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Mr. Adrian Sanders (Torbay): Which Government were responsible for reducing the formula for bed nights, which has affected tourist areas; which Government reduced weighting for elderly people; and which Government have caused problems for areas with rising numbers of school pupils because of the time lag in the head count in standard spending assessments? Can the Minister name a council affected by all three of those factors? I can give her an answer: Torbay, where those characteristics account for a large proportion of the tax rise.
Ms Armstrong: I wish that that were true. However, the truth is that Torbay is raising the council tax, not because it has taken SSA changes into account, but because it is raising its budget by 6.7 per cent., which is somewhat above inflation. That is why there is a council tax rise of 17 per cent. The Liberal Democrats are responsible for the rise in that budget and they are responsible for the consequent council tax rise.
The Conservatives are no better. Conservative councils have higher than average increases in council tax at 7.6 per cent. In shire districts, Conservative councils have higher average rises than Labour councils.
Ms Armstrong:
The hon. Gentleman will have a chance to put his point in his speech.
In the 1980s, the Conservatives were proud of Wandsworth--their flagship borough. Last year, ahead of the local government elections in London, which may have been incidental, Wandsworth cut its council tax substantially. This year, when there are no elections, Wandsworth has the highest increase of any council in London, with a massive tax hike of 21.5 per cent. Compare that record with the rest of inner London.
All inner-London authorities were treated similarly in this year's settlement. There are only three Conservative councils in inner London. The top three increases in council tax in inner London are in those same three Conservative councils. In Conservative Kensington and Chelsea, council tax is up 7.5 per cent.; in Conservative Westminster, it is up 8.7 per cent.; and in Conservative Wandsworth, it is up 21.5 per cent.
By contrast, other councils--Islington, Greenwich, Hackney and Lambeth--are cutting council tax this year. In the London borough of Redbridge, the Conservatives and the Liberal Democrats combined to vote through a total council tax rise of 11.3 per cent. in the face of opposition from the minority, but ruling, Labour group.
It is little wonder that, across London, councils run by Conservatives and Liberal Democrats have higher average council tax rises than Labour councils.
Mr. Sanders:
The Minister attacked Torbay council for a 16.4 per cent. rise, which she blamed on the Liberal Democrats. Will she explain why the Labour group on Torbay council wanted a 20 per cent. tax rise?
Ms Armstrong:
I am not responsible for Labour group decisions and I do not support all of them, as I will make clear in my speech.
I do not make these points for partisan reasons. While it is the case that Labour councils have lower than average increases in council tax, I readily acknowledge that, in some Labour councils, council tax rises are higher than I would have argued for had I been a councillor. Those rises and the increases by Conservative councils--which are higher than average--are the responsibility not of the Government but of local decisions taken by local councillors.
It is the Government's responsibility to ensure that those decisions do not bear too harshly on the public purse, either locally or centrally. To protect the local taxpayer, we will shortly announce whether and how we propose to use existing capping powers for 1999-2000. To protect the national taxpayer, we have made local councils responsible for the extra costs of council tax benefit caused by large council tax increases.
The national interest demands that, where councils are proving irresponsible, the Government should have the power to intervene. The Local Government Bill, which is before Parliament, creates a reserve power for the Secretary of State, so that excessive council tax decisions can be judged over time, measured against expressions of support by local people and, if necessary, restrained. The Liberals oppose any restraining powers on local government. So, while they are prepared unfairly to blame the Government for higher council tax bills, the Liberals would stand back and let those tax bills rocket out of control.
Mr. Simon Hughes:
Given what the Minister has said, will she explain, for the benefit of our constituents, the answer to the question that I put to my hon. Friend the Member for Sutton and Cheam (Mr. Burstow). If our local council, which is Labour run--for the first time in its history, Labour now has control only through the vote of the mayor--cannot raise the money that it wants because it is capped and the Government are setting a limit, and if the Government do not give it the money that it is asking for, whom should the council blame? It has been told that its day centres are to close--some have closed and the day centres for adults with learning difficulties are to close in the next few days. It has also been told that some of the council estates will have to be sold because there is not the money to repair them. Whom should the council blame?
Ms Armstrong:
The hon. Gentleman's problem is that he does not understand local government finance; it has nothing to do with the housing account. The Government have put substantial new money into housing and that is a separate matter from this debate. As I understand it, that is not the argument that Southwark council is putting about its estates.
In respect of the other issues raised by the hon. Gentleman, he said that the Government were capping councils. The Government are not capping councils. Councils have the opportunity to set their council tax at a level that they believe will deliver the quality of services for which people are prepared to pay. It is important that councils take responsibility for those decisions, and that they discuss them and argue them through with local people. Under current legislation, they are not supposed to do that; that is why we are changing the legislation in the way that will be announced tomorrow.
The Tories, who for years were hooked on centralisation, are today reformed "capoholics", slowly emerging from their blue haze, trying desperately to come to terms with the reality of their past, not quite certain whether to control their addiction by an occasional fix or to give up the cap for good. In contrast to the Conservatives and the Liberal Democrats, the Government recognise our responsibility to ensure that local services are well resourced and well delivered.
Best value will sweep away the outdated over-regulation of compulsory competitive tendering and usher in a new era of rising standards of public service, greater involvement by local people in setting and monitoring standards and an emphasis on year-on-year improvement, innovation and public-private partnership. Best value provides the best means for keeping council tax rises down over the medium term. It is a fact that this year's local government settlement has been the most generous since the introduction of the council tax, with substantial extra money for education and social services.
As we have said, if council tax had increased in line with the increase in SSAs, bills need not have risen by more than 4.5 per cent. However, councils have decided to increase their spending by more than that, so council tax bills will rise on average by 6.8 per cent.--less than £1 a week, and a lot less than the double digit increases predicted by the Conservatives and the Liberal Democrats. [Interruption.] We made no predictions, but said that, if council taxes rose in line with the increase in SSAs, the rise would be 4.5 per cent. Those council tax rises have occurred despite the extra resources we have committed this year: an extra £2 billion of Government grant, which is an increase of 5.5 per cent., well above the rate of inflation. No local authority has received less grant this year than last year, and all education and social services authorities have received more grant this year than last.
Of course, the Liberal Democrats have today repeated their usual mantra: tax more, spend more. However, it is based on a false boast. The Liberals say that the Government have not put enough money into health and social services. At the election, they promised an extra £3.5 billion; we have put in an extra £21 billion. They say that we have not put enough money into education. They promised £9.5 billion; we are putting in £19 billion. This debate has been called by Liberal Democrat Front Benchers for no other reason than to curry favour with the Association of Liberal Democrat Councillors--one might almost imagine that a leadership contest was in the offing.
The debate has not been called to hold the Government to account, because we know that this year's settlement is the most generous for seven years and more generous than
anything offered by the Liberals or the Conservatives at the election. The Liberals keep telling me, and Paddy Ashdown reaffirmed it--
Mr. Deputy Speaker (Mr. Michael Lord):
Order. The Minister must refer to parliamentary colleagues in the correct form.
Ms Armstrong:
I am sorry, Mr. Deputy Speaker. The right hon. Member for Yeovil (Mr. Ashdown), who is still a Member of Parliament, reaffirmed last September that the Liberals would have stuck with the financial memorandum that accompanied their election manifesto throughout this Parliament. The figures I am using are drawn from that document and, if hon. Members do not like it, I am sorry for them.
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