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Mr. Lansley rose--

Mr. Gardiner: On a point of order, Mr. Deputy Speaker. Can it be right that, of the three hours available for discussion of the local government settlement, an hour and 25 minutes will have been taken up by the opening and closing speeches from the two Front Benches, and--

Mr. Deputy Speaker (Mr. Michael Lord): Order. I am sorry to interrupt the hon. Gentleman, and I entirely understand the point that he is trying to make, but this is the way the House always conducts business of this kind. The time that hon. Members take for their speeches is largely a matter for them, and time is now being taken from the time that is left for debate.

6.36 pm

Mr. Andrew Lansley (South Cambridgeshire): If the hon. Member for Brent, North (Mr. Gardiner) has an objection, he should raise it with his Front Bench. Last year, five hours and two minutes were allowed for this debate, and in the preceding nine years never was less than five hours and 20 minutes allowed. This year, the time has been reduced to two hours and 49 minutes.

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It is clear from the three speeches that we have just heard why the Government do not want a long debate on this subject. The hon. Member for Halton (Mr. Twigg) is in a minority of one on the Labour Benches in applauding the settlement. Why does he applaud it?

Mrs. Ellman: Will the hon. Gentleman give way?

Mr. Lansley: No; I have no time.

I will tell the House why the hon. Member for Halton applauds the settlement. The hon. Member for Northampton, South (Mr. Clarke), for example, spoke of methodology changes, and the Government's political fix which meant shifting money from shire areas and London to metropolitan areas: 2.9 per cent. has been lost in Northampton in methodology changes. My hon. Friend the Member for Banbury (Mr. Baldry) spoke of Oxfordshire, where a 4.8 per cent. increase in the control total was reduced to 3.8 per cent., simply because of the SSA methodology changes. The hon. Member for Halton is happy, however. Why is he happy? Because the control total increase of 4.1 per cent. was increased to 5.9 per cent. by the changes in SSA methodology. That proves the point that my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) was making about the shift from the shires and London to the metropolitan districts.

Mr. Andrew Love (Edmonton): Will the hon. Gentleman give way?

Mr. Lansley: No.

That is why the hon. Member for Halton is happy, and others are not.

Mr. Love rose--

Mr. Eric Pickles (Brentwood and Ongar): Will my hon. Friend give way?

Mr. Lansley: I shall give way to the hon. Member for Edmonton (Mr. Love), because it would be discourteous not to do so.

Mr. Love: I thank the hon. Gentleman for giving way. I am not sure whether it is premature to welcome him to the Front Bench, but I do so in any case.

The right hon. Member for South-West Norfolk(Mrs. Shephard) welcomed the 7.2 per cent. increase for education. Will the hon. Gentleman now take the opportunity to welcome the 5.5 per cent. overall increase in spending on local government in the coming year?

Mr. Lansley: In the few minutes left to me, I shall make it clear that although the Government have increased spending for local authorities, they have not kept in touch with the current changes in spending pressures. Let me give an example. There has been a £2 billion increase in aggregate external finance in England, but an extra £130 million must be spent by local government because of the change in advance corporation tax. It would have been £230 million but for the changes in actuarial calculations. At least £100 million, probably more, will have to be spent on the millennium bug,

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and £80 million will have to be spent on landfill tax. Anyone who knows about waste will know that will be compounded by the increased cost of waste charges. The working time directive and the minimum wage will cost £200 million. Then there is the overhang of teachers' pay settlements, and the £70 million extra that is unfunded. If we add all that together, we realise that at least£600 million is being taken out of the £2 billion.

Mr. Pickles: In his brief speech so far, my hon. Friend has explained where the £33 million by which Essex county council is short to fund its services adequately, has gone.

Mr. Lansley: Absolutely. Essex has exactly the same experience as Cambridgeshire. Although we have an increase, spending pressures are such that we will end up with a 10 per cent. increase in council tax. The Government's policies will lead to a higher council tax and a loss of services.

