contribute to a further strengthening of local accountability.
Mr. Adrian Sanders (Torbay):
Consultation will occur after councils have set their budgets. That is hardly fair.
Ms Armstrong:
I am not sure that the hon. Gentleman is correct. However, the consultation is outside this process and the budgets do not have to be set until later. The councils know what is going on, and they will listen to our discussions not just in the Chamber, but in Committee.
With central Government no longer telling councils what they may spend, local people will have more impact on the decisions taken by local councils regarding the taxes that they raise, the spending that they commit and the public services that they deliver.
The Bill modernises local government to enable the delivery of modern public services. Alongside our other local government reforms, it puts local people in the driving seat for reform, giving them a bigger say and a better deal from local councils.
The Bill defines the national interest in the workings of local government. It is in the national interest that service standards are high; that best value is gained for every penny of public money spent in the public or private sector; that local government, like central Government, is prudent and responsible; and that the council tax payer is protected from the wasteful and the profligate.
The Conservatives and the Liberal Democrats do not understand that national interest. The Tories maintain their hostility to community and their support for capping, compulsion and central control. The Liberal Democrats seem not to care how high council tax gets or what the public get for their money.
The Bill honours our commitments to end crude, universal council tax capping and outdated compulsory competitive tendering. In their place, we shall strengthen
local financial accountability, provide new protections for the council tax payer and introduce a new duty of best value to raise the standards of public service and modernise public procurement.
The Bill has been broadly welcomed by public and private sector alike, by employers and employees, by local government across the parties and by trade unions. For too long, our public services have been marred by conflict and confrontation. Today, the Bill marks a new spirit of consensus and co-operation in the development of public services. I know that the Opposition do not like that. It is a third way, designed to reform public services, build new partnerships between the public and private sectors, encourage innovation and new forms of public service and protect the council tax payer.
This is a modernising Bill for a modern public service and I commend it to the House.
Mr. Bernard Jenkin (North Essex):
If the Bill promotes light, truth and harmony in local government, consensus, partnership and a better community spirit, we will be right behind it. The Minister knows full well that a sense of community is at the heart of modern Conservatism. If that raises a wry smile on the Government Benches, it is simply because the hon. Lady's ludicrous posturing at the Dispatch Box makes her look ridiculous. What was interesting about her performance was the way in which it made Labour Members sizzle with enthusiasm. The Labour party obviously has a sense of unity of purpose, consensus and partnership about the Bill, which confers 27 powers on the Secretary of State to exercise over local government.
Another interesting point about the Minister's performance was that it was characterised by the tell-tale signs that emerge when the legislative cart has been put before the policy horse. First, she announced amendments to the Bill as she moved Second Reading. The pilot schemes for best value are still in progress, so the Government are still formulating the policy on which we are being asked to legislate. Secondly, the hon. Lady spoke about what the Bill does not contain rather what it does contain, and she made little mention of the 27 new powers. There is also a tell-tale clause of the kind that appears in a Bill when there is a muddle; I refer to clause 14, which deals with the use of secondary legislative powers to amend primary legislation. That suggests that the Government do not now know what changes need to be made, and will think of them later.
5.12 pm
| Next Section
| Index | Home Page |