My hon. Friends the Members for Wantage (Mr. Jackson) and for Banbury instanced that in relation to Oxfordshire. My hon. Friend the Member for South Dorset (Mr. Bruce) spoke of Dorset and my right hon. Friend the Member for Bridgwater(Mr. King) spoke strongly of the impact on schools in Somerset. The hon. Member for Leicester, South(Mr. Marshall) perhaps put it best when he described it as another abysmal year.

The impact is on council tax in the first instance. Last year, the average increase was 8.6 per cent.; this year, the Treasury estimates a 7.5 per cent. increase. If we put the two together, in the two years to 2000 the Government will preside over increases in council tax that are three times the rate of inflation. The Government are again introducing stealth taxes through local government taxation. Within the settlement, much has not been done, and that deserves our criticism. The Government have significantly failed to grasp important nettles. My right hon. Friend the Member for Skipton and Ripon (Mr. Curry) spoke strongly of the failure to remedy unreasonable deficits and disparities in funding for local education authorities. Work should be done on the additional educational needs index and on pupil weighting.

Likewise, my hon. Friend the Member for West Derbyshire (Mr. McLoughlin), the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) and the hon. Member for Lancaster and Wyre (Mr. Dawson) spoke strongly about the need to do something about the area cost adjustment. I understand that, because Cambridgeshire is one of those councils that is beyond the cliff edge in terms of the adjustment. The Deputy Prime Minister says that it is difficult. Three days before the last general election, the Prime Minister, when asked the question, "What are you going to do about it?" did not say, "It is difficult"; he said, "I am going to review it and change it for the year 1998-99."

The Prime Minister did not change it for the year 1998-99. He is not changing it for 1999-2000--he is freezing an unfair distribution system for a further three years. To compound the error of his ways, the Deputy Prime Minister says that Ministers will not take deputations on the subject--they will not listen to the arguments. All the material is being presented through examination of the area cost adjustment, but they will not deal with it.

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Through the settlement, the Government have brought further errors into the system. Crude and universal capping is the subject of debate in relation to the Local Government Bill; I suspect that crude and universal capping is precisely what will arise from the powers that the Government are taking through the Bill. However, through the council tax benefit subsidy limitation we have something that is equally crude and universal.

The criticism by the hon. Members for Normanton(Mr. O'Brien) and for Sutton and Cheam (Mr. Burstow) was right. As a consequence of the settlement, some of the poorer councils will have to raise council taxes by more than 4.5 per cent. A significant part of that money will be raised from poor people in their areas. In fact, money will be taken away to subsidise council tax benefit for those who are unable to pay council tax. It is an iniquitous clawback system.

Within that, there is a further iniquity. Councils that spend below SSA--and South Cambridgeshire spends 23 per cent. below it--will be penalised in the same way, although its budget is well below that which the Government regard as necessary for providing services.

Time is short. By keeping the debate so short, the Government have limited the opportunities for hon. Members on both sides of the House to draw out the problems with the settlement.

The size of the settlement hides a reality. Over two years, council tax rises will be three times the rate of inflation. There has been no response to spending pressures. Service improvements that might otherwise have been achieved will be bled away in the cost pressures that are being placed on local government, principally through Government changes: a political fix that shifts money out of shire areas and London into metropolitan areas will damage services in many important regions in a way that is iniquitous and at odds with Deputy Prime Minister's initial statement that the settlement was nothing to do with councils' political complexion. Well, perhaps not--yet the damage that will be caused to certain areas of the country by the Government's methodological changes makes clear their intention.

We are looking at a system which is taking money and piling it into some of the councils that are the most likely to waste it rather than to spend it successfully on good services. It is the traditional Labour policy of increasing taxes and piling it into the waste. It is as though the Government have come to the House saying, "Look how wonderful we are. We have turned on the taps and the water is pouring out." Unfortunately, they have left out the plug. It is our responsibility, in the short time available, to tell the Government where the settlement has gone wrong and to oppose it.

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